Scientific and Technical Revolution: Yesterday, Today and Tomorrow [1st ed.] 9783030479442, 9783030479459

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Lecture Notes in Networks and Systems 129

Elena G. Popkova Bruno S. Sergi   Editors

Scientific and Technical Revolution: Yesterday, Today and Tomorrow

Lecture Notes in Networks and Systems Volume 129

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

Scientific and Technical Revolution: Yesterday, Today and Tomorrow

123

Editors Elena G. Popkova Moscow State Institute of International Relations Plekhanov Russian University of Economic Moscow, Russia

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

ISSN 2367-3370 ISSN 2367-3389 (electronic) Lecture Notes in Networks and Systems ISBN 978-3-030-47944-2 ISBN 978-3-030-47945-9 (eBook) https://doi.org/10.1007/978-3-030-47945-9 © Springer Nature Switzerland AG 2020 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, express 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

Introduction

The process of digital transformations is long and multistage, and its consequences are accumulative and multiplicative. The first digital technologies which appeared in the late twentieth century were accessible for a limited number of people; their advance laid a marketing foundation for the Fourth Industrial Revolution as a means of meeting the growing needs of the consumer society. Subsequently, the mass distribution of simple (unintellectual) digital technologies—computer equipment, handheld devices, the Internet which eventually became high-speed and broadband—made it possible to form an advanced frame of mind with the representatives of great masses of population in the first decade of the twenty-first century. This period was followed by a wave of the mass distribution of high technologies aimed at achieving high performance—intelligent assistance for making cut-and-dried solutions—and cyber security—cloud technologies and block chain technology (distributed ledger technology)—as well as at more extensive automation of certain business processes: production processes—by means of 3D printing, distributive processes—by means of RFID technologies, logistic processes—by means of SCM technologies, and communication processes—by means of CRM technologies. At this stage which may be considered to be finished at the end of the second decade of the twenty-first century, there was a re-thinking of the role of engineering and technologies in people’s lives, which came to the fore. To date, the openness of the popular majority of both developed and developing countries to high technologies, loyalty to them has been achieved; in addition, their great value and benefit for society and the economy have been acknowledged and recognized. In 2020—at the beginning of the third decade of the twenty-first century—one may talk of the beginning of a new stage of the Fourth Industrial Revolution. It is expected that the impending stage will be associated with new outstanding scientific discoveries and technical inventions and will ensure the mass distribution of groundbreaking technology innovations of Industry 4.0. The transition to the Fourth Technological Mode will make it possible to form a “smart” economy in which

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automation will reach the peak, and the boundaries between human and artificial intelligence may eventually be erased. On the threshold of the impending new wave of the Fourth Industrial Revolution, critical analysis and system research of the future of mankind, as well as the development of recommendations for managing this future, constitute a topical issue of contemporary science. The consequences of the transition to Industry 4.0 are so unpredictable that they require that modern scientists not only have research abilities, but also creative thinking. The contours of the future are blurred: A technocratic society, which will be dominated by intelligent machines, may be formed, and a model of a social market economy based on social values and interests may be implemented in practice. Therefore, the Fourth Industrial Revolution is a logical consequence of the scientific and technological progress in the twenty-first century. The relationship of the past, the present, and the future is absolutely clearly visible in it. This book is the result of a collective study of this process, its scientific reflection, and is reflective of a system view of its dynamics and future prospects, and also offers comprehensive recommendations on the organization and management for using the latest opportunities of the scientific and technological progress for the sake of mankind. The book includes the most knowledge-intensive and creative papers which were reported and discussed at the 12th international scientific and practical conference, organized by the Institute of Scientific Communications. The conference “Artificial Intelligence: Anthropogenic Nature vs. Social Origin” took place during December 5–7, 2019, in Krasnoyarsk, Russia. The target audience of the book consists of academic researchers and independent experts who study the social and human aspects of the Fourth Industrial Revolution and the associated transition to the digital economy and Industry 4.0, as well as the creators of the legal framework of this process and its participants— entrepreneurs, managers, employees and consumers. The book has a logical structure and contains research findings in the following conceptual sections: – “Intelligent” technologies and artificial Intelligence: promising directions of application in the present-day economy; – Digital transformations of modern economic and social systems; – Social environment of the Fourth Industrial Revolution and its consequences for mankind; – Regulatory framework of the Fourth Industrial Revolution: experience and prospects; – Effects of the Fourth Industrial Revolution on the environment: climatic change and “green” prospects of the digital economy; – Financing of the Fourth Industrial Revolution and the prospects for improving the investment attractiveness of the digital economy.

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Conference The conference was organized by the Institute of Scientific Communications (Volgograd) in cooperation with the Siberian Federal University (Krasnoyarsk) and the Krasnoyarsk regional fund for supporting scientific and technological activities (Krasnoyarsk).

Contents

“Intelligent” Technologies and Artificial Intelligence: Promising Directions of Application in Present-Day Economy Artificial Intelligence: Semiolinguistic and Communicative Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Andrey V. Olyanitch, Marjet P. Akhidzhakova, Zaineta R. Khachmafova, Elchin A. Gashimov, and Bella N. Akhidzhak Cybernetic Approach to the Modern Knowledge Economy . . . . . . . . . . Gilyan V. Fedotova, Veronika S. Epinina, Tamara V. Stepanova, Evgeny N. Bardulin, and Ramzan V. Gipaev

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The Comprehensive Development of Small Enterprises in the Russian Federation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S. N. Shchemelev and O. I. Abbasova

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Analysis of the Features of Commodification in the Regions of Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tatiana L. Melekhina and Victoria A. Pobedushkina

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Forming Expertise Clusters in Spatial Accelerated Development Zones of the Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Irina S. Baghdasarian, Natalia V. Raznova, Anastasia N. Rusina, and Irina V. Filimonenko Innovative Aspect of Assessing the Competitiveness of Engineering Companies in the Nuclear Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nikolay Y. Leontiev, Victor P. Kuznetsov, Alexey Y. Ivanov, Nadezhda D. Ivanova, and Aleksey A. Ivanov Conceptual Bases of Company Competitiveness. Criticism and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nikolay Ya. Leontiev, Anna F. Plekhanova, Aleksey A. Ivanov, Nadezhda D. Ivanova, and Kirill I. Kolesov

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Structuring the Calculation Planning Function of the Enterprise . . . . . . Igor E. Mizikovsky, Elena V. Shpilevskaya, Tatyana O. Tolstykh, Maksim M. Kutepov, and Artyom A. Sirotkin Potential for Household Development in the Depressed Regions of Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Olga A. Nikolaichuk, Nina M. Lizunova, and Larisa Yu. Obukhova Science and Technic Revolution’s Impact on the Economic Development of Germany in 16th – 19th Centuries . . . . . . . . . . . . . . . . . Roman Yu. Boldyrev, Slavyana Yu. Boldyreva, Asiyat A. Vakhabova, and Olga L. Tychina The Intercultural Communications in the Global World: Methods and Tools for Building Relevant Models . . . . . . . . . . . . . . . . . Natalia A. Orekhovskaya, Tatiana N. Seregina, Elena I. Zamaraeva, and Dariya Yu. Kushnir

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The Integrated Model for the Development of Entrepreneurial Potential in the Context of the Formation of a Corporate Entrepreneurial Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 N. V. Ketko, N. N. Skiter, O. E. Akimova, V. V. Velikanov, and A. V. Kostikova Complex Product Development in the Conditions of High-Tech Transformation of the Economic System . . . . . . . . . . . . . . . . . . . . . . . . 113 Natalia S. Andryashina, Ekaterina P. Garina, Elena V. Romanovskaya, Victor P. Kuznetsov, and Alexander P. Garin Development of Industrial Production Through the Product Management Creation Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Ekaterina P. Garina, Elena V. Romanovskaya, Natalia S. Andryashina, Alexander P. Garin, and Svetlana N. Kuznetsova Generalization of Methodological and Practical Approaches for Formation of Product Creation Systems at Industry Enterprises . . . 131 Ekaterina P. Garina, Elena V. Romanovskaya, Natalia S. Andryashina, Victor P. Kuznetsov, and Yaroslav S. Potashnik Transformation of Economic Systems Under the Conditions of Technical and Technological Complexity of Transformed Processes: Organizational and Management Decisions . . . . . . . . . . . . . . . . . . . . . . 140 Elena P. Kozlova, Ekaterina P. Garina, Elena V. Romanovskaya, Natalia S. Andryashina, and Anastasia O. Egorova Management of the Development of Economic Systems in the Context of Their Technological Transformation . . . . . . . . . . . . . 150 Victor P. Kuznetsov, Altynay S. Adzhikova, Marina S. Romanova, Elena P. Kozlova, and Evgeny A. Semakhin

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Use of Letter of Credit Form of Payment in the Implementation of Smart Contracts and Blockchain Technology . . . . . . . . . . . . . . . . . . . 160 Elena N. Agibalova, Igor B. Ilovaysky, Yanina Y. Kayl, and Viktoria A. Usanova Blockchain Technology in Smart Contracts: Is It a Constitutive Attribute or a Technological Neutrality? . . . . . . . . . . . . . . . . . . . . . . . . 171 Elena N. Agibalova Methodological Approaches to a Comprehensive Assessment of the Economic Efficiency in Using Innovative Technologies in Agriculture: A No-till Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Natalia V. Bannikova, Alexander V. Tenishchev, Svetlana S. Vaytsekhovskaya, Natalya V. Vorobyova, and Elena G. Pupynina Hotel Tech Ecosystem: Adaptations to Online Distribution . . . . . . . . . . 194 Natalia A. Zamyatina and Oksana G. Solntseva Smart Contracts in the Russian Transaction Regulation . . . . . . . . . . . . 205 Elena B. Zavyalova, Ekaterina I. Shumskaia, and Mikhail D. Kuzmin Artificial Intelligence and Its Impact on Economic Security: Trends, Estimates and Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Evgeniya K. Karpunina, Sergey V. Dedov, Marina V. Kholod, Sergey V. Ponomarev, and Elena A. Gorlova Contemporary Trends in International Maritime Organization’s Navigation Safety Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 A. V. Grinevich and S. M. Kopylov The Use of Information and Communication Technologies in the Practice of Special Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Svetlana E. Uromova, Elena Y. Medvedeva, Elena E. Dmitrieva, Elena A. Olkhina, and Elena V. Zhulina Cluster Model in Medicine, Healthcare and Pharmacy as a Platform for Public-Private Partnership . . . . . . . . . . . . . . . . . . . . . 239 Ekaterina A. Pogrebinskaya, Galina A. Rybina, Valentina V. Kuznetsova, and Nadezhda P. Tishkina Information Technology as a Tool for Learning Market Narrative . . . . 249 Vladimir V. Skalkin, Sofia A. Sidorova, Vladimir V. Maltsev, and Violetta S. Tsarckova Analysis of the Factors and Scenarios of Forming a New Direction in the 21st Century Energy – Intelligent Energy Networks (Smart Grid) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 Pavel V. Trifonov, Maria A. Kirpicheva, and Astkhik A. Khachatryan

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Methodology of Risk Management Assessment at an Industrial Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Yaroslav S. Potashnik, Elena P. Kozlova, Svetlana N. Kuznetsova, Sergey D. Tsymbalov, and Elena A. Chelnokova Improvement of Strategic Planning in the Forest Sector of the Economy (Regional Level of Analysis) . . . . . . . . . . . . . . . . . . . . . 272 Yana Y. Radyukova, Elena A. Kolesnichenko, Svetlana V. Zenchenko, Anna V. Savtsova, and Nikolay N. Pakhomov The Process of Technological Re-equipment Planning of an Enterprise in a Complex Industrial Production . . . . . . . . . . . . . . 280 Elena V. Romanovskaya, Ekaterina P. Garina, Natalia S. Andryashina, Svetlana N. Kuznetsova, and Alexander P. Garin Product Creation System in the Conditions of High-Tech Transformation of the Economic System . . . . . . . . . . . . . . . . . . . . . . . . 289 Elena V. Romanovskaya, Ekaterina P. Garina, Natalia S. Andryashina, Victor P. Kuznetsov, and Alexander P. Garin Competence of AI: Measuring and Management . . . . . . . . . . . . . . . . . . 296 Irina S. Bagdasarian Artificial Intelligence and Its Role in the Development of Small and Medium Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 Aliya M. Bazieva, Asylbu I. Ermatova, Aida S. Umuralieva, Gulbara N. Borubaeva, and Zairbek A. Osmonov The Scientific and Methodological Approach to Studying the Social Nature of AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 Evgeniy V. Krasnov, Alexander A. Bondarenko, Svetlana V. Ponomareva, and Roman P. Bulyga The Choice of the Regularization Parameter for Solving Linear Volterra-Stieltjes Integral Equations of the Third Kind . . . . . . . . . . . . . 321 Nurgul Bedelova The Model of Organization of “Green” Digital Production and Consumption Based on the Internet of Things and AI . . . . . . . . . . 329 Gulzat K. Tashkulova and Elena V. Kletskova Modernization of State Management of the Digital Economy Based on AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 Tatiana M. Rogulenko, Alexander A. Turovsky, Anna V. Bodiako, and Yuri V. Sinyakov Digital Workforce for the “Green” Economy “Smart” Enterprises: Training and Management Features . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 Aida Ya. Tamakhina, Stepan I. Mezhov, and Sergey V. Yungblyudt

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Digital Transformations of Modern Economic and Social Systems Relationship of Economic Communications and Productive Consumption: Theoretical Aspect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357 Svetlana L. Sazanova, Radim Valenczyk, Bagrat A. Yerznkyan, and Galina N. Ryazanova Managing Company Competitiveness in the Digital Economy . . . . . . . . 365 Irina Yu. Sizova, Elena M. Semenova, Aleksandr V. Zakharov, Elena A. Sotnikova, and Yuliia A. Zviagintceva Directions for Increasing the Budget Expenditures Efficiency Under the Digital Economy Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 376 S. N. Meliksetyan, G. V. Popova, A. L. Malyuga, and E. V. Kravchenko The “Green” Scenario of Development of the Digital Economy: Strategic Priorities and Subjects of Management . . . . . . . . . . . . . . . . . . 387 Raisa T. Adarina, Ayapbek A. Kuttubaev, and Kseniya A. Melekhova Digital Humanities: The Possibility of Using Intelligent Learning Systems in Teaching Foreign Languages . . . . . . . . . . . . . . . . . . . . . . . . 395 Ludmila V. Guseva, Elena V. Koroleva, Galina A. Kruchinina, Julia A. Marinina, and Anastasia A. Oladyshkina Responsible Information Society as a Social Environment for Creation of the “Green” Digital Economy: Formation and Monitoring . . . . . . . . 402 Tamara G. Stroiteleva, Elena A. Petrova, and Sergey V. Yungblyudt Ontogenesis of Green Development Model of Digital Economy: Essence, Stages, and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410 Tamara G. Stroiteleva, Elena V. Kletskova, and Svetlana I. Balaeva The Possibility of Forming Systemic and Critical Thinking Skills of Students in the Digital Economy . . . . . . . . . . . . . . . . . . . . . . . . 418 Alexandra Kriulina and Tatiana Gudkova Digitalization of the Russian Economy: Institutional Strategies, Factors and Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 Marina Alpidovskaya and Ekaterina Stompeleva The Role of Digital Technology in the Formation of Agri-Food Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435 Olga Kusakina and Natalia Dovgotko Legal Liberalism and the Digital Economy: Boundaries of Freedom in a New Era . . . . . . . . . . . . . . . . . . . . . . . . . . 449 Vladimir E. Berezko

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Clustering and Development of Information and Telecommunication Technologies as Factors for Overcoming the Digital Divide of Regions . . . . . . . . . . . . . . . . . . . . 459 Anna N. Zhilkina, Marina V. Gracheva, Marina B. Trachenko, Ol’ga D. Gaisha, and Vladimir A. Dzhioev Digital Innovation Technologies in Public Governance: Budget Geolocation System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467 Sergei G. Kamolov and Aleksandra A. Smagina Towards Sustainable Development Through Bridging Digital Penetration Gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 Evgeniya K. Karpunina, Anna F. Beilina, Larisa M. Butova, Svetlana A. Trufanova, and Alexander S. Astakhin Dialectics of Sustainable Development of Digital Economy Ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486 Evgeniya K. Karpunina, Galina K. Lapushinskaya, Asya E. Arutyunova, Svetlana V. Lupacheva, and Alexander A. Dubovitski The Ecosystem of the Digital Economy: A New Approach to the Study of Structural Features and Content . . . . . . . . . . . . . . . . . . 497 Evgeniya K. Karpunina, Elena A. Okunkova, Ekaterina V. Sazanova, Natalia N. Gubernatorova, and Evgeniya S. Tishchenko Improving the System of Regulation and Conduct of Banking Operations in the Era of Digitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 509 Alisa S. Kirizleyeva Potential for Development of Business Segments of the Green Economy in the Republic of Crimea . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 Olga V. Kozhevina, Natalia V. Salienko, Evgeny A. Starozhuk, Victoria A. Klueva, and Irina V. Pavlova Digital Transformation of the Industrial Sector: Challenges and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530 Olga V. Kozhevina, Natalia V. Salienko, Evgeny A. Starozhuk, Victoria A. Klueva, and Irina V. Pavlova Labour Market in the Era of Digital Economy . . . . . . . . . . . . . . . . . . . 540 Olga A. Nikolaichuk, Nina M. Lizunova, and Larisa Yu. Obukhova The Contract of Power Supply During the Era of the Digital Law: Civil Bases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553 Oxana B. Novruzova, Yuliya O. Pronina, Elena A. Shergunova, and Evgenij D. Gorevoy Problems of Digitalization: Using Information Technology in Business, Science and Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561 Irina A. Rumyantseva, Tatiana Yu. Krotenko, and Marina B. Zhernakova

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Development of the Crowdfunding Financial Mechanism in the Framework of the Digital Economy . . . . . . . . . . . . . . . . . . . . . . . 571 Ekaterina G. Sheina, Alexander V. Kurdyumov, and Andrei K. Izmodenov Forecasting Method of Product Shipment . . . . . . . . . . . . . . . . . . . . . . . 581 Michael N. Pavlenkov and Rinat Zh. Reimov Institutional Environment of the Digital Economy . . . . . . . . . . . . . . . . . 593 Svetlana L. Sazanova and Nikolay V. Kuznetsov Creation of a Virtual Model of Educational Programs Management in a University . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602 Elvira K. Samerkhanova, Pavel A. Ruzanov, Elena P. Krupoderova, Klimentina R. Krupoderova, and Alexander V. Ponachugin Designing Digital Learning Environment for the Future Teacher of High School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610 Elvira K. Samerkhanova, Elena P. Krupoderova, Klimentina R. Krupoderova, Lyudmila N. Bakhtiyarova, and Alexander V. Ponachugin Digital Economy and Sustainable Development of Northern Traditional Industries in the Paradigm of Ethnological Expertise . . . . . 619 Irina V. Samsonova, Matrena S. Malysheva, Maria B. Pavlova, and Lyubov A. Semenova Formation of the Digital Economy Through Essence, Genesis and Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625 Elena A. Zbinyakova, Oleg V. Sizov, Nataliya V. Pyanova, Liliya M. Marchenkova, and Elena M. Samorodova Museum in a Single Digital Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637 Elena B. Ivushkina, Elena V. Dashkova, Natalya Z. Alieva, Irina B. Kushnir, and Anton N. Samodelov The Digital Approach to Managing Region’s Marketing Activities for Accelerating Its Growth and Development . . . . . . . . . . . . 647 Yulia I. Dubova Social Environment of the Fourth Industrial Revolution and Its Consequences for Mankind Research on Employers’ Attitude Towards Elderly Workers . . . . . . . . . 657 Elena B. Zavyalova and Tatyana Krotova Vocational Training and Re-skilling of Senior Citizens . . . . . . . . . . . . . 671 Ellina A. Shamanina and Anastasia E. Bryzhinskaya

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Effective Leadership to Senior Workforce: Opportunities and Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689 Olga Dubovskaya and Vladimir Naumets Entrepreneurship at a Mature Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695 Elena B. Zavyalova, Evgeniya A. Starikova, and Natalia N. Chubaeva Uniform Approximations for Solutions of a Singularly Perturbed System of Differential Equations in a Particularly Critical Case . . . . . . 707 S. Karimov and G. Anarbaeva Classification of Constitutional Principles of the Modern Economic System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 E. E. Barinov, L. G. Berlyavskiy, M. A. Manukyan, and Sh. M. Nuradinov Archetype of “Self/Other” in Modern European Social Advertising . . . . 725 Marina V. Aksenova, Tatyana G. Charchoglyan, Ekaterina V. Ignatyeva, Anna V. Merzlyakova, and Yuliya V. Ryabkova Diagnostics of Methodological Competence Development of Preschool Teachers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731 Lyudmila V. Aleksieienko-Lemovska Assessing the Impact of Intellectual Potential on the Innovative Development of Resource-Based Region . . . . . . . . . . . . . . . . . . . . . . . . . 740 Zoya A. Vasilieva, Anastasiya N. Rusina, Irina S. Bagdasarian, and Irina V. Filimonenko Regional Identity and Assessment of the Quality of Life by the Population (In Terms of Empirical Research in the Samara Region) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 755 Irina Tsvetkova, Tatyana Ivanova, Evgeniya Zhelnina, and Natalya Gorbacheva Strategies of Developing a Risk Map in Space and Time Axes in the Regional Labor Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764 Zoya A. Vasilieva, Anastasiya N. Rusina, Irina V. Filimonenko, and Natalia V. Raznova Foreign Language as Intellectual Resource and Value in Modern Conditions in Professional Activity of Manager . . . . . . . . . . . . . . . . . . . 776 Maria V. Boyko, Ludmila V. Guseva, Olga M. Kim, Natalia S. Pronina, and Aleksandr N. Shamov Opportunities and Prospects of Using Chatbots in HR . . . . . . . . . . . . . 782 Evgeniy E. Egorov, Tatyana E. Lebedeva, Maria P. Prokhorova, Tatyana N. Tsapina, and Anzhelika A. Shkunova

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About the Possibility to Combine Reduction of Working Time and the Retirement Age Increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 Aleksandr V. Zolotov, Tatyana N. Demicheva, Michael V. Shilov, Marina V. Zolotova, and Irina P. Denisova Activation of Foreign Language Communicative Competence Components in Specialists’ Professional Work . . . . . . . . . . . . . . . . . . . . 799 Natalia S. Pronina, Marina I. Klyueva, Maria V. Zimina, Natalya A. Lyulyaeva, and Tatyana A. Perova Experience of Experimental Area Development in the System of Professional Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 808 Anna V. Lapshova, Julia A. Kulagina, Daria G. Sidorova, Olga V. Golubeva, and Irina M. Morozova Philosophical Aspects of the Development of Technique and the Destiny of a Human . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816 Tahir M. Makhamatov, Timur T. Makhamatov, and Saida T. Makhamatova Development of Children’s Supplementary Education as a Component of the University’s Third Mission . . . . . . . . . . . . . . . . 826 B. Ch. Meskhi, S. V. Ponomareva, E. A. Ugnich, and M. G. Drozd Extraterritorial Obligations in Core International Human Rights Treaties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835 Aliya A. Amirova Assessing the Experience of Development of Personality’s Creative Potential in the Industry of Educational Services . . . . . . . . . . . . . . . . . . 841 Asya Arutyunova Corporate Social Responsibility of Commercial Banks at the Present Stage: Scientific and Technological Revolution . . . . . . . . . . . . . . . . . . . . 851 Natalia E. Brovkina and Helena P. Ternovskaya Deculturation of Economic Activity as a Systemic Challenge . . . . . . . . . 859 Andrey Y. Bolshunov, Alexander G. Tyurikov, and Sofiya A. Bolshunova A Systemic Approach to the Development of the Theory of Economic Interaction of the Institution of Farming and a Socially-Oriented Environment of a New Type . . . . . . . . . . . . . . 866 Lyudmila Yu. Piterskaya, Tatyana G. Gurnovich, George A. Baum, and Sergey D. Fetisov Human Rights Protection Challenges Affecting Christians – Forced Migrants in Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875 Nataliya S. Semenova, Ekaterina V. Kiseleva, and Ekaterina N. Mamaeva

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The Scientific and Technical Revolution in the Context of Capitalism: Estrangement vs Social Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 884 Dmitry P. Sokolov and Igor V. Astafyev Features of the Social Institution Management . . . . . . . . . . . . . . . . . . . . 892 V. I. Surat, M. S. Santalova, I. V. Soklakova, and D. K. Balabanova Relations of Control in the Management of Integration Processes of Innovation in the Knowledge Economy . . . . . . . . . . . . . . . . . . . . . . . 907 Larisa N. Drobyshevskaya, Vasilij V. Chaplya, Ekaterina D. Popova, and Svetlana A. Kovalenko The Problem of Manipulative Interference in the Processes of Identification and Self-identification of an Individual in the Conditions of the Information Society Functioning . . . . . . . . . . . 915 Anna S. Petrakova, Tatiana G. Martseva, Irina N. Voblaya, and Elena N. Seifieva Change of the Level of Working Capacity of a Student in the System of Professional Education Under Mental Load . . . . . . . . . 925 Yury N. Petrov, Alexey Y. Petrov, Nina S. Petrova, Nadezhda V. Syrova, and Olga N. Filatova Interconnection Between the Behavior and Needs of Employable Population in the System of the Pleasure Economy . . . . . . . . . . . . . . . . 932 Chinara R. Kulueva, Kanikey B. Seitova, Gulmira R. Abdyraeva, Zhannat K. Rayimberdieva, and Aynura S. Uzakbaeva Place and Role of Human in the System of Circular Reproduction in the Digital Regional Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943 Gulzat K. Tashkulova and Elena V. Kletskova Quantification of Socio-Economic Effects of Strategic Development of Small Business in the System of the Digital Economy . . . . . . . . . . . . 952 Yuliya V. Melnikova, Anna V. Shokhnekh, Victoria S. Telyatnikova, and Ludmila I. Nasonova Aitmatov’s Characters Infusing the Heart of a Child with the Good and Their Study at School . . . . . . . . . . . . . . . . . . . . . . . 960 A. A. Mamatova, Bekmurza Zuluyev, and M. U. Muzulmanov Semantic and Structural Peculiarities of Proverbs and Sayings in the Form of a Compound Sentence with a Meaning of Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 969 Parida M. Kaiymova, Nurzhamal A. Mapaeva, Uyalkhan N. Kamardinova, Dinara A. Yzabekova, and Kapar Z. Zulpukarov

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There Is a Need of Protecting Children from Sexual Information Disseminated Through Information and Communication Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 976 Liudmila A. Bukalerova, Alexander V. Ostroushko, Saule M. Naurzalieva, and Anzhela V. Dolzhikova Regulatory Framework of the Fourth Industrial Revolution: Experience and Prospects Indirect Law Regulation of the Economy in Russia . . . . . . . . . . . . . . . . 987 Liudmila A. Bukalerova, Alexander V. Ostroushko, Dmitry V. Karpuhin, and Olesya V. Merkushova Criminal Liability for Escape from Arrest or Detention . . . . . . . . . . . . 996 M. M. Kobleva, E. Y. Korunenko, V. A. Ovsyannikov, and I. A. Podroykin Dysfunctionality of Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1002 D. V. Pozharskiy, A. A. Kosykh, N. F. Nasretdinova, and V. O. Chernakov Labor Opportunism Amongst Agricultural Business Workers: Legal Forms of Manifestation and Ways to Overcome It . . . . . . . . . . . . 1011 A. A. Sapfirova, V. V. Volkova, and E. V. Khakhaleva Salvage at Sea: International Law Problems . . . . . . . . . . . . . . . . . . . . . 1018 N. A. Butakova and T. N. Ivanova The Legal Essence of the State Administration Methods and Their Correlation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026 O. V. Grechkina, A. V. Zubach, P. N. Safonenkov, and O. V. Shmaliy The State Regulatory Policy as a Factor of the Proper Legal Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1036 Vitaly V. Vanin, Lesya A. Dushakova, Stanislav D. Mogilevsky, and Oksana V. Shmaliy Theoretical and Legal and Law Enforcement Aspects of the Liability for the Breach of Civil Obligations in Russia . . . . . . . . . 1046 T. A. Skvortsova, O. I. Korolevskaya, E. V. Trunova, and V. S. Kirilenko Violence as a Way of Self-expression: A Legal Aspect . . . . . . . . . . . . . . 1056 N. V. Petrasheva, G. A. Diatlov, A. A. Kulikova, and L. A. Spektor Arbitration Proceedings in the Refusal of One of the Parties to the Dispute to Participate in the Process: International Legal Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1061 Luo Lan Climate Change Mitigation and Renewable Energy Sources: International Legal Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1068 A. Kh. Abashidze, A. M. Solntsev, and R. D. Akshalova

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Countering the Legalization of Criminal Income as a Factor to Deal with the Risk of Terrorist Threats and Increasing Competitiveness in Foreign Economic Markets . . . . . . . . . . . . . . . . . . . 1076 Dmitry A. Artemenko, Vladimir N. Gurba, and Maria A. Evnevich Realization of the Right to Health by People with Mental Illnesses . . . . 1089 A. A. Belousova Warranties of Public-Law Entity as a Type of Debt Obligation in a Systemic Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1094 Georgiy N. Kutsuri, Lola D. Sanginova, and Svetlana S. Galazova Legal Regulation of the Development of Breakthrough Technologies in Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1102 Svetlana S. Gorokhova, Anna V. Popova, Yulia I. Shupletsova, and Natalia V. Putilo Environmental Migration and International Law: Contemporary Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1112 D. V. Ivanov Antitrust Law Indemnity in the Russian Federation . . . . . . . . . . . . . . . 1119 Yu. A. Artemyeva, E. P. Ermakova, O. V. Protopopova, and E. E. Frolova Global Blockchain Jurisdiction: Prospects and Features of Use in Russian Realities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1136 Julia A. Gavrilova, Oleg Y. Rybakov, Elena A. Antonyan, and Natalya V. Sharueva Property Theory: Methodological Approaches to the Problem of Specification and Protection of Property Rights . . . . . . . . . . . . . . . . . 1143 Olga V. Karamova, Alexandra E. Sergeeva, and Evgeny V. Sumarokov Tokens: Actual Problems of Determining the Legal Status and Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1152 Stanislav V. Odintsov, Valentina A. Koncheva, and Marina V. Trubina Modernization of the System of State Registration of Real Estate as a Factor in the Development of State-Legal Regulation of Entrepreneurial Activity in the Russian Federation . . . . . . . . . . . . . . 1159 Oksana N. Petyukova and Aimée M. L. Tshibola Foresight: Outlook for the Legal Framework of the National Legal System in the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1166 Yuliya O. Pronina, Varvara V. Bogdan, and Oxana B. Novruzova Fuzzy Cognitive Modeling of the Integral Level of Regional Food Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1173 A. F. Rogachev, E. N. Antamoshkina, E. V. Melikhova, and T. V. Pleschenko

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Organization of Interaction Within the Model of Regional Economic Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1182 Tatyana A. Rudakova, Oksana Yu. Rudakova, Inna N. Sannikova, Olga V. Kozhevina, and Nadezhda D. Usvyat Specificity and Problems of the Settlement of Economic Disputes Between the ASEAN Member States . . . . . . . . . . . . . . . . . . . . . . . . . . . 1195 A. A. Saidmukhtorov Illegal Receipt of Information Containing Trade Secrets (Commercial Espionage) as a Threat to Fair Competition . . . . . . . . . . . 1205 Viacheslav V. Sevalnev, Uriy V. Trunzevskiy, and Artem M. Tsirin Destruction of the National State Economic System by Means of Global Politics (Experience of Modern Russia) . . . . . . . . . . . . . . . . . 1217 Sergey S. Slepakov, Natalia N. Novoselova, Rashid K. Kecherukov, and Vladimir A. Fadeev Challenges for BRICS Today and Tomorrow . . . . . . . . . . . . . . . . . . . . 1224 Elena A. Zvonova, Galina A. Bunich, Irina Z. Yarygina, and Anastasia V. Zhiglyaeva Pursuing a Regional Housing Policy: Methods, Approaches and Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234 Sergey A. Korostin Best Practices of the States of the Romano-Germanic Legal System in Countering Bankruptcy Crimes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1242 Oleg A. Yastrebov, Rinat R. Sapparov, and Liudmila A. Bukalerova Causes of Juvenile Delinquency in the Republic of Kazakhstan . . . . . . . 1250 Saule M. Naurzalieva, Alexandra S. Vasilenko, Mariya A. Simonova, Dmitriy V. Bondarenko, and Piotr K. Dolzhikov Criminal Responsibility for Child Sexual Abuse in the Law of the Leading Countries of the World . . . . . . . . . . . . . . . . . . . . . . . . . . 1259 Ludmila A. Bukalerova and Irina I. Skripova Deradicalization of Prisoners in the Scandinavian Countries as a Milestone Phenomenon of Circular Economy . . . . . . . . . . . . . . . . . 1266 Maxim A. Yavorskiy, Irina E. Milova, Renat R. Khasnutdinov, and Danila D. Osipov Differentiation and Integration of the Norms of Executive Law . . . . . . . 1277 Aleksei A. Chistyakov, Yulia A. Golovastova, and Kirill A. Chistyakov

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Probabilistic Model of Implementing Mediation into Russia’s Criminal Procedure in the Conditions of Society’s Digital Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1286 Aleksandra S. Vasilenko, Vladimir M. Filippov, Maria A. Simonova, and Sergey A. Kovalenko The Genesis and the Current State of Domestic and Foreign Legal Thought in Countering Extremism in Penal Institutions as a Manifestation of Liberal Economic Processes . . . . . . . . . . . . . . . . . 1294 Maxim A. Yavorskiy, Irina E. Milova, Renat R. Khasnutdinov, and Danila D. Osipov Experience of the States of the Anglo-Saxon System of Law in Countering Market Manipulation and Unlawful Use of Insider Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1307 Semyon I. Adinyaev, Lyudmila A. Bukalerova, and Alexandra S. Vasilenko Effects of the Fourth Industrial Revolution on the Environment: Climatic Change and “Green” Prospects of the Digital Economy Systemic Issues of Bee Breeding in Russia . . . . . . . . . . . . . . . . . . . . . . . 1317 Ivan F. Gorlov, Vasily I. Komlatsky, Elena Yu. Zlobina, Aleksander A. Mosolov, and Daria A. Mosolova Features of Sustainable Enterprise Development . . . . . . . . . . . . . . . . . . 1326 Natalia S. Andryashina, Ekaterina P. Garina, Alexander P. Garin, Zhibek B. Seitova, and Bolotbek M. Seitov Sustainable Development of Regions of Russia in the Conditions of the “Green Economy” (Estimation Problems) . . . . . . . . . . . . . . . . . . 1335 Lyubov Yu. Arkhangelskaya, Victor N. Salin, Victor N. Prasolov, and Larisa Ev. Danilina Efficiency of Eco-Management in Agriculture . . . . . . . . . . . . . . . . . . . . 1346 Tatyana M. Vorotinceva, Alena A. Veselko, Aleksei M. Sorokin, Khosiyat S. Imomnazarova, and Elena I. Andreeva Small Island Developing States’ (SIDS) Problems in the Focus of Sustainable Developing Goals (SDGs) . . . . . . . . . . . . . . . . . . . . . . . . 1354 Victoria I. Mikheeva Methodological Approach to the Classification of Digital Economies by Environmental Efficiency and Sustainability Criterion . . . . . . . . . . . 1360 Elena V. Merdesheva, Olga V. Titova, and Pavel T. Avkopashvili

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A Systemic Approach to the Study of the Sustainability of the Global Digital Economy: Economies of Scale, Ratchet Effect and Hysteresis Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1369 Larisa I. Nekhvyadovich, Vladimir A. Borodin, and Pavel T. Avkopashvili Newest Trends and Future Scenarios for a Sustainable Digital Economy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1378 Evgeny E. Shvakov and Elena A. Petrova Eco-Efficiency Models for the Future of the Global Digital Economy: Convergence or Divergence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1386 Maria G. Sukhova, Evgeny E. Shvakov, and Marina N. Lyovkina Digital Technologies as a Path to the “Green” Economy: Financial Effectiveness vs. Ecological Responsibility . . . . . . . . . . . . . . . . 1394 Elena A. Yaitskaya, Vitaliy V. Mishchenko, and Tatyana A. Yakushina Integrating the “Green Economy” into the Model of Digital Future of the Modern Socio-Economic Systems . . . . . . . . . . . . . . . . . . . . . . . . . 1402 Evgeny M. Karataev, Vladimir V. Merkuryev, and Olga V. Titova The Fourth Technological Paradigm as a Vector of Sustainable Development of the Modern Digital Economy: Implications for Society, Government and Entrepreneurship . . . . . . . . . 1411 Elena V. Kletskova, Olga V. Titova, and Victoria V. Vorobyova Technological Infrastructure of the “Green” Digital Economy: Measurement and Management Methodology . . . . . . . . . . . . . . . . . . . . 1420 Irina Sh. Dzakhmisheva, Olga V. Titova, and Darya S. Robets Technology for the “Green” Digital Future: Productivity and Efficiency vs. Security and Sustainability . . . . . . . . . . 1431 Madina V. Blieva, Galina G. Vukovich, and Olga I. Ergardt Mass “Green” Digital Technologies in the Economy: The Future and the Present . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1440 Zalina L. Kantsalieva, Darima A. Kozhanova, and Andrey A. Bezhovets Overview of Promising Educational Services for a “Green” Digital Future: Online, Lifelong and Distance Learning . . . . . . . . . . . . . . . . . . 1449 Darima A. Kozhanova, Oxana M. Makhalina, and Kirill A. Kirilin Product Life Cycle in the Circular Economy: Economic Priorities vs. Environmental Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1456 Julia G. Gazukina, Olga N. Shvakova, and Kseniya A. Melekhova “Knowledge Economy” as a Mechanism of Social Adaptation to the “Green” Digital Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1464 Larisa I. Nekhvyadovich, Viktor N. Makhalin, and Elena V. Gubkina

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Eco-economic Component of Digital Future in the Model of Sustainable Development of Economy . . . . . . . . . . . . . . . . . . . . . . . . 1473 Oksana V. Klimova, Toskanay A. Kuttubaeva, and Olga V. Titova Financing of the Fourth Industrial Revolution and the Prospects for Improving the Investment Attractiveness of the Digital Economy Two-Stage DEA: An Application in Banking . . . . . . . . . . . . . . . . . . . . . 1483 Kristína Kočišová The Token and Blockchain Economy: Risks, Opportunities, and Implication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1518 Fabian Teichmann and Marie-Christin Falker Blockchain Technology and Cryptocurrencies: An Alternative to Central Banking? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1532 Fabian Teichmann and Marie-Christin Falker Blockchain: Implications of the Impending Token Economy . . . . . . . . . 1551 Fabian Teichmann and Marie-Christin Falker Technology of the Information Modeling as an Innovative Form of Managing the Investment and Construction Process . . . . . . . . . . . . . 1566 Valery N. Barinov, Natalia I. Trukhina, Oksana V. Kornitskaya, Ella Y. Okolelova, and Alexey V. Shulgin National Debt in Industry 4.0 in Developing Countries: Analysis of the Influence of Digitization and Perspectives of Reduction of Debt Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1572 Karina V. Matvienko and Elizaveta A. Milkina The Mechanism of Participation of State and Foreign Capital in the Investment Provision of Large Companies . . . . . . . . . . . . . . . . . . 1581 Chatkalbay K. Rayimbaev, Alisher S. Yusupov, and Uchkunbek T. Shamshidinov Accounting Policies for Financial Instruments of Organizations in the Modern Conditions of the Innovative Economy . . . . . . . . . . . . . . 1588 Tatyana Y. Druzhilovskaya, Emilia S. Druzhilovskaya, Tatuana N. Korshunova, Irina P. Denisova, and Petr V. Denisov Influence of Modern Financial Technologies (Fintech) on the Institutional Composition of the Russian Banking System . . . . . . 1596 Larisa S. Aleksandrova, Aleksandr V. Berdyshev, Olga V. Zakharova, and Sergey S. Matveevskiy Foreign Investment as a Factor of Economic Progress: Russian and European Vectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1604 Marina L. Galas

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Individuals’ Capital Allocation in Different Jurisdictions Within the Context of International Tax Transparency: Improving the Global Approaches to Financial Regulation . . . . . . . . . . 1612 Ekaterina A. Tsepova Creation of a Single Information Resource Within the Framework of the Registration and Accounting Function as a Factor in Increasing the Efficiency of Land Management . . . . . . . . . . . . . . . . . 1627 Tatyana V. Volkova Analysis of Regional Performance Management of Tax Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1633 Valentina B. Dzobelova, Alisa V. Olisaeva, Anvarjon A. Isokov, and Oksana V. Torchinova Value Added Tax: Problems Affecting GDP . . . . . . . . . . . . . . . . . . . . . . 1642 Irina A. Zhuravleva, Natalia A. Nazarova, and Larisa P. Grundel Some Aspects of Forecasting and Evaluating the Effectiveness of Investments in the System of Management of Oil Production and Refining Industry in the Region . . . . . . . . . . . . . . . . . . . . . . . . . . . 1653 Alexander A. Silaev, Mikhail I. Kuternin, Galina Yu. Parshikova, and Alexey A. Perfilyev Technological Changes in the Finance Industry: Regulation and Supervision Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1664 Oleg B. Anikin, Boris A. Anikin, and Boris B. Loguinov Banking Russia: Systemic Deformation and Potential for Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1670 Georgy M. Mishulin and Alexander V. Gubin Problems of Competition Between Commercial Banks and Technology Companies in the Market of Innovative Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1681 I. V. Pashkovskaya and N. A. Kovaleva The Protection of Mutual Funds Investors’ Rights in the Context of Digitalization: Russian and Foreign Practice . . . . . . . . . . . . . . . . . . . 1688 Oksana N. Petyukova and Maria A. Mikhaleva The Influence of Modern Financial Technologies at the Level of the Shadow Economy and Banking . . . . . . . . . . . . . . . . . . . . . . . . . . 1697 Helena P. Ternovskaya and Sisheng Yuan Trends in Assessment of the Tax System’s Competitiveness in the Context of Shifting to the ‘Industry 4.0’ Concept . . . . . . . . . . . . 1707 El’vira Chelysheva, Tat’yana Saltanova, Tat’yana Mikhnenko, and Nataliya Shelepova

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The Effect of Capital Structure Management on Commercial Bank Financial Performance: A Case of the Zambian Banking Sector . . . . . . 1716 Macmillan Handema and Lubinda Haabazoka Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1737 Author Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1739

“Intelligent” Technologies and Artificial Intelligence: Promising Directions of Application in Present-Day Economy

Artificial Intelligence: Semiolinguistic and Communicative Competencies Andrey V. Olyanitch1(&) , Marjet P. Akhidzhakova1 , Zaineta R. Khachmafova1 , Elchin A. Gashimov2 , and Bella N. Akhidzhak1 1

2

Adyghe State University, Maykop, Russia [email protected], [email protected], [email protected], [email protected] Moscow City Pedagogical University (Samara Branch), Samara, Russia [email protected]

Abstract. The purpose of the paper is to designate and describe the direction of the competencies’ formation in artificial intelligence systems, among which two types are distinguished, such as semiolinguistic and communicative ones that are supposed to become leading in the artificial intelligence activity as an equal partner to humans both in activity and communication. Typologies of such competencies are considered, an approximate semiosis of artificial intelligence aimed at cognitive development of reality similar to the human mentality is proposed. The article uses the general scientific method of introspection and retrospection; semiolinguistic analysis to study sign formation and clustering of emerging signs; conceptual analysis to identify the characteristics of the conceptual sphere of artificial intelligence; discursive analysis to determine the signs and methods of artificial intelligence’ immersion into a communication environment. Examples of artificial intelligence systems demonstrating the ability to master two types of competencies are given - linguistic-semiological (cognitivetypological, conceptual-distinguistic, search-determinative, search-pericular, semio-creative) and communicative/discursive (in such variants as linguistic, socio-linguistic and pragmatic). In the conclusion to the paper options for ensuring human security during its interaction with artificial intelligence systems are considered, such as: linking the program to only one medium; providing humanoid symbiotic connection of AI with the world; protection of media programs or its elements from selfreprogramming; restriction of protocols and communication channels with the prohibition of independent connection to Internet networks; the impossibility of AI for building networks. Keywords: Artificial intelligence
Cluster
Concept
Cognitive development of reality
Communication
Competence
Concept-sphere
Cyber-somatic
Non-verbal
Pattern
Primitive
Sign
Semiolinguistics
Verbal
Visual JEL Codes: O350


C890
E170

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 3–11, 2020. https://doi.org/10.1007/978-3-030-47945-9_1

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1 Introduction As stated in the summary of the Conference of the Assembly of European Regions «Skills and Competences in an AI era», «…as AI rapidly progresses in its ability to perform physical and analytical tasks, the skills that were once vital to obtaining a secure, well paying job, will diminish in importance. Given the restructuring of the workforce which is already underway, it is worth considering the skills and competences that will be most valuable going forwards» [https://aer.eu/ai-skillscompetences/]. Today, artificial intelligence systems are already able to support the efforts of human intelligence in terms of skills: to receive and process information in large volumes (the so-called big data); to recognize and analyze visual images with their subsequent matching and finding correspondences between them (systems “search ! compare ! find matches”); to recognize the linguistic signs of different linguistic cultures and find correspondence between them (machine or automatic translation systems); to recognize and imitate speech signs (recognition and imitation systems of human speech). In addition, artificial intelligence systems are quite able to: a) perform actions on planning, strategic choice of decisions and tactical calculation of moves and their combinations in computer strategy games; b) analyze the state of the environment and predict all its possible changes (probabilistic weather forecasts); c) manage financial flows, i.e. calculate income and expenses, predict dynamic changes in financial exchanges and markets; d) to control the energy consumption and emission of harmful substances in transport; e) in the framework of the digital economy, manage a virtual enterprise or network organization, conduct an Internet business and manage the concept of “Internet of things”; f) provide technical support for the work of call centers and telephone services; g) participate in medical events (tests, procedures, patient care); h) replace a person in hazardous industries. So what’s next? How to teach artificial systems to perform creative tasks on a par with humans? What steps are required to train these systems to INDEPENDENTLY plan activities and make decisions that are not harmful to Homo sapiens? This task today boils down to supplying artificial intelligence with such a motivation system that controls behavior, and this means giving the machine cognitive functions of a person, resulting in the development of semiolinguistic and communicative competencies inside the machine. The goals of this paper now proposed to the scientific community, make up an attempt, firstly, to identify and typologize those primary competencies of artificial intelligence, without which further work is impossible to develop humanlike creative abilities that allow him to behave motivated, i.e. to reproduce the processes of human social activity. We are talking about competencies that allow artificial intelligence to cognitively master the surrounding reality, form judgments and opinions about it, accumulate knowledge and use them for constructive purposes, without causing harm to humans. Secondly, taking into account the fact that today technologies with the use of artificial intelligence are being rapidly introduced into our lives, and the competencies of a world society that is not very much inclined to accept the “invasion of

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smart machines”, are just as rapidly changing, the authors of the paper will try to structure the system of semiolinguistic and communicative competences of a person, which is able to consistently and successfully interact with artificial intelligence.

2 Methodology The research methodology is based on the following kinds and types of analysis timetested in linguistics: 1) the general scientific method of introspection and retrospection, which allows to explore the object from the point of view of its dynamic development and growth; 2) semiolinguistic analysis, which makes it possible to study sign formation in the corresponding subject area and to study the features of clustering of emerging signs (Astafurova and Olyanich 2008); 3) a conceptual analysis revealing the subject, figurative and value characteristics of the studied concept-sphere; 4) discursive analysis used to identify constitutive signs of immersion of the studied object in the communication environment.

3 Results The very problem of the artificial intelligence semiosis, aimed at cognitive development of reality, begins with the question of attitude to how the shell in which it is enclosed should look. Should it look humanoid or not? The work of many scientists is devoted to the problem of “cyberbodies,” see, for example, a volumetric study edited by Winfred Noth (2006) “Semiotic Bodies, Aestetic Embodiments, and Cyberbodies”, the authors of which study the significance of the semiotic competence of sensing the body shell with artificial intelligence as a humanlike shell with different points of view – semiotics proper, cognitive representations and representations of an aesthetic order. In addition, semiotic (cyber-somatic) competencies as sensations by the artificial intelligence of their own shell are discussed by scientists at the University of Jaume I, Castellon (Spain) Beatriz Leon (Anton Berariz), Antonio Morales and Joaquín SanchoBru) in their joint monograph “From Robot to Human Grasping Simulation” (León et al. 2014). Dennis Allerkamp, in his monograph “Tactile Perception of Textiles in a VirtualReality System”, discusses the recognition and use of virtually transformed tactile sensations by artificial intelligence (Allerkamp 2010). Mario Guadalupe Sanchez-Escribano from the University of Politécnica de Madrid (Spain) from all possible points of view considers the problem of developing the activity of emotions signs semiotic cluster in artificial intelligent systems; the problem is discussed in his monograph “Engineering Computational Emotion – A Reference Model for Emotion in Artificial Systems” (Guadalupe Sánchez-Escribano 2018). The importance of using semiotic research to build the foundations of artificial intelligence is highlighted by researchers whose work is collected in the monograph

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“Semiotics and intelligent systems development” (2007). As its editors Ricardo Goodwin and Hoao Cueiros note in the introduction to the publication, “The interdisciplinary method of semiotics offers a new analysis and methodology for the study of intelligent control and intelligent systems; an approach is based on explicit consideration of the concept of a sign” (Semiotics and intelligent systems development 2007, p. 11). Researchers from the Adygea State University point out the importance of developing and instilling semiotic competencies in the behavior of systems with artificial intelligence, applied in various branches of knowledge, science, technology and production: using the example of the development of a semiotic system of a multitask digital economy, they study the possibilities of using various sign clusters and offer automated models discursive behavior, bringing together behavioral patterns of a person and a learning machine (Olyanitch et al. 2020) . Independent researcher Valerio Targon proposed a computer algorithm that allows you to create semiotic artificial intelligence with semiolinguistic competencies for recognizing the semantics of linguistic signs, their stylistic quality (for example, signs of a metaphor or interpretation), syntagmatic structure of sentences and utterances using “countable primitives”, those minimal machine recognizable sign clusters. The researcher puts it like this: “I propose creating a “semiotic artificial intelligence” that uses internal functions and structures machines as a substrate for meta-reasoning and teaching semantics. The machine can be used in various fields. She is able to enter mathematical sentences and understand that the symbols “+”, “1”, “=” in the sequence corresponding to simultaneous movement to the network images that she has created. Automation is also characterized by “computational primitives”, including conditional, applied, continuum, as well as their formation in sequence. Semiotic artificial intelligence can rely on these “computational primitives” not only to understand the semantics of arithmetic and other abstract sciences, but also when trying to form a meaning, starting with text input. The extracted meaning may be in this case simply an interpretation, a metaphor, a reflection of words in “computational primitives”. Ultimately, such comparisons would be successful if they allowed for full interaction in an automated conversation, as well as to expand the mechanism of such automated reflection with the help of syntactic rules of the language when speaking about oneself”] (Targon 2018, p. 563). Discussing the competencies necessary for artificial intelligence systems (for example, robots), Japanese researchers Tadahiro Taniguchia, Takayuki Nagai, Tomoaki Nakamura, Naoto Iwahashi, Tetsuo Ogata and Hideki Aso insist on creating a whole symbolic system for adapting artificial intelligence to the human world: “In order to develop a robot that naturally communicates and collaborates with people in the long term, we must create a robotic system that will behave as an adaptive element of the system of emerging characters. To become an element of the system of emerging characters, a robot must be able to form an internal system of representations, master the language system that people use, modulate its pragmatics, communicate with people in various contexts and autonomously collaborate with people in a natural environment” (Taniguchia et al. 2015, p. 13). According to scientists, robots, like humans, should receive the necessary competencies, the main of which are semiotic and communicative competencies, in natural,

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unobservable conditions, when everything should happen as it does in children when they naturally enter the world. Here is their opinion on this matter: “People can master the language through physical interaction with the environment and semiotic communication with other people. This phenomenon is understood as an assimilation process in which a system of personal symbols supported by an internal system of representations becomes associated with a system of emerging symbols. To achieve this assimilation, a person must be able to learn a language without supervision. For robots, this should be the same. To ensure long-term interaction with people, the robot must be able to learn the language without supervision, so that the robot’s symbol system begins to connect with the emerging symbol system that human society possesses. Therefore, it is extremely important to present in the form of computer calculations how people are able to learn a system of symbols and gain semiotic skills through their own autonomous mental development” (Tanigushi et al. 2015, p. 27). The problem of teaching cognitive development of reality to AI comes down to the actualization of a number of functions, such as clustering signs (distinguishing, systematizing, and typologizing semiotic elements of reality); conceptualization of reality (separation of concepts, integration of concepts into the concept-sphere); categorization of being in general; discursive actualization of cognitively mastered reality. It seems in this connection that two global tasks are facing the modern world society, the content of which has been discussed in a significant number of scientific papers (Asimov 1981; Baker and Hewitt 1977; Grebowicz and Merrick 2013; Kakoudaki 2014; La Grandeur 2013; León et al. 2014; Sims 2013). The first task is to endow artificial intelligence systems with semiolinguistic competencies, which include: a) cognitive-typological (recognition and typologization of arrays of linguistic and non-linguistic signs in various thematic areas); b) conceptualdistinctional (the ability to distinguish primary and secondary conceptual systems (concept-spheres) supported by particular clusters of linguistic and non-linguistic signs to determine their primary/secondary usefulness for humans (see, for example, Finn et al. 2019); c) search and determination (the ability to find/determine failures or gaps in the logical chains of necessity/sufficiency of semiolinguistic data to solve a particular problem); d) search-pericular (the ability to identify danger signs when performing a particular task, which are determined by the set of rules for artificial intelligence regarding safety for Homo sapiens1, and signal to a man until he draws attention to danger; otherwise case – to eliminate the danger facing a person); e) semio-creative (the ability to creatively arrange clusters of signs in such combinations that make it possible to actualize creative decisions both from the point of view of manufacturability and from the point of view of ethics/aesthetics, taking into account possible (mandatory?) positive assessments by human (!) consciousness).

1

Compare the Isaac Asimov’s laws for robots: “a robot cannot harm humanity or, through its inaction, allow humanity to be harmed; a robot cannot harm a person or, through inaction, allow a person to be harmed; the robot must obey all orders given by a person, except in cases where these orders are contrary to the First Law; the robot must take care of its safety to the extent that it does not contradict the First or Second Laws” [https://robo-hunter.com/news/kulturnii-kod-azimova-kak-tri-zakonarobototehniki-voshli-v-istoriy8887].

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The second task is to teach artificial intelligence systems to human-like flexible communicating, i.e. to provide them with communicative competencies (see, for example, Bocharnikova 2009, p. 132), typical of a Man, namely: a) linguistic, which includes 1) knowledge of the meaning-distinguishing function of sounds; 2) the volume and semantic accuracy of the thesaurus; 3) cognitive organization of tokens into an associative network with recognition of the lexical unit necessary for communication; 4) availability, i.e. knowledge of the place of the token in the memory of the artificial intelligence system; 5) knowledge of the appropriateness of use in a communicative situation – application register, synonymous differences in application, etc.; b) sociolinguistic, reflecting sociocultural norms of communication typical to a person performing as a representative of some ethnic culture; c) pragmatic, involving ownership of interaction schemes (discursive tactics and strategies, cohesion, coherence of syntactic patterns, recognition of types and norms of texts, stylistic phenomena, such as irony, parody, puns). We will demonstrate how the technology works, which assumes the presence of semiolinguistic competencies in artificial intelligence systems using the technology proposed by IBM regarding the selection of candidates for workplaces (Workplace recruitment). As a company consultant, University of London scientist Nigel Guenole and IBM workers Chris Lamb and Sheri Feinzig noted in their article, the semiotics of hiring in companies that use artificial intelligence have changed significantly: the context for recruiting has changed. With comprehensive and easy-to-access labor market information available to applicants through job websites, the number of candidates applying for jobs is often in hundreds, and for many of the most interesting jobs, in thousands. With such a volume of applications for a particular workplace, it is almost impossible to objectively assess the knowledge, skills, abilities and other advantages of all candidates for a given place, not to mention a reasonable time frame. This is a task that just begs for automation! The devil, however, is in the details, and automation can be complicated (Guenole et al. 2018). As the practice of the company showed, the algorithm, including such semiotic competencies, turned out to be quite simple, and the machine coped with them without human intervention. She managed to isolate signs-resourcives as identifying a list of jobs, to identify the corresponding signs-requisitives as job signs (identifying a list of corresponding job requirements), to establish signs-qualitatives as the appropriate qualities of applicants for vacant jobs (identifying worker attributes that indicate candidates are qualified) and make a list for the final selection of candidates in the form of rank signs, ranking candidates based on ranking (ranking candidates based on selection tools, for a final human decision). As for instilling in the machine communicative competence in all its forms, there are enormous prospects here that gradually humanize the communication of man and machine. A good example here is the example of Alice’s Yandex voice search assistant. Here is a statement from one of the creators of this popular network robot: “The assistant should not only understand natural language, but also be able to speak it – as a person, not as a robot. For Alice, we synthesize a voice originally owned by dubbing actress Tatyana Shitova (Scarlett Johansson’s “official voice” in Russia).

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And we are talking about a fairly deep synthesis using neural networks, and not about cutting ready-made phrases – it is impossible to write down all their diversity in advance. Live communication has one property – we do not always require a specific answer or action from the interlocutor, sometimes we just want to talk. If the application sends such requests in search, then all the magic will be destroyed. That is why popular voice assistants use a database of editorial answers to popular phrases and questions. We taught the car how to answer our questions, engage in dialogue in the context of certain scenarios and solve user problems. This is good, but can it be made less soulless and endowed with human properties: give her a name, teach her to talk about herself, and maintain a conversation on free topics? In the voice assistant industry, this is accomplished with editorial responses. A special team of authors takes hundreds of the most popular questions from users and writes several answers to each one. For Alice, we also write the answers - but we have something else. In addition to the top of popular questions, there is a long tail of low-frequency or even unique phrases for which it is impossible to prepare an answer in advance. How do we solve this problem? Using a neural network model; Alisa uses a neural network trained on a huge database of texts from the Internet, books and films to answer unknown questions and remarks to her. Alice learns from a wide variety of texts in which people and characters are far from always being polite” (Alice www).

4 Conclusion In conclusion, we should note that the formation of the considered competencies in artificial intelligence does not remove the important global problem of ensuring human safety while activating the machine mind. Experts in the field of AI are already working on this problem (see: Olyanitch et al. 2016). While there are still no specific technologies and technological solutions, the scientific world is still discussing the principles within which the technologies for controlling AI will be created. It seems that in search of an answer to the question of restricting the freedoms of artificial intelligence, one should turn to the experience of nature: after all, we often use technological solutions prompted by nature, so why not look wider and pay attention to structural solutions? The following actions performed by Homo sapiens can serve as an example of artificial intellect ability restrictions. 1. Binding a program to a medium, i.e. a program tied to a specific device can only use the resources of that device and cannot start on another, more powerful or more suitable device; the AI that controls the refrigerator will not be able to get into the control complex of a nuclear reactor and have a good night’s smoke, even if he hates the owner and all of humanity. Maximum what it is able to – to spoil the products kept in the fridge. 2. Starvation, dependence, pain and responsibility for AI: to a certain extent, a person has a symbiotic connection with the world around him, and critical violations in this world lead to human suffering; if these principles are applied to AI, they can mean low energy autonomy of AI carriers, low resource of certain modules, for example, RAM modules, the need for commands to confirm the extension of operation.

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3. Protection of media programs or its elements from self-reprogramming: an intelligent program should not have access to media programming, it is desirable that the gap is at the hardware level; certain AI operation constants are written in ROM, which cannot be edited programmatically from the inside, but can only be physically outside. 4. Limitation of protocols and communication channels: the popular idea of connecting AI to the Internet is a big danger, because there you can collect a lot of information. In addition, it is through the Internet that AI can gain control over other computers and equipment, create its own backups or other AI. 5. The impossibility of building networks: if we assume that an AI conspiracy can lead to a global catastrophe, then conditions must be created under which their combined work will be difficult.

References Alice (how Yandex teaches artificial intelligence to talk with people). Yandex company blog. https://habr.com/ru/company/yandex/ Astafurova, T.N., Olyanich, A.V.: Semiolinguistics of power: sign, word, text: monograph. IPK FGOU VPO VGSHA “Niva”, Volgograd (2008). 256 p. Bocharnikova, M.A.: The concept of “communicative competence” and its formation in the scientific community. Mon. Sci. J. 130–132 (2009). Young scientist, No. 8, Chita Olyanitch, A.V., Rylshchikova, L.M., Khudyakov, K.V.: Linguosemiotic creativity of science fiction discourse: monograph. Volgograd GAU, Volgograd (2016). 246 p. Finn, V.K., Gutner, G.B., Usmanova, A.R.: Semiotics. In: Humanitarian Encyclopedia: Concepts. Center for Humanitarian Technologies (2002–2019). https://gtmarket.ru/concepts/ 6925. Accessed 28 Nov 2019 Allerkamp, D.: Tactile Perception of Textiles in a Virtual-Reality System. Springer, Heidelberg (2010). 122 p. Asimov, I.: Asimov on Science-Fiction. Doubleday, Garden City (1981). 334 p. Baker, H., Hewitt, C.: The incremental garbage collection of processes. In: Proceedings of the Symposium on Artificial Intelligence Programming Languages, August 1977. ACM Sigplan Notices, vol. 12, no. 8, pp. 55–59 Erton, I.: The essence of semiotics as a mediator of communication and cognition. Int. Online J. Educ. Teach. (IOJET) 5(2), 267–277 (2018) Grebowicz, M., Merrick, H.: Beyond the Cyborg: Adventures with Donna Haraway. Columbia UP, New York (2013) Guadalupe Sánchez-Escribano, M.: Engineering Computational Emotion – A Reference Model for Emotion in Artificial Systems. Springer, Switzerland (2018). 250 p. Guenole, N., Lamb, C., Feinzig, S.: Competencies in the AI era. IBM Talent Management Solutions. – LOW14353-USEN-01 (2018) Kakoudaki, D.: Anatomy of a Robot: Literature, Cinema, and the Cultural Work of Artificial People. Rutgers UP, New Brunswick (2014) La Grandeur, K.: Androids and Intelligent Networks in Early Modern Literature and Culture. Routledge Studies in Renaissance Literature and Culture. Routledge, New York (2013) León, B., Morales, A., Sancho-Bru, J.: From Robot to Human Grasping Simulation. Springer, Switzerland (2014). 270 p.

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Noth, W. (ed.): Semiotic Bodies, Aestetic Embodiments, and Cyberbodies. Kassel University Press (2006). 240 p. Olyanitch, A.V., Khachmafova, Z.R., Makerova, S.R., Akhidzhakova, M.P., Ostrovskaya, T.A.: Multiple digital economy: semiotics and discursive practices. In: Popkova, E.G., Sergi, B.S. (eds.) Digital Economy: Complexity and Variety vs. Rationality. Lecture Notes in Networks and Systems, pp. 442–449. Springer, Switzerland (2020) Gudwin, R., Queiroz, J. (eds.): Semiotics and intelligent systems development. Idea Group Publishing, United States of America (2007). 369 p. Sims, C.A.: Tech Anxiety: Artificial Intelligence and Ontological Awakening in Four Science Fiction Novels. McFarland, Jefferson (2013) Taniguchia, T., Nagai, T., Nakamura, T., Iwahashi, N., Ogata, T., Aso, H.: Symbol emergence in robotics: a survey. In: Advanced Robotics, pp. 1–27 , 1 October 2015 Targon, V.: Toward semiotic artificial intelligence. Procedia Comput. Sci. 145, 555–563 (2018)

Cybernetic Approach to the Modern Knowledge Economy Gilyan V. Fedotova1,2(&), Veronika S. Epinina3, Tamara V. Stepanova4, Evgeny N. Bardulin4, and Ramzan V. Gipaev5 1

4

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 Volgograd State University, Volgograd, Russian Federation [email protected] Saint-Petersburg University of State Fire Service of Emercom of Russia, St. Petersburg, Russian Federation [email protected], [email protected] 5 Chechen State University, Grozny, Russian Federation [email protected]

Abstract. Purpose/Objectives: The purpose of the article proposed is to reevaluate the structure of the economy being transformed in the context of the technological growth and complexity influenced by information processes. New knowledge and ideas accumulated and implemented into production processes have determined the main social trends. The cybernetic approach necessitates the ongoing changes in the structure of a new emerging knowledge economy to be assessed and purposes and development principles of the economy to be justified. Current metrics for the dynamics and rates of the new economic structure do not fully reflect structural changes, which requires search for new tools to manage knowledge intensification in future. This purpose determined the following tasks to be solved: to assess main approaches to studying the knowledge economy, analyze the budget support for science in Russia, substantiate the concept of knowledge economy in the context of digital transformation of the world community, compare the main metrics of knowledge economy assessment, and analyze structure of human capital indices and structure of components and principles of knowledge economy. Methodology: In this work, methods of regulatory analysis and assessment of management of innovation and science development and implementation of intellectual activity results into business have been applied. The ongoing changes were considered from the perspective of the cybernetic approach, that is, with respect to dynamic development of the economic system and active use of electronic interaction tools. To assess the development trends of the economy and new knowledge-based economy, a content analysis of the industry has been conducted. Digital data were obtained from open sources on the Internet, processed by methods of financial, graphical and trend analysis, formalized and systematized.

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 12–21, 2020. https://doi.org/10.1007/978-3-030-47945-9_2

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Results: In the light of the fourth industrial revolution, traditional systems of interaction and organization of production processes have lost their former relevance and become uncompetitive. Enterprises of various industries need to follow modern trends and modernize all interaction processes and mechanisms, to enhance their competitiveness in the domestic (Russian) and world markets. In our case, the interaction occurs due to electronic administration and management tools developed in the context of the information paradigm. To maintain the system of that kind working, knowledge must be constantly updated and introduced into the economic process, so knowledge becomes the main factor in economic growth. Conclusions/Significance: The peculiarity of this work is to comprehend the importance of the ongoing changes in the structure of the economic system and justify the need to search for new ideas and solutions to ensure competitiveness in the world market of goods and services. The new economic paradigm is focused on knowledge as main production resource, which is confirmed by the ongoing transformations of information in all sectors of the national economy. Keywords: Cybernetics
Knowledge economy
Information society Digitization
Human capital index
Innovations JEL Code: G28





O15
O33

1 Introduction The cybernetic approach to the study of systemic aggregates is a certain point of view that considers an assembly of elements as an independent system or part of a large system in various cases. Presented elements form diverse relationships that are always in dynamics. Elements of a system of that kind are also unstable under the influence of external environment; its influence requires consideration. The modern economic system is based on knowledge generated or accumulated in society. The more complex the accumulated knowledge is, the higher the level of economic development and quality of living of the population is. In such a system, knowledge acquires features of a full-fledged economic resource that allows not only producing economic goods and values, but also changing society. The knowledge economy is interpreted ambiguously by domestic and foreign economists. Moreover, there are several approaches to the definition of this concept, i.e. aggregative approach that identifies the knowledge economy as ICT and information disseminating sectors; integration approach that considers development of economy and its active interning with the world economy; globalization approach that sees globalization and integration of national economies as a basis for the new knowledge economy; network approach establishes the knowledge economy on the Internet and electronic market; informational approach believes that the knowledge economy is based on information generated by human capital; sectoral approach considers ICT implementation as a criterion for a set of industries that make the knowledge economy; innovative approach supposes the knowledge economy to be based on a new techno-economic paradigm; and integrated approach regards not only

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ICT, but also technologies of related industries—biotechnologies, nanotechnologies, ecotechnologies, etc.—as the basis of the knowledge economy. The cybernetic approach we consider in this study is based on a regulatory influence on the knowledge economy, which contributes to generation of a system of rules for this field of science. In various research studies, the knowledge economy correlates with the innovation and intellectual sphere, as new knowledge flows through these related areas. The establishing of the knowledge economy is seen in the volume of financing science and innovations in the country. Therefore, to assess support for establishing and developing the knowledge economy, one can consider the amount of financial investment in the scientific field, since it is here that new knowledge is generated (Fig. 1).

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Fig. 1. Volumes of budget financing of science, million RUB.

The dynamics of investment in science demonstrates a steady increase in budget expenditures. For the period from 2008 to 2018, the growth of budget allocations for science increased by 245,293.1 million RUB, that is, by 60%. In addition to this criterion, there are indices developed and used by the world community to assess the level of technological development of national economies. These are various ratings, indicators and indices of the knowledge economy development that open up facilities and advantages of a national economy in the context of developing information society.

2 Materials and Methods To study the modern knowledge economy, it is necessary to assess the level of technological development of society and the scope of integration knowledge into public life and economic process. Information flows include new knowledge and substantially change the structure of production and ideas about production resources. New knowledge is becoming a tool for managing the structure of the economy and social life.

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The emerging innovative trend in the development of the economic system makes knowledge a priority, which was emphasized by the economists (Machlup 1962; Makarov 2003; Avdokushin 2004; Zencov and Komarov 2015, and Burdenko 2017). The influence of the knowledge economy on the social advancement and other sectors of the national economy in different periods of the state’s history in terms of target indicators was assessed in the works by Evans (2006), Kudryshova and Zvyagintseva (2008), Popov et al. (2016), Burdenko and Mudrova (2018), Plotnikov et al. (2020), and Chugumbaev et al. (2020). Issues on the transformation of the modern economic system into a knowledge economy in the light of the transition to the information society turned out to be poorly elaborated in works of foreign and Russian economists. The methodological base of the study includes the methods of system, problem, structure and function analysis, special-purpose programme, and a formalism method.

3 Results The knowledge economy has been forming since the end of the 20th century, qualitatively changes the life of a society and redefines goals of the technological progress. The production growth and complication in manufactured goods is the commercialization—practical implementation of knowledge into business. Knowledge-generated goods and services and knowledge itself make up to 80% of the GNP in developed economic systems. The cost of production systems in the information society can greatly differ from the balance cost, since there is a financial market where the system has its value. The market price of companies may exceed the book price several times, since the financial capitalization of a company is made by the market independently. This price is not officially fixed, it is virtual and may vary depending on the market trend. The knowledge economy and innovative economy are difficult to separate, as these are related concepts and one implies the other. Nevertheless, the knowledge economy is a much broader concept than the innovative economy. We suppose, the knowledge economy is a new approach to the organization of management and production in a state and is based on active use of information and communication technologies. This is a new philosophy of business that actually moves into the online space that develops in the context of total IT penetration. To build such a space, people need new breakthrough knowledge and ideas that can revolutionize traditional economy. Therefore, the knowledge economy should be considered from the perspective of a cybernetic approach and dynamically changing systems. The knowledge economy structure constantly experiences the flow of new knowledge and information, that requires strong links between the elements of the system. The stronger and better these links are, the more effective and efficient the new knowledge will be. New knowledge should be applied in all spheres of society and

16

G. V. Fedotova et al.

sectors of the economy. Based on the innovations and technological solutions implemented, the most innovative countries in the world are ranked. Bloomberg compiled this rating for 2019 (Fig. 2).

Fig. 2. The Top-10 of the world’s most innovative countries in 2019.

According to the global Innovation Index presented by Bloomberg, the USA, European and Asian countries are in the Top-10. Unfortunately, Russia ranked only 27th here. The ranking demonstrates the level of innovative development of a state in seven metrics, i.e. research and development spending, manufacturing capability, concentration of high-tech public companies, tertiary efficiency related to higher education, number of researchers measured against 1 million of the country’s population, and patent activity. The main problem of Russian companies is a low percentage of commercialization of new ideas and knowledge into the economic life of society. In this case, it is necessary to pay attention to the market mechanism of new technology commercialization. In the knowledge economy, the quality of human capital (HC) is important, since that is able to generate new ideas and new knowledge. Many world states, including Russia, deal with the HC quality problems. Countries channel large-scale investments in the development of this resource and educational infrastructure to stimulate the population to study and improve their skills. In fact, the HC defined by the UN is a combination of knowledge, skills, abilities, and other qualities embodied in citizens to ensure well-being. To measure it, various rankings and development metrics of the HC are applied, e.g., World Bank Human Capital Index (Fig. 3).

Cybernetic Approach to the Modern Knowledge Economy

0.88

0.84

0.84

0.8

0.79

0.79

0.78

0.77

0.76

0.76

17

0.73 0.67 0.56 0.41

0.44

Fig. 3. World Bank Human Capital Index in 2018.

According to the World Bank Index, in 2018 Russia ranked 34th. The level of the HC development was 0.73, that is, the person’s labor performance upon reaching the age of majority will be 73%. The structure of this index includes several elements (Fig. 4).

Life expectancy for children born in a given year, who will reach their 5th

birthday

Test results of international and regional assessment of students’ educational achievements

Expected duration of school education

Human capital index

Proportion of children under age 5 years whose height is not lower than the average at this age

Expected proportion of people under 15 who will reach their

60th birthday

Fig. 4. The structure of the human capital index according to the World Bank.

Metrics of the human capital index focus exclusively on the population’s quality of life in a country, level of education, a certain age survival period, while this index does not take into account the quality of knowledge generated, scientific field, and commercialization of knowledge and ideas in the economy. Therefore, this index is difficult to accept as the main criterion for the development of the knowledge economy.

18

G. V. Fedotova et al.

The second metrics group—the human development index and ICT development index—reflect the potential of the national economy to generate new knowledge. We considered its results for 2017 (Fig. 5).

8.39

8.18

8.65

8.24

8.43

7.07 5.6

0.798

Russia

0.916

0.915

0.727

China

USA

Germany

Human development index

0.888

0.907

France

Great Britain

0.891

Japan

ICT Development Index

Fig. 5. Indices of human capital development and ICT development in countries in 2017.

According to the graph, Russia is at an average development level in terms of the indices presented, i.e. it ranked 50th out of 130 countries according to the Human Capital Development Index and 45th according to the ICT Development Index. The third metrics group—innovative indices of the knowledge economy advantages—is associated with generating new ideas. We considered the ranking of innovative economies and the Top 100 Global Innovators (Fig. 6).

25 19 17 11

10

9

6 4

4

2

3

0 Russia

1

0 China

USA

Ranking of Innovave Economies

Germany

France

Great Britain

Japan

Top 100 Global Innovator Companies, units

Fig. 6. Rankings of innovative countries in 2018

Metrics of innovative development indicate the ability of the economy to commercialize the latest achievements of science and technology. Russia ranked 25th in the world for the level of innovative development in 2018, but the Top 100 Global Innovator found no innovator companies in the country in 2018. Japan ranked 1st; the

Cybernetic Approach to the Modern Knowledge Economy

19

United States ranked 2nd. These states are centers of global innovation development. Innovator companies there prove that states create a favorable innovation environment and maximize the support of innovation incentives in society. The fact that Russia was absent in the Top-100 in 2018 indicated certain problems with new knowledge and ideas being commercialized and innovative incentives being implemented, so it is necessary to create innovative infrastructure. An ambiguous ranking of Russia in various researches speaks for a rather high intellectual potential of the country, since the number of patents obtained and certificates of state registration of rights, as well as the share of young researchers among scientists have been growing over a period of several years. But all these advantages do not allow the country to become a leader in the global innovation market due to bureaucratic obstacles and the lack of a market mechanism for the R&D results commercialization. It is impossible to build an efficiently functioning knowledge economy, without these problems to be solved. The knowledge economy has a rather complicated structure that in fact duplicates the Russian structure of the national economy with its production branches of tangibles and intangibles. The peculiarity of the knowledge economy is that information and communication technologies should be applied in all sectors of the economy, and not merely in high-tech industries. There are certain principles for the development of the knowledge economy, i.e. – firstly, the knowledge economy is based on human capital, i.e. the higher the level of education and qualification of the population in the country is, the more new breakthrough knowledge and ideas are generated; – secondly, a friendly working atmosphere based on mutual assistance in a work team; – thirdly, new professions emerged in new social groups and strata; – fourthly, new knowledge and unique information are the main competitive advantages in society; – fifthly, subjects of a market economy, government agencies, and scientific institutions develop networking cooperation; – sixthly, new knowledge and information being disseminated through confidence channels; and – seventhly, the global goal of the knowledge economy is to improve the quality of life of the population due to maximal satisfaction of needs and creating a comfortable living environment. Thus, the knowledge economy has the features of sociality, broad interaction, democratic partnership, and the priority of research and development.

4 Conclusion Our study summarizes the analysis of the development of the new knowledge economy in the context of the information society. The new knowledge economy has been forming in many countries of the world over the past 20 years and accumulates the advanced achievements of science and technology. Increasing complexity of the

20

G. V. Fedotova et al.

production process and manufactured products and wide development of new services received remotely are the manifestations of the knowledge economy. Its main management tool is information and communication technology. Since the beginning of the 2000s, Russia has been implementing ICTs in all spheres of public life, stimulating the development of the innovation sphere, creating an innovative infrastructure, and supporting the scientific sphere at the government level, but the level of science and technology in economic life remains insignificant. The country ranks in the top 30 or 20 countries for the innovative development and human capital development indices, but Russia was not included in the Top-100 innovators. An interesting situation is emerging, i.e. there is substantial intelligent potential and certain results have been obtained, but they remain unclaimed by business community. The main problem of the Russian economy are considerable bureaucratic obstacles to the implementation of innovative incentives, the lack of a developed know-how market and significant investors interested in implementing new knowledge and intellectual results in production. Overcoming these obstacles and creating a favorable innovation and investment environment can solve the problem of commercializing a considerable amount of new knowledge and build a really working new knowledge economy. Acknowledgments. The reported study was funded by RFBR according to the research project No. 18-010-00103 A.

References Avdokushin, E.F.: On the Essence and Features of the “New Economy”. Institute of New Economy, no. 1 (2004) Burdenko, E.V.: Index of global innovators as a characteristic of using the benefits of the knowledge economy. Creat. Econ. (8), 813–824 (2017). https://doi.org/10.18334/ce.11.8. 38236 Burdenko, E.V., Mudrova, S.V.: Formation of indicative indicators of knowledge economy. Plekhanov Sci. Bull. 3(1), 20–25 (2018) Zemtsov, S.P. Komarov, V.M.: The formation of the knowledge economy in the regions of Russia in 1998-2012. Innovations 2(10), 29–38 (2015) Kudryashova, I.A., Zvegintseva, M.Yu.: Development of the service sector in the context of Russia’s transition to the “new economy”. Issues of new economy, no. 1(5) (2008) Makarov, V.L.: Economy of knowledge: lessons for Russia. Bulletin of the Russian Academy of Sciences, no. 5 (2003) Popov, E.V., Vlasov, M.V., Kochetkov, D.M.: The influence of the knowledge economy on the economic development of Russian regions: measurement method and practical application. Economy, no. 44, pp. 106–116. Perm University Herald (2016). https://doi.org/10.17072/ 1994-9960-2016-4-106-116 Shatter, E.F.: New Information Economy and Transformation of Business Strategies: Monograph, Moscow (2006) Machlup, F.: The Production and Distribution of Knowledge in the United States, p. 416. Princeton University Press, Princeton (1962)

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Plotnikov, V., Golovko, M., Fedotova, G.V., Rukinov, M.: Ensuring national economic security through institutional regulation of the shadow economy. In: Popkova, E.G., Sergi, B.S. (ed.) Digital Economy: Complexity and Variety vs. Rationality: Proceedings of the 9th National Scientific and Practical Conference, Vladimir, Russia, 17–18 April 2019. Lecture Notes in Networks and Systems (LNNS), vol. 87, pp. 342–351. Institute of Scientific Communications, Volgograd, Russia, Vladimir State University named after Alexander and Nikolay Stoletovs, Vladimir, Russia. Springer Nature Switzerland AG, Cham, Switzerland (2020). https://doi. org/10.1007/978-3-030-29586-8 Chugumbaev, R.R., Fedotova, G.V., Nesterenko, Yu.N., Chugumbaeva, N.N., Barilenko, V.I.: Strategic control as a tool of effective management of region’s economy. In: Popkova, E.G. (ed.) Growth Poles of the Global Economy: Emergence, Changes and Future Perspectives. Lecture Notes in Networks and Systems (LNNS), vol. 73, pp. 25–36. Springer Nature Switzerland AG, Cham, Switzerland (2020). https://link.springer.com/book/10.1007/978-3030-15160-7

The Comprehensive Development of Small Enterprises in the Russian Federation S. N. Shchemelev(&) and O. I. Abbasova Rostov State University of Economics, Rostov-on-Don, Russia [email protected], [email protected]

Abstract. Purpose. The article is aimed at determining the main factors and conditions of the small business development in the Russian Federation and the formation of an effective policy for the development of small enterprises. Design/Methodology/Approach. The article analyzes the indicators dynamics of small enterprises, the results of their activity. Based on the correlation analysis there have been defined the interrelations of the small enterprises number and their efficiency indicators with the dynamics of Russian macroeconomics. Findings. There have been obtained data to determine the most significant moments in the small business development, accounting for which will effectively regulate the small enterprises development. Practical Implications. The results of this study allow to adjust the programs for the small businesses support in order to increase their effectiveness and implement a set of measures for the small businesses development. Originality/Value. The real influence of the postulates about the importance of the credit resources availability and the national economy on the development of small business is determined. Keywords: Entrepreneurship
Enterprise
Small business
Correlation and regression analysis
Determination index
System
Economic policy JEL Code: M21

1 Introduction Numerous publications of domestic and foreign economists and speeches of government officials at various levels pay a great attention to the development of small enterprises. The task is to increase the number of employees at such enterprises to twenty-five million people by 2024. At the same time, the number of small enterprises varies slightly over the last decade, despite the measures taken by government agencies to stimulate the development of small business, and currently there is a decrease in both the number of small enterprises and the share of their products in the GDP of the Russian Federation. This situation calls for a deep systematic study of the theory and practice of entrepreneurship in our country and the formation of an effective policy to stimulate the development of small businesses.

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 22–29, 2020. https://doi.org/10.1007/978-3-030-47945-9_3

The Comprehensive Development of Small Enterprises

23

2 The Position and Problems of the Small Business System Development Entrepreneurship is often defined as an activity aimed at systematic profit from the use of property, sale of goods, performance of works or provision of services, which is carried out independently at its own risk by a person registered in accordance with the procedure established by law as an individual entrepreneur. According to this definition from the Resolution of Plenum of the Supreme Court of the Russian Federation from 24.10.2006 No. 18 (edition of 09.02.2012) entrepreneurship refers to the activities of only individual entrepreneurs, that is to one of the organizational and legal forms of the small enterprise. This interpretation of entrepreneurship by the Plenum of the Supreme court is conditioned by the decision of a specific issue and cannot be an exhaustive definition of the phenomenon under consideration. If we turn to the works of representatives of the Austrian school of Economics, Friedrich August von Hayek (2011), they considered entrepreneurship as a creative activity that makes it possible to use the means of labor and labor force in the creative direction of the production of products and services necessary to society and profit from their implementation. A similar point of view is found in the domestic economic literature (Kozyrev 2015). Entrepreneurship is defined as a type of economic activity aimed at making a profit from the production of goods and services. At the same time, it is noted that entrepreneurship is implemented in various forms, both by individuals and legal entities. Since various organizational and legal forms of enterprises assume excellent indicators characterizing the financial results of their activity, the target orientation of entrepreneurial activity is advisable to determine as obtaining benefit, which can act in the form of profit, income or personal benefit in various forms of its manifestation. The organizational and legal forms of entrepreneurial activity can be individual, with different tax regimes, and collective, also with their own peculiarities of determining the taxable bases and financial results of work. One business idea can be embodied in various organizational and legal forms and their combinations, it can pass, in process of development of the enterprise, from one form to another. At the same time, entrepreneurship can combine different forms of ownership in different partnerships. The choice of the entrepreneurship sphere is inseparable from the business idea and it is in dialectical unity with the organizational and legal form of its implementation. Projects of realization of business activity differ in capital intensity, used subjects and means of labor, the quantity and quality of the labor force. Some business plans are implemented in small forms, others in medium and large ones.

24

S. N. Shchemelev and O. I. Abbasova

In the real economy there are transitions from small forms of business organization to medium and large ones. There are also reverse processes, when on the basis of an unsuccessful large enterprise there are several small ones. The dynamics of the development and transformation of enterprises embodying different business ideas and operating in different areas differ, but at the same time at certain stages of their formation and development, they have common features, uniform laws of functioning and can be considered as certain generalities isolated from the economic environment surrounding them. The very distribution of enterprises into groups, depending on the scale of activity, is somewhat conditional, especially when determining the transition boundaries. The criteria vary from country to country. Moreover, the number of employees at the enterprise is used as a criterion for attributing the enterprise to a particular form of business. The very distribution of enterprises into groups, depending on the scale of activity, is somewhat conditional, especially when determining the transition boundaries. The criteria vary from country to country. Moreover, the number of employees at the enterprise is used as a criterion for attributing the enterprise to a particular form of business. In the United States, statistics refer to small business enterprises with the number of employees no more than 500 people, to the average business enterprises from 500 to 1000 people. In the Russian Federation, enterprises with up to 100 employees (excluding the industry differentiation) are considered to be small, and up to 250 are considered to be medium enterprises. In addition, there are additional restrictions on groups by volume of sold products and others. There are also differences in the systems of national accounts. In Russia, products produced in households are not included in the implementation of small businesses, although they produce, for example, about 40% of vegetables and fruits. In small business, the unobserved economy is much more widespread than in other forms of business, and the methods of accounting for it also have differences in deferent countries. These circumstances make it difficult to study cross-country comparison of small business development processes and raise the question of the economic substantiation of borders, attribution of enterprises to one or another form of entrepreneurial activity. The minimum size of the enterprise is determined by the minimum necessary combination of means of production and labor, allowing to sell products or services in accordance with the entrepreneurial idea underlying its creation. It is obvious that the implementation of some business plans initially involves a significant scale of production and such enterprises, in the conventional sense, can not be attributed to small enterprises (for example, the production of electric vehicles, quadrocopters for the delivery of goods in the city, etc.). On the other hand, a shoe repair shop can grow into a shoe factory and then again there arises a question about the boundaries of the enterprise’s classification as a small business. Why, in fact, it is necessary to determine which group the enterprise belongs to? The division of enterprises into medium and large businesses is largely connected with the issues of the monopoly regulation of markets, the implementation of national projects to ensure the country’s leading position in the production of certain goods, etc. There is

The Comprehensive Development of Small Enterprises

25

no fundamental difference between medium and large enterprises. The differences are in the qualitative and quantitative characteristics of the business, the technologies used in them, transport batches of shipped goods or volumes of purchased raw materials, the specialization of structural units, the availability and price of loans, etc. All these differences are in the nature of business transformations when changing its scale, but do not have fundamental qualitative differences. That is why in a number of countries, national statistics do not separate medium and large businesses. At the same time, the development of small business, its impact on the economy of the country is paid attention everywhere. First of all, small business develops where there are objective conditions to meet specific social needs with small volumes of production. The needs of the market determine the scope of activity when it is impractical to create a larger production. Startups, which by Schumpeter’s definition carry risks, destructive creations often begin as small businesses are also of great importance for the economy. The economic efficiency of small business is usually low compared to medium and large, and the positive impact on the economy is determined by the satisfaction of demand for small volumes of products and services. Accordingly, small business should be implemented in such organizational and legal forms and have such systems of accounting, reporting and, most importantly, taxation, which would minimize nonproduction costs and stimulate its development to meet the public needs for its products and services. Not considering the issues of small businesses taxation, we note that they should provide participants of this business with personal income at a level not lower than the minimum real wage in the chosen sphere of activity. Thus, the scale of small business is determined by: existing and changing over time demand for a relatively small amount of their products and services; – the market of means of production providing activity of the small enterprises; – the development of information and logistics systems of the region; – the adequacy of organizational and legal forms of small business, reporting and taxation of its performance. Small businesses have industry specifics, they are influenced by the peculiarities of the region and a number of other factors. At the same time, small enterprises have common features that allow to identify them in the surrounding socio-economic environment. The common regulatory conditions for the activity of small businesses, target orientation, similarity of the processes of creation and functioning allow to make the assumption about small businesses within a certain system. As already noted, small businesses have a single goal as the final desired result (if we abstract from small venture enterprises). The essence of interaction with the external environment, the conditions of competition, also have a common character, taking into account the industry specifics. It means it is possible to assume the functionality as one of the most important properties of the system. At the same time, small businesses form a certain set, have a certain territorial distribution and demonstrate, sometimes implicit, links

26

S. N. Shchemelev and O. I. Abbasova

between themselves and the surrounding socio-economic environment (sources of raw materials, localized markets for products, similar technological processes, forms of interaction with state bodies, etc.). All this forms the structure of the small enterprises system. Over the last two decades of the complex development of the Russian Federation, there was the genesis of small business, its transformational changes both in the number of small enterprises and their industry affiliation (Table 1). Table 1. The small business development dynamics (Rosstat 2019) 2009 All in the economy: including Wholesale and retail trade; repair of motor vehicles and motorcycles Manufacturing activity Real estate activity Construction

2010

2011

2012

2013

2014

2015

2016

2017

67434,7 81196,1 99978,4 15116,3 15679,9 129195,0 141547,2 149334,2 27586,4

28181,0 33359,8 41221,6 8838,4

8898,5

51923,4

56362,4

56581,1

15693,2

14423,3 18761,4 23940,0 1614,1

1700,7

32019,6

34687,2

36716,8

2822,5

3654,4

4214,4

4959,0

1367,1

1548,0

7246,0

8687,5

10317,9

1161,3

3238,2

3652,1

4225,5

1768,4

1804,5

4929,0

4723,5

6216,0

3337,1

This table shows the development of small business, its change under the influence of external and internal factors, which is a condition and property of socio-economic systems. In retrospect, small businesses have persisted, going through certain changes under the influence of the environment, and their totality has maintained a dynamic equilibrium. In other words, the aggregate of small enterprises has a systemic property of homeostasis. If the above provisions are correct, and the set of small business subjects is a system, it is possible in relation to it to develop policy that have a common conceptual approaches that help to improve the quality of regulatory activity in order to enhance its socio-economic efficiency.

3 Research and the Resulting Component of Systemic Relations in Small Business in Russia To confirm this position, we will conduct a number of studies. Consider the relationship between the number of small businesses (y1) and the dynamics of the GDP (x1) as an indicator of changes in the general economic situation in the country, amount to small and medium enterprises loans (x2) - increased financial support of small business and the average rate on loans (X3), describing the availability of funds to small businesses. The totality of the presented indicators is reflected in Table 2.

The Comprehensive Development of Small Enterprises

27

Table 2. Indicators of the economic environment of small enterprises and their number (Rosstat 2019; CBR 2019). The number of small enterprises (without micro enterprises) by forms of economic activities In total, (thousand) Manufacturing activity In total, (thousand) The volume of loans to small and medium-sized businesses, in total (million rubles) Dynamics of Russia’s GDP (billion rubles) Rates of credit institutions of Russia on loans to non-financial organizations (%.) The turnover of small enterprises (excluding microenterprises) by type of economic activity (billion rubles) The turnover of manufacturing industries (billion rubles.)

2009

2010

2011

2012

2013

2014

2015

2016

2017

227,8

219,7

242,7

243,1

234,5

235,6

242,7

172,9

256,7

36,5

35,3

34,9

35,4

34,0

33,6

33,9

26,3

33,2

2516533 3873702 5149819 6023812 6933243 6568483

4540710

4560099

5304913

38807

46309

59698

66927

71017

77945

80804

83898

88177

13,6

9,2

9,6

10,3

10,2

12,50

16,50

14,29

11,87

67434,7

81196,1

99978,4

15116,3

15679,9

129195,0 141547,3 149334,2 27586,4

14423,3

18761,4

23940,0

1614,1

1700,7

32019,6

34687,2

36716,8

2822,5

The correlation and regression analysis carried out using the specialized program VIEW showed a practical lack of connection (R-squared 0.000448) between the number of small enterprises and changes in the GDP, a weak dependence of the number of small enterprises on the rate of loans provided to them (R-squared 0.054280) and practically the same relationship between the number of small enterprises and the volume of loans provided to them (R-squared 0.082555). The latter fact contradicts empirical observations and statistics of social surveys of small businesses, linking the future of their businesses with the availability and price of loans. Apparently, the results are due to the lack of differentiation between loans to small and medium-sized businesses, and a comparison of their total value with the number of small businesses. In addition, the data on the number of small enterprises in domestic statistics are formed on the basis of sample surveys, which a little distorts the information on their actual number. A number of households, being essentially a form of small business, are not accounted for by statistics.

28

S. N. Shchemelev and O. I. Abbasova

In this study, determination indices were calculated with a temporary annual lag between the number of small enterprises and the above indicators, but the obtained Rsquared values were even less significant. These data confirm the thesis about the mobility of small businesses sensitive to changes in the economic environment. Next, the dependence of the number of small manufacturing enterprises (Y2) on the GDP, the volume of the SME loans and their value was analyzed. The results showed a weak relationship (R-squared 0.386547) between the number of small manufacturing enterprises and the GDP, insignificant (R-squared 0.148638 and 0.011705) between them and the loan rate and lending volumes, respectively. Further, the correlation and regression analysis was carried out between the considered indicators characterizing the economic environment of small enterprises and their total turnover, as a kind of resultant activity reflected in official statistics. As a result, there was revealed a weak link between the rates on loans to small and medium-sized enterprises and their turnover (R-squared 0.333791) and practically a lack of connection between the dynamics of the GDP and the turnover of small enterprises (R-squared 0.032320), loans and the turnover of small enterprises (R-squared 0.058623). When the turnover of the entire population of small enterprises is replaced by the turnover of small manufacturing enterprises, the picture has not changed. The weak relationship between the turnover and the price of loans (R-squared 0.355030) and practically its absence in the two cases discussed above (R-squared 0.035702 between the turnover of enterprises and the GDP; R-squared 0.070647 between the turnover of enterprises and the volume of loans granted to them).

4 Conclusion According to the obtained data it is reasonable to carry out research of small enterprises taking into account the type of their activity, and the system reform of the small business development stimulation to carry out on uniform methodology, but with obligatory account of specifics of the work profile. In addition, the national small business statistics require the improvement of more accurate reflection of the processes taking place in this area for the purpose of the rapid and effective measures for the development of small business. It is important to take into consideration to date, some small enterprises are used for the purpose of cashing money (according to the Prosecutor General’s office of the Russian Federation in the first quarter of 2018 the share of such enterprises was 5% of the total number of small enterprises), and a number of small enterprises do not carry out production and economic activity and they are not liquidated due to the lack of funds from their founders and the hopes of the latter to sell these enterprises to new owners (RBC 2019).

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29

References CBR: Central Bank of the Russian Federation (2019). http://www.cbr.ru/statistics/udstat.aspx? TblID=302-17 Hayek, F.: Individualism and Economic Order. Austrian School, 24 (2011) Kozyrev, V.M.: Economic Theory, p. 350. Logos, Moscow (2015) RBC: RBC television (2019). http://tv.rbc.ru/archive/startup/5cac412b2ae596e658340478 Rosstat: Russia in Numbers. Annual statistics compilation (2019). http://www.gks.ru Serga, S.V., Bogdanova, R.M.: On the position and problems of the development of small and medium-sized enterprises in the regions of the Southern Federal District. Bull. Rostov State Univ. Econ. 4 (2018) Schemelev, S.N., Abbasova, O.I.: Current position and problems of the small enterprises development in the industry of the Russian Federation. Fin. Stud. 3 (2017) Surzhik, E.N.: My Opinion (2018). http://surzhyk.info/vvp-rossii/

Analysis of the Features of Commodification in the Regions of Russia Tatiana L. Melekhina(&) and Victoria A. Pobedushkina Financial University under the Government of the Russian Federation, Moscow, Russia [email protected], [email protected]

Abstract. The article describes the features of commodification in some regions of Russia that represent different levels of socio-economic development. A number of negative consequences that have a great impact on the well-being of the population and the psychological state of citizens have been identified. One of the most significant problems is the debt burden on citizens in the regions of Russia. The trends of the commodification process are described based on the analysis of the correlation of consumer loans and average wages in the region using the methods of statistical analysis. Correlation analysis allows to make conclusions about the wider spread of commodification in the most economically developed regions. The hypothesis that the growth of government spending leads to GDP growth with a delay of at least one year has been confirmed that allows to make conclusions about the need for measures to support the population in terms of financial literacy and improving the living standards of citizens of the Russian Federation. A linear relationship of GDP on the growth of economic expenses has been revealed. Recommendations on smoothing the negative consequences of the commodification process in the Russian regions are proposed. Keywords: Commodification
Consumer loans spending
Correlation analysis JEL Code: C8


Average wages
Public


E2

1 Introduction Over the past few years, in the conditions of an unstable socio-economic situation in the country, the problem of excessive debt burden on the population, which is closely associated with such a phenomenon as commodification, has escalated. Commodification, the process of turning anything or service into a product, can be found in all developed and developing countries, and Russia is not an exception. Karl Marx in his works has already affirmed the fact that capitalism is a self-expanding economic system that requires a greater commodification (Marx 2018). According to the research, the intensity of commodification varies depending on the socio-economic development of the region, however, the detection of a number of

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 30–39, 2020. https://doi.org/10.1007/978-3-030-47945-9_4

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negative consequences that have a great impact on the welfare of the population and the psychological state of citizens remains unchanged. The main negative consequence of commodification is the high debt load of citizens, which is confirmed by the data of the Bank of Russia, the Ministry of Economic Development and the Ministry of Finance of the Russian Federation. The term “surpassed debt burden” has recently appeared in the Russian economy and spread to all areas of financial and credit relations. The meaning of this term is similar to the meaning of “excessive debt” used in the countries of the European Union. In practical terms, surpassed debt burden means an excessive debt load on households, which paralyzes their budget and leads to a general decrease in the standard of living of the population (Romanova 2016, 4, p. 24). The scientific community has been concerned about this topic for a long time and a great number of scientific papers have been written in recent years. So, in the monograph “Threats to food security” written by Kasyanenko V.A. the whole section is devoted to the debt load of the population (Kasyanenko 2016, 1). Highly interesting are the scientific works of such economists as Karanina (2017, 2, p. 56), Sharinova (2017, 5, p. 82), Malanov et al. (2017, 3, p. 110). Every work raises questions about the insufficiency or even lack of action by the state. However, the situation in society requires special attention to legislative decisions. The interconnections of economic processes at the household and state levels have common trends. Statistical studies, the methods of which are used in this work, allow to make general conclusions that lead to the decision-making process of smoothing the negative consequences.

2 Methodology According to the Central Bank of the Russian Federation, the share of overdue loans in 2019 decreased significantly, despite the minor changes in the volume of reserves for possible losses (RPL). The data for the period from July 1, 2015 to July 1, 2019 is represented in Table 1.

Table 1. The share of loans with overdue payments in the period from 2015–2019. Date RPL Share of loans with overdue payments over 90 days in the total volume of loans, %

01.07.15 01.07.16 01.07.17 01.07.18 01.07.19 1 103 869 1 158 632 1 081 058 1 033 929 1 048 835 10,3 10,6 8,8 6,5 5

However, the interesting fact is that despite such a positive, at first sight, trend, a large number of problem loans are present in the Russian banking system. According to the S&P rating agency in July 2019 their volume reached 16%, including both restructured debts and debts with delinquencies over 90 days.

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According to the Ministry of Economic Development and the Bank of Russia, household loans are growing almost 2 times faster than their salaries. By the end of 2018 the growth rate of the retail loan portfolio increased to 22.4% from 12.8% a year before. Moreover, the predominance of housing loans during the last 5 years is becoming less noticeable. There is a convergence in the growth rate of loans to the population. Furthermore, loans to companies practically do not change their pace. The increase in the retail loan portfolio reached 1.5 trillion rubles, which indicates its growth by 10.5% compared to the previous year. Exactly this indicator had the greatest impact on the growth of consumer loans in general.1 The situation has reached such proportions when the country’s leadership is obliged to take decisive measures. Minister of Economic Development of Russia Maxim Stanislavovich Oreshkin noted that currently a special mechanism is being developed to help Russians who find themselves in difficult living situations due to loans. According to him, the amount of household debt on loans reached 8 trillion rubles as at 22 July 2019 with a constant increase in such debts by 25% per year. In this connection, it is necessary to slow down the volume of consumer lending. However, the problem of commodification arises here again, an increase in the level of consumption and the inability to reduce the consumer spending due to the fact that earnings are spent on an increasingly wide range of products and services. Due to this negative consequence of commodification, the additional debt burden on the population, a number of shortcomings arise, mainly related to the legal regulation of emerging problems and contradictions. To compare the negative impact of commodification on the population of Russia in its various entities, it is advisable to analyze the dynamics of the number and size of consumer loans in certain regions and the share that they occupy in household incomes. For comparison, three regions of the Russian Federation that represent different levels of socio-economic development are considered according to the annual rating of the socio-economic situation of the constituent entities of the Russian Federation according to the results of 2018.2 Namely: the city of Moscow (1 place), Vladimir region (43 place) and the Republic of Tuva (85 place). It should be noted that, despite the changing situation, the number of applications for consumer credit is increasing more and more every year (Fig. 1), which is directly related to the increase in everyday expenses of the population.3

1

2

3

Ministry of Economic Development of the Russian Federation, “The picture of the economy. January 2019”, available at: http://economy.gov.ru/wps/wcm/connect/885e0909-e8cf-4e9a-83ad-5d0681f7105b/190211_econ_pic.pdf?MOD=AJPERES&CACHEID=885e0909-e8cf-4e9a-83ad-5d0681f7105b (accessed 21 July 2019). “Rating of the socio-economic situation of the constituent entities of the Russian Federation in 2018”, available at: http://riarating.ru/infografika/20180523/630091878.html (accessed 7 May 2019). “Open data of Sberbank”, available at: https://www.sberbank.com/ru/analytics/opendata/ (accessed 9 April 2019).

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Number of applications for consumer loans

Wladimir region

01/10/2018

01/07/2018

01/04/2018

01/10/2017

01/01/2018

01/07/2017

01/04/2017

01/10/2016

01/01/2017

01/04/2016

Moscow

01/07/2016

01/01/2016

01/07/2015

01/10/2015

01/04/2015

01/01/2015

01/10/2014

01/07/2014

01/04/2014

01/01/2014

01/07/2013

01/10/2013

01/04/2013

01/01/2013

90000 80000 70000 60000 50000 40000 30000 20000 10000 0

Republic of Tuva

Fig. 1. Dynamics of the number of applications for consumer loans by constituent entities of the Russian Federation in the period from 2013 to 2018

Due to this graph it can be seen that despite some fluctuations, over the past five years there has been an increase in the number of loans approximately by two times in all considered regions. To further comparison of the characteristics of commodification in the constituent entities of the Russian Federation, a correlation analysis was carried out to identify the relationship between the average wage and the average amount of the applications for a consumer loan. In connection with the commodification of people’s livelihoods in recent years not only has people increased their desire to purchase as many goods as possible (“the curse of the consumer society” (Baudrillard 2017)), but also the size of everyday expenses of the population has increased significantly, resulting in the growth of average consumer loans. It should be noted that the situation in regions with different levels of socioeconomic development is very different. In the most economically developed region, there is a stronger interdependence of the considered indicators. A special case is the city of Moscow, where the correlation is manifested to a lesser extent, despite the more developed economy. This can be explained by several reasons: the strongest diversification of income, without reflecting the actual average level of remuneration for the subject; the predominant concentration of people with incomes well above average and without a strong need for consumer loans in this region. Another necessary indicator for comparing the characteristics of commodification in the regions of Russia is the relationship between the average wage and the number of consumer loans in the regions under consideration (Pobedushkina 2019).

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On Fig. 2 an increase in credit debt in the city of Moscow over the past two years can be seen. The situation in the regions has the similar picture when adjusted by proportions.

million rubles

Information about loans in Moscow 2000000 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0

Amount of loans received Debt overdue debt

Data

Fig. 2. Dynamics of volumes of loans and debts received in Moscow in the period from 2011 to 2019

An analysis of the correlation between the average wage in the region and the number of consumer loans allows to make an interesting conclusion: the more economically developed the region is, the less this relationship is traced. A decrease in this dependence is clearly observed while considering the data on the entities of the Russian Federation, from the most developed region of Russia - the city of Moscow to the least developed - the Republic of Tyva. Obviously, in regions with a lower level of socioeconomic development, people fully rely on their current wages and, if it is not enough, take consumer loans in connection with an increase in the number of goods needed in everyday life. And vice versa, in regions with a higher level of socio-economic development, people are trying to get the necessary amount of money in other ways (part-time job, opening deposits in banks and other). For the most visual interpretation of the results, the ratio of the average per capita debt on consumer loans and the average annual salary for the regions under consideration was calculated. In Moscow, this ratio was 26.4%, in the Vladimir region 47.5%, in the Republic of Tuva - 66.5%, which clearly indicates the importance of the problem in less socio-economically developed entities of the Russian Federation. Thus, there is a strong need to study the patterns of development of the regions of the Russian Federation and to identify in more detail the relationship between the domestic regional product and the growth of expenses of the regional economy.

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3 Results

GDP at current prices, billion rubles

For the general picture, the relationship between the federal budget expenditures for the entire period from 2006 to 2018 on current GDP in billions of rubles was researched with the goal to: find out the reason - the GDP growth was caused by the dynamics of government spending or vice versa. The research has shown a linear regression between these instruments with a correlation coefficient r = 0.969325, which indicates a linear dependence of GDP growth on government spending. Figure 3 shows a graph of dependencies with a trend line, where significant changes in GDP over the past two years are evident with insignificant changes in expenditures. This gives a reason to the assumption of the dependence of GDP on the dynamics of government spending over the past years.

Dependence of GDP on the federal budget expenditures from 2006 to 2018 120000 100000 80000 60000 y = 5.7304x - 4192.7 R² = 0.9396

40000 20000 0 0

2000

4000

6000

8000

10000

12000

14000

16000

18000

total expenditures in billion rubles

Fig. 3. Dependence of GDP on federal budget expenditures from 2006 to 2018

Figure 4 shows the dependence of GDP on expenditures with a shift of one year. There is a smoothing of the series and a closer relationship of the linear trend, and a trend towards an increase in GDP with a growth of expenditures can be seen.

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Dependence of GDP on last year's expenditures GDP from 2007 2018

120000 100000

y = 5.4518x + 4399 R² = 0.9404

80000 60000 40000 20000 0 0

2000

4000

6000

8000

10000

12000

14000

16000

18000

expenditures from 2006 to 2017

Fig. 4. Dependence of GDP from 2007 to 2018 on federal budget expenditures from 2006 to 2017

To examine the situation in the regions and compare it with the general picture, there is a need to consider how the share of expenditures in relation to GDP was distributed in the indicated period in percentage terms.

Share of expenses to GDP in % 30.00 24.89 25.00

21.85 18.01 18.34

20.00 15.92

19.09 18.12 18.92 18.24 18.73 18.73 17.83 16.12

15.00 10.00 5.00 0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Fig. 5. The change in the share of expenditures of GDP in percentage in 2006–2018

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Outliers from 2009–2010 are clearly manifested in the histogram (Fig. 5) as well as in the dependency graphs. There is a need to consider the situation in the regions in the period from 2005 to 2017. For the analysis were selected the budgets of entities which have almost equal sizes of GRP in the first years of the analyzed period but the significantly various rates of growth of expenditures on the national economy of GRP at the end of the analyzed period. To determine the impact on GRP growth rates, regions with different budget sizes were selected. For the objectivity of the indicators, the budgets of the constituent entities of various federal districts were analyzed. These are such entities of central Russia as Vladimir, Ivanovo and Yaroslavl regions, showing approximately similar rates of development and costs. The second group is Chechnya, Ingushetia and Mordovia - regions with a higher subsidized component.4 Despite the fact that the share of expenditures in GRP in the regions is significantly lower than the share of federal budget expenditures as a share of GDP (2.92 compared to 17.83 in 2017), the general trend of linear regression of GRP from expenditures with a shift in one year is fully confirmed. So, a detailed study of the relationship between the expenses of the consolidated budgets of the constituent entities of the Russian Federation on the gross regional product confirms our hypothesis that exactly the growth of government spending has a significant effect on GRP, with a shift of at least one year. The findings confirm the hypothesis that not only a growth of gross product leads to an increase in costs, but a growth in costs provides the prospect of an increase in gross product. Thus, the obvious to business statement about forward-looking spending is relevant in all spheres of society. However, the lack of financial literacy and a drop in the general level of education in the post-Soviet system contributes to the development of public debt and, as a result of commodification, complete change of the psychological state of citizens (Nikitina 2017).

4 Conclusions Based on the results of the research, the following conclusions can be drawn: • over the past few years, due to the commodification of all aspects of people’s livelihoods, the need to buy goods has grown much more than the average wage, which has led to an increased demand for consumer loans throughout Russia; • in regions with a higher level of socio-economic development, the average amount of consumer credit has significantly increased, which indicates a wider spread of commodification in economically developed regions • there is a deviation from the other regions’ trend of the correlation between the average salary and the amount of consumer loans in Moscow, which can be caused by various factors;

4

“Rating of the socio-economic situation of the constituent entities of the Russian Federation in 2018”, available at: http://riarating.ru/infografika/20180523/630091878.html (accessed 7 April 2019).

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• the growth of government spending has a significant impact on the domestic regional product with a shift of at least a year, which confirms the need to stimulate the development of regions with state subsidies for the future; • an increase in the amount of benefits and subsidies to Russian citizens will have only positive effects on the development of society as a whole and will also contribute in the development of regions. In general, speaking about trends in the process of commodification, it should be noted that it really has a largely negative impact on the Russian population, leading to an increase in the number of loans, which in turn leads to a high debt load on society (up to 66.5% in the least developed region). Taking into account the constant expansion of commodification of all spheres of public life, under constant circumstances, these indicators will only worsen in the future, putting the population into a financial debt hole. As a result, it is necessary to take measures to support the population, which, first of all, include the economic development of the lagging regions of the Russian Federation: increasing the number of jobs, creating opportunities for additional income and developing the institution of financial markets, increasing the amount of benefits and subsidies to citizens, which will allow to improve the recent years’ trend to increase the debt burden on the society. Improving financial literacy among the population, which is already being actively discussed not only in the Internet space, but in all mass media, together with state support will lead to a real increase in the standard of living of citizens of the Russian Federation.

References Marx, K.: Capital. AST, Moscow, MSK (2018) Romanova, Yu.V.: The influence of socio-economic factors on the occurrence of household debt and living standards. Living standards of Russian regions, vol. 202, no. 4, pp. 24–30 (2016) Kasyanenko, V.A.: Food security threats. Prospect, Moscow, MSK (2016) Karanina, E.V., Timin, A.N.: The credit burden on the population as a factor of the assessing the economic security of the federal districts of Russia. Econ. Manag. Prob. Sol. 3(8), 56–64 (2017) Sharinova, G.A.: The problem of the debt burden on the population of the regions of the Russian Federations. Agric. Econ. Russ. 210(3), 81–84 (2017) Malanov, V.I., Yakovleva, I.A., Burlov, D.Yu.: Living standards as a factor of the debt load of the population. Bull. ESSU 64(1), 110–116 (2017) Bank of Russia Research and Forecasting Department. Consumer lending in Russia: prospects and risks based on household finance surveys. https://www.cbr.ru/Content/Document/File/23500/ analytic_note_170928.pdf. Accessed 4 July 2019 Ministry of Economic Development of the Russian Federation. The picture of the economy, January 2019. http://economy.gov.ru/wps/wcm/connect/885e0909-e8cf-4e9a-83ad-5d0681f7105b/190211_econ_pic.pdf?MOD=AJPERES&CACHEID=885e0909-e8cf-4e9a-83ad-5d0681f7105b. Accessed 21 July 2019

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Rating of the socio-economic situation of the constituent entities of the Russian Federation in 2018. http://riarating.ru/infografika/20180523/630091878.html. Accessed 7 May 2019 Open data of Sberbank. https://www.sberbank.com/ru/analytics/opendata/. Accessed 9 Apr 2019 Baudrillard, J.: Consumer society. Publishing House Republic, Moscow, MSK (2017) Pobedushkina, V.A.: Peculiarities and prospects of commodification in the regions of Russia. In: Proceedings of the VI International Scientific and Practical Conference “Contemporary Mathematics and the Concepts of Innovative Mathematical Education”, pp. 507–515. Publishing house MFO, Moscow, MSK (2019) Nikitina, A.A.: Commodification as the factor of the integrity formation of personality in modern social and cultural context. Humanit. South Russ. vol. 6, no. 6, pp. 182–190 (2017)

Forming Expertise Clusters in Spatial Accelerated Development Zones of the Region Irina S. Baghdasarian(&), Natalia V. Raznova, Anastasia N. Rusina, and Irina V. Filimonenko Institute of Business Process Management and Economics, Siberian Federal University, Krasnoyarsk, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. The innovative development of the economy in the Krasnoyarsk region has aggravated the imbalance in the demand-supply pattern of human resources in local and regional markets and has changed the professional framework and requirements to employee’s expertise. If there is a demand for human resources of economic actors, the efficiency of their employment for economic sectors declines. The trouble is due to an unavailable technique for analysis and assessment of business actors’ needs for the expertise, which would predict their changes concerning the priorities of spatial socio-economic development of regions. The purpose of the research is to develop a methodology for the development of expertise clusters in accelerated development zones of the regional economy, the staffing needs of which undergo significant changes due to innovative technological solutions through clarification of “expertise cluster” and “accelerated growth zone” concepts. In the authors’ opinion, the difference in the pace of socio-economic, technological and innovative development of the regional economy (under foreign economic activity) and operation of different technological sectors in the regional economic space requires a targeted approach to determining HR expertise. It seems that one of the necessary conditions for accelerated development zones in the region is to identify expertise clusters that ensure the achievement of targeted priorities of economic development. This concept has become particularly important in the context of accomplishing priority goals of the socio-economic development of the region due to localization of accelerated development zones based on the sectoral nature of the economy (traditional, high-tech, innovative) and the spatial distribution of industries across municipal entities. The authors underlie this standpoint in a structural flow chart of expertise cluster formation in regions’ accelerated development zones developed in accordance with the purpose of the paper. Using the methodology for expertise cluster development in the system of municipal and regional economic management will further develop an effective mechanism of managing demand and supply in the regional labor markets and design a working system for the cooperation of business, government, education, and population. Keywords: Expertise cluster
Expertise structure
Staffing needs
Accelerated development zone
Labor market
Diagnostic assessment
Mechanism
Business actors
Stakeholders
Industrial and HR capacity © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 40–48, 2020. https://doi.org/10.1007/978-3-030-47945-9_5

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1 Introduction One of the challenges in today’s Russia is uneven socio-economic development and innovative potential of regions which hinder the balanced growth of the Russian economy. Shifting towards an innovative development model that will reduce the technological gap across the leading economic sectors is an important task for regional and federal authorities [13, 20]. The search for an innovative development path makes urgent a need to arrange a regional economic space that would speed up the growth of high-tech industries and give rise to “growth points” of the regional economy. The concept of resource concentration in localized areas called the “poles of economic growth” is widely and successfully practiced abroad [14, 25]. The basis of this theory is the idea of the leading role of the sectoral structure of the economy and foremost the leading industries that produce new goods and services. Economic spaces where enterprises of leading industries are located become poles attracting production factors since they provide their efficient utilization. Relying on successful foreign experience in the application of this approach, the Government of the Russian Federation has replaced the concept of program strategic planning at the regional level with one of polarized development for the most suitable distribution of state resources. One of these poles is the Krasnoyarsk Territory. Its resource and economic-geographical foundation have given significant competitive advantages for many decades. Krasnoyarsk Territory is a unique and advanced Siberian region. It is located in the center of the Russian Federation, occupying almost oneseventh of its territory and determining the future of Siberia and the whole of Russia. Natural reserves, hefty and competitive industrial capacity are factors of rapid economic growth and components of the high investment attractiveness. The scientists define regional accelerated development zones as “the part of the region’s territory with a special regime for business and investment activities to be established, or other types of state support of explicitly zone-based nature to be provided (for example, the infrastructure provision of the clearly-defined territory)” [7]. The Federal Law “On Advanced Socio-Economic Development Territories in the Russian Federation (as amended on July 26, 2019) interprets advanced socio-economic development territory as part of the territory of the Russian Federation constituent entity with “a special legal regime established for business and other activities to lay favorable conditions for attracting investments, ensuring accelerated socio-economic development and creating comfortable conditions for population’s well-being” [2]. In some studies, these territories are considered as a new form of special-purpose economic zones caused by the “evolution of various kinds of economic zones with the preferential stimulation of economic activity and formation of territorial industrial and innovative “growth points” based on them [7]. The authors of the article define the accelerated development zone as “the territory within the region concentrating financial and organizational resources, which makes it possible to get significant economic (innovative) results”. It is in the accelerated development zones that the economic and business needs for HR expertise are changing. Since the resources of the territories are the foundation for the development of industrial and human potential, rethinking approaches to changing business needs

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for the human resources necessary for the accomplishment of priority goals of social, technological, innovative and digital development of the economy has become urgent. One of the indispensable conditions for “accelerated development” zones is the identification of expertise clusters that ensure the achievement of economic development priorities. In our opinion, this concept is of particular importance in the context of accomplishing priority goals of socio-economic development in the Krasnoyarsk Territory due to localization of accelerated development areas based on sectoral nature of the economy (traditional, high-tech, innovative) and the spatial distribution of industries across 62 municipal entities. However, the resolution is troublesome for some reason (methodological and technical). There is no uniform definition of expertise cluster and a generally accepted algorithm for their formation. The purpose of the research is to propose a technique of developing expertise clusters in “accelerated development” spatial zones based on business needs research through analysis and arrangement of available scientific approaches to the solution of the above problems. Research Methods. For this purpose, we employed methods of system analysis, content analysis of documents, statistical and empirical research methods, comparison and modeling, which allowed developing an author’s approach to the definition of expertise clusters. The initial data were Strategy for the socio-economic development of the Krasnoyarsk Territory until 2030 [3]); Investment strategy of the Krasnoyarsk Territory until 2030 [6]; Strategy for managing the labor market of the Krasnoyarsk Territory until 2020. [4]; Forecast of HR needs of the economy in the Krasnoyarsk Territory until 2020; Official data and secondary information of the Agency of Labor and Employment of the Krasnoyarsk Territory on the state of the labor market, Federal state educational standards (higher education, secondary vocational education), Occupational standards. The content analysis of scientific publications showed that most often the “expertise cluster” is considered as the basis for the development of the vocational education system when training competitive specialists for business actors, which include certain knowledge and abilities to perform functions assigned in specific situations. The authors differently interpret this term: it’s “a navigator in developing training programs”, and competencies are an integrated concept pointing at “the individual’s ability to independently use various elements of knowledge, skills, and relationships in routine and unordinary situations” [23]; it’s a competency model representing a given set of skills required for accomplishment of certain professional tasks”. They note “that combining heterogeneous competencies in the same context forms the various competencies of the employee” and emphasize that “the expertise clusters may be adjusted depending on every particular situation” [26]; “a set of closely connected competencies (usually from three to five)” [31]; possible “concentration of various interrelated skills of individual specialists for solution of common problems in the system of innovative development” [33]; “a resource component of developing innovation and technology transfer due to the high concentration of various skills and intentions to use them for solution of unordinary problems” [32].

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The expertise model was proposed by R. Boyacis. The term “expertise cluster” appeared in his studies due to the application of the cluster analysis method when processing a large number of different competencies that were united by the author into five groups and called clusters [13]. A comparative analysis of the publications allowed the authors to agree with the standpoint of scientists who noted an educational or activity-based approach in the available definitions. At the same time, the approach to expertise clusters as a tool of “arranging certain knowledge and the abilities of a specialist to perform assigned functions in specific situations is prevailing now” [31]. There are other interpretations of this term enabling a much broader approach to the study of expertise cluster as a certain resource “enterprise feature” in the context of its functional objectives [16, 17, 30 etc.]. In our opinion, such a variety of approaches to the content of “expertise cluster” is mostly associated with the areas of scientific research, goals, and objectives, which gives authors of this article the reason to clarify it. In this paper, an expertise cluster is regarded as “a combination of abilities, skills, and intentions to use the knowledge acquired in professional activities in a particular industry or economic sector” [21]. Such an understanding of expertise cluster points at its targeted nature, structure properties, and variability over time that should be taken into account when developing an algorithm of developing clusters for the region’s accelerated development zones. The relevance of developing the technique is explained by changing business needs for employees’ expertise, higher uncertainty when predicting the future needs of the economy in human resources, decreasing labor mobility of the employed population, etc. Business representatives note that the shortage of specialists with required competencies is a mass-scale phenomenon in the economic space of Russia. Besides, most often we see the qualitative inconsistency of staffing need components, including HR personal qualities. One of the possible ways to eliminate the imbalance in the structure of professional training and, consequently, to satisfy the needs of business actors is an assessment of demand for new professions and development of expertise clusters in accelerated economic development zones (by sectors, foreign economic activity, HR training levels, fields and specializations). The differences in the pace of socio-economic, technological and innovative development of the regional economy (under foreign economic activity) point at the simultaneous operation of different technological sectors in the regional economic space (traditional; high-tech; innovative), which form varied needs for HR expertise (Fig. 1). Based on the analysis of publications [15, 20, 23, 25, 26, 28, 29] containing approaches to the development of expertise clusters, the authors of the article developed a consistent, integrated, and targeted algorithm that takes into account: – priorities of socio-economic, innovative and technological development of the region’s economy that change the pattern of the economy and staffing needs; – the interests of all major stakeholders (government, business, population) reflecting the actual structure of their needs;

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Description of economic sectors of the Krasnoyarsk Territory

Traditional - It combines foreign economic activity with sluggish (weak) innovative and technological development; - It is characterized by steady demand for available expertise and available professions in the labor markets (LM).

High-tech - It combines foreign economic activity with active processes of technological development based on the utilization of breakthrough technologies that have advantages over traditional alternative technologies; - It is characterized by higher demand for available expertise and their expansion (refreshing) for available professions.

Innovative - It combines foreign economic activity with active introduction of unique innovative technologies; - It is characterized by a changing demand for professional staff and establishment of new labor markets (LM).

Fig. 1. Description of economic sectors of the Krasnoyarsk region

– requirements of the Federal State Educational Standard and occupational standards to the training of specialists concerning foreign economic activity (by levels, fields, and specializations of training), etc. The algorithm presented in Fig. 2 presupposes 3 stages with a specific goal, object, and subject-matter of study, methods of getting reliable information. The stages of expertise cluster formation technique are the following: Stage 1. Revealing the future needs of the region’s business and economy in the most demanded professions for each zone of accelerated development. Drawing up a list of demanded professions required the analysis of the current situation in the labor markets of municipal entities in terms of foreign economic activity of high-tech and innovative sectors. Simultaneously we had been developing a database of professions ranked in the TOP region. As a result, we made up the list of new and promising professions to achieve the strategic goals of accelerated development zones. Having matched the information obtained, we determined the future need of the region’s business and economy for the most demanded professions (including cross-industry professions), its industry-based structure for a particular zone with regard to the required level of professional training. Stage 2 and 3 are aimed at developing expertise clusters by economic sectors (FEA) with changing staffing needs and requirements to staff expertise. Stage 2. Developing expertise clusters for already existing professions that are in priority for the accomplishment of the strategic goals of the high-tech sectors. For each group of professions, we selected Federal State Educational Standards (Higher Education, Secondary Vocational Education) and Vocational Standards (PS) and carried out a detailed analysis of the requirements contained herein. As a result of matching the requirements of the Federal State Educational Standards Occupational Standards, we drew up the list:

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Fig. 2. Algorithm of developing expertise clusters in “accelerated development” spatial zones

– cluster-core competencies demanded by business; – expertise contained in Occupational Standards but not mentioned in the Federal State Educational Standard. They are considered as “cluster periphery” and further explored regarding the usefulness of their entering the pool of expertise for professions of the high-tech sector. The information generated is structured by levels of professional education. Stage 3. Developing expertise clusters for new professions. Expertise clusters are developed as a result of making the list of priority professions (professions of the future) and expertise crucial for the accomplishment of the strategic development goals in the innovative sector of the regional economy (FEA). The publicly accessible information is analyzed (Atlas of professions; Top-50 professions in Russia; Top-24 professions in the Krasnoyarsk Territory; Demanded professions in the labor market of the Krasnoyarsk Territory, etc.). When polling and keeping foresight sessions, the

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opinion of experts among representatives of science, business and education with sufficient managerial experience, as well as HR specialists from high-tech companies is investigated, which allows predicting possible changes in expertise. Ultimately, expertise clusters are formed concerning foreign economic activity, training level, field, training specialization in accelerated development areas of the regional economy

2 Findings Thus, a content analysis of the scientific approaches to understanding and developing expertise clusters presented in publications allowed the authors to clarify the definition of expertise cluster and to develop their own structural-logical approach (algorithm) with account for specific features of the state of local and regional labor markets, actual needs of the regional business (current and long-term), the innovative nature of the regional economy in accelerated development zones (FEA). The paper has been written within research under the support of the State Autonomous Institution “Krasnoyarsk Regional Fund for the Promotion of Scientific and Technical Activities” as part of the project “Mechanisms of dealing with supplydemand gaps in the regional labor market as risk points when accomplishing priority goals of socio-economic development in the Krasnoyarsk Territory” [Application code: 2019051505029.].

3 Conclusion In our opinion, the importance of approach suggested lies in future applications by federal and municipal government of the Krasnoyarsk Territory and other regions of the Russian Federation to make scientifically-based decisions on the management of staff training at all levels (scope, fields, specializations) to mitigate gaps between the needs of stakeholders (human resources, business) for expertise when accomplishing priority goals of social-economic development of the region. Implementation of algorithm suggested in further continuous monitoring of changes in the staffing needs of economic actors will make it possible to apply an effective mechanism of staff shortage risk management in accelerated development zones (basic specialization sectors). Acknowledgments. The project «Mechanisms of managing the gaps between supply and demand in the labor market of the region as risk points in the implementation of priority directions of socio-economic development of Krasnoyarsk krai», was funded by Krasnoyarsk Regional Fund of Science (application code No. 2019051505029).

References 1. Atlas of New Professions. https://edu2035.org/pdf/GEF.Atlas-ru.pdf

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2. Federal Law: On Territories of Advanced Social and Economic Development in the Russian Federation, as amended on 26 July 2019. http://docs.cntd.ru/document/420243009 3. Strategies for Socio-Economic Development of the Krasnoyarsk Territory until 2030. http:// zakon.krskstate.ru/doc/52526 4. Strategy for Managing the Labor Market of the Krasnoyarsk Territory until 2020. https:// trud.krskstate.ru/documents/detail/bdf0441c-8303-4d9b-9b82-607322f55223 5. On Territories of Advanced Social and Economic Development in the Russian Federation, as amended on 26 July 2019. http://docs.cntd.ru/document/420243009/ 6. The investment Strategy of the Krasnoyarsk Territory until 2030. http://docs.cntd.ru/ document/465805473 7. Anisimova, K.V., Nilova, K.V.: Trends in the development of advanced socio-economic development territories. In: Advanced Socio-Economic Development Territories: Theory and Practice: Proceedings of the 1st All-Russian Research and Practice Conference, 2 March 2017, pp. 22–26. Poznanie Publishing House of Kazan Innovation University named after V. G. Timiryasov, Kazan (2017). https://chl.ieml.ru/files/u30/20170316Sbornik/Territorii_ operezhayushchego_socialno-ekonomicheskogo_razvitiya_voprosy_teorii_i_praktiki.pdf 8. Bagdasaryan, I.S., Safonova, O.N., Vasileva, Z.A., Almabekova, O.A., Popova, I.: Factors of innovative development of socio-economic system of the region. In: 2nd International Multidisciplinary Scientific Conference on Social Sciences & ARTS, SGEM 2015, pp. 275– 282 (2015) 9. Bagdasaryan, I.S., Sochneva, E.N., Stupina, A.A., Globa, S.B., Karaseva, M.V.: New system for qualifications evaluation: experience of Russia. In: 4th International Multidisciplinary Scientific Conference on Social Sciences and Arts, SGEM 2017, pp. 557–564 (2017) 10. Bagdasaryan, I.S., Vasileva, Z.A., Shmeleva, Zh.N., Korpacheva, L.N.: Accreditation of the university education as a guarantee of the competencies quality in the labor market. In: International Multidisciplinary Scientific GeoConference SGEM, vol. 19, no. 5.4, pp. 3–8 (2019) 11. Bagdasaryan, I.S., Stupina, A.A., Shmeleva, Zh.N., Titiberiya, R.R., Vaitekunene, E.L.: Training of it-personnel in the interior of “Digital economy”. In: International Multidisciplinary Scientific GeoConference SGEM, vol. 19, no. 5.4, pp. 385–392 (2019) 12. Belyakova, G.Ya., Vcherashny, P., Vasileva, Z.A., Bagdasaryan, I.S., Almabekova, O.A.: Infrastructure provision for innovative development of territories. In: 2nd International Multidisciplinary Scientific Conference on Social Sciences & Arts, SGEM 2015, pp. 445– 452 (2015) 13. Boyatsis, R.: Competent manager: a model of effective work. Translation from English. GIPPO, 352 p. (2008) 14. Kudryavtseva, E.I.: Modern approaches to developing and employing competence models. Manag. Consult. (1), 166–177 (2012) 15. Kekkonen, A., Sigova, S.: Foreign experience in predicting expertise demanded in the labor market. Supply and Demand in the Labor and Educational Services Market of Russian Regions. http://labourmarket.ru/conf8/reports/kekkonen_sigova.doc 16. Latypova, E.V.: Expertise cluster in the innovative development system. https://docplayer. ru/28982840-Latypova-ekaterina-valerevna-klastery-kompetenciy-v-sistemeinnovacionnogo-razvitiya.html 17. Latypova, E.V.: The innovative capacity of expertise cluster in the knowledge-driven economy. In: Issues of Economics and Law, No. 5 (2015). https://law-journal.ru/files/pdf/ 201505/201505_139.pdf

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18. Monakhova, I.A.: Innovative development territories: regulatory support peculiarities. The Contour of Global Transformations: Politics, Economics, Law, No. 3, pp. 64–74 (2014). https://cyberleninka.ru/article/n/territorii-innovatsionnogo-razvitiya-osobennostinormativnopravovogo-obespecheniya 19. Ptashchuk, A.V., Novysh, B.V.: A multi-criteria simulation model to assess the competence of young IT-specialists. Innovative Educational Technologies, No. 1(41) (2015). http:// media.miu.by/files/store/items/iot/41/iot_1_2015_8.pdf 20. Raznova, N.V., Yarichina, G.F.: The selection of professional staff based on the competency approach using the fuzzy-set theory. Bull. Novosibirsk State Univ. Econ. Manag. 3, 322–328 (2014) 21. Rusina, A.N., Karpicheva, O.V., Filimonenko, I.V.: Identifying Popular Professions and Training Programs in the Regional Labor Market. Creative Econ. 11(11), 1145–1156 (2017) 22. Sukhorukova, O.A., Barbina, A.M.: The development of a special economic zone as a way of stimulating the regional economy. In: Management of Socio-Economic Development of Regions: Problems and Solutions: Proceedings of the 3rd International Research and Practice Conference, Kursk, vol. 1, pp. 37–40 (2013) 23. Sablina, S.G.: Shaping qualification frames: crystallization of expertise clusters in the regional labor market. In: Region: Economics and Social Studies, No. 3, pp. 78–93 (2011) 24. Savalei, V.V.: Evolution of organization forms of accelerated growth zones in the russian regions. In: Regional Economics: Theory and Practice, No. 39, pp. 2–14 (2015) 25. Sezonova, N.O.: Concerning the issue of forming and development expertise model. Auditorium: Electron. Sci. J. Kursk State Univ. (2) (2014). http://auditorium.kursksu.ru/pdf/ 002-016 26. Sigova, S.V., Stepus, I.S.: Staff support assistance of the arctic zone development priorities – contribution of the higher education system. University Management Practice Anal. 5(99), 19–29 (2016) 27. Furshchik, M.A., Shutova, A.V., Prozorov, M.S., Savel’ev, A.V., Goryacheva, M.A.: Special Economic Zones: Experience and Prospects. Media Info Group Publishing House, 212 p. (2014) 28. Filimonenko, I.V., Raznova, N.V., Yarichina, G.F.: The methodology of risk points in the regional labor markets based on the competency approach. Bull. Krasnoyarsk State Agrarian Univ. 3, 143–147 (2015) 29. Tselykh, A.A.: Method of assessing the gap in university graduate competencies. Fund. Res. 11(Part 8), 1602–1606 (2013). https://fundamental-research.ru/ru/article/view?id=33387 30. Shraer, A.V., Latypova, E.V.: Innovative and expertise clusters: relationship of concepts. Manag. Econ. Syst. Electron. Sci. J. (8) (2015). http://uecs.ru/index.php?option=com_ flexicontent&view=items&id=3662 31. Widdet, S., Holliford, S.: Competency Guide: Translation from English. Moscow (2008). http://www.hr-portal.ru/pages/hrm/comp01.php 32. Khoreva, L.V., Latypova, E.V.: Expertise clusters in the service innovative development system. Theor. Pract. Serv. Econ. Soc. Field Technol. 2(20), 59–65 (2014) 33. Shraer, A.V., Latypova, E.V.: Innovative and expertise clusters: relationship of concepts. Manag. Econ. Syst. Electron. Sci. J. (8) (2015). http://uecs.ru/index.php?option=com_ flexicontent&view=items&id = 3662

Innovative Aspect of Assessing the Competitiveness of Engineering Companies in the Nuclear Industry Nikolay Y. Leontiev1(&), Victor P. Kuznetsov2, Alexey Y. Ivanov1, Nadezhda D. Ivanova3, and Aleksey A. Ivanov4 JSC Engineering Company “ASE”, Nizhny Novgorod, Russia {n.leontyev,a.ivanov}@niaep.ru 2 Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected] Nizhny Novgorod State Technical University named after R.E. Alekseev, Nizhny Novgorod, Russia [email protected] 4 Nizhny Novgorod State University named after N.I. Lobachevsky, Nizhny Novgorod, Russia [email protected] 1

3

Abstract. Innovative development of enterprises and production of highquality competitive products is the key to economic development and power of the modern government. Assessment of innovation performance and development prospects is an important part of increasing competitiveness of enterprises. The article is aimed at identifying indicators for rapid assessment of the current state and innovative potential of engineering companies in order to increase their competitiveness and choose strategy development. In the process of preparation of the article used general scientific methods of research, as well as the method of enterprise development, coefficient analysis, methods of classification, graphic visualization, and matrix approach. The author made classification of indicators of enterprises innovative development on the basis of an assessment of the current state and prospects of development, and selected examples of relevant indicators. A matrix scheme and a complex methodology for assessing the effectiveness of innovative development, as well as the choice of basic and innovative strategy are developed. A comparative assessment of the innovative development of Russian and foreign engineering companies related to the nuclear industry is made, taking into account actual data on the development of the respective companies. Keywords: Competitiveness
Innovative development
Innovative strategy Nuclear industry
Engineering JEL Code: L29


O31
O32

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 49–57, 2020. https://doi.org/10.1007/978-3-030-47945-9_6




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1 Introduction Ensuring the competitiveness of the Russian industry and the national economy as a whole is a priority task for our country, which is designed to ensure the achievement of the global goal—raising the standard of living of Russian population [1]. There are studies according to which competitiveness can be described as the interaction of four components: product quality, internal and external adaptability, innovativeness of goods and processes, as well as productivity [2]. Innovation is generally seen as an important component of competitiveness, embedded in organizational structures, business processes, products/services. In turn, the innovative development of enterprises and production of high-quality competitive products is the key to economic development and power of the modern government. Most of the available methodologies for measuring the innovation component are based on the use of instantaneous statistical indicators developed by the FGHS or other statistical services. Such an approach seems insufficient and requires further elaboration in terms of examining not only indicators of achievement but also indicators of development prospects that would allow further assessment of the sustainability of enterprises innovative development.

2 Theoretical Basis of Research The innovation performance indicators of enterprises characterize the results of introduction of new improved products, services and technologies both in volume terms and their impact on the overall performance of the enterprise itself. For example, indicators are the share of innovative products in total sales, revenues from innovative products in the total revenue, the level of use of innovative technologies or resources in the production process, and others [3]. Abroad use valuation techniques related to the performance of R&D and the impact of innovation on the company’s activities [4] (for example, R&D expenditure relative to total volume sales, total research and development costs; savings from the use of new technologies in relation to annual profits, and others) [5]. The key disadvantage of research is the underestimation of prospects (potential) of innovative development in comparison with the assessment of current achievements in the field of innovation. In addition, most authors use the method of expert estimates, which brings subjectivism to calculations and can also increase the complexity of calculation of integral values. Most of methods focus only on evaluation of internal parameters of an enterprise [6, 8] and do not take into account the impact of its external environment on achievement of goals in the field of innovation [7]. In view of the above, we proposed the author’s approach to the classification of indicators of innovative development, taking into account both the current innovation position and its potential, as well as author’s method of evaluating the effectiveness of innovative development.

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3 Methodology of Research Based on the nature of innovations and investments for the future, sees it necessary to include in the evaluation of the effectiveness of innovative development is not only the results indicators (the current status/static component), but also the prospects/trends of development indicators (potential/dynamic component), expressed relative to the value of the tempo. According to the author’s approach, constant, slowly changing and controlled factors of innovation activity of the enterprise: property of the enterprise, attracted natural resources, advantages of infrastructure, quality of human capital and others should form a static component. Factors of the dynamic component include resources and conditions that shape a potential of innovative development, future opportunities that grow from experience and trends, taking into account the factor of time. Together—dynamic and static components—allow to create, implement and commercialize innovative product or technology. A fragment of the list of indicators for assessing the effectiveness of innovation activity is presented in Table 1. Table 1. Static and dynamic components of assessing the effectiveness of innovative development of enterprises Static component Share of sales of new products in total revenue Share of R&D expenditure in cost structure Share of employees engaged in research out of total number of employees of the company Ratio of new technology Number of new products and/or services that company has introduced to market Coefficient of profitability of innovation The ratio of security of intellectual property Source: compiled by the author.

Dynamic component Rate of change in the share of revenue from the sale of new products in total profit Rate of change in share of R&D costs Rate of change in the number of employees engaged in research Development rate of new technology Rate of change in the number of new products and/or services that company has introduced to market Rate of change of profitability of innovation Innovation growth rate

The significance of each of components and indicators in Table 1 should be determined by the goals of assessing innovative development for example, similarly to Table 2.

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Taking into account the above indicators and the author’s approach, a strategic matrix of innovative development is proposed, which will allow depending on the current state and prospects of development in to define the mission, innovation and basic strategy of enterprise development (Fig. 1). In addition, in this matrix the types of enterprises by a combination of dynamic and static components are proposed: “interested”, “active”, “denying” and “exploiting”. Table 2. Evaluation indicators classification of innovation activity Priority objectives of innovation activity Objectives of external efficiency of the enterprise

Indicators of innovation activity evaluation

Share and rate of change in sales of new products in total revenue Number and rate of change of new products and/or services that have been introduced to the market Innovation growth rate Objectives of internal efficiency Share and rate of change of R&D in total expenditure Rate of change and absolute values of innovation profitability Development rate of new technology The ratio of security of intellectual property Share of employees engaged in research out of total number of employees of the company Source: compiled by the author.

Thus, according to Fig. 1, enterprises with high innovative potential use an offensive strategy in order to achieve their goals, creating and implementing as many new ideas as possible on the market. Enterprises with low innovative potential adhere to a protective strategy, seeking only to maintain their current market share, usually copying foreign innovative products. In addition, the use of innovative technologies increases the technological level of production activity, thus creating additional advantages for the enterprise compared to competitors. “Implementation of innovative potential is determined by the level of innovation activity of the enterprise, which characterizes the degree of participation of the enterprise in implementation of innovation activity as a whole or its types within a certain period of time” [11], its readiness for renewal in various spheres, as well as its susceptibility for the new. Thus, “innovative development is the most important element that creates sustainable competitive advantages for domestic enterprises” [12].

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High "Intrested" (developing) Mission: promoting innovation development in support of basic (main) business processes Innovation strategy: offensive, absorption, simulation Innovative potential Basic strategies: intensive development, diversification

"Denying" Mission: support economic efficiency of current (secondary)business processes, cost reduction Innovation strategy: defensive, simulation low

Basic strategies: integration,reduction of costs

"Active" Mission: active growth in the background earning profits, stability of development and progressive image Innovation strategy: offensive, predatory Basic strategy: integration, intensive development "Exploiting" Mission: getting active profit "skimming" Innovation strategy:intermediate, protective Basic strategy:integration

Weak

Strong Current level of innovation development

Fig. 1. Strategic matrix of innovative development (Source: compiled by the author.)

Description of the author’s approach to the algorithm for evaluating the effectiveness of innovative development: Stage 1. Identification of the need for a comprehensive assessment of innovative development. An enterprise may be interested in conducting a comprehensive assessment in connection with receiving recommendations from regional authorities or on a personal initiative. Stage 2. Collection of data on the internal and external environment of the object of assessment. The source of information can be statistical reporting data, results of employee surveys, publications of agencies and departments. Stage 3. Strategic analysis of micro and meso-environment of the object of evaluation. At this stage, an operational assessment of the overall state of the organization is carried out using tools such as SWOT, SNW analysis, and others. Stage 4. Evaluation of the actual static and dynamic components of innovative development (indicators from Table 1). Stage 5. Analysis of results of financial and economic activity in terms of assessment of financial stability and solvency. Stage 6. Comprehensive assessment of the current state and potential of innovative development. Current status and potential indicators obtained in stage 4 should be normalized relative to reference (e.g. industry averages) values. The normalization

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will allow to delineate indicators on levels (above/below the reference value), as well as calculate integral (complex) indicators of innovative development: current state and potential based on average value. The resulting integrated assessments of the current state of innovative development and potential allow to position enterprises in the strategic matrix (Fig. 1). Stage 7. Determining the type of assessment object from the point of view of innovative development according to the strategic matrix (Fig. 2) based on calculated integral indicators of innovative potential and current state. Stage 8. Selection and implementation of basic and innovative strategies. Definition of strategies on the basis of a strategic matrix of innovative development and proposal of an action plan for their implementation.

4 Analysis of the Study Results The largest generating company in Russia is the State Corporation “Rosatom” (GC “Rosatom”), which unites assets in the field of nuclear power, power engineering, as well as design and NPP facilities and other complex engineering facilities for energy purposes. Innovative development of Rosatom Group is an indispensable condition for maintaining the position of technological leadership and defense capability of the country and, thus, is one of the basic priorities of its activities [13]. It should be noted that Rosatom is a significant participant in most segments of the nuclear industry, including engineering (represented by ASE Engineering Division). The importance of engineering activity is evidenced by the fact that the volume of international tenders for construction of nuclear power plants reaches 200 billion dollars. At the same time, the main contribution to Russian engineering is made by nuclear power companies. For control purposes, Rosatom GC regularly conducts market-technological and competitive types of analysis (technological audit and benchmarking), taking into account which ASE Engineering Division initiates innovative projects [13]. However, these tools are seen as insufficient in terms of competitiveness assessment and management. In order to test the author’s approach to the definition of indicators of innovative development on the basis of an assessment of the current state and innovation trends. A comparative evaluation of the effectiveness of these four leading companies which are competitors of Rosatom Group, and also working in the field of nuclear engineering, were selected. A comparative assessment was made by the Chinese company CNNC (China National Nuclear Corporation), the French Orano SA (until 2018 Areva), as well as the American company Westinghouse which is under the bankruptcy process. Each of these engineering companies is a national and/or one of the world leaders in nuclear engineering in the industry, possessing unique technologies, a portfolio of complex projects and years of experience. However, from the point of view of innovation components and development prospects, not all of them today can display good results.

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According to the author’s approach, indicators of static and dynamic components [14] evaluation of innovative development for 2017 were obtained from open sources, further, on the basis of calculation of integral (Table 3), companies were classified in the strategic matrix of innovative development (Fig. 2). Table 3. Integral estimates of innovative development indicators of companies Indicators Current level of innovative development Innovative potential Source: compiled by the author.

Maximum values 1

CNNC ASE Orano SA 0.47 0.71 0.75

0.81

1

0.68

0.38

0.74 0.42

Westinghouse

The obtained results reflected the innovative aspect of competitiveness in engineering companies and correspond to the trends of change of their strategic position in the competitive environment of atomic engineering. Not long ago in the construction of nuclear reactors was led by “big nuclear three”, represented by engineering companies from the USA, France, and Russia (USSR). However, in 2017, the French government, attracting huge budget funds and financing from third-party investors, was struggling to keep Areva, while changing its name on Orano SA, as well as reengineering its divisions.

Fig. 2. Strategic matrix of innovative development (Source: compiled by the author.)

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In addition, the bankruptcy process of Westinghouse continues, once possessing unique developments and projects in the field of nuclear engineering. These American and French companies continue to use the accumulated innovation potential but have limited opportunities for its expansion in the future (the position of “exploiting” on Fig. 2). The current behavior of the management of these companies corresponds to the specified basic strategy - integration, and in the field of innovation protective. One of Russia’s potential competitors in the nuclear engineering market, the Chinese CNNC-, with its huge own market and ambitions in the international arena, supports the strategy of intensive development with focusing on the innovative component of competitiveness. In the matrix of innovative development (Fig. 2) the company was classified as “interested”, which according to the author should be expressed in offensive and/or imitation which is characteristic of the Chinese industry as a whole of innovation strategy, translating CNNC on position of one of the leaders of nuclear engineering taking into account huge financial resources and state support of the company. Thus, from the point of view of innovation and competitiveness, CNNC is the main rival of the Russian engineering company ASE in the world market. The engineering division ASE was defined as “active” (Fig. 2) against the background of stability of development, profit growth, and favorable image. The obtained assessment is confirmed by the information from the annual report of the Group of Companies “Rosatom”. First of all, the Russian nuclear industry is implementing a large-scale program of innovative development and technological modernization aimed at achieving the strategic objectives of Rosatom Group. In 2017 alone, more than 70 technological projects were implemented. In addition to industry organizations, 27 universities, 24 academic institutions, more than 35 third-party scientific institutions were involved. organizations. The innovative activity of the nuclear industry was aimed at development and introduction of new technologies, expansion of mechanisms and quality of commercialization of innovative solutions, comprehensive support innovative projects at all stages. At the same time, for the period 2018–2019, ASE and GC “Rosatom” “has an important task to update the strategy of activities until 2050” with an emphasis on development of scientific activities. In this situation according to the author’s approach, it will be logical to advance innovation strategy (Fig. 2) with prioritization of scientific programs in order to focus engineering efforts on areas with the greatest potential to achieve technological leadership. Thus, the main direction of increasing the competitiveness of the Engineering Division of GC “Rosatom” and the source of leadership in the world nuclear market is a combination of high innovative capacity (progressive image) and stability/reliability of core activities.

5 Conclusions Innovative activity is one of the key aspects of the effective functioning and development of the enterprise. Constant monitoring of innovative development and evaluation of its effectiveness is necessary in order to manage competitiveness. Development and implementation of the “right” innovation strategy can significantly increase its competitive advantages, affect the balance of power in the industry, as well as

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development of the industry itself. Since investments should bring results not only in the near possibility but also in the distant future, the use of exclusively current performance assessments limits the significance of obtained results. Inclusion of the dynamic component will allow to assess the sustainability of innovative development and competitiveness of the enterprise as a whole.

References 1. Message of the President of the Russian Federation to the Federal Assembly “Russia needs to be strong and competitive”. http://legalacts.ru/doc/poslanie-prezidenta-rf-federalnomusobraniiu-rossii-nado/ 2. Shestak, S.E.: Innovations and Competitiveness—Main Factors of Sustainable Development of Industrial Enterprises. Scientific Potential of Youth—the Future of Belarus: Materials IV ISPC, Polessky State University, pp. 133–134. PolessGU, Pinsk (2010) 3. Tarasenko, I.A.: Trends in innovation development in Russia. Russ. Econ. Online. Mag., 1–6 (2016) 4. Kruglov, V.N., Spiders, S.A.: Evolution of the theory of innovation in foreign and domestic science. Regional Economy: Theory and Practice, no. 5(428), pp. 4–22 (2016) 5. Yudakova, Yu.S.: Theoretical aspects of innovation relationship and investment activity. Bulletin of Samara University. Economics and Management, no. 9-1(131), pp. 195–199 (2015) 6. Chomutinsky, D.: How to measure innovations. Management of Innovations, no. 8, pp. 50– 56 (2013) 7. Gunin, V.N., Barancheev, V.P., et al.: Innovation management, pp. 104–124. INFRA-M, Moscow (2012) 8. Trifilova, A.A.: Management of innovative development of the enterprise, p. 176. Finance and Statistics, Moscow (2013) 9. Eremina, T.A.: Theoretical foundations of innovative activity. Science today: Theoretical and practical aspects of the materials of the international scientific and practical conference: in 2 parts. Scientific Center “Dispute”, pp. 40–43 (2017) 10. Chulok, A.A.: Analysis of indicators of efficiency of innovations at micro and macro level. Innovations, no. 5, pp. 27–32 (2014) 11. Lebedeva, N.N.: Innovative activity of enterprises as a condition of their competitiveness. JIS, no. 4 (2010). https://cyberleninka.ru/article/n/innovatsionnaya-aktivnost-predpriyatiykak-uslovie-ih-konkurentosposobnosti 12. Kravchenko, N.A., Bobylev. G.V., Valieva, O.V., Fedorov, A.A.: Competitiveness based on innovation: international positioning of Russia. Problems of Forecasting, no. 5, pp. 90–101 (2013) 13. Official website of Rosatom GC. https://rosatom.ru/about/ 14. Leontiev, N.Y., Ivanov, A.A., Ivanova, N.D.: Evaluation of innovative development as a component of enterprise competitiveness assessment. Econ. Anal. Theory Pract. 17(8), 1414–1427 (2018)

Conceptual Bases of Company Competitiveness. Criticism and Development Nikolay Ya. Leontiev1(&), Anna F. Plekhanova2, Aleksey A. Ivanov2, Nadezhda D. Ivanova1, and Kirill I. Kolesov1 1

Nizhny Novgorod State Technical University named after R.E. Alekseev, Nizhny Novgorod, Russia [email protected], [email protected], [email protected] 2 Nizhny Novgorod State University named after N.I. Lobachevsky, Nizhny Novgorod, Russia [email protected], [email protected]

Abstract. Modern conditions are characterized by an increasing rate of change in all areas of social activity. Explosive development of technologies in the field of information, communications and transport lead to a significant acceleration and complication of all processes, strengthening and increasing information flows, which leads to globalization of all spheres of economy and society. Globalization is one of the most significant factors in increasing competition. Thus, the issues of survival in the competition become the main tasks in a strategic management of the company. Purpose of this work is to study basic views on determining the competitiveness of the company, their systematization, and identification of the basic theoretical provisions that are common to all current approaches of competitiveness. To these provisions the authors include: the basic theory, principle, approach for evaluation and a person determining the level of competitiveness. Theoretical provisions formulated in this way were critically analyzed with the identification of their significant lack—of the consumer in determining the essence of competitiveness. As a result of this research, the authors proposed a new theoretical platform for the formation of the concept of competitiveness, which meets advanced scientific and public views, and based on the theory of sustainable development. Keywords: Competitiveness of the company
Economic growth
Sustainable development JEL Code: 20


M20
O44

1 Introduction The stage of market relations formation in our country showed that with introduction of new technologies, acceleration of saturation of demand, globalization, and strengthening of competition, market is constantly becoming more complex, and information space is becoming more and more saturated, as a result of which companies are constantly searching for new, competitive management tools. Survival and success in © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 58–64, 2020. https://doi.org/10.1007/978-3-030-47945-9_7

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such turbulent times are increasingly dependent on competitiveness. In this work, the authors identify the main theoretical provisions concerning the essence and content of the competitiveness concept. The analysis is necessary to identify shortcomings in existing approaches to determining competitiveness. Critical understanding of theoretical provisions leads to the need to improve the concept of competitiveness at a new stage of development of science and society.

2 Methodology In the context of the theory of competitiveness is the process of definition and development of the concept of “competitiveness”. A clear definition of competitiveness, as well as competition, is still not accepted (Bhawsar and Chattopadhyay 2015; Ketels 2016). Definitions of competitiveness given by different authors emphasize the significantly different characteristics of this concept (Atkinson 2013). Thus, the authors of the Modern Economic Dictionary (Reizberg et al. 1999) define it as “the ability of goods to meet the needs of buyers in comparison with other similar goods”. In this definition, the following characteristics of the concept can be distinguished: – Refers to objects such as goods – Based on meeting the needs – Is considered in comparison with other analogs. It is important to note that this concept is considered only as a feature of a product or service. Accordingly, buyers are the subjects whose needs must be met. This understanding of competitiveness significantly understates its real application. Similarly, in the Explanatory Dictionary of Economic Terms (Konoplitsky and Filina 1996), the article on competitiveness refers to this concept only to the competitiveness of goods (services) and transactions. At the same time, it is also necessary to compare it with similar objects on a market. The Russian economist and journalist Lopatnikov (2003) gives a broader understanding of the term competitiveness. This feature already applies not only to the product (service) but also to the economic unit. At the same time, competitive objects are divided into goods, producers, and countries. The greatest degree of competitiveness of a firm can be defined as the ability of a firm to develop, produce and/or sell products superior to competitors, taking into account price and non - price quality (D’Cruz and Rugman 1992). The first condition for the manifestation of competitiveness feature is obviously a presence of similar facilities in a particular market or facilities that satisfy the same need. Competitiveness is manifested only in the context of competition. Thus, this feature is not inherent to any object. The feature of competitiveness is conditioned by the existence of certain conditions for its manifestation, in this case - the presence of similar objects. In the absence of these conditions, a single object does not have competitiveness. This provision is well illustrated by the situation of a monopolist enterprise in a certain market. In this case, its competitiveness is zero, which is instantly

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manifested when at least one similar enterprise arises or its entry into a new, competitive market. The second condition for the manifestation of competitiveness property is the presence of struggle, rivalry, competition between analogs. If there are several manufactories operating in the same market and meeting the same need, there is a possibility that there is no competition between them. In this case, the competitiveness property of these objects, of course, also does not appear. In the case of cartel collusion, for example, the existence of several legally separate economic agents reduces or eliminates competition in the market and thus reduces or eliminates the availability of competitiveness of these manufactories. The following provision relates to an assessment of entity competitiveness. To study this issue, it is necessary to focus on the basic principle of the market economy— customer satisfaction. Competitive fight takes place between producers (sellers) for the buyer. The mechanism of the market system forces each manufacturer to fight for the buyer, taking into account his interests and needs, in such a way as to be the best in this fight. Consequently, the market economy is based on the primate of the consumer. Consumer dictates his desires to the producer. From here it is possible to draw the following conclusion. Because the level of competitiveness of an object is determined by the degree of satisfaction of the needs of a particular buyer or the market as a whole, it can, therefore, be said that a person determining the level of competitiveness of the object is the buyer. This assessment of competitiveness is made by the buyer, of course, not explicitly, but in the form of selection and implementation of sales transactions.

3 Results The result of the author’s analysis was the systematization and formulation of these basic theoretical provisions concerning the essence of competitiveness as a property of a particular object. We have identified the basic principle of manifestation and evaluation of competitiveness of various objects. This is the principle of satisfying the needs of the buyer. The main task of any commercial enterprise is customer satisfaction in order to earn profit. The necessity of this task is conditioned, in turn, by the basic principle of market economy—the principle of economic selfishness. The essence of this principle is manifested in the priority of economic interests of various economic entities over the interests of other entities, as well as interests of non-economic nature. Actually, the basic role of economic selfishness in the market economy was established by A. Smith, who put forward the idea of “the invisible hand of the market”. And since then, this idea has been the basis of basic economic theories of growth. According to them, a target setting of the market is the satisfaction of personal and group needs, which are initially selfish in nature and, therefore, economic selfishness is an inherent property of a market economy. The significant leap and rapid development of production, consumption, and welfare as a result of the industrial revolution conditioned and practically confirmed the validity of theories of economic growth (Rostow 1978).

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In accordance with this principle, all rational actions of economic operators are assessed in terms of economic efficiency. Therefore, indicators of assessment of competitiveness in the traditional concept most often represent certain indicators of efficiency of various aspects of enterprise activity—production, sales, logistics, innovation, etc. (Kovalenko 2013; Fatkhutdinov 2008). Despite the apparent diversity of scientific publications and research on enterprise competitiveness, they all fit into some generally accepted frameworks and theories (Sölvell 2015; Bhawsar and Chattopadhyay et al. 2015; Ketels 2016). Summarizing the conducted research, the author formulates methodological foundations of the traditional paradigm of competitiveness, presented in Table 1. Table 1. Basic theory Basic principle Basic criterion The main task

Theory of economic growth Principle of economic selfishness Economic efficiency Satisfaction of the needs of the consumer

The disadvantages of the existing paradigm include the following aspects: 1) Competitiveness appears in the process of meeting the needs of mainly consumer of goods; 2) Competitiveness is determined primarily by the consumer; 3) Competitiveness is practically independent of other participants in economic and social life; 4) Assessment of competitiveness is formed mainly by economic indicators. As mentioned above, the basic theories of the development of the modern world economy and, consequently, theories of competitiveness are theories of economic growth. Assertion that without economic growth there can be no development is associated with active substitution of concepts and manipulation. The categories of growth and development are totally different and have different consequences for society as a whole and for the individual. To assess competitiveness, these concepts need to be separated. Economic growth refers to the improvement of production results and increase in the productivity of production factors. The main criterion for success is quantitative indicators. The basis for measuring economic growth is the growth of the real gross national product, which is believed to lead to an increase in the competitiveness of products, goods, and services of enterprises in various industries. However, it is impossible not to notice that in conditions of globalization, a satisfaction of unlimited needs leads to the demand for continuous growth of the global economy. It is obvious that this is an antagonistic contradiction of the limited resources of the planet and leads to an increase in economic, social, environmental conflicts in the global economy (Famiyeh 2018).

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Development refers to the processes resulting in the manifestation of a new state, parameters of which exceed parameters of the previous state. It is worth noting that with the development of society and economy these parameters are becoming more qualitative, reflecting the state of human capital, environment and social environment (Popescu et al. 2017). If we talk about economic development, it can be understood not only and not so much as an increase in the value of goods and services produced by all sectors of the economy per capita during the stipulated period (GDP), but also an increase in the standard of living, institutional changes, improvement of technologies i.e. socioeconomic progress. Thus, growth leads to a change in quantitative indicators while preserving the existing qualities and properties of objects. During development, there is a transition to a new state, which qualitatively differs from the existing one. Hence the difference in problems of measuring growth and development. Quantitative, volumetric indicators can be measured, and comparing different qualitative conditions is quite problematic. Finally, the most important aspect of this study is that there are limits to growth. Any system can grow—grow only to certain sizes. Of course, this applies to systems with limited resources, which is currently the world economy within the globe. When certain limits of growth are reached, a crisis occurs. And further movement on this path becomes impossible. Development can continue indefinitely. Since the middle of the 20th century, in conditions of rapid development of science and technology, the progress of society and development of the economy receives more and more supporters. Development was defined as “an evolutionary process in which human potential has increased in terms of creating new structures, solving problems, adapting to constant changes and purposeful and creative pursuit of new goals” (Peet 1999). Research into the causes of the recession of the second half of the 20th century led to an awareness of limitations of economic growth. In 1972, a group of famous scientists published a report of the Club of Rome called “Limitations of growth”. They warned that the Earth has a limited supply of physical resources and that exceeding the limits of exploitation can lead to disaster. It is necessary to distinguish between growth is quantitative change and development is qualitative change (Allen 1980). The conceptual basis of the modern use of “sustainable development” term was established in the early 1970s. Principles of sustainable development are reflected in the declaration adopted at the United Nations Conference on the Human Environment, held in Stockholm in 1972. The document recognizes that development must be sustainable, focusing not only on economic and social issues but also on issues related to the use of natural resources. In this study, the authors propose to change the methodological foundations of understanding competitiveness, including the basic theory, principle, criterion and basic objectives of competitiveness of companies (Table 2).

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Table 2. Methodological framework

Author’s concept of competitiveness

The traditional paradigm of competitiveness 2 Theory of economic growth

3 Theory of sustainable development stakeholders theory

Basic principle

Principle of economic selfishness

Balance of business interests, society and nature

Basic criterion

Economic efficiency

Criteria of different nature

The main task

Meeting the needs of consumers

Satisfaction of the needs of many stakeholders

1 Basic theory

The cardinal difference of proposed concept is the use of the theory of sustainable development and the theory of stakeholders instead of the traditionally used theory of economic growth. The main criterion is not only and not so much economic efficiency, but a set of criteria of social, environmental, financial and other nature. The very same competitiveness in the author’s interpretation is determined by the set of stakeholders and manifests itself as a result of satisfying the interests of the set of stakeholders taking into account their changes in the life cycle stages of complex engineering objects. Below is a fragment of the comparative assessment of the competitiveness of companies in the field of nuclear energy for 2016 (Table 3). Table 3. Company

Revenue

ASE

43 255 652 218,113 billion of rubles billion of rubles 11 million euros - 666 million euros

AREWA

Net profit

Profitability of sales, % 1.1%

Negative

Westinghouse 1075.54 million 48.95 million 13% euros euros Fortum 3.6 billion euros 0.6 billion 7.42% euros 3949,77 6.49 EUR Iberdrola SA 29215,38 million euros million euros

TPIndex

EBITDA

3.3 million per 364 billion person rubles EUR 52,370 thous./people 7.18 23.12 million euros/person

- 684 million euros $555M 267 million euros. 3698.74 million euros

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4 Conclusion Analysis of domestic and foreign literature allowed to reveal a number of shortcomings of the existing paradigm of competitiveness, including the presence of only one person, whose needs are aimed at competitiveness—consumer, the use of main economic indicators to assess the competitiveness of companies, unidirectional development of the company—only making a profit. As a result, the author’s concept of competitiveness and its components based on the theory of sustainable development and the theory of stakeholders within a system approach to management were proposed.

References Bhawsar, P., Chattopadhyay, U.: Competitiveness: review, reflections and directions. Glob. Bus. Rev. 16(4) (2015) Ketels. C.: Review of competitiveness frameworks. An Analysis Conducted for the Irish National Competitiveness Council (2016) Atkinson, R.D.: What Really Is Competitiveness? The Globalist, 20 September 2013. https:// www.theglobalist.com/really-competitiveness/ Reizberg, B.A, Lozovsky, L.Sh, Starodubtseva, E.B.: Modern Economic Dictionary. INFRA-M, Moscow (1999) Konoplitsky, V., Filina, A.: This is Business. Explanatory Dictionary of Economic Terms, Alterpress, Kyiv (1996) Lopatnikov, L.I.: Economic-Mathematical Dictionary, vol. 43. Delo, Moscow (2003) D’Cruz, J., Rugman, A.: New Concepts for Canadian Competitiveness. Kodak, Canada (1992) Rostow, W.: The World Economy. History and Prospect. Macmillan, London (1978) Kovalenko, A.: Theoretical and methodological aspects of the use of the concept of “competitiveness” in scientific research. Modern Competition, no. 6(42), pp. 65–79 (2013) Fatkhutdinov, R.: Competitiveness Management (2008) Sölvell, Ö.: The Competitive Advantage of Nations 25 years–opening up new perspectives on competitiveness. Compet. Rev. 25(5) (2015) Famiyeh, S., et al.: Environmental management practices, operational competitiveness and environmental performance: empirical evidence from a developing country. J. Manuf. Technol. Manag. 29(3) (2018) Popescu, G., et al.: Measuring sustainable competitiveness in contemporary economies—Insights from European economy. Sustainability 9(7), 1230 (2017) Peet, R.: Theories of Development. Guilford Press, New York (1999) Allen, R.: How to Save The World. Kogan Page, London (1980)

Structuring the Calculation Planning Function of the Enterprise Igor E. Mizikovsky1(&), Elena V. Shpilevskaya2, Tatyana O. Tolstykh3, Maksim M. Kutepov4, and Artyom A. Sirotkin4 1

National Research Nizhny Novgorod State University named after N.I. Lobachevsky, Nizhny Novgorod, Russia [email protected] 2 Rostov Institute (Branch) of the All-Russian State University of Justice (RPA of the Russian Ministry of Justice), Rostov-on-Don, Russia [email protected] 3 National Research Technological University «MISiS», Moscow, Russia [email protected] 4 Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected]

Abstract. Comprehensive implementation of planning and accounting function is the primary task of effective management development of production resources in a modern manufacturing enterprise. The solution of this problem implies a declining abandonment of standard solutions and outdated approaches, which requires a noticeable change in the production strategy of an enterprise. Of particular importance is the implementation of a comprehensive program of permanent and balanced cost reduction, ensuring compliance with an economically sound mode of saving resources. In these conditions, it becomes necessary to use modern methods of planned calculation of production costs of products works, and services, functionally oriented on the rational use of production resources in all processes enterprise value creation. So, the purpose of the study is to develop the above methodology, maximally “deployed” in the direction of information requests of effective management. In the course of this research, the author used methods of observation, measurement, systematization, and classification of information about the subject sphere, system analysis of collected materials, application in their processing structural and process approaches. The result of this research was improved by the author method of planned calculation, integrated into the information-tool space of an enterprise. The method allows: monitor the system of norms and actual production costs in the context of divisions and an enterprise as a whole; perform a comprehensive economic analysis and cost planning as produced by-products and prepared for release; to carry out management accounting and control costs for production and sales of products; estimated planning (budgeting) of production costs. Keywords: Planned calculation Planning


Costs
Expenses
Cost accounting


© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 65–73, 2020. https://doi.org/10.1007/978-3-030-47945-9_8

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1 Introduction Studies have shown that often planned calculation is identified with the cost estimate (production cost), which is methodologically incorrect. It should be noted that the object of cost planning is the total output, while a planned calculation reflects only part of production of the batch, series, or order. In these conditions, terminological disengagement of externally similar instruments, as well as an introduction of stricter requirements for their object identification are required. The relatively low level of demand for this, without a doubt, effective management tool lies in the undeveloped theoretical and methodological base, in some algorithmic startup and sleep upgrade mode [1]. The main issue in terms of modernization of the existing methodology of calculation planning is the numerical characteristics of production costs. A solution of this issue is especially important when building an integrated information space of an economic entity, harmonized implementation of production management functions. It is necessary to note the existing scientific discourse on this issue, participants of which, often, stand in diametrically opposite positions. There is a scientific opinion, positioning the use of the planned calculation of average values of production costs [2–4]. The alternative position assumes that a calculation process of this function is based on the maximum allowable values of enterprise expenses in the forthcoming (planned) calendar period [5, 6]. In [7] emphasized that the planned calculations “are calculated for a new calendar period by individual items”, are formed on the basis of reporting indicators and are a source for making up business - plan. From the last postulate, we can conclude that the author of the tutorial does not consider median or limit values of costs, uses their planned and calculated, “item-by-item” indicators. It should be noted that similar positions are taken by the authors [8–10]. The need to use estimated values of cost indicators is emphasized in [9], where it is stated that “the planned costing of certain types of products is the calculation of costs for costing items for the production of a unit of the corresponding type of product or service in the planned period”. In [10] it is noted that “planned costing, which is a documented calculation of the planned costs per unit of production, work or services of a certain type, is compiled by items of expenditure for a year with quarterly breakdown with a large range of products, and quarterly planned cost estimates cannot be compiled.” There is also a scientific position that does not consider planned calculation as a tool for the calculation process. For example, as an independent definition, it is not presented in [11–13].

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Table 1. Analysis of the theoretical and methodological base of the object of planned calculation Scientific opinion Average cost values in the plan period Maximum allowable cost values Estimated cost in the planned period Planned calculation is not considered as an independent definition

Authors and sources Kondrakov N. P., Ivanova M. A. A.V. Glushchenko, N.N. Nelyubova. Dubonosova A.N. A.V. Basova, A.S. Nechaev. Volkov O.I., Sklyarenko V.K. IA.V. Sokolov, Ilyin A.I. Encyclopedia of Economics T.U. Serebryakova, O.A. Biryukova, O.G. Gordeeva, E.A. Ivanov, O.R. Kondrashova, K. Drury, G.Yu. Kasyanova

The goal of this research is to develop a methodology of planned calculation of production cost of production (works, services), satisfying requirements of modern management. Achievement of this goal is possible by supplementing the adopted set of management tools by means that allow structuring the unified logic of PCS formation, its practical implementation and incorporation into existing management system of an enterprise. Theoretical and Methodological Approaches. In the process of this research, methods of measurement, observation, systematization, and classification of objects, system analysis, structural-substrate and process approaches to the implementation of planning functions, cost accounting and calculation of production costs were used. Results. It should be noted that in those enterprises where planned calculation is applied, the average and marginal values of costs in this process are not used, and formation of PCS is based on consolidated (enlarged in sections of material resources groups, types of work, etc.) or specified (itemized by materials, labor operations) types of resource use rates. This is understandable by the need to apply the most accurate estimates in the implementation of corporate management functions discussed above. However, studies conducted by the authors have shown that procedures for the use of the PCS do not require detailed disclosure of indicators of rationalized costs by specific names or labor operations. This means that the structuring of planned calculations by means of specified norms not only disproportionately increases complexity of calculations but also creates an array of redundant information in their use in the management process. It would, therefore, be appropriate to establish a PCS on the basis of strictly verified consolidated standards developed for the relevant accounting and calculation facility for existing equipment, technology and specific conditions of each workplace. At the same time, we should not forget about the need to integrate planned and normative forms of calculation in a single information-tool space with estimated planning (budgeting) expenditure of enterprise resources (Fig. 1). This is necessary not only for the introduction of “end-to-end” technological process of data processing,

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avoiding all kinds of duplication of operations but also for the rational use of costs as a whole, carrying out system verification of indicators with generated values.

Normave Calculaons Specified standards Cost esmates Consolidated standards

Scheduled Calculaons

Fig. 1. Scheme of integration of planned and normative calculation with estimated planning (budgeting) costs

The research carried out by the author allowed to formulate an approach to PCS structuring, presupposing the consideration as systemically forming elements of consolidated norms of direct material (taking into account the corresponding share of transport and procurement costs), direct labor and indirect costs. Values of indicators are adjusted accordingly to the quantitative values of accounting prices, wage rates and the volume of calculated products output provided by the approved production program of value generation flow (nomenclature production plan, product manufacturing order). It should be noted that at each stage of calculation should be carried out verification of completeness and reliability of results. Therefore, a complex and structured process of planned calculation assumes stepby-step accumulation of verified values of value creation, certainly assuming specific features of calculations of each type of normalized resources. Consequently, consolidated normative material resources of the Nmri (basic materials, raw materials, semifinished products, purchased components, fuel and electricity consumed during the implementation of technological processes) is a set of cost characteristics of useful consumption of materials Pri, waste caused by the established technology of production TOi and losses Pi (1): Hmri ¼ Pr i þ TOi þ Pi

ð1Þ

Table 1 shows the section of direct material costs of the planned costing of a batch of moisture-resistant VSP-40987M pallets produced in the main production workshop of one of the enterprises under study.

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Table 2. 1. Material costs (fragment) № p/p 1 2 3 4 5 6 7

Name of material Plate OSB 2500  1250  9 mm NLK Transport and procurement costs (TPC) Total: Metal corner Transport and procurement costs (TPC) Total: Total:

Price (RUB) 554

Amount 200

Unit of measurement sq.m.

15 569 58.5 8 66.5 –

Cost (RUB) 110800 3000

200 80

p.m.

113800 4680 640 5320 119120

–

The object of consolidated rationing of direct labor costs, as a rule, is j-type of work (group of homogeneous operations) provided by a technological process of product production. According to the author, this type of norms should take into account not only operations directly integrated into the flow of value creation and preparatory and final processes of PZJ, but also reflecting objectively arising losses or savings PJ related to working conditions, specific features of production, etc. Thus, as a summary rate of labor costs, Ntrj is considered the total value of Oj operations related to the type of work (2). M

ð2Þ

Ntrj ¼ sðOj þ PZJ  PJ Þ

where j = 1, M, M-number of operations. Table 2 shows an example of the summary rates of direct labor costs of the main production workers, where the hourly rate reflects the final calculation figure accumulating values of the parameters PZJ and PJ (Table 3). Table 3. 2. Labor costs (fragment) № p/p 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8

Name of work Processing plates OSB 2500  1250  9 mm NLK Marking Undercut Cutting Grinding Primer Reinforcement Drilling holes Preparatory and final operations Total:

Standard (hour)

Rate (RUB)/ hour)

Cost (RUB)

4 16 24 12 5 32 0.2 2

30 25 50 40 20 60 15 14 –

120 400 1200 480 100 1920 12 28 4260

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As shown by the research conducted by the author, the summary rate of indirect costs, including costs of maintenance of production and management, is formed on the basis of their estimated value in the context of production unit (cost center) or enterprise and the indicator selected as the distribution base for the planned period. The generally accepted approach to attribution of indirect costs to the planned cost of a product involves the use of a special coefficient Kt: Kt = Pt = H,

ð3Þ

where: Pt—estimated indirect costs of period T; H is the indicator used as a distribution base by cost center or enterprise. Studies have shown that there are no standard methods for selecting an indicator as a basis for the allocation of indirect costs. However, in [13] it is recommended to use: at high labor intensity - direct labor costs; in case of significant material intensity - direct material costs; in the absence of both trends - revenue. This source rightly points out that the selection of an indicator as the base of distribution should be preceded by careful situational analysis. The NIC indirect cost rate per product is calculated by multiplying Kt by the value of the corresponding direct cost item of the calculated object (2): NIC = K * Hi ;

ð4Þ

where: Hi is the item of calculating i-th object, corresponding to the distribution base. For example, in the 2nd quarter of 2018, which is scheduled to release the product, indirect costs would amount to 893000 (RUB). Accounting policy of the enterprise provides as the basis of distribution the indicator of direct labor costs, which amounted for the planned period of production division 562000 (rubles). Planned distribution factor shall be calculated as follows: 893000/562000 = 1,59. Indirect costs of the planned release as long as the cost of direct labor costs amounts to 132,000 rubles and will be equal to 209 880 rubles. (1.59 x 132000). Thus, according to the author, a structurally planned calculation can be presented as a set of consolidated norms of direct material and direct labor costs, as well as a consolidated rate of indirect costs (Fig. 2).

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Planned calculaon of the product cost

Consolidated standards

Direct material costs

Direct labour costs

Volume of output

Indirect costs

Fig. 2. Structure of planned cost calculation

It should be borne in mind that the PCS is dynamic, since the consolidated standards may be revised during the operating period in accordance with results of organizational and technical events focused on the introduction of innovations in the field of organization and technology, production management and accounting.

2 Conclusions The use of planned calculations, based on the use of consolidated norms of direct and indirect costs, involves not only a significant improvement in the quality of planning, cost accounting and calculation cost of production, but allows simultaneous improvement in many areas of production and financial activity of an enterprise at all stages of the value creation. Structuring of the PCS implicitly involves an introduction of a regular practice of scientifically and economically justified planning and rulemaking work carried out in the context of specific production processes of value creation based on the principles of maximum rationality of resources available to an organization. The planned calculation method should become an important, widely used tool, firmly incorporated into the tool platform for the implementation of production management functions of the organization, including:

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• Monitoring of the system of norms and actual production costs in the context of divisions and for the enterprise as a whole, which involves the prompt identification of emerging deviations and carrying out timely normalized costs by mandatory recording in special registers of reasons and causer of deviations from values and changes of norms; • Formation of the information base for estimating the cost of defective products and stocks of unfinished production at inventories; • Integrated economic analysis and cost planning, both manufactured products and prepared for release; • Management accounting and controlling costs for production and sales of products; • Estimated planning (budgeting) of production costs, etc. Results obtained in the course fully correspond to the hypothesis of the study on the effective use of PCS in management process of an industrial enterprise proved the necessity of institutionalization of methods of planned calculation, its incorporation into the operating system of accounting of economic activity and corporate management in general. As an important direction of future research, the author considers the development of integrated approaches to the formation of an independent function of calculation process—planning, which allows to balance the cost management system at all levels and ensure its sustainability. An important condition for the effectiveness of proposed solutions is the implementation of a set of measures to improve the level of competences of management personnel in accounting and calculation sphere. There are promising studies on expansion of the tool platform of cost management, and use of modern methods of calculation, including those related to the use of information resources of big data. Comprehensive implementation of PCS in management practices of enterprises in manufacturing industries will ensure significant reduction of production losses, will create conditions for meeting requirements of optimization of production capacities, and make a serious step to the resource-saving system.

References 1. Accounts plan of financial and economic activities of organizations. http://www.consultant. ru/document/cons_doc_LAW_29165/c37d49a22d7466ccad782d554a428346d0036657/9дa тpa. Appeal 02 February 2019 2. Kondrakov, N.P., Ivanova, M.A.: Management Accounting, 2nd edn., Revised And Additional. NIC INFRA-M, 352 p. (2015). 60 x 90 1/16. Higher Education: Bachelor’s Courses 3. Glushchenko, A.V., Nelyubov, N.N.: Cost Accounting, Calculation and Budgeting in the Agro-Industrial Complex. Master, 189 p. (2008) 4. Dubonosova, A.N.: Cost control system: planned and actual calculation. In: Handbook of the Economist, no. 10 (2015). https://www.profiz.ru/se/10_2015/. Access 28 Feb 19 5. Basova, A.V., Nechaev, A.S.: Accounting Management. INFRA-M, 324 p. (2017). (Higher Education: Master’s Degree)

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6. Volkov, O.I., Sklyarenko, V.K.: The economy of the enterprise: the course of lectures. INFRA-M, 280 p. (2006). (Higher education) 7. Pipko, V.A.: Accounting of Production and Calculation of Production Cost in Agribusiness. INFRA-M, University Textbook, 208 p. (2010) 8. Sokolova, Ya.V.: Management Accounting. Master: NIC INFRA-M, 428 p. (2013). 60 x 90 1/16 - (Baccalaureate) 9. Ilyin, A.I.: In-Company Planning, 219 p. BSEU, Minsk (2008) 10. Encyclopedia of Economics. http://economy-ru.info/info/150/. Accessed 8 Feb 2019 11. Serebryakova, T.Yu., Biryukova, O.A., Gordeeva, O.G., Ivanov, E.A., Kondrashov, O.R. (eds.) Management Accounting. INFRA-M, 553 p. (2018). (Higher Education: Bachelor’s Degree) 12. Drury, K.: Management Accounting for Business Solutions. Translated from English. UNITI-DANA, 655 p. (2003) 13. Kasyanova, Y.: Cost of Products, Works, Services: Accounting and Tax, 3rd edn., revised and additional. ABAK, 424 p. (2017)

Potential for Household Development in the Depressed Regions of Russia Olga A. Nikolaichuk(&), Nina M. Lizunova, and Larisa Yu. Obukhova Financial University under the Government of the Russian Federation, Moscow, Russian Federation [email protected], [email protected], [email protected]

Abstract. The research subject covered in the article is household economy in the depressed regions of Russia. The study aims to define and analyze the effective methods for involving households in a small business enterprise. The research is becoming increasingly urgent and its relevance lies in the fact that the study is intended to determine in theory and adjust timely in practice (at the state level) the production component of the household activities that affects the standard of living and the economic development of the country. Much work remains to be done in the depressed areas of the Far East, which are adversely affected by the downturn in business activity and population migration. Research methodology is comprised of a thorough search for the scientific data, statistical analyses as well as systematization and generalizations of the research findings focused on identifying the current trends and their interpretation, supported by forecasting and planning. The scientific novelty of the study lies in providing analytical information on the interpretation of the economic performance of the country through household involvement in a small business enterprise as real indicators of the country’s economic growth. From the results obtained, we can conclude that the current economic situation in the Far East is not favorable compared to other regions of our country. However, the Far East certainly has the potential to overcome its depressive hurdles and foster the growth and prosperity. Keywords: Households
Human capital
Small business development
Recent trends
Far Eastern Federal District


Economic

JEL Code: Е2

1 Introduction The policy of the Russian government is currently aimed at developing small and medium-sized businesses. The state should stimulate households to interact with the state structures in order to foster the level of economic development both in the central part and in the Far East. Indeed, households do not only meet personal needs, but are

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involved in the distribution of goods and services, and mould the human capital—the basis of the country’s economy. The unsolved problem of the economic growth of the Russian economy aggravated by the lack of effective proposals to involve households in the economic process, hinder the economic development of Russia and the Far East in particular. The research is becoming increasingly urgent and its relevance lies in the following: • the revaluation of households as a country’s potential for economic development; • the lack of effective regulation policy on household economy; • the need to develop directions aimed at attaining a decent living standard for households so that they could save and invest and thus contribute to the growth of the country’s national wealth. In writing the paper, the specific scientific publications, monographs and periodicals were analyzed. Among them is the article “Households in the modern economic system” (Girnik 2011), where the author highlights the significance of households for the modern economic system. He points out that not only the welfare of an economic entity depends on households, but also the well-being of the entire population of the country. Households participate in all micro- and macro regulatory processes together with other enterprises and the state. E.A. Panova, N.N. Oparina and E.V. Andrushina (Panova et al. 2017) discuss the value of workforce in the Far East. One cannot but agree with the authors regarding the importance of human capital. In our study special attention will be paid to the depressed region, the Far East, which is also intended to ensure national security of the country. Nevertheless, there is an urgent need of highly qualified personnel. There is now good evidence to support the argument. In 2012 the Ministry for the Development of the Far Eastern Federal District was established for the purpose of introducing legislation and governing labor relations between employees and employers, and providing them with social guaranties, analyzing which, we can say that the system of incentives has been offered to the employees in the Far East. It is comprised of additional payments which are to raise the material well-being of the population. Obviously special attention should be paid to the support provided by the government. Employees and employers are concerned about the decent living standard and are interested in maintaining their well-being. Highly skilled employees need both better working and living conditions. The development of human capital requires stronger state and regional support. It will help to reduce the brain drain to other towns, regions and countries, as the trend is likely to continue. To develop the region the government is improving working conditions by providing living accommodation and additional payments, while employers receive high-tech equipment. Despite the fact that the state policy is aimed at raising the quality of labor force in the Far East, the Government of the Russian Federation faces a number of difficulties in implementing its policy in full. The region is located far from the central part of the country in close proximity to China which takes “its” interest in the Asia-Pacific region. In our opinion, joint and coordinated actions as well as synchronized decisions made by federal, regional bodies and local authorities and investors will enable the government to pursue an effective policy on human capital management in the Far East, and also lay the basis for the development of the socio-economic potential and offer more opportunities for geopolitical influence.

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2 Methodology In writing the paper, the scientific publications, monographs and periodicals on the research theme were analyzed in detail. A case in point is the article “Households in the modern economic system” (Girnik 2011), in which the author highlights the significance of households for the modern economic system. More specifically, E.A. Panova, N.N. Oparina and E.V. Andrushina (Panova et al. 2017) discuss the value of workforce in the Far East and Gritzko (2018) puts an emphasis on the peculiarities of human capital development in the Far East. According to L.V. Lehnyanskaya and E.S. Chestjuhina (Lekhtyanskaya and Chistyukhina 2016) Russia is the only state in the world which can greatly increase the production of high-quality agricultural products and provide food not only for its population but also for other countries, as Russia has enormous potential for food export. It should be noted that analyzing the research theme we examined articles published in the RBC journals in which the place and role of households in agriculture were described in detail. In the articles particular attention is paid to the president’s views on the economic situation in the Far East. As the president points out, the economic situation is changing for the better in the Far East and we in no way can equate it with the depressed regions of the country (Putin 2017). So the research methodology is comprised of a thorough search for the scientific data, statistical analyses, systematization and generalizations of the research findings focused on identifying the current trends and their interpretation, supported by forecasting and planning.

3 Results By the term “household” we mean an economic entity that is managed by one or more persons who live together in a house or flat considered as a single unit and have a common budget. Households unite employees, owners of large and small capital, land and securities owners, who are employed and are not employed in social production (Girnik 2011). A household should not be identified with the concept “family”. A household may consist of one or more persons, who do not have blood relations with each other. A few years ago, households were mainly perceived as consumer activities, i.e. their activities were aimed only at providing food products and goods which they needed to meet their own needs. In the modern world the number of people who show more entrepreneurial initiative is increasing. Households, for example, put a lot of effort into farming to sell goods, thereby setting up business entities which develop the economy of the country (Lehtyanskaya and Chistyukhina 2016). Today, households are both sellers and buyers. On the one hand, they purchase necessary resources to produce some goods and agricultural products, on the other hand, they themselves act as suppliers of goods. Thus, it seems reasonable to conclude that in the labor market household members are regarded as labor force suppliers.

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Therefore, this business entity has a lot to contribute to the development of small business enterprises. In this paper households located in the Far East are considered to be labor force suppliers to small business enterprises. Rosstat presented the latest statistics on the number of private households from the 2010 census (see Table 1).

Table 1. Private households by household size in the Far Eastern Federal District. Number of private house holds

Of which number of members of private households

The Far 2470782 6120451 Eastern Federal district Cities, 1905169 4598773 towns, urban settlements Rural 565613 1521678 settlements

Of the total number of private households – households, which consist of 1 2 3 4 5 6 or person people people people people more people

Average size of private house holds, people

662726 741634 567651 329435 107789 61547 2,5

529882 578168 444614 244994

71906 35605 2,4

132844 163466 123037

35883 25942 2,7

84441

(Russia Population, Census 2010)

From Table 1 we can see that there are more households in cities and towns than in the rural areas of the Russian Far East. A household predominantly consists of 2 or 3 people. On the whole, the number of households is sufficient to cover everything that needs doing. Not all members of households are able-bodied or able to work after all. Things happen and it is pretty obvious that one member is able to provide the welfare for the entire household. Small business creates new jobs that undoubtedly improve employment prospects and increase household incomes. It now seems certain that rural households are mainly sellers. This is due to the fact that it is much easier for them to do business aimed at producing goods for sale. We think that ecological tourism is a highly topical business for the Far East at the moment (Nikolaichuk and Veleva 2018). To meet the needs of a household, at least one of its members must be employed. Employees could engage in various kinds of activities including ecological tourism, and there is a good deal of evidence that it will take a special place in small business. At the same time, there are households that solely comprise members of a family. The development of this form of business in the agricultural sector of the economy, for example, leads to the formation of private property in agriculture. To provide an explanation, for the number of people who theoretically can be involved in households as labor force suppliers, statistical data are shown in Table 2 (see below).

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Table 2. Population of private households by age groups of the Far Eastern Federal District. Of which live in households consisting of 1 2 people 3 people 4 people person

Number of members of private households Total 6120451 population Including age, years 0–14 1013933 15–17 208737 18–24 64198 25–34 1026689 35–44 882267 45–54 924423 55–64 797189 65 и 592422 бoлee Age not 593 specified (Russia Population, Census 2010)

662726

1483268

1702953

1317740

5 or more people 953764

644 9114 62287 76872 75789 109540 139528 188812

74306 26857 137636 186941 174367 303192 341784 238016

298676 61913 202570 349960 280865 259270 164860 84692

357163 64237 148026 246665 227898 147812 81856 43992

283144 46616 123679 166251 123348 104609 69161 36910

140

169

147

91

46

From Table 2 we can see that the population aged 25–34 prevails in private households. This is the best age to set up your small business, when a person knows what to do, and also has a lot of ambition and time in reserve. The population aged 15– 54 is considered to be able-bodied, i.e. labor force, as 0–14 years old are still children, while after 55 years, most of them are already pensioners. Economically active population in 2010 at the age of 15–72 amounted to 3,238,101 people of which 471,594 were pensioners. Some of this economically active population was involved in the work of small enterprises while others were self-employed. This can be seen in (Fig. 1).

Small and medium-sized buinesses in Russia

51481

97192

Legal entities

Individual entrepreneurs

Fig. 1. Small and medium-sized business in Russia. (Population of Private Houses, Census 2010).

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From the data in Fig. 1, we can conclude that more than 140 thousand people were involved in small business. This makes up only about 2.5% of the total population of the Far Eastern Federal District (by 2010 census data). Such insignificant involvement in small business can be primarily associated with the uneven territorial development. The key role must be played by human capital, which cannot fully realize itself due to the numerous reasons, such as: • social and economic inequalities, which are clearly evident in rural areas; • the low density of the population and economic activity; • insufficient development of transport, social and energy infrastructures. All these factors result in the concentration of labor force in the cities and towns (Gritsko 2018). Only a very small part of households managed to participate in the development of small business in the Russian Far East in 2010. Moreover, since the last census was held in 2010, our current data on households objectively are not likely to be accurate, though we can make assumptions about the current situation, relying on the data from Rosstat. Firstly, let’s compare the population in the period from 2010 to 2018 (see Table 3). The decrease and increase in population are primarily associated with immigration and emigration.

Table 3. Population of the Russian Far East 2010–2018. Year Population size (people) 2010 6293129 2011 6284932 2012 6265833 2013 6251496 2014 6226640 2015 6211021 2016 6194969 2017 6182679 2018 6165284 (Russia Population, Census 2010), (Federal State Statistics Service 2019).

From the table, we see that the population of the Far East has been gradually decreasing from year to year. Consequently, the size of the labor force that can be involved in the entrepreneurial sector of the economy is falling (Motrich and Molodkovets 2019). They have been trying to solve this problem for many years, but the results are disappointing. The assumption that, in the future, the migration outflow of the population from the Far East to other regions of the country is not unreasonable (Motrich and Izotov 2018).

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V.V. Putin believes that the country’s population is one of the most important indicators of economic development and the effectiveness of economic programs. “I have to say that so far this indicator is in an alarming “red zone”. Putin stated that: “the number of those who leave the Far East region, exceeds the number of those coming and the influx to the central regions is growing - this is an obvious fact, this is statistics” he added, emphasizing that the migration of the population still has the negative dynamics” (Putin 2019). “In order for the situation to change, local authorities should pay more attention to health problems, housing and education”, the head of state said (Putin 2019). The government realizes that the economic situation in the Far East is much worse than in other federal districts and they promise to improve living conditions there. But in practice it’s easier said than done: the authorities fail to focus on the vital problems. The first step forward are Eastern Economic Forums, which are now organized regularly. At such events, the population can get acquainted with the products of small enterprises, someone may even find an idea for their own business. Basically, households as economic agents can realize themselves fully mostly in the agricultural sphere. The share of agriculture in the gross regional product of the Far Eastern Federal District is 6%. The agro-industrial complex itself has a large share of small business, which acts as a driver of industry development in the macro- region. The contribution of personal plots to the total production volume makes up 49.5%. Of these, 35.3% come from agricultural enterprises, while 15.2% are provided by peasant farms (Farmers are on Top 2019). We can say that over time, small business is gaining more and more popularity, compared with previous years. In today’s world, more and more people are involved in entrepreneurial activity and we hope that every year this trend will be growing. But we must take into account that in the Far East the economic situation is unstable, which prevents many people from realizing their potential. Due to this fact this, most smart people go to other cities and countries, where they can confidently start their own business without any problems. However there are some brave people who are trying to set up their own businesses and stay in the Far East. Now it is facilitated by the support and financial assistance from federal, regional and municipal authorities. For example, the Law “On the Development of Small and Medium-Sized Enterprises in the Primorsky Territory” was adopted. It reflects the main provisions and regulates relations between the executive and legislative branches, defines the forms and conditions for supporting small businesses in the Primorsky Territory (Golobokov et al. 2018). Such measures should attract specialists and boost the economy of the regions as small business is mainly set up in towns, where life differs from that in the large cities (Izotov 2017). In general, the problem of employment is still relevant. For many households the standard of living is inadequate because they have no job, since the number of people wishing to work exceeds the number of vacancies. And most often this problem is faced by a young population. That’s why in universities it is necessary to pay close attention to training of specialists who have socio-environmental and economic knowledge, so that graduates can more easily integrate into the modern labor market. (Nikolaichuk et al. 2019). The structure of the region’s economy and, consequently, the structure of labor demand from employers result in the gap between the demand for

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labor and its supply from higher school graduates. It is the reason why a significant part of the graduates remain unemployed. Moreover, no stable links between universities and the regional labor market have been formed yet. This aggravates the problem of growing number of unemployed among graduates from higher school and specialists whose work does not match their qualifications (Filippova 2019).

4 Conclusion Summing up, we can say that a household includes one or more persons who have a common budget and whose activities are aimed at meeting personal needs. They play an important role in the development of economy at micro and macro- levels. This is primarily due to the fact that they are directly involved in the trade turnover. We need not underestimate the role of a household and it should be considered as an independent subject of economic legal relations. Household involvement in business currently tends to expand, but mostly in towns and cities, which is not surprising, due to higher availability of labor there rather than in rural areas. In the Far East, the current economic environment is unfavorable compared to other regions of the country. The problem is that small business is not sufficiently developed in that distant area. As a result, some people cannot find a job in the field of small and medium-sized enterprises, while others cannot create their own business due to the unstable economic situation and insufficient government support. Nevertheless, this federal district is not the weakest one, and it sure has the potential to overcome the depressive state of things and strive for further prosperity. The government is putting a lot of effort into the development of the Far East. That means that small business will also be expanding, and numerous household members will be able to find a job in this economic zone. In conclusion, it can be noted that households play an important role in the economic system of the state. While satisfying their personal needs, they engage in the distribution of goods and services over the market, they also form the basis of human capital for the development of the country’s economy. Based on the results obtained and the facts analyzed, it can be concluded that households are the main supplier of labor for small businesses. It should be noted that state policy is currently aimed at the expansion of small and medium-sized businesses. Consequently, the government need to stimulate household members and interact with them as well as develop the overall level of the economy, including business in the Far Eastern area.

References Girnik, V.Yu.: Households in the modern economic system. STEZH (12), 1–8 (2011) Golobokov, A.S., Budnikov, I.A., Ammosova, K.L.: Actual issues of small business support in the Primorsky Territory. ANI Econ. Manag. 2(23), 1–7 (2018) Grivanov, R.I., Shokurova, Yu.S.: Human capital as a factor of implementation of projects of development of the regional economy of the far east. ANI Econ. Manag. 1(26), 8–16 (2019)

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Gritsko, M.A.: Features of forming human capital in large centers of population cconcentration of the Far East of Russia. Power Manag. East Russia 4(85), 2–12 (2018) Izotov, D.A.: Far east: innovations in state policy. Eco (4), 27–44 (2017) Farmers are on Top. RBC, issue no. 1, 5 September 2019. https://plus.rbc.ru/news/ 5d6fffe37a8aa9328fa3cd36/. Accessed 20 Oct 2019 Federal State Statistics Service (2019). http://www.gks.ru/. Accessed 11 Oct 2019 Filippova, K.V.: To the question of personnel support of industrial enterprises of the Russian Far East. Econ. Bus. Theory Pract. (6–2), 1–7 (2019) Lekhtyanskaya, L.V., Chistyukhina, Yu.S.: Household as a promising direction of agricultural development in the Russian Federation. Soc. Polit. Econ. Law (11), 5–11 (2016) Motrich, E.L., Izotov, D.A.: Modern trends and problems of migration in the border region of Russia: the far east. Probl. Forecast. 3(168), 28–37 (2018) Motrich, E.L., Molodkovets, L.A.: Shaping the population and labor resources in the Russian Far East. Econ. Soc. Changes Facts Trends Forecast 12(1), 53–69 (2019) Nikolaichuk, O.A., Lizunova, N.M., Obukhova, L.Y., Moiseeva, T.V., Richter, K.K.: Integrated approach to train environmentally-responsible students of economics and finance. In: Popkova, E. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826. Springer, Cham (2019) Nikolaichuk, O.A., Veleva, M.V.: Pecularities of Russian tourism in Eastern European Countries. In: Financial and Economic Tools Used in the World Hospitality Industry Proceedings of the 5th International Conference on Management and Technology in Knowledge, Service, Tourism and Hospitality, pp. 155–160 (2018) Panova, E.A., Oparina, N.N., Andryushina, E.V.: The state of labor resources of the Far Eastern Federal District of the Russian Federation in 2014–2015: zones of risks and opportunities. Public Adm. Electron. Bull. (60), 17–23 (2017) Population of Private Houses (Census 2010). http://www.gks.ru/free_doc/new_site/perepis2010/ croc/Documents/Vol7/pub-07-02.pdf. Accessed 13 Sept 2019 Putin announced the “red zone” of demography in the Far East. RBC, 04 September 2019. https://www.rbc.ru/rbcfreenews/5d6f9e8c9a7947772ac0695b. Accessed 13 Sept 2019 Russia Population (Census 2010). http://www.gks.ru/free_doc/new_site/perepis2010/croc/ Documents/Vol6/pub-06-11.pdf. Accessed 13 Sept 2019

Science and Technic Revolution’s Impact on the Economic Development of Germany in 16th – 19th Centuries Roman Yu. Boldyrev1(&) , Slavyana Yu. Boldyreva1 Asiyat A. Vakhabova2 , and Olga L. Tychina3 1

,

Northern (Arctic) Federal University named after M.V. Lomonosov, Arkhangelsk, Russia {r.boldyrev,s.boldyreva}@narfu.ru 2 Volgograd State Agrarian University, Volgograd, Russia [email protected] 3 Nyagan College of Technology, Nyagan, Russia [email protected]

Abstract. The authors consider how the introduction of new equipment and technologies into the German economy of the 16th–19th centuries led to new opportunities in the economy, to direct and side effects in the development of science and technology on the basis of the concept of global history, the theory of the nexus of science and production of N. Rosenberg and L. Beardzell and the concept of global economic history of R. Allen. Engineers of the 19th century used the technical inventions of the 18th century, originally created for one industry, in the widest areas. The introduction of new energy sources led to the appearance of by-products and the development of the corresponding branches of science and economics. The widespread use of technical innovations led to the development of transport infrastructure and a reliable communication system, which had a beneficial effect on the development of trade, labor migration and the supply of industry with raw materials. The introduction of technology required the attraction of large investments, which led to the creation of joint-stock companies and investment banks. This allowed the German Empire to eventually circumvent Great Britain with industrial production and foreign trade. The rapid development of the natural sciences and the introduction of technology in production were caused by the success of polytechnic education in Germany. On the one hand, the key engineering and technical personnel of German companies had a higher education, and on the other hand, university research workers themselves made discoveries that would increase production efficiency and create new products. JEL Code: O31


O33
N53
N63
N73

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 83–92, 2020. https://doi.org/10.1007/978-3-030-47945-9_10

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1 Introduction The beginning of the modern times in Germany is traditionally associated with key changes in the economy. The rapid population growth, the rise in agriculture and the demand for agricultural products, in turn, affected prices and income. The transfer of the most important trade flows from the Mediterranean Sea to the Atlantic Ocean and the “price revolution” had a positive effect on the development of the German economy and trade. Thanks to the successful combination of these factors in Germany the early modern times became the heyday of the German economy (Lütge 1958). However, the Thirty Years’ War (1618–1648) had a very deep and devastating impact on Germany: slow demographic growth, a crisis in agriculture, and its economic development were slowed down for a long time. Historians and economists, traditionally pay more attention to the demographic and economic factors that ensured the economic recovery, considering the economic development of Germany in modern times. The technical aspect remains out of side. This article is an attempt to fill this gap and show how the introduction of new equipment and technologies in the German economy and production led to new opportunities in the economy and to consider which side effects in the development of science and technology have arisen.

2 Methods The work is based on the concept of global history, the theory of the interrelation of science and production by Rosenberg and Birdzell (2008), as well as the concept of global economic history by Allen (2011). The authors proceed from the fact that the introduction of new technologies initially leads to slower rates of economic growth than when borrowing ready-made technological solutions. It was technology that became the driver of the industrial revolution and ensured unprecedented longcontinuous economic growth. The introduction of technology went according to the scheme: weaving machines – steam engine – new metallurgy technologies – development of machine tool and machine building – development of transport and communications. It is the sequence that we will consider the introduction of new technology and its economic effect.

3 Analysis 1. Agriculture. Over 80% of the population of Germany in the early modern times lived in villages. The economic unit in agriculture was still the extended family, in which everyone worked to provide themselves with the necessary surplus product. Relations within the extended family, as well as ideas about farming, remained archaic, which is why agriculture in most areas developed extensively (Aubin and Zorn 1971). In this regard, German agriculture quickly faced a new problem – land scarcity, which forced the involvement of previously empty uncomfortable land (Schilling 1988).

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Having reached the limit of arable land expansion, the Germans were forced to search for intensive farming methods (Henning 1991). Conrad von Heresbach’s “Foure Books of husbandry” was a practical guide to improving soil treatment. He was one of the first who paid special attention to fertilizing soils with manure, compost, marl, lime, ash, grass rotation, which also contributes to soil regeneration. Thanks to new farming methods, peasants could receive crops, depending on the type of crop, from 10-fold to 26-fold. Himself peasants of the infertile Eastern-Elbe-zone, who managed the farm in the old-fashioned way, harvested only 5-fold. Livestock breeding became an important source of income in the 16th–17th centuries, as the demand for this type of products was constantly growing. Livestock husbandry developed especially actively in Northern Germany, where the vast pastures and the main consumers were located closely (Mottek et al. 1957). In the 17th century, agriculture entered a period of crisis, caused primarily by the Little Ice Age – a significant cooling. This entailed a reduction in the vegetative period of plants, a reduction in the favorable for agriculture zone, frequent crop failures, rising food prices and poor nutrition, pauperization and famine in the inferior classes (Parker and Smith 1997). The crisis was aggravated by the consequences of the Thirty Years War. Abandoned land plots also were not cultivated at the beginning of the 18th century. In most areas of Germany, the three-field system still prevailed, but in a number of regions in the 18th century they began to use multi-field crop rotation or introduce a single-field system with intensive soil fertilization. The growing of various fruit and vegetable has risen sharply, especially in the vicinity of cities. String, fiber, oilseed, and other crops began to be introduced into production (Belkovets 2005). A notable achievement in agriculture was the expansion of sown areas through land reclamation and drainage, cultivation of peatlands and deboning. Especially intensively these processes took place in Prussia and in Bavaria. To raise livestock, root crops and fodder crops were introduced. From the second half of the 18th century potatoes were introduced. By the end of the century, the development of sheep farming became a prerequisite for the production of woolen fabrics. As a result, over the 18th century, sown area increased by 60%, and productivity per unit of cultivated land increased by 20% (Vierhaus 1984). Meanwhile, since population growth and demand for food products significantly outstripped their production, there was no significant improvement in the nutrition of the population. In the first half of the 19th century in Germany, the traditional triple field was replaced by the first “improved” triple field (when the field left under steam was used to grow leafy vegetables), and then the modern crop rotation. Sown areas have increased almost 2 times, and harvest per hectare has increased by 50–60%. Among all cultivated crops, potatoes and sugar beets came to the fore. In animal husbandry, the transition from a grazing system to year-round livestock maintenance in the barn, breeding of new highly productive breeds led to an increase in the production of meat by 2 times and milk by 2.5 times (Lutz 1990). 2. Industry. The emergence and development of industrial production in the German states is traditionally associated with the mining sector, concentrated in the Harz, the Ore Mountains, the Thuringian Forest and Alps. They have been systematically used since the middle of 15th century (Aubin and Zorn 1971). The scientific revolution of the

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second half of the 16th – 17th centuries played a huge role in the intensification of mining. Application of a water wheel to various water-siphoning devices. The most primitive of them was a device that was a chain wrapped around a shaft of a waterwheel with buckets hung to it for scooping up water (Bulgenkunst), which was used in the Ore Mountains. A more sophisticated machine, consisting of a chain with balls passed through a water sump driven by a water wheel (Heinzenkunst), was first used at the Harz mines in 1535 (Dehler 2008). The use of such machines made it possible to build new mines deep in the ground and reintroduce old mines abandoned due to water breakthroughs. The discovery of sintering furnaces was revolutionary in ore smelting technology (Wengeroth 1997). This method, based on the difference in the melting temperature of various ores, was used to extract silver from copper ore using lead (Lange 1988). This allowed the first extraction of precious metal from copper ores with a low silver content (Schilling 1988). Copper smelting required a large number of workers, sources of copper ore, water and wood. Well-developed transport network was also needed. All these resources were available in the Mansfeld district in Lower Saxony, which made it one of the leading mining regions (Prescher 2003). Craft and industry in the second half of the 17th–18th centuries developed faster than agriculture. The workshop organization of production that has been preserved since the Middle Ages did not allow the use of any entrepreneurial or technical innovations. And yet, the development of manufactories, albeit slowly, but went on. The growth of the population’s demand for fabrics contributed to the development of manufacturing in the textile industry. In the 1820–1840s, the industrial revolution began in Germany. The first phase of industrialization (until the 1840s) primarily affected light industries (Ziegler 2012). So, in the kingdom of Saxony, during the period of the continental blockade and the breakdown of traditional trade relations with England (1806–1813), 25 own cotton mills were founded. They used the smuggled and re-designed English mule-machines of Samuel Crompton (they got this name because they combined the attributes of the water-wheel spinning machine R. Arkwright with the signs of the “Jenny” mechanical spinning wheel equipped with parts of a vertical spindle of the mechanical spinning wheel “Jenny” by J. Hargreaves (Brockhaus), while the number of rotating spindles on them was increased. In total, by 1815 the number of own spinning machines in Germany increased by 20 times, and the total number of spindles – up to 256 thousand pieces (Kiesewetter 1989). As a result of further improvement of the technology of weaving machines and enlargement of production (in 1837, the first large textile factory was founded in Augsburg – “Mechanical Cotton Spinning and Weaving Factory”) textile production in Germany in 1815–1849 increased from 1963 tons to 15,218 tons, and labor productivity – from 46 kg to 253 kg per weaving mill (Lutz 1990). The introduction of various innovations in spinning production has reduced labor costs and cotton prices. Each price decline led to even greater sales growth. The use of machines allowed entrepreneurs to engage female and child labor, which was paid much lower. Constant sales growth stimulated the rapid introduction of new innovations by reinvesting profits to further save labor costs (Ot agrarnogo 1998). Gradually, Germany began to have its own metallurgical and engineering industries. So, in 1818 Friedrich Harcourt, the son of a Westphalian landowner, turned the

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Vetter Castle on the Ruhr into the engineering factory Harcourt&Co Mechanical Workshops, thereby laying the foundation for the industrialization of this region of Germany. Initially, his factory did not have a certain specialization; it produced steam engines and equipment for gas lighting, as well as cold and firearms, armor. However, in connection with the beginning of the railway boom in 1840, it was redesigned to produce car axles and wheels, and since 1850 steel parts for the construction of buildings and bridges (Holst and Fischer 2008). The construction of railways caused an increase in demand for steel. The setting up of one kilometer of the railway in the 19th century required 160 tons of steel (until 1890 about half of all steel produced in Germany was used for railroads), which contributed to the accelerated development of this industry. In 1811 Friedrich Krupp founded the iron foundry in Essen to establish the production of high-quality steel according to the English model. He decided to counterfeit apply pudding at his factory – a method for producing soft low-carbon iron from cast iron by smelting in a special furnace without fuel access, developed by Henry Cort in 1784 (Barraclough 1990). However, the demand for steel in Germany was then low, and its quality left much to be desired (smelting was carried out by trial and error), therefore, after his death in 1826 the metallurgical entrepreneur left his debt firm to his son Alfred. The heir continued experiments with the development of better grades of steel and at the same time began to look for new markets. An important role in the heyday of the enterprise was played by railroad fever, which sharply increased the demand for wheels, axles and rails. Thanks to the production of components for railways, primarily seamless wheel bandages Krupp managed to gain the leading position in the global market. Technological innovations in metallurgy were paramount for the industrial development of Germany. In 1856 the Bessemer process was invented in England, which significantly reduced the cost of steel production. In 1866 the appearance of openhearth furnaces made it possible to control the entire melting process and, consequently, the production of steel with different hardnesses. In 1879 the British chemists Thomas and Hilkraist discovered a method for smelting and refining iron ore with a large admixture of phosphorus. At the same time, production wastes (Thomas’ clag) could also be sold as agricultural fertilizer. This allowed the Germans to begin using rich deposits of such ores in the Alsace-Lorraine region (Ot agrarnogo 1998). The railroad boom has led to an increase in production in machine building. As a monopolist, the British company “Robert Stephenson & Co” set very high prices for its products. Thus, the purchase of the first two locomotives “Adler (Eagle)” and “Pfeile (Arrow)” cost the railway company Ludwig 14,000 guilders—about the same as Nuremberg spent annually on the newly created street lighting system (Bischoff 2008). In order to overcome dependence on England in locomotives and bring down prices for them, many German entrepreneurs joined this production, adopting technological experience and the achievements of other countries (primarily England and Belgium). Soon, the largest machine-building enterprise in Germany (and the third in the world) was the August Borsig factory, which employed 1,100 workers. To convince everyone of the reliability of the German locomotive, on July 21, 1840 a competition was held between the locomotives produced by R. Stephenson and A. Borsig on the Anhalt railway. The distance between Berlin and Jüterbog Borsig locomotive was 10 min faster (Amtlicher Bericht 1844). In 1841–1858, the plant produced one thousand

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locomotives. Since 1846 in Saxony, and in 1850 in Nuremberg the production of freight cars was established (locomotive building centers also appeared in Baden, Württemberg, Hanover and Grand Duchy of Hesse). The result was not too long in coming: in 1842 only 38 of the 245 (15.5%) locomotives plying on German railways were made in Germany itself and in 1851 out of 1,084 locomotives 679 (62.6%) were German-made (Rürup 1992). Thus, already in the 1840s, German manufacturers of locomotives caught up with the British, and in the 1850s German railway companies imported steam locomotives only in the most extreme case (Ziegler 2012). The second industrial revolution of the 19th century was associated with the active introduction of electricity into human production and life (Ot agrarnogo 1998). Werner Siemens also became the inventor of the world’s first electric current generator without the usage of permanent magnets. In 1866 he discovered the dynamoelectric principle and created the first dynamo machine on its basis (Geschichte der Straßenbahn 2019). In 1879, in order to amuse visitors of the Berlin Industrial Fair, Siemens designed a two-axle electric locomotive that was transporting three wagons by a 300-m ring railway. Each wagon contained 6 passengers. The first German commercial tram was opened by the same Siemens on May 16, 1881 in the Berlin suburb of Lichterfelde. The German company “AEG” in 1891 began the construction of urban tram tracks in Halle, which became the first enterprise of such type in Europe. In 1896, Siemens and Halske began construction of the first stage of the Berlin metro (Kemmann 1902). Incandescent lamps with tungsten filament, developed by German scientist Karl Auer von Welsbach, began to be produced in 1905 at the Osram company he founded in the Friedrichshain district of Berlin (Wittendorfer 2019). 3. Transport and Communications. In the 18th century, German foreign trade achieved relative success. Through Bremen and the Netherlands Germany exported flax and agricultural products to England, Spain and France, and imported tobacco, sugar, fabrics and other goods. Fishing and processing, as well as Asian trade, were concentrated in Emden. Lübeck dominated in trade in the Baltic, where grain played an essential role. The development of foreign trade was associated not only with the growth of demand, but also with the advent of new convenient means of transportation – channels connecting the flow of various rivers. Since the end of the 17th century, intensive canal construction began in Germany, which propelled the economies of many territorial states, especially Prussia, where a whole system of water transport arteries connecting Berlin with the coast of the North and Baltic Seas was built. In the first half of the 19th century there was a great revolution in the means of communication. In 1824 the first steamboats went along the Rhine, and in 1827 a regular shipping service was opened between Cologne and Mainz, as well as along the Danube. In 1836–1845, on the initiative of the Bavarian king, the Ludwig Canal was built which connected the Main and the Danube. On December 7, 1835 the first railway in Germany between the cities of Nuremberg and Fürth came into operation. The “Adler” locomotive traveled a distance of 6 km in 9 min—much faster than any carriage (Bischoff 2008). The first railway, important from the economic point of view, was built in 1837 between Leipzig and Dresden. Its length was 115 km. In 1838 the Berlin – Potsdam, Düsseldorf – Erkrat and Braunschweig – Wolfenbüttel lines were put into operation. In 1840 Munich – Augsburg and Mannheim – Heidelberg, and in 1843,

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Cologne – Aachen – Antwerp were commissioned. By 1840 the total length of railways in Germany was 580 km, and by 1850 more than 7 thousand km long (Borchardt 1978). From 1870 to 1880, the length of rail tracks increased from 20 thousand to 34 thousand km. From 1840 to 1880, the share of all investments in the German economy allocated for railway construction increased from 15 to 25%. (Condrau 2005; Walter 2011). The emergence of a new mode of transport notably increased the volume and speed of passenger and cargo transportation: in 1851, a high-speed train delivered passengers from Berlin to Cologne in just 17 h (Bischoff 2008). Besides the railways, Germany in the first half of the 19th century began to be covered by a network of highways, the construction technology of which was borrowed by the Germans during the Napoleonic occupation. Highways, unlike country roads, were designed on the basis of engineering features, i.e. significantly straight, they had a drainage system, have ups and downs with a slight slope of 3–5%, which allowed the use of vehicles without braking systems. Often highways consisted of a gravelled main road and a summer dirt track. Plants along the roadsides protected pass-fats either from the scorching heat and wind or the soil from erosion (Herder 1854). Due to the improved quality of roadways, it was now possible to carry 3 times more cargo on highways than on roads with an old pavement or 5 times more than on land routes not equipped with any coating (Lutz 1990). So, only in Prussia from 1816 to 1835 the length of land roads increased by 2.6 times, from 3,836 to 10,120 km. (Hahn 2011). The transport revolution had far-reaching socio-economic consequences: transportation prices decreased by 80%, social mobility increased significantly, and new markets opened up for minerals, food, and consumer goods (Lutz 1990). A single German market and regional specialization had been gradually developed. A real revolution has occurred in the field of information transfer. The emergence of railways, shipping links and highways, as well as the distribution of standard-type postage stamps (since 1840) made it possible to rationalize the mail delivery system. The telegraph is gradually becoming a powerful competitor to mail. The optical telegraph has been known since the beginning of the 19th century, but was used exclusively in the interests of state governments. The pioneer of the use of the telegraph for civilian purposes was Prussia, which in 1832–1833 built the Berlin-Koblenz optical telegraph line with 61 intermediate relay stations with a total length of 550 km. The HamburgCuxhaven telegraph line came into operation in 1838, and by 1847 it was extended to Bremerhaven and Bremen (Aschoff 1984). With the advent of the optical telegraph, the transmission rate of information for the first time surpassed the speed of riding the horse. The massive use of the electric telegraph began after improving its design by Werner von Siemens and Johann Georg Halske made. They made a telegraph device in the form of a dial fixed with nano letters, when pressing the keys, an arrow deflected by an electromagnet indicated a required letter. Siemens himself described the advantages of his device the following way: “My Telegraph only needs a wire. It is possible to play it as the piano, conveying the message with the same speed as pressing buttons one after another. In addition, it is surprisingly simple and completely independent of the current” (Feldenkirchen 2008). In 1847 the first public telegraphs line was laid between Bremen and Bremerhaven for a length of 65 km (Schulz 2002). Members of the Bremen Stock Exchange, shipowners and captains received telegraph messages for a fee. In 1848 the longest telegraph line in Europe between Berlin and Frankfurt am Main

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was built (Aschoff 1995). In 1850 the German-Austrian Telegraph Union was founded, which began the construction of communication lines along the railways (telegraph communication made it possible to coordinate better the movement of trains). In 1850 Paul Julius Reuter founded a news agency in Aachen that transmitted messages between Paris and Berlin with the help of carrier pigeons, which covered this distance much faster than coach cars. In 1851 birds were replaced by a telegraph line (Schuschmel 2015). In 1851, with the underwater cable, a telegraph communication was established between Germany and England, and then with the USA (Lutz 1990).

4 Results Engineers of the 19th century used technical inventions of the 18th century in the widest areas. So, the steam engine, originally created for pumping water from the mine, found its application not only in mining, but also in industry, the construction of vehicles (steamer, steam locomotive). The introduction of new energy sources led to the appearance of by-products and the development of the relevant branches of science and economics. For example, aniline was discovered by F. Runge in the analysis of coal tar – a by-product of the production of metallurgical coke, which subsequently led to the development in Germany of the production of aniline dyes, which are widely used in the textile industry. The widespread use of technical innovations led to the development of transport infrastructure and a reliable communication system, which had a beneficial effect on the development of trade, labor migration, and the provision of industry with raw materials. The introduction of technology required to attract investments, which led to the creation of joint-stock companies, investment banks, which accumulated the funds of investors and invested them in the development of production and trade. This allowed the German Empire to ultimately bypass the UK in industrial production and foreign trade. It should be noted that the development and implementation of technologies would not have been possible without the development of a polytechnic education system in Germany. In the 1820s and early 1830s, Polytechnic schools and institutes were opened in Berlin, Karlsruhe, Darmstadt, Munich, Dresden, Stuttgart and Hannover. Most of them were transformed into technical universities by the end of the 19th century (Henning 1991). The key engineering and technical personnel of the companies had a higher education, and scientific researchers from universities made discoveries that would increase production efficiency and create new products (Allen 2011).

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Aschoff, V.: Geschichte der Nachrichtentechnik. Beiträge zur Geschichte der Nachrichtentechnik von ihren Anfängen bis zum Ende des 18. Jahrhunderts. Springer-Verlag, Berlin (1984). 255 p. Aschoff, V.: Geschichte der Nachrichtentechnik. Nachrichtentechnische Entwicklungen in der ersten Hälfte des 19. Jahrhunderts, vol. 2. Springer-Verlag, Berlin (1995). 261 p. Aubin, H., Zorn, W.: Handbuch der deutschen Wirtschafts- und Sozialgeschichte, vol. 1. Klett, Stuttgart (1971). 1711 p. Barraclough, K.: Steelmaking: 1850–1900. Institute of Metals, London (1990). 320 p. Belkovets, L.P.: Germaniya v epohu absolyutizma (1648–1789 gg). In: Bonwetsch, B., Galaktionov, Yu.M. (ed.) Istoriya Germanii. S drevnejshih vremen do sozdaniya Germanskoj imperii, vol. 1, pp. 283–366. Kuzbassvuzizdat, Kemerovo (2005) Bischoff, J.: Vorwärts durch Raum und Zeit. In: Die Industrielle Revolution: wie Dampf, Stahl und Strom die Welt verändern, Geo-Epoche, no. 30, p. 62 (2008) Borchardt, K.: Grundriß der deutschen Wirtschaftsgeschichte. Vandenhoeck und Ruprecht, Göttingen (1978). 104 p. Brockhaus Enzyklopädie Online, “Spinnerei”. https://brockhaus.de/ecs/permalink/4EB80D488 237A8051302D8DC11E24D9D.pdf. Accessed 31 Juli 2019 Condrau, F.: Die Industrialisierung in Deutschland. WBG, Darmstadt (2005). 141 p. Dehler, M.: Wassermanagement im historischen Bergbau (2008). http://www.geo.tu-freiberg.de/ Hauptseminar/2008/marcus_dehler.pdf. Accessed 31 Juli 2019 Feldenkirchen, W.: Werner von Siemens. Lebenserinnerungen. Piper Verlag, München (2008). 336 p. Geschichte der Straßenbahn: Geschichte der Straßenbahn Halle. Homepage über die Straßenbahn in Halle (Saale) (2019). http://www.strassenbahn-halle.de/info/geschichte/halle.php. Accessed 31 Juli 2019 Hahn, H.-W.: Die industrielle Revolution in Deutschland. Oldenbourg, München (2011). 193 p. Henning, F.-W.: Handbuch der Wirtschafts- und Sozialgeschichte Deutschlands, vol. 1. Schöningh, Paderborn (1991). 323 p. Herder: Chaussée. In: Herders Conversations-Lexikon, vol. 2, p. 73. Herder, Freiburg im Breisgau (1854) Holst, I., Fischer, H.: Das Ende der alten Zeit. In: Die Industrielle Revolution: wie Dampf, Stahl und Strom die Welt verändern, in: Geo-Epoche, no. 30, p. 22 (2008) Kemmann, G.: Zur Eröffnung der elektrischen Hoch- und Untergrundbahn in Berlin. Verlag von Julius Springer, Berlin (1902). 64 p. Kiesewetter, H.: Industrielle Revolution in Deutschland, 1815–1914. Suhrkamp, Frankfurt am Main (1989). 350 p. Lange, P.: Saigerhütten in Thüringen. In: Kupfer. Silber. Stahl – Beiträge zur Geschichte der Metallurgie, pp. 15–17. Museen der Stadt Olbernhau, Olbernhau (1988) Lütge, F.: Die wirtschaftliche Lage Deutschlands vor Ausbruch des Dreißigjährigen Krieges. In: Jahrbücher für Nationalökonomie und Statistik, vol. 170, pp. 43–99 (1958) Lutz, H.: Die Deutschen und ihre Nation. Zwischen Habsburg und Preußen. Deutschland 1815– 1866, vol. 2. Siedler, Berlin (1990). 527 p. Mottek, H.: Wirtschaftsgeschichte Deutschlands. Ein Grundriss. Von den Anfängen bis zur Zeit der Französischen Revolution, vol. 1. Deutscher Verlag der Wissenschaften, Berlin (1957). 376 p. Otagrarnogo: Ot agrarnogo obschestva k gosudarstvu vseobschego blagosostoyaniya. Rossijskaya politicheskaya enciklopediya, Moscow (1998). 261 p. Parker, G., Smith, L.: The General Crisis of the Seventeenth Century. Routledge, London (1997). 314 p.

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The Intercultural Communications in the Global World: Methods and Tools for Building Relevant Models Natalia A. Orekhovskaya(&), Tatiana N. Seregina, Elena I. Zamaraeva, and Dariya Yu. Kushnir Financial University under the Government of the Russian Federation, Moscow, Russia {NAOrehovskaya,TNSeregina,EIZamaraeva, DYKuhsnir}@fa.ru

Abstract. The relevance of the study of intercultural communication is determined by the globalization of the modern world, the increasing importance of intercultural interaction in all areas of human activity, while the alignment of interlingual and intralinguistic communication is taking place. These factors require an updated theoretical comprehension of the phenomenon of intercultural communication, development and optimization of the methodology for its study. The authors used the methods of analysis and synthesis of theoretical literature, as well as methods of comparative and correlative, typological, semantic and pragmatic analysis of the fragments of the discourse. This work has resulted in the identification of specific approaches that are characteristic for each individual science, to the study of the interdisciplinary nature of intercultural communication. The authors analyzed three methodological approaches to the study of intercultural communication: functional, explanatory and critical. The main conclusion of this work lies in the idea that the goal of communication should be mutual understanding among cultural bearers and tolerance towards the individual features of each culture separately. Keywords: Intercultural communication
Globalization
Communication models
Intercultural interaction
Models of intercultural communication

1 Introduction The rapid pace of changes in the cultural climate in the world needs the organization of such type of behavior in a multicultural environment which would contribute to the prevention of cultural conflicts among communicants, to the formation of willingness in order to find optimal ways to achieve certain goals in unpredictable situations when two cultures clash together. Stability and communication are two phenomena of modern multicultural society that are extremely contradictory and meanwhile, inextricably interconnected with each other. Factors that characterize the dynamics of the interaction of these phenomena show new opportunities and limitations. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 93–102, 2020. https://doi.org/10.1007/978-3-030-47945-9_11

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In the 90s of the XX century, S. Huntington suggested the possibility of a third world war as a war of civilizations that are based on various cultural traditions (Huntington 2003). Political and economic systems are no longer such a dominant factor. The confrontation between different ethnic groups gives particular relevance to the issues of comprehension culture in the general philosophical context and its importance in the stable functioning of modern civilization. It is worth mentioning that today`s postindustrial civilization is focused on the production and development of knowledge in various fields, and although it is quite difficult nowdays to clearly capture the specifics and characteristics of the new information reality, it certainly combines many of the possibilities of industrial and traditional culture. However, it may safely be said that technological progress plays a large role in the socio-cultural development of society, both in the industrial era and at the present stage, in the transformation of spiritual values in modern conditions of intercultural ineraction. And today, the relevance of the study of intercultural communication is determined by the globalization of the modern world, the increasing importance of intercultural cooperation in all areas of human activity, while the alignment of interlingual and intralinguistic communication is taking place. These factors require an updated theoretical comprehension of the phenomenon of intercultural communication, development and optimization of the methodology for its study. Moreover, the anthropocentric superparadigm creates the conditions to study assembled integrative objects in a “broad extralinguistic context” (Arutyunova 1999).

2 Methodology The methodological basis of this study is provided by the philosophical and cultural approaches assumed in foreign and domestic science, which are characterized by attention not only to the direct process of communication, but also to the conditionality of this process by social and cultural experience, knowledge, ideas, opinions, values and standards that have historically developed in each culture and, in particular, linguoculture, acquired by its bearers. In addition, there were used methods of analysis and synthesis of theoretical literature, as well as comparative and correlative analyze, typological, and semantic-pragmatic analysis of discourse fragments. The scientific novelty of the work consists in an integrated approach to the definition of methods and tools for building relevant models of intercultural communication, their typological analysis, which is first considered from the point of view of semantic, pragmatic, interpretative aspects. A holistic approach to the variety of studied factors of the functioning of models, forms and principles of intercultural communication complements the scientific knowledge on the topic under study. The theoretical value of the work lies in the fact that it proved the productivity of semantic-pragmatic and interpretative approaches to the study of typological models, forms and principles of intercultural communication; and also revealed the features of tools and principles of organization of intercultural communication in different linguistic cultures, the principles of their interaction in the dialogue of cultures.

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The practical value of the work is determined by the possibility of using the obtained results for further scientific research devoted to the study of models, methods and tools and construct intercultural communication and methods of their functioning. The results of this work can be used in the framework of training courses in the humanities and social disciplines. The provisions, recommendations and conclusions contained in the work are aimed to improve knowledge about the typology of models, methods and tools for building intercultural communication.

3 Results An analysis of the existing Western and Russian schools of intercultural communication (Permyakova 2007) indicates the possibility of integrating the achievements of these schools, which posses significant heuristic potential and correspond to the spirit of intercultural communication, and that fact allows us to move on to the dialectical stage of development of intercultural communication. The insufficient development of the theory of intercultural communication does not allow an individual to deeply adjust oneself to the modern multicultural space and to use efficiently internal resources in order to achieve harmonization in communication and the intended result in terms of cultural instability. The current situation shows that the era, which focuses on the values of material and technical development, has exhausted itself. Today`s reality requires a transition from hard economic determinism to spiritual values, from instrumental reason to reason, which promotes the “communicative interactions” of man with nature, man with man, man with culture (Habermas 1992). The transition to a post-industrial society makes spiritual values predominant. Rapid cultural movements are changing the course of social development, as a result of which economic growth ceases to act as the dominant guideline (Inglehart 1999). The interdisciplinary nature of intercultural communication does not exclude the presence of specific approaches, characteristic to the research of each individual science. Gradually, there were formed three methodological approaches to the study of intercultural communication: functional, explanatory and critical. The functional approach developed in the 1980s and is based on the sociological and psychological methods. Any changes in culture can be measured and described. Culture defines communication, and therefore communicative behavior can also be described and predicted. An intercomparison of the cultural differences of the interacting parties allows us to predict the success or failure of communication. Within the framework of the functional approach, there was formulated the theory of communicative adaptation, according to which people change their communicative behavior patterns in situations of intercultural communication, adjusting themselves to the models of their partners` behavior patterns (Gallois, Ogay and Giles 2005). At the same time, a change in the style of communication occurs faster during relaxed, calm communication or in cases where the partners do not see much difference between themselves and the interlocutor. Even from our own experience of communication with representatives of other cultures, we can make a conclusion that we would prefer to adjust ourselves to the interlocutor if we estimate him or her positively. For example,

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when communicating with a foreigner, we can speak slower, clearer and more distinctly, use less stylistically colored vocabulary, thus facilitating the process of communication for the interlocutor. A functional approach allows you to learn communication styles in different cultures. Thus, the famous American researcher of intercultural communication, Dan Bernland, used this approach to compare communication styles in Japan and the USA (Krivorot 2010). He found quite a few differences, including differences in the way how the Japanese and the Americans compliment and apologize. The explanatory (or interpretative) approach was also widespread in the late 1980s. Adherents of this approach believe that the world around us is not alien to us, since it is created by man. During our conscious activity, we receive subjective experience, including that in communication with representatives of other cultures (Krivorot 2010). But human behavior becomes unpredictable, and it is impossible to influence it in any way, due to the subjectivity of human experience. The purpose of the explanatory approach is to understand and describe, but not to predict human behavior. Adherents of the explanatory approach consider culture as a human environment created and changed through communication. This approach uses the anthropological and linguistic methods: role-playing games, observation included, etc. The main attention is usually focused on understanding communicative models within a particular cultural group. In the process of studying intercultural communication which was based on an explanatory approach, it was concluded that the communicative rules of that or another community of people are based on cultural values and ideas of one particular group. The critical approach includes many provisions of the explanatory approach, but it is largely focused on the study of communication conditions: situations, the environment, etc. (Krivorot 2010). Adherents of this school are primarily interested in the historical context of communication. In their research, they proceed from the assumption that there are always power relationships in communication. According to this opinion, they consider culture as a battlefield, a place where numerous explanations and interpretations of cultural phenomena clash together and where there is always a dominant force that determines cultural differences and the nature of communication (Habermas, electronic resource). The purpose of studying intercultural communication consists in explaining human behavior, and through it - a change in people’s lives (Luhmann, electronic resource). According to the adherents of the critical approach, the study and description of the dominant force in cultural situations will teach people to resist it and organize their communication more effectively with other peoples and cultures. The main method of critical approach consists in the interpretation of texts. Therefore, scientists usually analyze television programs, video materials, publications in print, which, in their opinion, make the main contribution to the formation of modern culture. However, they do not enter into direct contacts with communicants, nor do they investigate personal intercultural interactions. A theoretical comprehension of the process of intercultural communication allows us to identify patterns of interaction in intercultural communication. Such are adaptive and hermeneutic models.

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The adaptation model involves communication among representatives of different cultures with a step-by-step attempt to adjust oneself to the specifics of the partner of communication. The hermeneutic model of intercultural communication is understood as the reinterpretation of one’s own cultural experience, with the aim of analyzing and comprehending a foreign culture. These models are differentiated according to the tasks that are solved during intercultural communication. The models used differ in three aspects: • according to the method of training - didactic or empirical; • according to the content of training - general cultural or culturally specific; • according to the area in which they strive to achieve the main results - cognitive, emotional or behavioral. In the process of constructing relevant models of intercultural communications, specific tools are used, which include the following main components: education, orientation, instruction and training. The purpose of education is to acquire knowledge about culture, ethnic community, etc. While entering into communication with a representative of another country, it is necessary, at least, to read books about its history, geography, customs and traditions. As our compatriot will scorn the foreigner who lives in Russia but does not know who Peter I was, so residents of other countries will look at the traveler with bewilderment if he does not know their leaders and heroes. For example, in the USA, training for those who go abroad has long been built on the basis of a didactic model of culturally specific education, which is called intellectual, “classroom” or “university”. Trainees - volunteers of the peace corps, representatives of government organizations, etc. were being acquainted with the history, government, customs and traditions of the host country. And the emphasis was made on abstract knowledge. But very soon it became clear that acquaintance with a foreign culture was not sufficient: the knowledge gained did not always mitigate the cultural shock, and the information often did not correspond to the nature of direct contacts with local residents. In addition, it is clear that, trainees cannot be fully prepared for life in a foreign country, no matter what the amount of information is received. Therefore, the following opinion is becoming more widespread nowdays, according to which immigrants and visitors should be “taught to learn”. There are two more types of tools that regard education: orientation and instruction. The target of orientation is to promptly introduce a man with a new environment, basic norms, values, and beliefs of a foreign cultural group. At the same time, the manuals that are used, ironically called “cultural cookbooks” with recipes such as: “Do this and do not do that”. While the instruction lets to take a broad look at possible problems or focuses on specific aspects of adjusting to a new environment. Another practical tool that is designed to provide and is focused on the direct cooperation with members of other groups is training. According G. Triandis, intercultural training has two main tasks: • to introduce students to intercultural differences in interpersonal relationships, which require role playing in the situations where things go differently according to two cultures;

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• to make it possible to apply the acquired knowledge in new situations, which is achievable if the learner gets to know the most specific features of a foreign culture for him (Triandis 1989). General cultural training programs that are focused on self-awareness of one`s group or culture, are also often used. According to them, the training of individuals is intended to analyze differences between cultures through recognizing the values of their own culture and, ultimately, to develop the ability to “enter into the spirit” of cultural differences and, therefore, to increase the effectiveness of interaction. The “American contrast model” can be used as an example of such a training program. According to it, the training goes like this: the trainee and the figurehead (“actor”) take part in roleplaying in various proposed conflict situations. Moreover, in such situations, the behavior of the “actor” is always the opposite of the actions of the “typical American”. And, without even realizing it, the student, demonstrates the stereotypes of behavior and perception that he acquired in the process of socialization in American culture, for example, he pays more attention to material values and personal achievements than to spiritual values and the status of a person as a family member. The interaction is recorded on a video camera, and while watching the recording, the trainer explains to the student how American culture has influenced his behavior (Sidorenko 2008). Among the many cultural-specific training programs, the following are especially widespread: • training, which includes real intercultural contacts, for example, workshops with group discussions, during which participants discuss situations arising from personal contacts of two representatives from different cultures. K. Rogers (Rogers 2006) conducted such training with members of the groups that were involved in the war conflicts in Northern Ireland and South Africa. Though, this kind of training does not always reach its goal, since the strong ethnocentrism of the participants prevents them from getting rid of prejudices during the training; • attributive training, which is focused on teaching how representatives of different nations and cultures interpret the causes of their behavior and the results of their activities. This is a very important task, since one of the main problems in communication between representatives of different cultures lies in the fact that people do not understand the reasons for each other’s behavior and make false situational attributions. Attributive training helps to make the individual’s expectations more accurate about the possible behavior of a representative of another culture and also helps to master isomorphic attributions, i.e. attributions, that are specific of that culture with which the individual will interact. In order to prepare for intercultural interaction, the so-called culture assimilators have become widespread in many countries of the world, although this is not the best name, since students are not forced to abandon their own culture and become like members of another group - to assimilate. The target of this method is to teach a person to see situations from the other point of view, that is common for members of a foreign group, to understand their vision of the world. Therefore, the culture assimilator is also

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called the technique of increasing intercultural sensitivity (Stefanenko 1993). The first culture assimilators were developed in the early 60 s by the psychologists of University of Illinois by the rule of G. Triandis (Triandis 2007). They were intended for those American citizens who had to interact with Arabs, Iranians, Greeks, Thais. The creators of the model set as their goal to give students information about the differences between two cultures as much as possible and in a short time, and chose a programmed manual with feedback, which allowed its reader to be an active participant in the learning process. Later, computer versions of such manuals came into operation. Culture assimilators consist of descriptions of situations (from 35 to 200) in which representatives from two cultures interact, and of four interpretations of their behavior - causal attributions of the observed behavior. Information is selected such way as to present situations in which either prominent, or most important, key differences between cultures are demonstrated. The situation can be considered an ideal if, firstly, it describes a frequent interaction between representatives of two cultures. Secondly, when a representative of a “guest” group finds the situation conflicting or when he is used to misinterpreting a situation, and thirdly, when the situation allows to get important information about foreign culture. When selecting situations, mutual stereotypes, differences in role expectations, customs, features of non-verbal behavior, and more other aspects are taken into consideration. Particular attention is paid to the focus of culture on the team or on the individual. For example, a representative of European individualistic culture, participating in assimilator situations, must realize that: • the behavior of members of eastern collectivistic cultures reflects largely group standards than individual attitudes; • relations between parents and children in the East are almost sacred; • in most Eastern countries it is customary to show modesty at public in assessment of their own achievements; • it is also customary there to give gifts in cases where Europeans are used to paying money. Examples of potentially conflict situations can be taken from ethnographic and historical literature, the press, and the observations of the developers themselves. Interviews are also taken with the use of the “critical incident” methodology: respondents are asked to recall the events in which something happened and that – positively or negatively – changed drastically their opinion about representatives of a different culture. The creators of a culture assimilator face the most complicated tasks during the stage of completing a set of alternative explanations – attributions. If we assume that an assimilator is intended to prepare a representative of a culture A to interact with a representative of a culture B, then it’s necessary, with the help of the experts of these two cultures, to select three types of behavior, which are mostly customary for the “A” representative and one mostly used by “B” representative. The answers are considered correct which are specific for the behavior of representatives of culture “B”. If the learner chooses the wrong answer, he is asked to return to the situation again and choose a different explanation for the behavior of the participants. If choosing the right answer, the cultural features in accordance with which they acted are described in detail.

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The culture assimilator itself serves a method of cognitive orientation, but it is often used in training programs - groups discuss and compare the results of participants, conduct role-playing games using situations of the culture assimilator. In this case, the culture assimilator is the basis of the attributive training program, since the task of the trainees is to choose that interpretation of each situation in which representatives of two cultures interact, that corresponds to the point of view of a group strange to him, i.e. to select an isomorphic attribution. The practice of using the considered methods makes it possible to compare two or more cultures, to focus on the general difficulties of the communication process, as well as on special cases of intercultural communication. The practice of using the considered methods makes it possible to compare two or more cultures, to focus on the general difficulties of the communication process, as well as on special cases of intercultural communication. The use of these methods in the process of teaching intercultural communication allows to prepare representatives of different cultures to contact effectively with foreign cultures, teach them to understand their communication partners and achieve their goals and results. The problem of intercultural communication is a complex, multidimensional one and is at the junction of various fields of knowledge and needs further scientific research. It is important to study intercultural differences for several reasons: knowing them allows you to understand more clearly the characteristics of your culture, to interact more effectively with representatives of another culture, to avoid interethnic tension and can be used as a guide in case of ethnic conflicts. Studying of cultures of other nations teaches people to be tolerant, to respect, and understand other cultures. Audiovisual technologies significantly expand the possibilities of implementing intercultural communications, as they “include” the vast masses of representatives of various cultures in the process of cultural communication. Acquaintance with other cultural practices naturally leads to the idea of asserting the uniqueness of one’s own culture, an idea that, being absolutized, can lead to unexpected and, by no means, always positive reactions and behavior scenarios.

4 Conclusions The post-industrial society is changing the ways of intercultural communications, which are becoming more and more diverse under the effect of audiovisual technologies, new vectors and ways of intercultural communications are turning up to transform the traditional component of the cultural space, which is becoming an active participant in intercultural interactions in the context of globalization. For example, the process of education is changing during the transformation of information technology. The main goal of communication should be the mutual understanding and tolerance towards the individual traits of each culture individually by culture bearers (this process is accompanied by the multiculturalism of modern human thinking). In the information space of modern culture the most important ideals are spirituality, morality, cultural creation and personal growth, which will help to overcome difficulties in transforming the culture and communicative field. Moral culture remains a mandatory attribute of any significant sociocultural interaction at the level of interpersonal contacts and dialogue of cultures and

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civilizations. Being a factor, characterizing this interaction and its result at the same time, moral culture determines the code, style and standards of intra-group communication. Thus, in practice moral culture is embodied in the moral creative power of each person. This force implies the process of building oneself, regulating social relations in accordance with the moral priorities that exist in these cultural and historical conditions. The dialogue of cultures contributes to their productive development, enriching the value content of each particular culture. So, such processes can be put first as the most important factors of sociocultural dynamics of the post-industrial society as changing of vectors and mechanisms of intercultural communication, the formation, development and conservation of a social and communicative field, the interaction of social individuals in solving problems important to society, as well as the desire for mutual partnership, mutual understanding and dialogue.

References Huntington, S.: The Clash of Civilization, p. 603. AST Publishing house, Moscow (2003). ISBN: 5-17-007923-0 Arutyunova, N.D.: The Language and the World of a Man, 2nd edition, p. 896. The languages of Russian culture, Moscow (1999). ISBN: 5-7859-0027-0 Permyakova, T.M.: The Intercultural Communication in the Discourse Theory. Monograph, p. 286. University of Perm Publishing House, Perm (2007) Habermas, J.: The Theory of Communicative Action. The modern western theoretical sociology, vol. I, pp. 36–205. The Science, Moscow (1992) Inglehart, R.: The Cultural Shift in Advanced Industrial Society. A new western post-industrial tide. Anthology, p. 640. Academia, Moscow (1999). ISBN: 5-87444-067-4 Gallois, C., Ogay, N., Giles, H.: Communication Accommodation Theory: A look Back and a Look Ahead. Gudykunst (2005) William, B.: Theorizing About Intercultural Communication, pp. 121–148. Sage, Thousand Oaks (2004). ISBN: 978-0-7619-2749-5 Krivirot, B.B.: The approaches and Methods of the Study of Culture Systems and Intercultural Situations. Relevant Tasks of Linguistics, Linguodidactics and Intercultural Communication: Proceedings of the 4th International Scientific and Practical Conference (Ulyanovsk State Technical University, 3–4 December 2010). Edited by Sosnina, E.P. (docent), pp. 148–152, 336. Ulyanovsk State Technical University, Ulyanovsk (2010) Habermas, J.: Das Verhältnis zwischen System und Lebenswelt im Spätkapitalismus/ http://znl. boom.ru/bibl/Hbrms.htm Luhmann, N.: The Improbability of Communication. http://www.soc.pu.ru:8101/publications/ pts/luman_c.html Triandis, H.: Intercultural Education and Training. Peter, F. (Ed.) Understanding the USA. A Cross-Cultural Perspective. - Tuebingen, pp. 315–322 (1989)

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Sidorenko, E.V.: The Communication Skills Training in Business Interaction. Saint (2008) Rogers, C.: The Counseling and Psychotherapy. Latest Practical Approaches. Institute of Psychotherapy Publishing House (2006). https://www.livelib.ru/author/322972/top-karlrensom-rodzhers. ISBN: 5-903182-06-2 Stefanenko, T.G.: The Methods of Preparing for Intercultural Interaction. In: Stefanenko, T.G., Shlyagina, E.I., Yenikopolov, S.N., The Methods of Ethnopsychological Research, pp. 55– 78. Moscow University Publishing House, Moscow (1993) Triandis, H.: The Culture and Social Behavior, p. 382. Forum, Moscow (2007). Sosnina, V.A. (trans.). ISBN: 978-5-91134-107-7

The Integrated Model for the Development of Entrepreneurial Potential in the Context of the Formation of a Corporate Entrepreneurial Environment N. V. Ketko(&), N. N. Skiter, O. E. Akimova, V. V. Velikanov, and A. V. Kostikova Volgograd State Technical University, Volgograd, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The article presents the results of a study of the evolutionary development of the entrepreneurial function and entrepreneurial potential, in accordance with the development of socio-economic conditions of management. Based on the results obtained, conclusions are drawn about the distinctive features of entrepreneurship in the post-industrial period, about its place and role in the economic development of the country. As part of the study, the article presents the integrated model for the development of entrepreneurial potential. The basic elements that make up this model are described, and the use of the integrated model as an effective form of doing business in the digital economy is justified. Keywords: Innovative economy
Entrepreneurship
Content of entrepreneurship
Entrepreneurial function
Entrepreneurial potential
Evolution of entrepreneurship
Integrated model
Corporate entrepreneurial environment
Entrepreneurship
Knowledge economy

1 Introduction In the process of economic development, entrepreneurship was singled out as a special economic category of business entities. The separation of this activity into a separate category is based on the special content of this concept, not only as a process, but on the properties of the person participating in this process. Entrepreneurship differs from hired labor by the presence of a certain idea that ensures the successful realization of potential, and not just the production of a product that is in demand, and profit, through the comprehensive transformation of labor, natural, financial and intellectual resources into a final product. Thus, nowadays, entrepreneurship is understood as the process of creating a new and significant product, the expenditure of the necessary time and efforts for the production of which justifies the financial, physical and social risks resulting from material and personal satisfaction [2]. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 103–112, 2020. https://doi.org/10.1007/978-3-030-47945-9_12

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Also, the concept of entrepreneurship is inextricably linked with the desire to realize existing opportunities at the expense of controlled resources. Based on this interpretation, entrepreneurship is understood as any attempt to create a new business, both in the form of individual labor activity, as well as a new organization or expansion of an existing business. In the process of economic evolution, scientists have revealed that an entrepreneur from an ordinary employee is distinguished by a certain set of qualities and properties, which allows him to create new products. In this regard, the content of entrepreneurship itself has also evolved, which began to include a special way of thinking and acting, based on a holistic balanced approach to organizing people’s activities, management in order to create and increase the final result. Currently, the possession or acquisition of special knowledge and skills is inextricably linked with successful entrepreneurship. However, the possession of knowledge and skills is not enough to become an entrepreneur, certain conditions are necessary for conducting business activities, the content of which changes with the changing external conditions and becomes entrepreneurial. The substantive meaning of entrepreneurship has evolved in accordance with the transition from one economic period to another, because, like any integral element of the economic system, it is not a final category that cannot be changed, and with a change in content, the form changes and the scope of application expands. In the preindustrial period, at the stage of entrepreneurship, its content was inextricably linked only with trading activities. This was due to the external conditions of doing business the level of production was low, there was no market orientation, therefore the activities of entrepreneurs were determined by discrepancies between supply and demand, which they used as a source of their income. The income was formed due to the difference in prices moved from the market to the market of goods. Therefore, in the pre-industrial period, the maintenance of entrepreneurship consisted in using the emerging market price imbalances, and its main characteristic was a high degree of risk [3]. The transitional stage of the Russian economy from the industrial stage of development to the postindustrial one is due to the acceleration of globalization processes and the integration of economies of developed and developing countries into a single world space, the intensification of political instability in the world, the combination of innovative and informational processes, require the development and implementation of such measures that will ensure transformation in all sectors of the country’s economy, contributing to the achievement and maintenance of high competitiveness Russian entrepreneurs in the world market and, as a consequence, overall economic superiority. In this regard, the basis of modern entrepreneurship is the development, testing and effective promotion of innovation, through the effective use of scientific knowledge and development, as well as the timely use of dynamically changing information. The process of converting scientific knowledge into real products enables modern entrepreneurs to create fundamentally new products that can satisfy the needs of current and future consumers [1]. Thus, the specific business environment in the digital economy creates the need for transformation of the nature and significance of entrepreneurship. Based on the

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evolutionary analysis of entrepreneurship, one can trace the dynamics of the content of entrepreneurship, the entrepreneurial function and entrepreneurial potential from the pre-industrial to the post-industrial period. The evolution of entrepreneurship is largely determined by the external conditions for doing business in various periods of economic development (Fig. 1). As can be seen from Fig. 1, the content of entrepreneurship in the process of development and transition from one stage to another gradually became increasingly important to ensure the sustainability and competitiveness of the economy. From the simple process of trade and the movement of goods to markets where there was a mismatch between supply and demand, it evolved to the process of unlocking human potential, realizing existing knowledge in order to develop the economy. Entrepreneurship Content

Business Trade

Use of emerging market price imbalances Pre-industrial period

Trade

Capital Management and Resource Management

Producon Industrial period

Raonalizaon of the form and method of managing and effecve management of capital

Trade Producon Financial sector Scienfic acvity

Post-industrial period

Fig. 1. The evolution of the content of entrepreneurship. (Source: compiled by the authors.)

The evolution of the entrepreneurial function and entrepreneurial potential is a consequence of changes in its content (Table 1).

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Table 1. Evolution of the entrepreneurial function and entrepreneurial potential in a digital economy (knowledge economy). The concept

Pre-industrial economy Entrepreneurial Trade in goods in function markets where there was a difference in prices Entrepreneurial Potential in potential determining the mismatch of supply and demand in different markets Source: compiled by the authors.

Industrial economy

Innovation economy (knowledge economy) Production of goods and Introducing innovations, services unlocking the possibilities of human capital The potential for Production potential is determined by the quality innovation is determined and quantity of resources by the quality of human capital (labor, land, capital)

As can be seen from Table 1, the entrepreneurial function evolves from simple trade in the pre-industrial period, the production of goods and services in the industrial period, to the introduction of innovations and the disclosure of the possibilities of human capital. The entrepreneurial potential, considered in the pre-industrial economy as an opportunity to search for markets for the sale of goods, in the industrial economy as the production potential, which is determined by the quality and quantity of resources (labor, land, capital), is transformed in the knowledge economy into the potential for innovation, is determined by the quality human capital.

2 Methodology At a certain stage of economic development, sole proprietorship enterprises no longer satisfy the conditions for conducting business activities. The increasingly complex economic relationships based on innovations have formed the objective need to create new forms of association of business entities aimed at creating and promoting innovations, due to a certain degree of separation from owners and their participation in business management. The increasingly complex economic relationships based on innovations have formed the objective need to create new forms of association of business entities aimed at creating and promoting innovations, due to a certain degree of separation from owners and their participation in business management. This form has become the corporate business environment. However, the corporate entrepreneurial environment only creates favorable conditions for doing business in the system of innovative economies. An entrepreneur can succeed when he correctly uses the prerequisites created by the corporate entrepreneurial environment. To do this, it is necessary to timely and with a sufficiently high degree of reliability assess the market capabilities of your enterprise, produce those goods for which there is a demand and optimize the ratio of revenue and production

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costs, while the manufactured products must have the necessary level of quality and be competitive, all the stated conditions are ensured innovative technologies. Entrepreneurial success also depends on the internal entrepreneurial environment, consisting of a set of personal qualities of the entrepreneur and internal factors of doing business. That is, in addition to the external conditions for conducting business, an entrepreneur must have internal potential, which includes the following personal qualities: 1) the level of motivation; 2) the ability to conduct business; 3) willingness to bear responsibility; 4) professional knowledge and skills. The following factors belong to the internal business environment: 1) the availability of equity, 2) the legal form of the enterprise, 3) the direction of activity, 4) partners, 5) market research and qualified marketing research, 6) personnel selection and management. The internal environment of entrepreneurship can be represented in the form of a system of relations, actions, relationships and relationships that are characteristic of a given organization, which are carried out as part of a certain type of entrepreneurial activity, at markets of different levels. The nature of the structure of internal relations in entrepreneurial activity allows us to determine the actions of individual entrepreneurs necessary to improve work efficiency. Thus, in a knowledge economy, the development of entrepreneurial potential is influenced jointly by the corporate entrepreneurial environment and the internal entrepreneurial environment. Since the process of developing entrepreneurial potential has complex interrelations between factors of the external and internal environment, a model has been developed to effectively manage the process of its development as a solution to the problems identified, which allows taking into account the interaction of factors of the external and internal environment due to the characteristics of the digital economy. The developed model meets the features of the post-industrial period. There are many types of models, but the most common are nonlinear and integrated. The nonlinear model reflects two areas: the growth in demand for goods and the development of science in accordance with the requirements for product quality and technology for its production. The integrated model is based on the innovation process, uniting all its participants into a system. Its distinctive features are: the combination of R&D and production, the inclusion of scientific developments in the production cycle; Formation of cooperation with suppliers of innovative products and major consumers; creation of prerequisites for horizontal cooperation. Since the corporate entrepreneurial environment creates the conditions for the unification of entrepreneurial structures, an integrated model is most suitable for modeling the process of developing entrepreneurial potential, as it best meets the requirements and conditions of an innovative economy. This model meets the criteria for the course of the innovation process, which currently consists of the interaction of three systems: the internal environment (innovative, industrial and commercial) and the external environment of the enterprise. It allows you to take into account changes in the economic environment, such as an increase in the cost of R&D, a reduction in product life cycles, increased global competition, accelerated technological change and the complexity of technology.

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A clearly integrated model of entrepreneurial potential development is presented in Fig. 2.

Achieving goals, increasing profits, increasing competitiveness

Legislation

Economic conditions

Staff

Equity

Willingness to be responsible

D E V E L O P M E N T

Scientific and technical progress

Form of incorporation

Professional knowledge

ENTREPRENEURIAL POTENTIAL

Motivation

Abilities Personal potential

Kind of activity

Partners Internal environment

Natural conditions

Demography

Political situation

External environment

Fig. 2. Integrated model for the development of entrepreneurial potential. (Source: compiled by the authors.)

The prevailing conditions have led to the need for a transition from competitive strategies to joint (cooperative) strategies. Enterprises, as part of the innovation process, require significant resources that even large businesses are not able to provide alone, so the combination of enterprises is the result of economic evolution, and not an artificially created form of doing business. The development of entrepreneurial potential, based on this model, is carried out by building flexible organizational structures that contribute to more efficient and effective decision making, developing corporate

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databases with interactive external communications, and using artificial intelligence systems. Such structures are necessary for corporate flexibility, which in the conditions of a knowledge economy provides a timely response to rapid changes in the external and internal environment, which in turn contributes to the strategic integration of entrepreneurs and horizontal technological cooperation required for successful management of the implementation of the enterprise strategy.

3 Results To date, the corporate business sector in Russia is poorly developed and is at the formation stage, which is why the creation, establishment and development of the corporate business environment is an urgent problem. The strong influence exerted by corporate business on social processes meets the requirements put forward by the postindustrial economy to the social responsibility of business. The integrated model developed by the authors allows us to solve the following main problems of entrepreneurship in Russia: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Weak entrepreneurial infrastructure; The heavy burden of government regulation; Low investment attractiveness of the economy; Low level of competition and a high level of monopolization of markets; High differentiation of business conditions in various regions of the country; Lack of working mechanisms for financing, lending and insurance of risks in the enterprise sector; Inconsistent taxation system; The lack of a mechanism ensuring accessibility for the business sector of state and municipal property; Weak cooperative ties between small business and large business; The complexity of implementing innovative projects and programs; Lack of an adequate information system to support the business sector; A sharp drop in the level of qualification and professionalism of employees; Low quality of material and resource base; Imperfect legislation governing the business sector.

These problems lead to the fact that entrepreneurship in Russia does not involve the active use of human capital and its development. As a result, the powerful intellectual potential of Russian employees remains unused, or there is a “brain drain” of Russian scientists abroad. A lot of high-level specialists are forced to work in lower positions, as their knowledge and experience are not required in Russian business models.

4 Discussion The corporate entrepreneurial environment was formed precisely in the post-industrial economy. It is one of the necessary factors for the successful development of entrepreneurship. Given the characteristics of the knowledge economy, from the

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standpoint of the external environment, the corporate business environment is understood as the prevailing conditions for doing business in the country, namely, socioeconomic, political, civil law, ensuring optimal development and fair competition to business entities [5]. Based on internal factors, the corporate entrepreneurial environment is a set of elements interacting in such a way that a situation is created that allows the entrepreneur to achieve the goals set, entrepreneurial projects and contracts and, as a result, make a profit necessary and sufficient for further development. To identify the nature of the influence of the corporate entrepreneurial environment on the development of entrepreneurial potential, we consider it from the position of inextricably interconnected fundamental aspects: process, system, subject and evolution. In the procedural aspect, the corporate entrepreneurial environment is a set of processes that form the corporate culture of the enterprise and are aimed at creating the organizational behavior of employees that corresponds to the innovative nature of the economy and helps to generate ideas and obtain new information that ensure the achievement and preservation of the competitive advantages of the enterprise. In the systemic aspect, this is a set of elements, as well as their relationships, which allow us to evaluate the conditions created by the corporate environment for doing business. In the subject aspect, this is the result of the impact of the corporate environment on the behavior of entrepreneurs. In the evolutionary aspect, this is the basis necessary to determine corporate changes that contribute to the improvement of the organization and the conquest of new target market segments. This aspect is gaining importance at the expert level, as it allows us to draw conclusions with a high degree of certainty about the level of innovation of the reproduced corporate environment. What are the benefits of corporate entrepreneurship in terms of innovative development? The main economic advantage of the corporate form is that it ensures the separation of property from the management process, and also creates the conditions for the economic and legal separation of the founders and participants of the enterprise, this is its main difference from individual entrepreneurs and their partner associations. Separation of ownership and management provided the corporate business environment with the advantages that determined its leading role in the innovation economy. The first advantage of the separation of ownership and management is that it allows you to create a limitation of property liability, and, therefore, to ensure sufficient capitalization in terms of volume and time of accumulation by attracting various segments of the population to invest. In addition, the limitation of property liability helps to reduce the level of risk, which in turn activates the innovative function of entrepreneurship. The second advantage of separating the management function from ownership is to increase the stability of the enterprise by reducing dependence on the founders and participants. This creates the conditions necessary for stable development, focused on the future, which meets the challenges of developing and promoting innovations.

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5 Conclusion Modern processes taking place in the global economic space also affect the processes taking place in each individual country. The interconnections between countries at this stage of development are so strong and deep that the existence of the economic system of a single country, isolated from the world, has become impossible. The changes caused by the transformations of the world economic system taking place in the Russian economy have formed the requirements necessary to strengthen the country’s competitiveness and sustainable development. These requirements consist in the need to create conditions for the development of entrepreneurship, both in the small business and in the large-scale production sector. In the post-industrial period, entrepreneurship is precisely that element of the economic system in which the most complete disclosure of the innovative function of almost any type of activity is possible. The prospects for the development of entrepreneurship are determined by its potential capabilities or potential. Entrepreneurial potential is a complex of opportunities created by the external environment and the abilities that an entrepreneur possesses, which is necessary for organizing and successfully conducting entrepreneurial activity [4]. Thus, the comprehensive development of entrepreneurial potential is influenced by a combination of factors of the external and internal environment. The main external factors influencing the development of entrepreneurial potential are: natural, demographic, political, cultural, scientific, technical, economic, which together constitute the entrepreneurial environment. In the conditions of the knowledge economy, a favorable external environment for the development of entrepreneurial potential is the corporate entrepreneurial environment that meets the conditions of the post-industrial period of development and is a new managerial reality. Summarizing the above, we can conclude that in the framework of the concept of an innovative economy (knowledge economy), the innovative essence of entrepreneurship is revealed, which manifests itself in the management of human capital, which is the bearer and source of innovation. The potential of human capital can be revealed only within the framework of the entrepreneurial structure; therefore, it is recognized as a structural unit of innovative activity in the economy. Thus, the specific features of the modern stage of development determine the following characteristics inherent in entrepreneurship in the post-industrial period - innovation; the dependence of the success of an entrepreneurial enterprise on the timely receipt of the necessary and relevant information; constant search for new perspectives; ability to make decisions in the face of uncertainty; the special role of strategic forecasting; creative approach to decision making.

References 1. Drachik, N.V.: The essence of innovation and its importance for the development of the modern economy. Probl. Modern Econ. 2(46) (2013). http://www.m-economy.ru/art.php? nArtId=4525 2. Doing Business in Russia (2012). http://www.doingbusiness.org/russia

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3. Yeremyan, V.S.: Determination of the place and role of modern entrepreneurship in the new innovation and information economy, Yeremyan, V.S., Young scientist, no. 10, pp. 236–238 (2014) 4. Repkina, O.B.: Factors of competitiveness of entrepreneurial structures in modern Russian conditions, Repkina, O.B., Scientific notes of the Russian Academy of Entrepreneurship, no. 28, pp. 104–111 (2011) 5. Hargadon, A.: Innovation management. Leading Company Experience = How Breakthrouths Happen. The Surprising Truth About How Companies Innovate. Williams, Moscow (2007). 304 p.

Complex Product Development in the Conditions of High-Tech Transformation of the Economic System Natalia S. Andryashina(&) , Ekaterina P. Garina , Elena V. Romanovskaya , Victor P. Kuznetsov , and Alexander P. Garin Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. In the presented article the analysis of the concept of complex product development in industry from the standpoint of technological, engineering design of production systems, industrial products and production organization. Integrated product development (IPD) refers to the process of multidimensional adaptive integration interaction of all system participants. In the framework of creating a high-tech product, which is based on the early involvement of all its participants in the project, coordination of goals and their interests, risk and reward distribution, as well as achieving a balanced process in the implementation of common goals for the project. An integrated approach allows to ensure a higher level of completion of the project at its early stages, that is, to save efforts on the implementation and documentation support of the subsequent stages of the project. Unlike traditional projects, IPD-projects share the risks and benefits of the project among all team members, which stimulates cooperation in the framework of achieving the overall goals. One of the main advantages provided by the IPD approach is the ability to all parties to attend and participate in the project from an early stage. The purpose of the article is to analyze the concept of integrated product development in industry from the perspective of technological, engineering design of production systems, industrial products and organization of production; identification of problems and issues related to the development of the concept and making suggestions for their solution. Keywords: Product
The concept of integrated product development Production development JEL Code: L230

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 113–121, 2020. https://doi.org/10.1007/978-3-030-47945-9_13




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1 Introduction Concurrent Engineering—(CE) concept developed by Japanese manufacturers was actively used back in the middle of the XX century. While developing systems for creating an industrial product—both a material product of production and the result of any technological business process. The idea was to combine design and production practices through joint integrated design of products and related production systems [1]. This approach made it possible to obtain higher quality products at a lower price and in a shorter time than before. However, increasing the complexity of production and the dynamism of the market environment. Significant changes in customer requests at the turn of the 1980s–1990s (emphasis on cost, availability, reliability and quality) against the background of a change in production philosophy (flexibility, response to customer requests, shortening the product life cycle, cost reduction) gave rise to the need for further development of production philosophy. And in the 1980s The US Department of Defense has proposed additions to the CE concept on the methodology of the system product development process in terms of technological solutions for the parallel production and design of complex products, as well as the formation of an integrated industrial product development process. Comprehensive engineering design of production processes, production systems and R&D processes was supplemented by a marketing component, investment processes, logistics support, operational management, etc. In the 1990s, the idea of integrated execution of the project became widespread in the construction industry. In 2007, the American Institute of Architects gave its meaningful description, which is identifying the main participants in the project: owners, designers, engineers, contractors. This experience contributed to the formation of the concept of integrated product development (IPD-concept, where IPD stands for Integrated Project Delivery), the essence of which is formation of a production environment where product development is implemented as a multidisciplinary, iterative process, including, in addition to engineering and technological solutions, marketing aspects, investment component, etc. The approach allows to achieve a high level of completion of the project at its early stages. It saves efforts on the implementation and documentation support of the subsequent stages of the project in order to achieve the overall goals. But, at the same time, despite the complexity of the approach to the issue and the inclusion in its solution of additional system participants - marketers, logisticians, IT technologists, etc. There is a need to develop basic key solutions, which, in addition to the functional and technical characteristics of the product, should also cover the coordination of production systems and processes within the project in a classic, systematic way. Orientation of production processes and systems for a specific project constitutes an obstacle to the further development of enterprises by prolonging the results achieved by testing and adapting the achievements of industry leaders, rather than developing a new project from scratch. An explanation of the existence of the identified needs is the lack of elaboration of theoretical and methodological issues related to the “matching” of production systems, enterprise processes and product creation systems, which determines the choice of research topic. To solve this problem, a deep integration of

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technologists and designers is required, starting with the initial conceptual design. Unification of production systems is created, as well as technological management for the project. Increased involvement of participants in the totality of interconnected technological transitions in the context of a single process of product development and preparation of production, reduction of technology conflicts at the interfaces of production facilities and much more. And most importantly, a unified methodological base is needed for combining design and production practices through integrated design of products and associated production systems.

2 Materials and Method The idea of integrated product design and production was almost simultaneously developed by: – Rosenberg et al. [2], which highlighting the totality of elements and processes associated with product development in industry under the conditions of parallel design of production systems, dwelled in detail on the methods of organizing production. A more detailed description of the process elements is given in the works of Skalen [3], which describe the sequence of technological elements of the product creation process in the context of production development; – Palya et al. [4], proposing to structure the process of designing and manufacturing a product through the allocation of a system of processes and project elements. The transition from one element to the next, according to Cooper and Gates, should be through “gates” or “gateways” - checkpoints that allow developers to make decisions at certain points about moving to the next stage of the process. Then remake the created project or stop it as unpromising; – Kotler [5], focusing on the elements of consumer preferences when choosing the optimal values of product attributes. In addition, Skalen [3] emphasized the importance of elements of the sales process as a result of the product development and development process; – Raid et al. [6], who provided a methodological substantiation from the field of operational production management. A comprehensive approach to the issue takes shape at the end of the 20th century in the works of Andreasen [7], Clark [8] and Ulrich [9]. The development processes of the integrated product Andreasen, Clark and Ulrich have certain differences but generally consist of five stages, with the exception of the Andreasen model, which offers an additional action that is carried out before the actual development process begins. This step is intended to determine the conscious need for a product; determining an unsatisfactory situation or an existing business opportunity. Table 1 shows a comparison of the processes of creation/development of an industrial product in the context of the production development of all three authors.

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Table 1. Comparison of the processes of creating an industrial product in the context of production development Andreasen Recognition of need Study of the need

Clark – Concept development Product planning

Process 3

Formation of functional characteristics of the product Product Design *

Process 4

Pre-production

Process 0 Process 1 Process 2

Detailed product design and development Commercial training

Ulrich – Concept development Formation of basic design elements Detailed design

System testing and refinement Process 5 Project implementation Entrance to the market Production; reaching planned volumes * The term “product design” refers to the stage of detailed design, specification of design parameters, definition of relationship priorities in assembly, working design of components, including material and its selection process.

Evaluating the publications of researchers, we believe that most of modern scientists focus on the stage of theoretical search and carry out mainly in one of the areas of development of the research question: on the organizational aspect, engineering design of systems (product, production systems) or operations management. From an organizational point of view, the authors mainly study a combination of factors; determinants of “project success” in the organization of production and technological processes. In their opinion, the structure, being the form of the system, is determined by its content, i.e. processes in this system. The study of this issue in the technological aspect is more detailed and the emphasis is on individual engineering solutions for example, design and modeling. But the parametric aggregate of the complex of engineering models and production systems is not represented systemically. Issues related to the methodology of integrated product development do not receive enough attention.

3 Results Growth efficiency material production through integrated product development in the industry in the modern economy is possible due to development of technological and economic systems presented a set of elements - organizationally, economically and technologically interconnected subsystems of a lower level, in particular - manufacturing and product creation systems. Visually integrated product development process in comparison with the conventional product shown in the process of creating a map of curves illustrating moments of key decisions on projects (Fig. 1).

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1

alternative costs

Project Changes /

2

4

3

Production / going

for planned volumes

Product

product concept

commercialization

Product Content

Approval / Pricing

approval of the final

documentation

Technical implementation

documents

Design / Project Detail

project

Preliminary design project criteria

Engineering

predesign Conceptualization

complex

traditional

time

Fig. 1. Map of curves illustrating key project decisions [10] (where: 1 The ability to influence the cost of a product and its functionality; 2. Cost of product design; 3. The traditional process of creating a product in industry; 4. IPD process)

Currently, the issue of designing a complex product, coupled with the engineering design of production systems, is solved by “matching” activities in the field of heterogeneous processes using three groups of technologies: (1) technology analysis and reengineering of business processes; (2) technology for parallelizing design tasks with subsequent combination of individual solutions at the level of the production process; (3) technologies for the integration of system participants by forming a “system federation”, and implementation of which is possible through: involvement of participants in the totality of interconnected technological transitions in the context of a single process of product development and preparation of production, which reduces the technology conflict. Organization of a unified design and technological documentation, a unified technical electronic document management system, data exchange between participants.

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As the experience of domestic engineering companies shows, improving the production system and changing corporate philosophy is most often carried out using the second technology. When the product is produced on the basis of a discontinuous (discrete) technological process, where the technological process can be suspended without harming both the product and the technological process. Taking into account the fact that the formation of the production system in accordance with tasks and possibilities for solving them is implemented at several levels (at the enterprise level, a separate workshop, site, production line, workplace, production process). Most enterprises form the components production system in the context of creating a product at the level of a separate production line or at the level of a reference site (Fig. 2).

DesignaƟons:

1

IsolaƟon from high originality and frequency of changes in the final assembly

Product structure

Product

Elements

PS 1

PS 2

PS 3

PS 4

1

2

IsolaƟon from high originality and frequency of changes in the preassembly area PS - pre-assembly

ProducƟon progress

PS 2 PS 3

Pre-assembly with high originality and frequency of changes

OS – final assembly Final assembly opƟon

Wareho

OS st

OS

2 PS1PS4

Pre-assembly of standard elements

Final assembly of standard elements

Fig. 2. Formation scheme of the production system in the context of creating a product at the production line [11–13]

As can be seen from the figure, the joint engineering design of production systems and R&D processes implies a shift to the middle stages of production (or to the end of the production line) of standard product elements [14, 15]. This allows parallel assembly of the original product elements with their subsequent combination stage of the final assembly. Explanation for this is the following. A complex product is preliminarily “broken down” into elements (components, modules, units, parts). Each element is assigned a characteristic (unified or original component/assembly) based on the value of its significance and uniqueness or “standard” in the total set of elements and the place of its manufacture and assembly on the designed production line. According to the researchers [11, 14], unique (original) product elements with a large number of options and a high frequency of changes should be placed on the selected pre-assembly site or at the final assembly stage, as this allows you to take into account the possibility of changing the influence of the component feature on the functionality of the entire product during the current project implementation [16]. In fact, a matrix of the product structure is compiled, which includes, in addition to the list of product

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elements, their weight coefficients, information about the frequency of their change, and the significance of the component for the product as a whole. Formation of individual functional characteristics and the necessary elements of the production system are built at the production line level [17, 18]. This model provides an effective organization of the production system for the created product with various changes in the technology of its production or structure due to the unification of the dependencies of production lines. This, in turn, allows you to change their functional characteristics with a substantial frequency with reduced operating costs. The advantage of this solution is the ability to obtain a product with the required functional characteristics and the planned architecture in the engineering design of production systems at the lowest cost. But at the same time, this approach involves taking into account the presence of an existing production line and its subsequent reconstruction under the project. It violates the principle of parallelism of the integrated process of designing product creation systems and enterprise production systems.

4 Conclusion Experience of the practical application of the IPD concept in Russia indicates that there are a number of problems and features of introducing the experience of world manufacturers in this field into domestic practice. There are several reasons for this: (1) organizational and technical problems. It is necessary to unify the production systems of enterprises in high technology industries, as well as the production and technical management of the participants in the integration system [19, 20]. Formation of a unified system of redistribution of resource flows between participants in the IPD process. Reduction of technology conflicts at the junction of production and much more; (2) issues related to the problems of legal support. Obviously, creation of a single set of operational documentation, documentation for the provision of business processes/technological processes at industrial high-tech enterprises is required, as well as a set of standards and specifications; (3) this is the unwillingness of domestic manufacturers to switch to deep integration between participants in the creation of a product, starting from conceptual (initial) design [21]. This form of interaction is a tool that makes more solid and trusting relationships between participants in the process [22]. For the formation of such relationships, participants should be as motivated as possible to share with each other the information and resources available to them. At the same time, there remains a field for the technological and organizational future development of the IPD concept in high-tech engineering industries, such as: aerospace and defense industries, engineering/automotive, petrochemicals and others. Since the parallel design of the product and production allows you to get a product structure that is focused on the effective organization of the production system. This model of the product structure in the early stages of the production system allows us to identify effective ways to re-equip the enterprise with the lowest cost.

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References 1. Schltz, C.: A methodology for production development: doctoral dissertation for the degree, p. 126. Norwegian University of Science and Technology, Trondheim (2006) 2. Roozenburg, N., Eckels, J.: Product Design: Fundamentals and Methods. Wiley, Hoboken (1995) 3. Scallan, P.: Process Planning, The Design/Manufacturing Interface. Butterworth Heinemann Ltd., Oxford (2003) 4. Pahl, G., Beitz, W.: Engineering Design: A Systematic Approach, 2nd edn. Springer, Heidelberg (1995) 5. Kotler, P.: Marketing Management, 11th edn. Prentice Hall, New Jersey (2003) 6. Reid, R., Sanders, N.R.: Operations Management. Wiley, Hoboken (2002) 7. Andreasen, M.: Flexible Assembly System. IFS Publication, London (1988) 8. Clark, K.B., Wheelwright, S.C.: Managing New Product and Process Development. The Free Press, New York (1993) 9. Ulrich, K.T., Eppinger, S.D.: Product Design and Development, 2nd edn. McGraw Hill Inc., New York (2000) 10. Integrated project delivery: a guide, p. 62. American Institute of Architects (2007). lhttp:// info.aia.org/siteobjects/files/ipd_guide_2007.pdf 11. Sadov, V. A.: Formation of the production system at the level of the production line, no 1, p. 29–41. Scientific Bulletin of the Kostroma State Technological University (2006) 12. Garin, A.P.: Landscape development of business processes at enterprises of mechanical engineering, p. 26. Dissertation 08.00.05./Saransk (2013) 13. Garina, E.P., Kuznetsov, V.P.: The development of sophisticated high-tech products in the industry, p. 280. Monograph. Rusains, Moscow (2015). https://doi.org/10.15216/978-54365-0339-4 14. Garina, E.P., Lysenkova, M.V.: CALS-system as a condition for the introduction of modern technologies in the domestic industrial practice within the replication of global best practices in this area, no. 4. Vestnik of the Minin University (2014). http://www.mininuniver.ru/ scientific/scientific_activities/vestnik/archive/4 15. Romanovskaya, E.V., Semakhin, E.A., Andryashina, N.S.: Lean production control system in the automotive industry. Actual Probl. Humanit. Nat. Sci. (4–1), 264–267 (2014) 16. Romanovskaya, E.V., Semakhin, E.A.: Marketing features of creating a new product in an industrial enterprise. Bulletin of the Volga State Technological University. Series: Economics and Management, vol. 4, no. 28, p. 64–72 (2015) 17. Chelnokova, E.A., Kuznetsova, S.N., Nabiev, R.D.: Possibilities of using information and communication technologies in teaching economic disciplines in the university, vol. 3, no. 20, p. 8. Vestnik of the Minin University (2017) 18. Smirnova, Zh.V., Gruzdeva, M.L., Krasikova, O.G.: Open electronic courses in the educational activity of the university, vol. 4, no. 21, p. 3. Vestnik of Minin University (2017) 19. 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) 20. 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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21. Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Ragulina J.V.: Entrepreneurship and economic growth: the experience of developed and developing countries. Entrepreneurship and development in the 21st century, pp. 3–32. Emerald publishing limited (2019) 22. Gryaznova, E.V., Treushnikov, I.A., Maltseva, S.M.: Disturbing trends in the Russian education system: the analysis of scientists’ and teachers’ opinions. Prospects of science and education 38(2), 47–57 (2019)

Development of Industrial Production Through the Product Management Creation Systems Ekaterina P. Garina(&), Elena V. Romanovskaya, Natalia S. Andryashina, Alexander P. Garin, and Svetlana N. Kuznetsova Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The article demonstrates the objective necessity of transforming the approach to the development of production through creation and development of an industry product by transition from a production to a product concept. The theoretical and methodological principles, as well as practical measures for development of industrial production based on product management creation systems in the context of transformation of the production paradigm. Novelty taking into account the initial basic conditions of domestic production when determining the potential for its development in the event of a transition to a more intensive philosophy of production at a subsequent level, such as: lack of a project-oriented management structure at all levels; lack of process distribution of responsibility during product development; unreasonable launch of a product into development by enterprise management solutions. As a result, this is leading to significant investment losses and lack of a system of accumulation and transfer of knowledge. Lack of gaining experience, and repetition of standard errors. Also, the paper identifies the disadvantages that impede development of domestic production in a modern product concept: (a) “gap” and lack of adaptation of methods and tools for modeling integrated high-tech processes and complex high-tech products to the production systems of manufacturers; (b) a significant life cycle of the product creation project; (c) the secondary importance of the task of creating and developing an industrial product in terms of organizing endless technical and organizational interdependencies of production processes, and changing individual elements of the technological process: resources, logistics, economics, which determines the generation of errors during its creation Keywords: Industrial production production JEL Code: O10


Development
Management
Product


O14
O25
O32
P41

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 122–130, 2020. https://doi.org/10.1007/978-3-030-47945-9_14

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1 Introduction Current development of the industry is characterized by volatility of demand and changes in consumer preferences in the direction of a significant uniqueness of a product, its novelty and functionality. Production of a wide range of products that meets the diverse requirements of the customer inevitably affects the production processes. Product and production systems are becoming increasingly complicated, and the complexity of processes and control systems is growing. In such dynamic conditions, the task of developing a competitive product determines the change in elemental saturation of both product creation systems and production systems. Determining their different structural content and technological support, which in turn affects the production cost, the product life cycle, and commercialization of projects (Dean 1991). As a result, there is need to ensure production efficiency, its productivity and flexibility, while maintaining a high level of assortment variety and quality of the product. In this context, most theoretical and applied work is aimed at maintaining competitiveness by ensuring uniform and defect-free production, reducing the number of engineering hours for conceptual design and prototyping of systems, avoiding or minimizing complexity in any component of the product-production systems (Palmer 2001; Terziovski 2001; Karkoszka 2007). Despite the fact that complexity is determined by modern technological achievements and production paradigms (technology 3D, Industry 4.0, etc.). Contradictions and fragmentarity of the concept of creation and development of product systems, weak adaptation of methods and tools of modeling in integrated high-tech processes and systems “product-production” for transforming demands of consumers in the direction of novelty, technicality and complexity of products. This is determined by the need to build a new logic for production development, principles and criteria for making managerial decisions. The set of tasks determines the need to form a theoretical and methodological base for development of a complex high-tech industry product, where the main solution may be to design product creation systems in the conditions of flexibility for their practical application, and taking into account the principles of product life cycle management. Questions related to development of production methodology in its traditional view, are reflected in the works of J. Pale, W. Bates, L. Taylor, C. Mayo, C. Clark and Wilright, C. Ulrich and others. The process of developing a new product as part of the process of creating a product, acting as its separate procedure, is presented in the works of Crawford, Benetto, Simon, and R&D activities as an integral part of the process—in Matthews’s model. The equivalence of product creation systems and production development systems is revealed in the works of L. Morgan, Clark, Fujimoto, Griffin. The idea of early involvement of technologists in the product creation process was developed by Nevins, Whitney and de Fasio, Clark and Fujimoto, Rosenberg, Paly and others. Philosophy of the parallel design of production systems and product creation systems is disclosed in the works of Takeuchi and Nonaka, and in the final classical version it is drawn up at the end of the 20th century in the works of Andreasen, Clark and Ulrich. The concept of a complex product and systems is reflected in the work of Hobday, the concept of integrated product development - in the works of Carter, Baker, Menon, the concept of

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universal quality management, which allows for the joint design of product-production systems, was developed by Deming, Juran and Crosby. At the same time, the available results of scientific research in the field of production development methodology in the context of product creation systems are characterized by the inconsistency of individual project practices for product development. Tools and methods are created for single one-time projects - specific production needs, which determines the impossibility of prolonging the result, and systematizing the current practice of creating product creation systems (Garina 2017). This information predetermined the choice of the topic and purpose of the research. Purpose of the work is the scientific development of theoretical and practical recommendations for development of industrial production based on management of product creation systems. In accordance with the goal in this work, the research task is: to distinguish between decisions on development of production with the aim of creating a systematic and adaptive approach for production. Which is based on determination of the potential for intensifying production through the formation of product creation systems.

2 Research Methods The theoretical and methodological base of the research is composed of scientific works of domestic and foreign authors (Shipshova et al. 2017; Usmanov 2018; Kabanov 2015), devoted to the problems of developing a complex high-tech engineering product and industrial production through management of product creation systems. Methodology of project research and the case study method were used, as a heuristic basis of the research process.

3 Results The mechanism of industrial development in the modern economy is determined by: 1. The priority paradigm is universally recognized standard solutions for production problems based on the current level of scientific knowledge (Aleksandrovsky 2015). 2. The stage of transition of one paradigm to another as scientific breakthroughs arise, and formation of the necessary technological, economic and environmental conditions. In the context of the research topic: – in the 1950s, development of production involves the expansion of production capacities, a change in the organization of production processes; creating a system of adaptive tools and the development of new technologies, including technologies for creating a new product. That is, creation and development of a product is carried out through a sequence of iterative steps in the framework of production development.

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Certain transformations in the approach through enhancing the importance of product creation systems are carried out only in the middle of the 20th century. Prerequisites for changes were a sharp transformation in consumer demand and an increase in demand for mass-produced products. – in the 1970s, when the main aspect of maintaining competitiveness was the quality of products by ensuring uniform and defect-free production; – in the 1980s, when the dominant of maintaining high productivity of production processes and product quality is ensured by a wide variety of nomenclature and production flexibility (Usmanov 2018); —in the 1990s, when the demand of consumers is transformed into novelty—there is a growing demand for new products, and in the 2000s—for high-tech products. In the 1990s, in practice, actively spreading the philosophy of concurrent engineering of production systems and creation of the product by so-called co-design method Concurrent Engineering (CE). During this period, the process of industrial production development is determined by the standardization of PD processes and adaptability of the production environment and product creation system. Development of R&D-activity, as an integral part of the PD-process. – in the 2000s, development of production means: 1. Development of new production solutions necessary for implementation of the concept of a new product; 2. Development of new production technologies and elements of production processes, i.e. manufacturing innovation (Ashmore 2001; Parshina 2019; Tolstykh 2020); – in the 2010s in the study of conditions for development of industrial production. Formation of the technological systems and processes considered the idea of an integrated implementation, where fundamentally new work standards, the structure of interconnections of system participants, product architecture and production technologies are crucial (Kuznetsov et al. 2019; Garina 2017). At the global level, among competing manufacturers, common development topics stand out, such as: reduction of lead time, automation of systems as evidenced by the accumulated experience of the industry in the last decade. Based on what, in modern approaches to the development of production become crucial questions: early coordination of systems participants, primary engineering ideas by product, combining design and manufacturing practices through integrated concurrent design of products and production systems, and others. In comparison: At the present stage of the domestic industry development, there are alternative production paradigms: – The theory of classical development of production (PDP-approach), which involves the process of product development through implementation of a sequence of actions: conceptualization, product development, testing and production; – the concept of parallel product design and production (CE-concept): crossfunctional integration of system participants, process parallelism, as well as joint/integrative development of complex product systems/production systems.

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Experience in development of production from the perspective of product by worldclass manufacturers in comparison with domestic vendors shows the following (Table 1):

Table 1. Comparison of production development indicators and product-production systems of leading world leaders with domestic practice The approach prevailing in domestic practice Design of the product based on “design initiative”, “by samples” Unreasonable launch of a product into development by enterprise management solutions. As a result, all this is leading to significant investment losses Quality management is implemented starting from the stage of product prototyping. The generally accepted management methods adopted in the practice of industry leaders are almost not used in APQP, FMEA, etc. Cost goals are formed at the stage of “Confirmation of the concept”, and more often - after the start of production, and as a result - failure to fulfill the sales plan and production loss Lack of a project-oriented management structure at all levels; lack of process allocation of responsibility in product development Lack of a system of accumulation and transfer of knowledge. As a result, there is no prolongation of experience, and recurrence of typical errors

The experience of leading car manufacturers Product planning within the project by a single team of specialists, covering all areas of the project System exclusion of the possibility of an administrative-volitional decision to launch a product Quality management is carried out from the conceptual design of the product

Cost goals are formed at the “Decision on the implementation of the project” stage, based on the target price breakdown. Cost management throughout the project Process allocation of responsibility in the product creation system

Based on the results reporting will be made with fixation of positive and negative experience

In the methodology for development of domestic production at the present stage, the concept of a product and the concept of production are actually compared in terms of importance, and individual points of growth in the automotive industry are unique and due to initial data. This often complicates the prolongation of the results to subsequent standard projects, which determines the need for the further formation of the original design and technological backlog, the use of specialized adaptive tools of the prevailing production paradigm, its key provisions and methodologies. Also, determining development potential in the case of a transition to a more intensive philosophy of development at a subsequent level (Table 2).

Traditional approach to product development (PDP approach)

The concept of production is an approach assuming that the consumer is ready to buy a product designed for mass demand at affordable prices. Means of implementing the idea commercialization of the product through increased production efficiency. The manufacturer’s tasks are to achieve economies of scale and reduce costs. Emphasis on production – production is primary, product is secondary

Implementable concept - process of developing a new product (NPD-process) or a complex product (PEP-process) is a separate stage of production, where the product is the object of influence; - any change is realized as a result of introducing new technologies into production, and mastering production innovations; - product development is carried out through a sequence of iterative steps in the framework of production development; - matching positions of the designer or production operator is carried out during implementation of a separate project; - production is based on functional specialization, where the scientific background and practical experience determine the effectiveness of operational activities

Characteristic

Cons at the present stage of development - non-adaptation of methods and tools for modeling integrated processes and products to the production systems of the manufacturer; - existence of additional iterative cycles in the project and, as a consequence there are lost profits; - secondary importance of the product development task in the context of endless technical and organizational interdependencies of production processes, changes in process elements, etc.; - fragmentation of the work of functional executors in the project and, as a consequence, a high proportion of the probability of generating errors at subsequent stages; - presence of a hierarchy in the functional structure, employees think vertically, as they depend on style and the degree of management integration (continued)

Table 2. Description of domestic production development in the context of industrial product development

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Philosophy of parallel design of production systems and product creation systems (CEapproach)

Characteristic - product development is implemented as a multidisciplinary, and iterative process; –Production is part of the product creation system; - transfer of solutions for product design and design of production systems to the initial stages; - project specification through the integration of knowledge of designers, technologists, and manufacturers; - interests coordination of manufacturers, investors, suppliers, sellers and consumers through the integration of production systems; - R&D-processes, engineering, systems design, directly production, maintenance of systems and processes are objects of intensification of production development

Implementable concept

Product concept is a philosophy that assumes the satisfaction of consumer demand by offering a unique product with advanced functionality and a degree of novelty. Means of implementing the idea - by improving the product, and enhancing its variability. The manufacturer’s tasks are to ensure the best product quality, and production flexibility. Emphasis on the product - production and product are equivalent

Table 2. (continued) Cons at the present stage of development - implementation depends on a number of factors (existing production base, accumulated experience, knowledge, skills,…); - the scale of the parallel design of production systems and product creation systems varies among individual manufacturers; - PEP phases are often performed sequentially; - planning of production systems starts after completion of PEP, and their full integration is almost not achieved, despite significant improvements in this area; - despite the fact that processes of cross-functional development are widely used by a number of worldclass manufacturers (World-class Manufacturers). According to researchers, their success rate does not improve and remains stable - 58–59%

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4 Conclusion 1. Relatively little attention is paid to the topic of engineering solutions, despite the activity of researchers in identifying the determinants of modern paradigms of industrial development (R&D-processes, engineering, systems design, directly production, maintenance of systems and processes). There is a small amount of work on product architecture, system element outsourcing, process flexibility policy, formation of new/adaptive tools of system process development; development and launch of new industrial product projects, stages of the value chain, PLC-cycle, etc. What determines the prospects of our research. 2. In the forecast period, there is a tendency for the development/change of the production paradigm. In the context of the universally applied strategy for modulating an industrial product in the future, manufacturers plan to focus on: – development of intelligent networks in the conditions of integration interaction of manufacturers, – formation of a short product life cycle; – optimization of product structure (modulation, common platforms); – supply segmentation/supply chain integration; – ensuring production flexibility; – formation of derivative projects in the framework of process management; – the acquisition of advanced technologies and active cooperation with foreign R&D centers. 3. PD processes in the PDP approach have two distinct advantages: they are easy to control and predictable, however, they do not allow to confront challenges of rapidly changing markets, intense competition and the rapid technological evolution of modern production. The disadvantages of the traditional approach in its present form are: (a) “gap” and lack of adaptation of methods and tools for modeling integrated high-tech processes and complex high-tech products to the production systems of the manufacturer; (b) a significant life cycle of the product creation project, and, accordingly, the occurrence of lost profits during the growth of costs due to the fragmentation of work and additional iterative cycles; (c) secondary objectives of creation and development of the industrial product in terms of organization of endless technical and organizational interdependencies of production processes, and changes in the individual elements: resources, logistics, economics. All this determines the generation of errors during its creation.

References Aleksandrovsky, S.V., Shushkin, M.A.: A model for implementing imitation strategies by companies. Innovations 1(195), 108–114 (2015) Garina, E.P., Andryashina, N.S.: Integrated product development in the context of its parallel design and production. Econ. Ind. 10(2), 98–106 (2017)

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Garina, E.P.: Designing of conditions effective organization of technological process for productive maintenance of equipment at industry enterprises. Vestnik NGIEI 1(68), 91–101 (2017) Shipshova, O.A., et al.: The innovative component formation of competitive advantages in production systems in the context of a change in technological structures: monograph, Moscow, p. 142 (2017) Usmanov, M.R., Podvintsev, I.B., Gimaletdinov, R.R.: Improving productivity and operating efficiency of production assets. Technological support of oil refining, petrochemical and gas processing enterprises - St. Petersburg: Peter, p. 304 (2018). ISBN 978-5-6041639-1-7 Kabanov, S.S., Pyzhov, D.O., Makarov, M.C.: Basic concepts and principles in system management of technical and economic development of the enterprise. International Scientific Conference on Economics, Management, Finance: Materials IV (Perm, April 2015). - Perm: Zebra, pp. 180–183 (2015). https://moluch.ru/conf/econ/archive/133/7762/. Accessed 12 Sept 2018 Ashmore, C.: Kaizen-and the art of motorcycle manufacture. Manuf. Eng. 80(5), 220–222 (2001) Dean, M., Robinson, A.: America’s most successful export to Japan: continuous improvement programs. Sloan Manag. Rev. 3, 67 (1991) Palmer, V.S.: Inventory management Kaizen. In: Proceedings of the 2nd International Workshop on Engineering Management for Applied Technology, Austin, TX, USA, pp. 55–60 (2001) Parshina, A.A., Levchuk, V.V., et al.: The study of modern approaches to development of economic systems through managing their complexity. In: The Future of the Global Financial System: Downfall or Harmony. ISC 2018. Lecture Notes in Networks and Systems, vol. 57, pp. 726–733 (2019) Terziovski, M.: The effect of continuous improvement and innovation management practices on small to medium performance. In: Proceedings of 5th International Conference on Quality and Innovation Management, pp. 1–22. Euro-Australian Co-operation Center for Global Innovation Management (2001) Tolstykh, T.O., Shkarupeta, E.V., et al.: Algorithm for assessing the efficiency of innovational technologies of industrial enterprises. In: Emergence, Changes and Future Perspectives. Lecture Notes in Networks and Systems, vol. 73. pp. 463–471 (2020) Kuznetsov, V., et al.: Re-engineering the business process of sales in view of life cycle stage and the company organisational structure. Int. J. Trade Global Markets (IJTGM) 12(3/4), 412–423 (2019) Karkoszka, T., Szewieczek, D.: Risk of the processes in the aspect of quality, natural environment and occupational safety. J. Achievements Mater. Manuf. Eng. 20(3), 539–542 (2007) Smirnova, Zh.V., Gruzdeva, M.L., Krasikova, O.G.: Open electronic courses in the educational activity of the university. Vestnik Minin Univ. 4(21), 3 (2017)

Generalization of Methodological and Practical Approaches for Formation of Product Creation Systems at Industry Enterprises Ekaterina P. Garina(&), Elena V. Romanovskaya, Natalia S. Andryashina, Victor P. Kuznetsov, and Yaroslav S. Potashnik Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The research hypothesis is based on the assumption that prospects for formation of long-term competitive advantages of industry manufacturers are related to their technological development based on management of product creation systems. Based on that, the crucial purchase fundamentally new standards of performance in the context of domination of the product over technological production decisions, interconnection structure of system participants, approaches for development of high-tech products, systems, processes, production lines and for organization of production in general. The article offers an author’s interpretation of the “Product Creation System”, which provides solutions for its formation from the perspective of related research areas: engineering design, organization of the production process, operational management. Its main elements, technology of their interaction, and approach to modeling the product creation system are identified. The main contribution is intersection of these areas and testing the hypothesis of the primary engineering idea of the product over its consumer characteristics. The object of research is the product creation systems, corporate systems of domestic and foreign engineering enterprises. Subject of research - a set of theoretical and methodological approaches for formation of product creation systems by engineering enterprises; principles, methods and ways of managing these systems, as well as methodological aspects of their development. Conclusions of the work can be used in further scientific research in the field of formation of product creation systems, and production systems of engineering enterprises. Keywords: Product creation systems
Corporate systems composition of systems
System modeling JEL Code: O14


Elemental


O32
P41

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 131–139, 2020. https://doi.org/10.1007/978-3-030-47945-9_15

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1 Introduction Results of scientific research in the field of methodology for formation and development of product creation systems are characterized by the inconsistency of development of individual design practices for product development. Inconsistency and nonadaptation of methods and tools for modeling integrated high-tech processes and complex high-tech products to the manufacturer’s production systems. The scale of parallel design of production systems and product creation systems varies greatly from project to project. Tools and methods are created for one-time projects - specific production needs, which determines the impossibility of prolonging the result, and systematizing the current practice of application of standard methodology. They require solving problems of forming a single concept for formation of product creation systems and highlighting its basic provisions. The purpose of the work is to develop conceptual provisions and improve methodological and practical approaches for formation of a product creation system at engineering enterprises. In accordance with the goal in this work, the research task is: interpret the definition of “product creation system” in the context of its identification in related fields of research from perspective of content, formation and development. The theoretical and methodological base of the research is composed of scientific works of domestic and foreign authors on the problems of forming systems for creating products; development of industrial production through the management of product creation systems.

2 Results The analysis of scientific works on the issue and their systematization made it possible to formulate a number of conclusions: 1. Product systems consist of product elements and several types of relationships: between product elements and items in a product environment. That part of the environment that the system can influence or affect the system is called the “context.” Connections between elements imply interactions and relationships. The interactions occur through the interfaces between elements inside or outside the system and can be defined as “… the exchange of data, materials, forces or energy”. Interactive compounds may be represented by: flowcharts, data flow diagrams, specifications, etc. Relationships also cover relationships between elements. The designer starts at the highest level of abstraction, concentrating on the needs, functions, characteristics of the system and limitations (problems) before identifying components, assemblies or subsystems. This approach allows you to create detailed product specifications, drawings, product and system architectures, etc. The architecture is represented by a set of models that convey an integrated view of the intentions and goals of the product, as well as the interactions and interfaces needed by all the various participating entities. The set of models includes a sufficient variety of information to transmit it to interested parties: designers, constructors, specialists in the

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design, operation of the system, etc. Summing up approaches to the issue made it possible to distinguish the following characteristics - “parts”/elements of architecture” (Table 1): Table 1. Product architecture specifications Characteristic Relations Components Display Approach Options Commonality Making decisions

Description, key elements Functional, physical (characteristic, product behavior) Building blocks, their physical decomposition “Actual architecture”, scheme Integral architecture, modular architecture, their composition Technical/technological, market options,… Standardized elements, modules, subplatforms Compromises, commonality, prolongation of the result

On the basis of which: – system is a set of elements and the relationships between them, structuring of which in a certain combination and quantity determines the system architecture; – modern production product is a multicomponent adaptation system/design/result of the implementation of technological processes/production processes, the content of which, as well as its formation, is predetermined by scientific and technological transformations during implementation of production relations. Development involves: – change in internal properties (change in structure), – change in external properties (change in shape), – configuration change (spatial, other), 2. Product system - may be presented: a) a combination of several products on a number of grounds (Martin 1997), b) a combination of auxiliary and final products (Fig. 1). Product system end products

development products

test product

auxiliary products

disposition products

- subsystem 1 - subsystem 2

Fig. 1. End and auxiliary products [ANSI/EIA 632 standard]

c) a set of auxiliary service systems, that contribute to the work. Based on this position (Gerasimov 2016):

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– system architect starts from the highest level of abstraction, concentrating on the needs, functions, characteristics of the system and limitations (problems), – subsystem components and their assemblies are identified - this system view allows you to create detailed product specifications, drawings, architectures, information flows, etc..; – the set of consumer requirements and technological capabilities of the manufacturer is converted into products and processes; In this position, the architecture of the product system is represented by a set of models that reflect an integrated view of the product, about the necessary interactions and interfaces, and which allow transfer of information to interested parties: developers, specialists in design and operation, etc. d) collection of (Garina 2014): – corporate systems (“enterprise systems engineering”) - a production system that directly turns a project into a physical artifact and a product creation system (“PD system”); – service system - service system product creation process; – product support systems - including a resource support system (for example, the formation of a component base) and operational support tools. On the basis of what the product creation system (“PD-system”) is proposed to mean: a) set of solutions of the basic processes of the product and its production conceptualization (technology, industrial, business process) - designand creation of factory facilities, processes, production systems with dedicated phases, steps and control points; decomposition of works with a basic set of processes, methods and tools of the second and subsequent levels in the composition; written management regulations, cost-management; a designed system for managing product attributes, project change management, etc..; b) procedures, a set of process models and methodologies in standardized project plans. These plans describe the flow of processes in all areas of product development based on the PLC product cycle. Unlike most scientific models, they have options for various product development tasks (for example, new developments or adaptation of existing ones) (Kuznetsov 2014). In accordance with the stated prospects for development of industrial production with its orientation to the world level, in approaches to determining the category it is advisable to single out a set of decisions on: a) elemental composition of the PD-system (through its architecture) (Table 2).

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Table 2. Product Creation Systems (Fragment) Product

Product architecture Product family

Product portfolio Module Platform

A multicomponent system, formation of which, as well as its content, is predetermined by scientific and technological transformations during implementation of industrial relations (Andryashina and Kuznetsov 2016; Garina 2017) Collection of system components, as well as the relationships between these components. Composition and interaction of which determines the overall functionality of the final product A group of products having common elements, modules, functions and/or subsystems, as well as a set of variables that remain constant from product to product A complete set of possible product configurations, i.e. the space of solutions offered by a business unit at a certain point in time A cluster of similarly dependent elements with strong bonds within and with other clusters A set of modules, components, and interfaces that form a common structure used to develop and create a stream of derived product families

System structure: System Abstract representation of basic elements identified by their type and structure relationships A universal property, parameter, or function used to analyze or characterize System attribute an object. May be specific, with a fixed set of values (e.g. colors) or describe a range of values Model Simplified system description

b) organization of the product manufacturing process - correlation and measurement of product creation systems and producer capabilities in the context of the production paradigm (Table 3). Table 3. - The system of production paradigms in the context of their evolutionary change (Shipshova et al. 2017; Chase 2004) Paradigm

Craft production

Mass production

Flexible production

Mass Sustainable customization production

Paradigm start Technological capabilities

* 1850 Electrical equipment

*1980 Computerization

2000 Information Technology

2020 – forecast Nano, bio materials

Production capabilities Production strategy

Power tools

1913 The concept of “interchangeability, unification, standardization” Moving assembly line & DML* Warehouse type of order delivery process (MTS strategy)

FMS * Robotization Production-fororder (MTO-), custom assembly (ATO-)

RMS *

production growth

Work on order (prototype of ETO-strategy)

product setup consumer-product(STO-) production interaction (joint configuration)

* where DML = dedicated processing line, FMS = flexible production systems, RMS = reconfigurable production systems

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c) used technologies and tools (Table 4). Table 4. Development of PDP and CE methodologies in terms of the formation of PD processes that have become widespread in the modern economy (fragment) (Parshina 2019) Approaches Parallel System Design (IPD Integrated Product Development)

Lean Manufacturing Philosophy Roadmap Methodology (Six Sigma) Multiple Choice Concept (Design for Variety - DFV)

PD implementation Parallel systems engineering, originally laid down in the CE philosophy, is complemented by the coordination of interests/Balanced business processes of investors, subcontractors, suppliers, sellers Developed in PD-design in the concept of Lean Product (LP), Lean Product Development (LPD) Developed in PD-design in the DFSS concept The stated tasks are solved by industry leaders in four areas: 1) supply chain segmentation; 2) supply chain integration; 3) ensuring production flexibility and 4) creating an optimal product structure

d) development strategies of PD-systems (Table 5) Table 5. Strategies for development of systems that have become widespread in the modern economy both in the Russian Federation and on the world market (fragment) Guidelines and mechanisms

Description/Argument

Adapting the product to the customer’s needs (configuration) Investment in R&D

Customization of the product according to customer needs using certain standardized product elements Product family design requires investment in research and development The product family can help replace old technologies with new ones. This must be taken into account when determining the design logic (Romanovskaya 2018) An increase in the number of possible sources of supply contributes to economical procurement Improving the manageability of production (transparency, predictability, flexibility) (Kuznetsov et al. 2019) Application of modular systems

New technologies

Component/Resource availability Improving manufacturing manageability Decrease in time and costs for increasing volumes Decentralization of assembly

Reduced downtime and maintenance costs

The ability to decentralize an assembly may be important, for example, due to restrictions on existing facilities or the remoteness of market areas. Requirements set by environment can be taken into account when determining the reasons for module separation. Product architecture and front-end solutions can influence the cost of maintenance, given the availability and ease of replacement of modules that may require maintenance (Romanovskaya et al. 2019)

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The architectural properties of the product system depend on interests of stakeholders. System characteristics are expressed through architecture, i.e. the nature of the elements, their quantity and the relationship between them. The internal characteristics of PD-systems are: – – – –

degree degree degree degree

of of of of

difficulty; standardization; novelty; quality (in relation to individual systems).

It is important to emphasize that, in accordance with the concept of a complex product and system (CoPS), the complexity and other characteristics of a product are a matter of degree. Dwelling on the characteristics of PD-systems, we determine in more detail that: 1) A key indicator of a product complexity in engineering design is the degree of manufacturability of the production, the number of components used and their relationship, etc. 2) Standardization, as a characteristic of PD systems, refers to a situation in which several components are replaced by one component that can perform the functions of all of them (Chase 2004). 3) The degree of novelty is an indicator of the difference between a new product and an existing one. Moreover, changes in the product or in its manufacture can vary from minor increments to its main characteristics to radical: radical processing of the product, new positioning, changes in an existing product, expansion of the product line, new product line, completely new product (Tolstykh 2020). 4) The degree of quality (in relation to individual systems), based on the practical application of the methodology of PROsys, LLC in domestic production, since the 2000s in enterprises is determined by the following key principles (Smetanin 2017): a) transparency of the process; b) synchronization of individual workflows; c) managing the timing of the launch of production and product on the market; d) management and control of the budget; e) engineering outsourcing. As previously defined, the enterprise’s corporate system is also represented by a combination of product creation systems that directly “run the project into a physical artifact and the enterprise’s production system. In the study, under the production system it is proposed to understand the complex of resources, as well as the totality of production, technological and other processes that ensure the effective implementation of the production process. Therefore, Enterprise System Design (ESE) involves applying principles, concepts and methods of system design to planning, design, improvement and operation enterprise. That is, to ensure efficient transformation of the enterprise, it should be considered as a production system, and not as a set of functions related to information systems and general means. As part of the study, production systems act as management objects, which determines the need for their study in subsequent studies in more detail.

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3 Conclusion 1. The study proposes to understand: – under the product creation system - a set of solutions for the basic processes of conceptualizing the product and its production (technological, manufacturing, business processes) with highlighted phases, steps and control points; decomposition of works with a basic set of processes, methods and tools of the second and subsequent levels in the composition; written management regulations, costmanagement; a designed system for managing product attributes, project change management, etc.; – under the comprehensive development of the product it is proposed to understand the process of multidimensional adaptive interaction of all participants in the system (systems of business structures) while creating a product. Which is based on the early involvement of all its participants in the project, coordination of goals and their interests, risk and reward distribution, and also achieving balanced processes (business processes, technological processes) in implementation of common goals; – under the production system, a complex of resources, as well as a set of production, technological and other processes that ensure the effective implementation of the production process and aimed at the release of the final product. Resources include five key elements that are called “5Ps Operations Management” from the following English words: People, Plants, Possessions, Parts, Processes. The system consists of links, each of which reflects the essential features of the elements of a higher order link, which they include: group of mechanisms, production site, workshop, industry, and cluster;

References Andryashina, N.S., Kuznetsov, V.P.: Features of creating a new product at engineering enterprises. Krasnodar (2016). 134 p. Garina, E.P., Andryashina, N.S.: Integrated product development in the context of its parallel design and production. Econ. Ind. 10(2), 98–106 (2017) Gerasimov, K.B.: Management of development processes of industrial enterprises in modern conditions. Doctor of Economic Sciences, St. Petersburg (2016). 316 p. Shipshova, O.A., et al.: The innovative component formation of competitive advantages in production systems in the context of a change in technological structures: monograph, Moscow (2017). 142 p. Romanovskaya, E.V., Kozlova, E.P.: Contents of the mechanism of sustainable development of the industrial enterprise. Bulletin of Nizhny Novgorod University N.I. Lobachevsky. Series: Social sciences. 2(50), 25–30 (2018) Garina, E.P., Kuznetsov, V.P.: Product creation systems in industry and their development: monograph. N. Novgorod: NGPU named after K. Minin (2014). 180 p. Kuznetsov, V.P., et al.: Systems for creating a product in industry and their development: monograph. N. Novgorod: NGPU named after K. Minin (2014). 176 p.

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Smetanin, S.D., Shalamov, V.G.: The ratio of quality indicators in quality management systems and technical systems. In: Moskalenko, O.V., Harlanova, E.M., Okorkov, V.V. (eds.) Science, Technology and Life - 2017 Proceedings of articles the IV International Scientific Conference. Scientific, pp. 92–99 (2018) Chase, R.B., Equiline, N.D., Jacobs, R.F.: Production and Operations Management, 8th edn. Publishing house “William” (2004). 704 p. (from English) Parshina, A.A., Levchuk, V.V., et al.: The study of modern approaches to development of economic systems through managing their complexity. In: The Future of the Global Financial System: Downfall or Harmony. ISC 2018. Lecture Notes in Networks and Systems, vol. 57, pp. 726–733 (2019) Kuznetsov, V., et al.: Re-engineering the business process of sales in view of life cycle stage and the company organisational structure. Int. J. Trade and Global Markets (IJTGM) 12(3/4), 412–423 (2019) Marti, M.: Complexity Management: optimizing product architecture of industrial products: dissertation. Graduate School of Business Administration, Economics, Law and Social Sciences. (2007). 27 p. Romanovskaya, E.V., Kuznetsov, V.P., Andryashina, N.S., et al.: Development of the system of operational and production planning in the conditions of complex industrial production. In: Popkova, E., Sergi, B. (eds.) Digital Economy: Complexity and Variety vs. Rationality. ISC 2019. Lecture Notes in Networks and Systems, vol. 87. Springer, Cham (2020) Tolstykh, T.O., Shkarupeta, E.V., et al.: Algorithm for assessing the efficiency of innovational technologies of industrial enterprises. In: Emergence, Changes and Future Perspectives. Lecture Notes in Networks and Systems, vol. 73. pp. 463–471 (2020) Chelnokova, E.A., Kuznetsova, S.N., Nabiev, R.D.: Possibilities of using information and communication technologies in teaching economic disciplines in the university. Vestnik Minin Univ. (3(20)), 8 (2017) 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) 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)

Transformation of Economic Systems Under the Conditions of Technical and Technological Complexity of Transformed Processes: Organizational and Management Decisions Elena P. Kozlova(&), Ekaterina P. Garina, Elena V. Romanovskaya, Natalia S. Andryashina, and Anastasia O. Egorova Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The development of economic systems is closely intertwined with their transformation, which covers many areas of business activity. At the present stage of economic development, the problems of instability and toughening of competition become especially urgent. This situation to an important degree affects not only the relationship with the external environment, but also affects the internal, including the production processes. The essence and functional orientation of the transformation processes is divided into: operational, which are implemented without making fundamental changes in engineering and production technology; tactical, within the framework of which a correction is made both in the product design and in specific transformations in management processes; and strategic, characterized by the ability to most radically change the feature of production in both technical and managerial aspects. The cardinal form of elements transformation in economic systems is associated with the targeted management of these processes. But with operational and tactical transformation, management does not pose significant problems, and its differentiation from management of current production is absent. Therefore, the use of organizational and managerial decisions in the conditions of technical and technological complexity of the processes requires carefully worked out methodological recommendations adapted to their economic activity. The purpose of this study is to develop methodological recommendations in the field of organizational and managerial decision-making on the transformation of elements in economic systems in the conditions of technical and technological complexity, as well as their practical application. The research methodology includes empirical (observation, comparison, description), theoretical and cognitive (formalization, ascent from the abstract to the concrete) and general logical (analysis and synthesis) methods. As a result of this work, methodological recommendations were developed for the adoption of organizational and managerial decisions on the transformation of economic elements under the technical and technological complexity of the processes. At strategic transformation target control, it is practically necessary, and in the most difficult situations should be and clearly divided into two directions with an © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 140–149, 2020. https://doi.org/10.1007/978-3-030-47945-9_16

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unambiguous definition of the function of skill in every direction and principles of interaction between them. The need for targeted management is substantiated. Firstly, by the increase in the technical and technological complexity of the transformed processes. Consequently, by the labor intensity of the solution in the temporal terms with arising problems. Secondly, involving an increasing number of senior employees in the process of solving problems, without exempting them from the usual activities associated with the current production, is often problematic. Keywords: Transformation
Enterprise development
Organizational and managerial decisions
Target management
Differentiation of target management JEL Code: L230

1 Introduction The growth of scientific and technological progress is determined by high dynamics in the field of innovative production of economic systems, including industrial enterprises. This process concerns a multitude of management levels, both operational and perspective-strategic, of such economic systems existing within the framework of economic activity (Ivanova 2017). The lack of theoretical and practical developments adapted to the specifics of the economic activity of economic systems, as well as the really applicable recommendations that allow us to develop effective organizational and managerial solutions, are the most important issues that domestic enterprises face (Gryaznova and Nikishina 2018, Gryaznova et al. 2019, Gryaznova et al. 2020). As a result of an analytical study of the existing methodological tools that allows to develop organizational and managerial solutions that contribute to the transformation of economic systems in conditions of technical and technological complexity of enterprise processes that are being transformed, based on a review of a large number of sources of economic literature, and existence of various approaches. The formulation of the basic directions in improving the technique is complicated. The presence of a large number of diverse points of views on this problem, which requires their analysis and systematization (Table 1). Table 1. Methodological approaches to the development of organizational and managerial decisions Author

Features of the technique

Number of stages

Gorevaya (2006)

“… consists of the following business functions: idea generation and knowledge management; planning and preparatory stage; informing; partial implementation; full implementation; performance of control and analysis functions”

6

Aleinova (2010)

“… within the framework of which a model of expediency of combining industrial enterprises into an integrated network-type structure is proposed”

4

Courtney (2001)

“… organizations and their decision support systems should encompass procedures that can cope with environmental and economic complexity and go beyond the technical orientation of previous DSS”

3

Johns (1999)

“… effective organizational support for project management was provided through executive management committees, and the first results of a continuous review of organizational support for project management”

5

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As part of the study, the authors set the goal of developing methodological recommendations for the formation of organizational and managerial decisions. The application of these recommendations should enable (Kozlova et al. 2020): – use them for any economic systems, taking into account the specifics of their activities; – gain an advantage in the competition due to the fact that the recommendations are based on a targeted approach, as well as the division of goals into qualitative and quantitative; – correction of recommendations on the development of organizational and managerial decisions in the event of new problems in the economic activity of the enterprise, social and environmental sphere, identification of new trends; ability to avoid randomness in the process of achieving development goals.

2 Methodology As part of this study, it is proposed to divide the methodological recommendations into 5 stages (Fig. 1). Assessment and analysis of the initial state of the subject in question

Goal formation of organizational and managerial decisions

Development of measures to achieve the company's development, based on the problems identified in specific areas of production

Assessment of developed organizational and managerial decisions Tactical management and corrections

At the first stage, it is recommended to consider a certain set of indicators or factors characterizing the strength of the company, sources of revenue, possible prospects, means, stocks of products, resources and many other production reserves used in economic activity. The second stage is to consider the existing goal. A key element of organizational and managerial decisions is the goal of sustainable development. The relationship between the organization’s stable commercial success and sustainable development efforts is becoming apparent (Babkina 2016). It is recommended that the goal be distinguished into qualitative and quantitative in the economic, environmental, technological and social areas of the enterprise’s activity,

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which will make it possible to further specify other elements of organizational and managerial decisions, determine the direction of the enterprise’s activity, and will have a direct impact on organizational and economic decisions (Romanovskaya 2020). At the third stage, it is necessary, together with leading experts competent in each of the areas of sustainability, to identify problems in specific areas of production. It is necessary to fill out a table of analysis of the identified problems by elements of sustainable development (Hoen et al. 1998). This stage includes the development of measures to achieve development goals. At the same time, they should be formed taking into account three important components that should be selected and analyzed according to the goals of sustainable development: principles; factors; methods and tools. When selecting the main principles, impact factors, as well as methods and tools, we recommend that you follow four directions: environmental, economic, social and technological. The following grouping of principles should be used (Table 2). Table 2. Grouping principles for the development of organizational and managerial decisions Environmental - increase principle; - reliability principle; - partnership principle; - adaptability principle; - principle of focus; - principle of transparency

Economic - the principle of “thinking globally - acting locally”; - responsible leadership; - the principle of using resources with minimal damage to the environment

Social - principle of respect and support for human rights; - principle of justice; - principle of sustainable goods; - responsibility to the future generation

Technological - scientific validity - accounting for scientific and technical progress purposefulness

Thus, it is necessary to develop strategic goals, formulated on the basis of the above principles, which will not allow the negative impact of the environment in order to achieve sustainable competitive advantages (Kuznetsova et al. 2019, Smirnova and Kochnova 2019, Smirnova et al. 2017). In order to assess the possibility of sustainable development, it is also necessary to take into account the conditions and factors influencing it. The feasibility of grouping factors into economic, environmental, technological and social is due to the principles of sustainable development of the enterprise. It should be borne in mind that these factors can be both external and internal. Assessment of technological, economic, environmental and social types of factors must be carried out in terms of their variability, origin and direction of the impact on sustainability. Therefore, we propose using the following typology of factors affecting the sustainable development of the enterprise, developed by V.V. Biryukova (Biryukova 2016) (Table 3).

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Name of type Name of factor

Typology feature By origin

Economic

By variability

The direction of the impact on sustainability

External Interior Changeable Unchangeable Increasing

Reducing

Economic situation

+

+

Unstable, destabilizing

Government intervention

+

+

The pace of economic reform Production and resource capabilities

+

+

Stable, favorable for economic development State regulatory acts aimed at supporting industry Positive dynamics Continuous process of capacity building, optimization of the geography of location, modernization of production, and distribution Lower costs and higher margins

Undeveloped logistics, high wear and tear, low distribution development

Organization productivity (financial and economic) Corporate culture

Engagement with partners

Product competitiveness

+

+

+

+

+

+

+

+

+

+

High, includes value orientations related to sustainable development, self-learning organization Established contacts with partners, mutual discounts High level of product quality, few competitors

The implementation of these acts is only formally Lack of dynamics

Higher Costs and Lower Profitability Low, nonconducive lack of self-learning culture

Lack of partners

The presence of a large number of competitors with better products

(continued)

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Table 3. (continued) Name of type Name of factor

Typology feature By origin

By variability

The direction of the impact on sustainability

External Interior Changeable Unchangeable Increasing Ecological

Social

Subsoil use Ecological culture

+ +

+ +

Environmental management Environmental audit

+

+

+

+

Environmental Safety

+

+

Social policy of the enterprise State social + policy

+

+

Level and qualifications of staff Technological State support for the field of scientific and technical progress Scientific and technological potential of the region

Staff readiness for new technologies

Passes and complies with ISO The basic principle is prevention High social activity Effective, relieving social tensions Highly qualified staff

+

+

+

+

+ The relationship of enterprises with scientific organizations Demand for research and development

Lean production It is an element of corporate culture Implemented

+

+

+

+

Active state policy in the field of technological development Regional funds for development of science and innovation Close collaboration, commitment and financial support

+

+

+

+

The company is actively interested in technological innovations Continuous staff training, the formation of a technological culture

Reducing Irrationality Absent

Not implemented Missing or implemented internally Missing or occurring in response to consequences Partial or absent Weak social tension Lack of highly qualified staff Lack of government interest in technological development Lack of regional funds for development of science and innovation Lack of cooperation,

The company is not interested in new technologies The staff is not trained

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The typology of factors presented in Table 3 from the point of view of increasing or decreasing stability provides an opportunity to assess the degree of stability of an industrial organization. Parameter of the determinant of a factor suggests a choice of various options for the enterprise: adaptation or action. Another element of the third stage are methods and tools. They should be grouped according to the same principle as the previous components (Vasiliev 2006, Yashin et al. 2019). At the fourth stage, it is recommended to use the developed methodology for assessing the level of sustainable development. It will allow you to establish the level of sustainability, at the same time, it is possible to clearly determine the reasons for the failure to achieve the goals. The fifth stage involves a response and decision-making in accordance with the level of sustainability determined at the assessment stage. Information obtained as part of the implementation of recommendations will allow us to choose directions for further actions not only to management, but also to employees, partners and investors. To make the right managerial decision, it is also necessary to calculate the economic effect. Based on the state analysis of the company management should improve the goal of sustainable development, and set objectives aimed at its improvement (Antsiferova 2015).

3 Results The practical use and effectiveness of the proposed developments are considered on the example of the enterprises of PJSC GAZ (hereinafter referred to as the Business Unit). In this work, the implementation of recommendations is presented fragmentarily as the central element of transformation of production processes are proposed measures. One of the measures for the practical use of methodological recommendations is “Technological transformation of the production process of metallurgical production in foundry No. 8 (optimization of feed flows of the charge and liquid metal)”. As a result of the analysis of the production activities of foundry shop No. 8, the following problems were identified, presented in Table 4: Table 4. Analysis of identified problems Economic Environmental Social Technological

- Loss of molds, and reduction in tonnage of smelted metal - High power consumption - The danger of liquid metal spills from the channel furnace and, as a consequence, increased injuries in the workplace - Waiting for a crane due to the intersection of feed flows of charge materials, filling the charge and issuance of liquid metal from crucible furnaces to the channel - Loss of time for draining liquid metal from casting ladles in case of problems - Losses of forms with the existing casting method (lack of control the metal temperature and pouring time) - Non-optimal liquid metal feed streams from furnaces to casting devices

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In accordance with the identified problems, the following goals are set: 1. 2. 3. 4. 5.

Improving safety during work. Optimization of feed flows of charge materials and the issuance of liquid metal. An increase in the tonnage of smelted metal by 15%. Decrease in losses of forms by 12%. Reduction of energy costs per 1 ton of liquid casting by 50%.

The achievement of the goals was carried out by optimizing the process (Figs. 1 and 2).

Fig. 1. Before. Burden yard - material flow

Fig. 2. After. Burden yard – material flow

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The composition of the melting site equipment before and after the introduction of the new technological process is presented in Table 5: Table 5. Сomposition of the melting site equipment before and after Prior to the project ASEA induction crucible furnace LFD-25 of industrial frequency for metal melting - 5 pieces with a capacity of 25 tons each ASEA induction channel furnace LFR-45 for the accumulation, heating and holding of the melt - 2 pieces with a capacity of 65 tons each Kunkel-Wagner filling device KW with an open tank and induction heating of the melt - 2 pcs. 0.25 tons each

After implementation of the project The AVR IFM-7 medium-frequency induction crucible furnace for the smelting of metal is 2 pieces with a capacity of 13.4 tons each Filling device OSS-50 firm “AVR” with closed capacity and induction heating of the melt — 2 pcs of 7 tons each The existing ASEA induction crucible furnace LFD-25 of industrial frequency for metal melting is 3 pieces with a capacity of 25 tons each, which will be used to a greater extent as liquid metal storage tanks (from IFM-7) and will be replaced by medium-frequency furnaces in the next stage of modernization

As a result of the proposed changes: 1. LFR-45 duct furnaces were removed from the process and dismantled. The possibility of liquid melt spillage is excluded. 2. Flows of feed of charge materials and delivery of liquid metal have been optimized. 3. The tonnage of smelted metal was increased from 210 tons/day up to 250 tons/day. (+19%). 4. The number of mold losses has been reduced by 12.8%. 5. The electricity consumption per 1 ton of liquid casting was reduced by 55.9%. As a result of this study, the implementation of methodological recommendations, and proposed measures, allowed us to achieve our goal. The results are applicable not only to the objects of considered study, but can also be used by enterprises and organizations of various industries in order to achieve their sustainable development. Thus, the results of this study are aimed at improving the efficiency of the enterprise through development of organizational and managerial decisions.

References Aleinova, A.A.: Theoretical foundations of the formation and development of management structures of industrial enterprises of network type. Terra Economicus 1–3(8), 43–47 (2010) Andryashina, N.S., Garin, A.P., Romanovskaya, E.V., Kuznetsova, S.N., Kozlova, E.P.: Analysis of reserves for effective development of production. In: Lecture Notes in Networks and Systems, vol. 73, pp. 403–441 (2020) Antsiferova, O.Yu., Myagkova, E.A.: Strategic planning of sustainable agricultural development goals. Int. Agricult. J. (2), pp. 29–31 (2015)

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Babkina, N.I., Zhirnova, Yu.S.: Stages of forming the development strategy of an industrial enterprise. In: Babkina, A.V. (ed.) Economics and Management in the Context of Global Competition: Problems and Prospects. Proceedings of the Scientific-Practical Conference with International Participation, pp. 202–207 (2016) Biryukova, V.V.: Sustainability of development of oil companies in Russia. Bull. Siberian State Automob. Highway Acad. (3), 92 (2016) Courtney, J.F.: Decision making and knowledge management in requesting organizations: to a new decision-making paradigm for DSS. Dec. Support Syst. 31(1), 17–38 (2001) Gorevaya, E.C.: Organizational and managerial aspects of the innovation activity of industrial enterprises. World Econ. Manag. 6 (2006) Gryaznova, E.V., Nikishina, O.A.: Methodological culture of the teacher-researcher. Prospects Sci. Educ. 33(3), 68–73 (2018) Gryaznova, E.V., Treushnikov, I.A., Maltseva, S.M.: Disturbing trends in the Russian education system: the analysis of scientists’ and teachers’ opinions. Prospects Sci. Educ. 38(2), 47–57 (2019) Gryaznova, E.V., Vladimirov, A.A., Maltceva, S.M., Goncharuk, A.G., Zanozin, N.V.: Problems of virtualization and internetization of social space. In: Lecture Notes in Networks and Systems, vol. 91, pp. 119–124 (2020) Hoen, H.W., et al.: The Transformation of Economic Systems in Central Europe, №. 848. Edward Elgar Publishing (1998) Ivanova, E.V.: Patterns of technological transformation of the modern world economy. In: Global Economy in the Twenty-First Century: Dialectic of Confrontation and Solidarity. Collection of scientific Papers Following the Results of the IVth International Scientific Conference, pp. 250–253 (2017) Johns, T.G.: On creating organizational support for the project management method. Int. J. Project Manage. 17(1), 47–53 (1999) Kozlova, E.P., Potashnik, Y.S., Artemyeva, M.V., Romanovskaya, E.V., Andryashina, N.S.: Formation of an effective mechanism for sustainable development of industrial enterprises. In: Lecture Notes in Networks and Systems, vol. 73, pp. 545–556 (2020) Kuznetsova, S.N., Lapaev, D.N., Artemyeva, M.V., Potashnik, Y.S., Kozlova, E.P.: Increase of economic effectiveness of investment projects in industrial parks. In: Lecture Notes in Networks and Systems, vol. 57, pp. 1138–1144 (2019) Operational Management: organization and improvement of efficiency. - Magazine “General Director”. [Electronic resource]/ Access mode: https://www.gd.ru/articles/8645-qqq-16-m504-05-2016-operativnoe-upravlenie Smirnova, Zh.V., Kochnova, K.A.: Training of employees of service enterprises using information technology. Vestnik Minin Univ. 7(1), 5 (2019) Smirnova, Zh.V., Gruzdeva, M.L., Krasikova, O.G.: Open electronic courses in the educational activity of the university. Vestnik Minin Univ. (4(21)), 3 (2017) Vasiliev, V.N.: Technological sustainability of the enterprise. Russ. Bus. 7(4), 26–32 (2006) Yashin, S.N., Koshelev, E.V., Ivanov, A.A., Garin, A.P., Kozlova, E.P.: Anti-crisis cluster innovation strategy risk management with usage of real put option. In: Lecture Notes in Networks and Systems, vol. 57, pp. 987–1001 (2019)

Management of the Development of Economic Systems in the Context of Their Technological Transformation Victor P. Kuznetsov1(&), Altynay S. Adzhikova2, Marina S. Romanova3, Elena P. Kozlova1, and Evgeny A. Semakhin1 1

2

Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected] North Caucasus Institute a branch of the Federal State Budgetary Educational Institution of Higher Education “Russian Presidential Academy of National Economy and Public Administration”, Pyatigorsk, Russia [email protected] 3 Stavropol State Pedagogical Institute, Essentuki, Russia [email protected]

Abstract. Uncertainty of the economic environment has become an integral characteristic of the current stage of development of the Russian economy. A period of economic uncertainty is characterized by the actualization of the development problems of managing economic systems. It also requires diversification structuring of the subject’s economy, which to a large extent should independently provide the solution to the problems of its comprehensive development. The purpose of this research is to develop a mechanism for managing the sustainable development of economic systems in the context of their technological transformation, as well as the practical application of this mechanism. The methodology includes empirical (observation, comparison, description), theoretical and cognitive (formalization, ascent from the abstract to the concrete) and general logical (analysis and synthesis) methods. As a result of this work has been refined the concept of sustainable development. Decisive changes at the present stage of development of society arise from the introduction of new technologies and innovation in connection with the introduction of technological transformation is one of the priority directions. The advanced concept of sustainable development can be a basis for the formation mechanism of economic system management of sustainable development in terms of their technological transformation. The basic components of the control mechanism for sustainable development in the process of transformation, and the mechanism has been tested on the particular enterprise. For determination of the mechanism, its components have been considered as interconnected multilevel structure which includes forms, methods and tools. At the same time integrating them into the rule of law regulated mechanism that allows the company to consistently manage its production and business activities, identify new solutions and organizing ability, and enhance the ability for an upgrade. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 150–159, 2020. https://doi.org/10.1007/978-3-030-47945-9_17

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Keywords: Development management
Economic system
Technological transformation
The concept of sustainable development mechanism JEL Code: L230

1 Introduction The basis of a new global era are fundamentally new, information and communication, bio, nano and other technologies. Their significance is growing so much that it allows us to talk about the deep transformation of the resource base of the modern economic system. Such changes are global in nature and relate to the national economy of any country, translated into specific technology policy. A number of technological modernization programs developed in the Russian Federation are aimed precisely at the conversion data, in particular government program “Research and technological development of the Russian Federation” in 2018–2025. At the same time, the stable term “scientific and technological progress” in the titles of this and most other documents has been replaced by the term “scientific and technological development”, which indicates the importance of the role of new technologies as a leading factor in economic development (Ivanova 2017). Current economic trends determine the need for new management methods development of economic systems in the conditions of technological transformation. The most popular concept of development is the concept of sustainable development (Andryashina et al. 2020). At the present stage under the concept of sustainable development implies a distinction into three areas: economic, social and environmental, which characterizes their particular importance, the presence of mutual connection and dependence. However, the denial of at least one of them can undermine the stability of the system as a whole. It should be noted that the evolution of the sustainable development model has undergone changes from the Mickey Mouse model with a priority in the direction of the economy, to the strong model “bull’s eye”. Where the first place is given to ecology, after which the weak one has already appeared a model with a balance priority between the three areas of environmental, economic and social sustainability (Fig. 1) (Mann 2009).

ecology sociology

economy

economic priority

Un

the 70s. in the XX century

environmental priority

1987 year

balance priority

2005 year

Fig. 1. Transformation models of sustainable development

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2 Methodology If we talk about sustainable development of economic systems based on the prevailing trends of modern technological transformation, it is possible to establish that they are characterized by the introduction of new technologies and innovation (Koryakov and Malyutin 2017). In this regard, we propose to strengthen the weak model of sustainable development by activities in the field of science and technology. Based on these findings, we propose to consider also the “technological” transformation of the enterprise, attention to which will ensure the competitiveness of the enterprise in the long term (Fig. 2).

Technological Environ mental

Social

Economic

Fig. 2. The advanced concept of sustainable development based on the technological transformation

On the basis of a proposal to improve the concept of sustainable development we propose to develop a mechanism for management of sustainable development in economic systems (Kuznetsova et al. 2019). For the successful existence of economic systems within an unstable market situation, a mechanism for managing their development is necessary. Formulation and refinement of the set of basic components of a system for managing the development of economic systems is one of the key points in its formation (Fig. 3) (Kozlova 2020). Methods, techniques, mode of operation, phased operational procedures are all reflected in the technology (Lankin 2005). They closely interact with the tools, equipment, tools, and materials used.

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Assessment and analysis of the initial state of the enterprise

Formation of sustainability management goals

Quality

Economic

Quantitative

Technological Environmental Social

Sustainability Management Activities Identification of problems Economic

Technological

Environmental

Social

Development of specific activities Principles

Methods and Tools

Factors

Sustainability Management Assessment

Tactical control and making adjustments

Fig. 3 The structural and logical diagram of the mechanism for managing the development of economic systems based on their technological transformation.

3 Results Practical use and efficiency of the proposed mechanism of economic systems are considered on the example of enterprises of “GAZ Group” (hereinafter Business Unit). This business unit has a high potential not only for overcoming the crisis but also for development, serious technical breakthrough, creation of technologies of the future, which the whole world is working on today, including areas such as electric transport or cars with an autonomous driving system (Novikova 2015). Practical application of the mechanism of development is managed in accordance with the five steps. In the first step we have been evaluated and the analysis of the initial state of the subject under consideration (Sergi et al. 2019). The need to implement the changes occurred in the analysis of components of the mechanism. As part of the research, their

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presence at the enterprise was established, but along with this, their weak focus was identified precisely in the direction of technological transformations (Table 1). Table 1. Analysis of the initial state of the subject Components Organization purpose Methods and tools of a mechanism

Source Business unit Articles of association Receive profit Annual report Feasibility planning, economic incentives, encouraging the introduction of energy saving technologies, social regulation Mechanism Impact Factors Annual report Increase economic uncertainty, including greater volatility in the capital markets, the depreciation of the Russian ruble, reducing the amount of foreign and domestic direct investment, as well as a significant reduction in the availability of debt financing sources The principles of sustainable Report on sustainable Are not available development mechanism development Assessment of the Report on sustainable Insufficient activity organization level of development sustainability Carried out as part of operational Operational management - Annual report management making adjustments, and coordination

At the second stage, the goal of the enterprise was established. The main goal of the company is to make profit according to the regulations (Smirnova and Kochnova 2019). It is not enough, to achieve sustainable development, since it takes into account only one economic component. Based on the presented system of goals and focusing on global experience, a goal was proposed for the business unit, which will read as follows: “Contribute to improving the quality of life of society by developing the best products and applying the best technology.” The third step is the analysis of the main factors, methods and principles of sustainable development, on the basis of which it is possible to propose specific measures to achieve the main goal (Vasilyev 2006). The analysis revealed a positive attitude of the company’s partners to such a path as “sustainable development of the enterprise”, which would entail the greatest interest of partners to metallurgical products. Partner companies believe that this trend will cause the greatest trust and confidence in cooperation. Based on the principles and factors of sustainable development a number of measures were proposed together with leading experts of the business unit to achieve the main goal.

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One of them is “Technological modification of the production process of metallurgical production in foundry No. 7 (installation of an automatic cutting and grinding complex Koyama 400 S/400 TT S)”. As a result of the analysis of the production activities of the foundry shop No. 7, the following problems were identified (Table 2): Table 2. Analysis of the problems identified by the elements of sustainable development Economic

Environmental Social

Technological

- The emergence of new requirements for obtaining contracts from customers of automotive components according to international automotive industry quality standards – Valeo, Ford, Renault, GM - A large number of employees for manual processing of castings - A high percentage of industrial waste - High probability of accidents, as well as the syndrome of white fingers caused by constant vibration - Risk of eyes and fingers damage - High noise level - Insufficient weld cleaning - Loss of time associated with a technological break, absence and staff rotation.

In accordance with the identified problems, the following goals are set: 1. 2. 3. 4.

Improve safety during work. New contracts with international companies. Reducing the number of staff required for casting cleaning. Reduced defects during cleaning, and the amount of removal on all the main and connecting rod necks from the top of the connector line to 1 mm.

In the fourth stage, the proposed activity should be evaluated. As a result of the identified problems, it was decided to purchase the Koyama 400 S/400 TT S automatic cutting and grinding complex (Yashin et al. 2019). This complex has the following advantages: – Reducing the number of employees. Only 2 operators replace up to 10 workers involved in manual cleaning; – Manipulator arm: manipulator arm length is about 400 mm, which is compared with the average size of the robot arm 1200 mm greatly reduces stress and increases several times the period of operation; – Compact design: required area for installation is 4–5 times less than the required area for a manual cleaning cell. – Low operating costs: simplicity and reliability of a design does not require annual replacement costs of expensive components and parts. Operating costs less than similar spending on CNC equipment at least 10 times. – Inexpensive and simple to manufacture equipment: accessories (conductor) does not require high accuracy and easy to manufacture. The cost of such equipment is 7–8 times less than high-precision equipment for CNC equipment.

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– The patented technology of the angle of 115º: on grinding discs and head. It allows to clean up to 90% of the surface of castings in one cycle; – Diamond blade technology: diamond deposition technology used in the grinding discs and heads allows: forget about the constant adjustments to the program; compensate for wear and related deviations from stripping circuit, which occurs with stone disks; – The complex operator does not need high qualifications: a highly qualified programmer is not needed for programming, like on CNC equipment. Programming of new castings, as well as the change of the production program, is carried out by the operator himself; – Workers are no longer exposed to vibration. No danger of damage to eyes and fingers prevented insulation stripping process in a closed chamber. There is practically, no dust release. Reduced noise. General working conditions are becoming much more acceptable; At the fifth stage, there was an analysis of the enterprise’s activities towards sustainable development. To further enhance the degree of stability it is necessary once again to review all elements of the mechanism if necessary, correct them. From our point of view, when choosing a development path towards sustainability, an enterprise should use the experience of reporting using GRI-technologies, which in domestic management called sustainability reporting. Sustainability reporting involves the reflection in a single format of indicators of economic, environmental and social performance so-called “triple outcome”. In this international trend becomes digitalization of business processes and implementation of the concept of sustainable development is consistent with the trends. The most relevant documents in this area are signed by the Prime Minister of the Russian Federation in 2017 the Program “Digital Economy of the Russian Federation” Smirnova et al. (2017) and the Order on approval of the Concept for the Development of Public Non-Financial Reporting Kozlova et al. (2020). Now consider the economic effect of the implementation of these measures. According to the labor intensity according to the specification, the wage fund for the cleaning area amounted to 13 033,810 rubles. The average salary in the industry is about 22 thousand rubles after taxes. The company’s salary before the payment of taxes is 30 800 rubles per month or 30 800  12 = 369 600 rubles per employee per year. Thus, we obtain the number of personnel employed in stripping Section 13 033 600 810/369 = 35, i.e., 1 shift at work 17–18 people. The production program per year is 7 000 000 castings. Working hours 4,000 or 240,000 min. 7,000 000/240,000 = 29, i.e. 17–18 people treated 29 castings per minute, or 1 worker cleaned 1 casting in 35–40 s. At the same time, the quality of stripping must be high and repeatable and in full compliance with international standards in the automotive industry. This time is extremely insufficient to obtain stripping according to international standards of the automotive industry in manual mode.

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With the full automation of the peeling section Koyama 400S complexes equipment costs amounted to 11 million rubles. x 14 12,760,000 rubles. x = 1 166 760 000 rubles. The new equipment has reduced the number of workers for production of 7 million castings a year, in accordance with the production program. A number of personnel to work on 15 complexes - 7 people per shift. Accordingly, the full staff of the cleaning area is 14 people, instead of 100 required for the organization of manual cleaning (Table 3).

Table 3. The forecast for the average accrued salary per employee for the next 5 years, taking into account 7% of inflation per year Year 2016 2017 2018 2019 2020 2021 Salary, rub. 30 800 32 956 35 244 37 708 40 348 43 164 The average monthly wage will be 36 703

Thus, only the wage savings for enterprise payment is as follows: Number of released workers at cleaning: 100 Manual - Automatic 14 = 86. Economical effect is 86  36 703  12 months. = 37,877,496 rubles in year. The payback period for the full volume of investments will be 166,760,000/37 877 496 rubles = 4, 4 years with a service life of equipment for up to 20 years. The calculation of the main economic effect of reducing the number of employees is presented in Table 4. Table 4. Calculation of reduction in payroll costs Name

Phase of the project Prior to After implementation implementation 100 14

Number of staff Payback period of investments * After tax

Savings (+), increase (−), people

The average Savings (+), salary, rub. increase (−), * rubles/year

86

22 000

37 877 496 4.4 years

Social positive effect in connection with the implementation of projects develops due to: – Improve safety during the work. – Reduce injuries in the workplace.

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Table 5 calculated the project savings by reducing accidents at work. Table 5. Calculation of project savings by reducing injury cases Name

Project implementation phase, for a year Prior to After implementation implementation 7 0

Injury cases Total savings from reducing injuries

Savings (+), increase (−), people

The cost of the Savings (+), insurance tariff, increase (−), rub. rubles/year

3

5 000

35 000 35 000

In addition, the high productivity on manual cleaning leads to an increase in the amount of dust emission, as well as a high noise level. Ecological positive effect in connection with the implementation of projects develops due to: – Reducing energy costs; – Reducing production waste. Efficient use of energy is the key to a successful solution of environmental problems. Reduction in electricity consumption - the easiest way to reduce environmental pollution.

4 Conclusion As a result, it provides a mechanism management of sustainable development in a process of transformation may also be introduced to other enterprises and organizations of the industry with a view to achieving their sustainable development. Implementation of proposed mechanism for managing the sustainable development of economic systems made it possible to increase the level of organization sustainability by: 1) Reduce production costs, in other words increases the economic stability of the enterprise; 2) Changes in the working conditions of staff (higher level of security), which is increasing the degree of social stability; 3) Reduction in energy costs and eliminating the production of waste, whereby increased level of environmental stability; 4) Transformation process and the introduction of new modern equipment that meets international standards in the automotive industry, as a result there was an increase of technological level of sustainability.

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References Andryashina, N.S., Garin, A.P., Romanovskaya, E.V., Kuznetsova, S.N., Kozlova, E.P.: Analysis of reserves for effective development of production. In: Lecture Notes in Networks and Systems, vol. 73, pp. 403–414 (2020) Ivanova, E.V.: Regularities of technological transformation of modern world economy. In: The Global Economy in the 21 Century: Dialectic Confrontation and Solidarity. Collection of Scientific Works on the Results of the IV-th International Scientific Conference, pp. 250–253 (2017) Koryakov, A.G., Malyutin, A.N.: Managing expenses of the enterprise — the key factor of its sustainable development in the conditions of stagnating economy. In: Proceedings of the International Scientific and Practical Conference. Development of Industrial Capacity in Terms of Import Substitution: Management and Marketing Techniques, pp. 80–87 (2017) Kozlova, E.P., Potashnik, Y.S., Artemyeva, M.V., Romanovskaya, E.V., Andryashina, N.S.: Formation of an effective mechanism for sustainable development of industrial enterprises. In: Lecture Notes in Networks and Systems, vol. 73, pp. 545–556 (2020) Kuznetsova, S.N., Lapaev, D.N., Artemyeva, M.V., Potashnik, Y.S., Kozlova, E.P.: Increase of economic effectiveness of investment projects in industrial parks. In: Lecture Notes in Networks and Systems, vol. 57, pp. 1138–1144 (2019) Lankin, V.E.: Management Decentralization of Socio-Economic Systems (Systemic Aspect). Publishing house TRTU, Taganrog (2005). 228p Mann, S.: Visualising sustainability, March 2009 http://computingforsustainability.wordpress. com/2009/03/15/visualising-sustainability/. Accessed 28 June 2012 Novikova, I.I.: Socio-economic processes and phenomena of sustainable development of territories of Russia in the conditions of global changes: collective monograph/under the general editorship of V. Nesterova N.N. — Yelets: Eletsk State University named after I.A. Bunin (2015). 285 p Report of the United Nations Conference on the Human Environment, Stockholm, 5–16 June 1972. (United Nations publication, Sales number R.73. II. A. 14), Chapter 1 -109 p Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Ragulina J.V.: Entrepreneurship and economic growth: the experience of developed and developing countries. In: Entrepreneurship and Development in the 21st Century, pp. 3–32. Emerald Publishing Limited (2019) Smirnova, ZhV, Kochnova, K.A.: Training of employees of service enterprises using information technology. Vestnik Minin Univ. 7(1), 5 (2019) Smirnova, Zh.V., Gruzdeva, M.L., Krasikova, O.G.: Open electronic courses in the educational activity of the university. Vestnik Minin Univ. (4 (21)), 3 (2017) The concept of public non-financial reporting. Approved by the Federal Government from 5.05.2017. N 876-p [electronic resource], Moscow. http://docs.cntd.ru/document/456064017 The program “Digital Economy of the Russian Federation”. Approved by the Federal Government from 28.07.2017. 1632 N-p [Electronic resource]. http://static.government.ru/ media/files/9gFM4FHj4PsB79I5v7yLVuPgu4bvR7M0.pdf Vasilyev, V.N.: Technological stability of the enterprise. Russ. Entrepreneurship 7(4), 26–32 (2006) Yashin, S.N., Koshelev, E.V., Ivanov, A.A., Garin, A.P., Kozlova, E.P.: Anti-crisis cluster innovation strategy risk management with usage of real put option. In: Lecture Notes in Networks and Systems, vol. 57, pp. 987–1001 (2019)

Use of Letter of Credit Form of Payment in the Implementation of Smart Contracts and Blockchain Technology Elena N. Agibalova(&) , Igor B. Ilovaysky , Yanina Y. Kayl and Viktoria A. Usanova

,

Volgograd Institute of Management– Branch of the Russian Presidential Academy of National Economy and Public Administration, Volgograd, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. Payments under a letter of credit are one of the forms of non-cash transactions, which is designed to meet the concerns of both the payer and the recipient of funds. Such obligations make it possible not only to perform quick payments, but also to obtain guarantee of the transfer of goods, construction or services. The advantages of this form of transactions can also be used in the implementation of blockchain technology and smart contracts, however, it requires adequate legal regulation. The aim of this publication is to consider the prospects for normative improvement of Russian legal norms in terms of regulation of both the letter of credit form of transaction and the use of information and Internet technologies in its implementation. The study conducted a comparative analysis of the subject composition and content of the “classic” letter of credit in international transactions and the initial Russian experience in the implementation of a letter of credit on the blockchain platform and the use of smart contracts. This approach, including consideration of the legislation of Russia and other countries, became the basis for the conclusion that the world community and the Russian legislator are at the initial stage of understanding this kind of public relations. In this regard, it is necessary to create unified international agreements in this area, agreed by the states among themselves, and harmonized with international standards of national law. Keywords: Letter of credit
Blockchain
Information system
Information technology
Smart contract
Opening of a letter of credit
Advising of a letter of credit
Blockchain address JEL Code: K12


К33
O31
L86

1 Studies Analysing the problems of using a letter of credit for the implementation of smart contracts and blockchain technology, including the legal regulation of this kind of relationship, we used a set of sources. These are the regulatory documents of the Government of the Russian Federation, namely the Digital Economy of the Russian © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 160–170, 2020. https://doi.org/10.1007/978-3-030-47945-9_18

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Federation program, approved by Decree of the Government of the Russian Federation No. 1632-r of July 28, 2017, and the standards of the Central Bank of the Russian Federation such as the Regulation on the Rules for Transferring Funds, approved by the Bank of Russia on 19.06.2012 No. 383-P and publications of the International Chamber of Commerce - Uniform Customs and Practice for Documentary Credits (UCP 600. Revision 2007.). The scientific basis of the article is based on the scientific works of foreign (Schmittgoff, K., Tynel, A., Funk, I., Khvaley, V.) and Russian (Goncharov, A.I., Inshakova, A.O., Kazachenok, S.Yu., Minbaleev, A.V., Savelyev, A.I.) scientists.

2 Methods The scientific research of the content of this article is based on the application of the universal scientific method of historical materialism. The general scientific methods of enquiry such as dialectical method, generalization, induction and deduction, analysis and synthesis, empirical description, classification, were introduced. Moreover, the study used such scientific methods as legal-dogmatic method, comparative-legal method, structural-functional method, etc.

3 Introduction In settlements between entrepreneurs, a letter of credit is a real alternative to prepayment, as provides relative risk parity of both the payer and the recipient of funds, and thus minimizes the risk of counter-default (Tynel et al. 1999). Moreover, along with payment tasks, it also performs the function of short-term lending. This form of transaction is necessary in situations when you need to sell your goods (it is the only way to stay on the market!), and the trustworthiness of the partner is in doubt. With competent merchants, a letter of credit has long been popular, albeit with great complications. The development of information technologies has made it possible to use this method of transaction on a blockchain platform and also perform smart contracts based on it. In order to determine the type of trade relations in these conditions and give them a legal assessment, including legal regulation, we find it necessary to consistently consider the essence of the letter of credit, the legal aspect of usage of blockchain technology and the prospects for using smart contracts within this conditions.

4 Results 4.1

The Concept and Subjective Composition of Settlements on the Letter of Credit (for Example, International Settlements)

In Russia, the regulation of a letter of credit relationship is based on the three most significant regulatory sources. More specifically, chapter 46 of the Civil Code of the Russian Federation; Regulation on the rules for the transfer of funds (hereinafter - the

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Regulation) (Regulation on the rules for the transfer of funds approved by the Bank of Russia 06/19/2012 No. 383-P) and the publication of the International Chamber of Commerce No. 600 “Uniform Customs and Practice for Documentary Credits” (hereinafter - Uniform Customs) (Ramberg 2011). Most completely, this obligation is regulated by the last of these normative acts. Although, it is just an international practice and is applied on the territory of the Russian Federation in accordance with Art. 5 of the Civil Code of Russian Federation. Nevertheless, the most fully letter of credit obligation is realized and regulated precisely with international settlements. For this reason, in order to give him the most capacious characterization, we will use the international composition of the subjects. In our opinion, in the international composition of subjects can be up to eight, and sometimes even ten participants, divided by functional features. Thus, we can distinguish the following subjects of letter of credit relationships. The applicant of the letter of credit (payer, or the client of the issuing bank, or the letter of credit) is the debtor of the obligation, in which the letter of credit is provided as a form of transaction, it is also called the principal contract. Under these agreements, for this participant, the contractor delivers the goods, performs work or provides services that the recipient is obliged to pay. The person authorized by the letter of credit (creditor) is the recipient of funds or, in accordance with Art. 2 of the Unified Rules, beneficiary. Such an entity supplies the payer with goods or provides him with services (work), and the latter pays for them upon presentation of the documents stipulated in the conditions of the letter of credit. They, as a rule, confirm the fact of shipment of goods (performance of work or services), their compliance with a certain quantity and (or) quality, and can also certify the fulfillment of other conditions significant for the parties. These documents are provided by the beneficiary to the bank, which accepted the order of the payer to open a letter of credit in his favor. This bank is called the issuing bank. He is obliged to check the documents, and if they comply with the conditions established in the letter of credit, then make a payment to the recipient of funds. The issuing bank may delegate the authority to execute the payment and verify the documents to another bank, the executing bank (in other sources, the designated bank). It performs intermediary functions that were entrusted to it by the issuer. One of the elements of a letter of credit obligation is notification of the recipient of funds on the opening of a letter of credit in his favor. In clause 6.9 of the provisions it is established that this kind of action is either carried out by the executing bank or involves a third party bank. In international settlements, this action is carried out by a special entity, the advising bank. He is indicated as an independent participant in settlements under a letter of credit in Article 2 of the Unified Rules, according to which this entity is not responsible for payment to the recipient of funds, but is obliged to carry out two legal actions. On the one hand, notify or, according to banking terminology, advise the beneficiary of the opening of a letter of credit in his favor, and on the other hand, through the SWIFT system, according to external signs, verify the authenticity of the letter of credit that he advises.

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This subject is not established in the Civil Code of the Russian Federation and in the Regulation. In international settlements, advising functions may be combined by other settlement participants: the issuing bank, the executing or confirming bank. As a result, in the legal literature the executing and advising banks are often identified and understood as one legal entity (Schmittgoff 1993), but this point of view is controversial. In practice, they may be different credit organizations. In any case, the payer and the recipient of the funds, signing the payment agreement, must specifically indicate which of the banks will be advising. The advising of a letter of credit is a process of great legal importance. Firstly, the beneficiary, having received from the advising bank the conditions of the letter of credit opened by the payer at the bank, can check them for compliance with the provisions of the principal contract (i.e. check, in essence, the trustworthiness of the payer). And, if the compliance is found and it meets the interests of the beneficiary, then he carries out the so-called reverse advising, i.e. agrees to execute the letter of credit on these conditions. If there is no compliance, and the conditions of the letter of credit opened in the issuing bank contradict the rules established in the principal contract, then the beneficiary has the right to either demand to open a letter of credit on previously agreed terms or refuse to fulfill the main obligation. Secondly, by making reverse advising, the beneficiary also agrees to pay for the services of the advising bank, unless otherwise is specified in this agreement. The recipient of the funds may insist on securing the obligations of the issuing bank by confirming the letter of credit from another bank. Confirmation, in accordance with Article 870 of the Civil Code of the Russian Federation and Article 8 of the Unified Rules, means the adoption of an additional obligation to the issuing bank to make a payment in accordance with the terms of the letter of credit. Involving a new member as such an entity other than the issuing bank or the performing bank gives a firm guarantee from a third party, from whom, in case of improper fulfillment of a letter of credit by the listed credit organizations, the recipient of the funds may demand a payment. According to Clause 3, Article 867 of the Civil Code of the Russian Federation, settlements under a letter of credit can occur through the use of covered and uncovered types of letter of credit. With a letter of credit covered, the payment amount is credited for the entire term of the letter of credit to the account of the performing bank. With an open letter of credit, this bank is allowed to write off the amount of the letter of credit from its correspondent account of the issuing bank, i.e. with this type of letter of credit, there must be correspondent relations between these banks. Thus, the executing bank receives a kind of security for payments under the letter of credit from the issuing bank. In international settlements, covered letters of credit are used very rarely, just as not often direct correspondent relations are established between banks. Under these conditions, the relationship between the issuing bank and the performing bank is through a common correspondent bank. In order to expedite the execution of the letter of credit, the issuing bank may request the executing bank to make a payment directly to the beneficiary from its own funds, and in order to guarantee the bank the return of the paid amounts, the issuer simultaneously issues the reimbursement authority to the correspondent, in accordance with which it assumes the reimbursement obligation compensation (reimbursement) to the performing bank for

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the issuing bank. A correspondent bank, if it assumes such obligations, is called a reimbursing bank. Since all settlements under the letter of credit are made by bank transfer, the funds sent to the beneficiary must be credited to the current account opened with his bank, i.e. beneficiary bank. If you graphically depict all participants who may be involved in the performance of letters of credit, then the relationship between them will be as shown in Diagram No. 1.

Diagram No. 1. Participants in settlements under a letter of credit

1. The primary obligation in which a letter of credit is provided as a form of settlement. 2. Instruction to open a letter of credit. 3. Issuance of reimbursement authority. 4. Providing reimbursement obligations.

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5. 6. 7. 8.

Instruction to notify (advise) the beneficiary of the opening of the letter of credit. Notification of the beneficiary of the opening of the letter of credit. Reverse advising. An order to secure the obligations of the issuing bank to the beneficiary through confirmation of the letter of credit. 9. Confirmation of a letter of credit. 10. Crediting funds to the beneficiary’s current account. 11. Submission of documents attesting to the fulfillment of the main obligation. In international practice, there are eight entities in the letter of credit settlements with different rights and obligations in relation to each other: payer of funds, issuing bank, reimbursing bank, executing bank, confirming bank, advising bank, recipient bank and recipient of funds. Whereas in the Russian Federation, after amending the Civil Code of the Russian Federation of July 26, 2017 (see article 870.1 of the Civil Code of the Russian Federation), it is possible to apply the so-called transferable or transferable letter of credit. According to the conditions of such settlements, the recipient of the funds may indicate one or more persons in whose favor payment by letter of credit can be made. As a rule, such entities include co-executors (subcontractors) of the beneficiary under the principal contract. In paragraph “b” of Article 38 of the Unified Rules such entities are called the second beneficiaries, and in paragraph 2 of Article 870.1 of the Civil Code of the Russian Federation - the second recipients of funds. Thus, we can supplement the above diagram with these participants too. Moreover, one person can act as a payer of funds under a letter of credit, and another person can act as a recipient of goods (services or works) from the beneficiary, i.e. in fact, appears another subject of the letter of credit, which can be called the “beneficiary”. The foregoing allows us to say that a letter of credit is a complex obligation with many entities performing various functions that complement and secure each other. The foregoing allows us to say that a letter of credit is a complex obligation with many entities performing various functions that complement and secure each other. In general, this creates a legal relationship in which both parties have a guarantee of obtaining benefits. 4.2

The Use of Blockchain Technology and Smart Contracts Based on It in the Settlements Under a Letter of Credit

Blockchain technology is considered as a specific information system, which is a register of information, as well as technology for its processing, including the accumulation (creation), storage of accurate data, confirming the totality of property and other rights and obligations of their owners that allows to carry out various legally relevant actions, including electronic settlements. From a legal point of view, blockchain is a kind of decentralized electronic distributed database, a kind of accounting ledger, which collects all recorded actions (transactions) committed in relation to any asset (for example, non-cash funds, electronic money, or uncertified securities, etc.). Moreover, the work of such a database is based on cryptographic algorithms (Minbaleev and Safronov 2018). Although such a characteristic of the blockchain does

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not correspond in all respects with the provisions of Article 1260 of the Civil Code of the Russian Federation on databases, nevertheless, this technology allows to store and process information from various public areas and use electronic services based on a variety of websites collected in a single chain in broad social fields. This may be entrepreneurship, education, banking, state and municipal government and other areas. An example of the use of blockchain technology in the Russian Federation is the State Services portal, which combines the work of servers of several public authorities and government agencies. Among foreign examples of using the blockchain, we can consider the EmcSSL service, which allows to combine the user’s work on an unlimited number of social networking websites under a single key, reflected in the client certificate received when connecting to the specified service. And a user do not need to go to a particular resource and perform special authentication, because the system will independently provide safe work on the website. All websites that the user uses will use the same key. And if this subject wants to change it, then it will automatically be applied on all websites (Inshakova Agnessa et al. 2019). The fact that blockchain technology makes it possible to safely process an extensive range of information that requires identification of specific individuals (participants), and the fact that this kind of information can not be changed or deleted without the consent of their owners, makes this technology very promising. In particular, the use of this technology is possible to create automated, programmed contracts, i.e. agreements that may be concluded and executed in whole or in part without human intervention. Such contracts received the generalized name “smart contracts” (Savelyev 2016). Although, in our opinion, such a phenomenon can be called a contract only conditionally. In this case, one can agree with the opinion of I.A. Mitrofanova, who claims that “… a smart contract should not be considered as a separate specific type of obligation, but as a special way of fulfilling obligations under an agreement” (Mitrofanova 2018). And from the perspective of amendments to the Civil Code of the Russian Federation by the Federal Law No. 34 adopted by the State Duma on March 12, 2019, a smart contract is generally a form of transaction - using electronic or other technical means (in the form of an electronic algorithm or, otherwise, computer programs). Moreover, this form is equivalent to a written form of the settlement. Thus, the legislator said that a smart contract is not a way of execution, but a form of settlement. The use of “smart contracts” (legally significant actions) when making settlements under a letter of credit is indicative. On December 20, 2016, between the Russian airline S7 Airlines, which acted as a contractor, Alfa Bank acting as the issuing bank and some executors, a deal was concluded to carry out work with their payment through an irrevocable covered letter of credit and using smart contracts. Thus, only three entities participated in the obligation. Smart contracts were used to perform only two actions, opening and closing a letter of credit. The conditions for its execution, namely the type of work performed for S7, the amount of the transaction, the dates of its opening and closing, the names of the parties and their TIN, were recorded on the blockchain. Apparently, to complete the transaction, the parties entered into an agreement on the use of public blockchain addresses as an electronic signature in advance. Considering the indicated legal relationship, A. Zaitsev correctly notes that there were not many legal functions in the operation of smart contracts, and their use was reduced to ensuring exclusively technical tasks (Zaitsev 2018).

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Another experience of using a letter of credit, which was carried out by Raiffeisenbank in Russia, is more interesting. Marina Smantser made a report on this project on June 22, 2017 at the Blockchain & Bitcoin Conference in St. Petersburg, according to her, three entities also participated in this obligation: a buyer, a seller and a bank (issuing bank, i.e. Raiffeisenbank). The Buyer and the Seller have entered into an agreement to provide certain goods. It was an important condition that the fact of their provision could be identified automatically. For example, the main agreement involves the sale of real estate or securities, or shares in the authorized capital of a legal entity. The fact of transfer of ownership of such property can be verified both on the basis of information in the submitted documents, and on the basis of information in external sources (for example, in the unified state register of real estate). Further transaction support is provided through the blockchain platform. The parties divided it into several stages. Firstly, the Buyer created a smart contract - “Application for a letter of credit” (hereinafter “Application”), which received the status of New. The Application address was placed in the Buyer’s and Bank’s Mailboxes. The Buyer attached to the Application a formalized electronic document describing the details of the transaction and the necessary non-formalized documents, for example, a scan copy of the contract for which a letter of credit was opened. After attaching all the necessary documents, the Buyer gives the Application the status of InBank. Secondly, the Bank automatically (for formalized electronic documents) or using experts (for non-formalized documents) checked this transaction. For example, the bank sent a request to its systems to check client details in the client data catalog, to confirm the account balance and reserve funds, for currency control purposes and for other checks. If the Bank has any claims regarding the content of the transaction or attached documents, it refuses to accept the Application and gives it the status of Rejected. If the Bank agrees to accept the Application for execution, it shall be given the status of Confirmed. Thirdly, on the basis of a formalized electronic document in the Bank’s accounting systems were carried out the necessary operations: transfer of the amount of the letter of credit from the client account to the “coverage account”, writing off the commission, etc. The Bank issued a smart contract “Letter of Credit” (hereinafter Letter of Credit), which received the status of New. The letter of credit address was placed in the mailboxes of the Bank and the Seller. The Letter of Credit kept the address of the Application, which made it possible to automatically track their key statuses so that the Buyer could monitor the status of the transaction. The Bank attached a formalized electronic document to the Letter of Credit (formed automatically from the conditions of the Application) with a description of the transaction details, other necessary documents and gave it the status of Released. The application also received this status. Upon receipt of this status, the Letter of Credit automatically queued two requests: – a request for control of the expiration of the Letter of Credit. It comes into effect when the current date exceeds the validity of the Letter of Credit, and this obligation can no longer be fulfilled;

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– a request for waiting for contract execution, i.e. a specific template that defines the content of the transaction that comes into effect if the conditions described in it are met. Fourth, after studying the issued Letter of Credit, the Seller could refuse to accept it. In this case, he gives it the status of Invalid. In this case, the letter of credit must be canceled, and further work with it becomes impossible and the Application also receives the status of Invalid. If the first event of the expiration of the Letter of Credit, it receives the status of Overdue, and further operations with it become impossible. The application also receives this status. In this case, automatic orders are sent to the Bank’s accounting systems to initiate transactions corresponding to the cancellation of the letter of credit (return of coverage, termination of the bank’s obligation, etc.). Fifth, if the first event is the execution of a contract, including when the Seller attaches electronic documents, the Letter of Credit received the status of InBank. Upon receipt of this status, it was automatically placed in the request queue for payment execution and the request to control the expiration date was removed from the queue. Based on a formalized electronic document attached to the Letter of Credit, the Bank made a payment in favor of the Seller by transferring the order to its settlement system and executing the Payment outside the blockchain (information about the actual execution of the Payment was returned to the blockchain). Sixth, after the payment execution event, the Letter of Credit received the status of Closed. The application also received this status, and the obligation was generally considered fulfilled and completed (Smantser 2019). Thus, in the above example, smart contracts perform only auxiliary, rather technical, functions in the performance of a letter of credit relationship.

5 Conclusion Comparing the content and subjective composition of the classic (in our case, foreign economic) letter of credit relationship, which was given in the first part of this study, and the letter of credit obligations using smart contracts, it must be recognized that the latest transactions are carried out on a much smaller scale (by the number of such kind of operations, according to the subject composition, by the complexity of the arising obligations and the relationships between them, etc.). If the first form of the letter of credit has been used for a long time and takes the third most popular place among the forms of non-cash transactions (Kazachenok 2018), then the interested parties are just beginning to master the letter of credit on the blockchain platform. Moreover, in the classic form of a letter of credit up to eight or more entities are possible, and a blockchain-based letter of credit is realized only between three entities and within the framework of such a platform of one bank. This credit organization simultaneously performs the functions of the issuing bank, the executing bank, the advising bank, the beneficiary bank and the payer, i.e. the buyer (payer) and the seller (beneficiary) should be customers of this bank, at least for the duration of the execution of the main agreement.

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A small composition of participants is dictated by the poor (even trivial) content of the letter of credit relationship in which smart contracts are used. In fact, smart contracts in these respects perform auxiliary technical tasks in the implementation of three legally significant actions - opening, closing and advising (notification of the opening of a letter of credit). The similar nature of the obligations gives rise to some doubts: “Is this legal relationship a letter of credit as such, since what was stated in the second part of this work is similar to the obligations of chapter 47.1 of the Civil Code of the Russian Federation on escrow?” Such form of letter of credit will unlikely be used, at least now, in foreign economic activity in a situation where counterparties will be located in far-off countries and their servicing will be carried out in different credit organizations. Nevertheless, if we imagine that the information resources of the SWIFT system will be combined with similar platforms of other large banks, the creation of such a global banking network in the form of a super-blockchain looks quite possible and realistic. However, such banking operations and transactions require legal regulation, and this should be the national legislation of individual countries, harmonized with unified international agreements, and not corporate acts in the field of settlements, which can be observed at the SWIFT level, and not the customs created, for example, International Trade a chamber for regulating cross-border settlements under a letter of credit (see Unified Rules and Customs for Documentary Credit (UCR 600) and other ICC standards adopted in their development). Well, will see… Acknowledgment. The study was supported by the Volgograd Institute of Management, a branch of the RANEPA within the framework of the implementation of the scientific project No. 04-2018 of the Higher Educational Institution “Topical issues of protecting rights and freedoms in the digital space”.

References Inshakova Agnessa, O., Goncharov Alexandr, I., Kazachenok Svetlana, Y.: Legal regulation of the syndicated lending: banking innovations in contemporary Russia. In: Proceedings of the 5th National Scientific and Practical Conference Perspectives on the Use of New Information and Communication Technology (ICT) in the Modern Economy, Pyatigorsk, Russia. Advances in Intelligent Systems and Computing, pp. 368–377 (2019). Greenspan G. Why Many Smart Contract Use Cases Are Simply Impossible (2016). https://www.coindesk.com/ three-smart-contract-misconceptions. дaтa oбpaщeния 24 Aug 2019 Zaitsev, A.M.: Smart contracts: concept and prospects of use. Arbitr. Pract. Lawyers 4(32), 28– 34 (2018) Obruchnikov, A.V., Solomatin, D.I.: Digital letter of credit using blockchain technology. In: The collection: Collection of Student Research Papers of the Faculty of Computer Science of VSU, Voronezh State University, Voronezh, pp. 215–221 (2018) Kazachenok, O.P.: The legal regime of bank responsibility in the settlement of letters of credit. In: Entrepreneurial Law. The Application “Law and Business”, vol. 1, pp. 22–25 (2018) Tynel, A., Funk, J., Hvaley, V.: The Course of International Commercial Law, p. 339. Amalfey Publishing House, Minsk (1999)

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Minbaleev, A.V., Safronov, E.G.: The legal nature of Blockchain. Bull. SUSU. Series Law 2, 96 (2018) Mitrofanova, I.A.: Legislative regulation of smart contracts: problems and development prospects. Legal Concept Legal Paradigm 4, 25–26 (2018) Regulation on the rules for the transfer of funds (approved by the Bank of Russia 06.19.2012 No. 383-P) (as amended on 10/11/2018). Bank of Russia Bulletin. no. 34 (2012) Savelyev, A.I.: Contract law 2.0: “smart” contracts as the beginning of the end of the classic contract law. Bull. Civil Law. 3, 32–60 (2016) Smantser, M.: Blockchain platform for trade finance transactions based on smart contracts URL: https://habr.com/ru/company/raiffeisenbank/blog/332756/. Accessed 24 Aug 2019 Unified rules and customs for documentary letters of credit (UCP 600). Revision 2007. (Publication of the International Chamber of Commerce No. 600). In: International Commercial Transactions, 4th edn. ICC Publication No. 711. International Commercial Transactions. Jan Ramberg. Fourth Edition. ICC Publication No. 711E/ Jan Ramberg; (translated from English under the editorship of N.G. Vilkova). - M. Infotropic Media (2011), p. 896. IBSN 978-5-9998-0090-9 Schmitthoff, K.: Export: law and practice of international trade. Legal Literature. – M (1993). Tynel, A., Funk, I., Khvaley, V.: S.202. The course of international commercial law. Amalfey Publishing House, Minsk, p. 339 (1999), and etc

Blockchain Technology in Smart Contracts: Is It a Constitutive Attribute or a Technological Neutrality? Elena N. Agibalova(&) Volgograd Institute of Management – Branch of the Russian Presidential Academy of National Economy and Public Administration, Volgograd, Russia [email protected]

Abstract. The study raises the problem of using the blockchain technology in smart contracts and discusses the prospects of using this technology in conclusion and execution of “smart contracts”. The need of analysis of this subject is determined by global changes in all areas of public life caused by the fullscaled introduction of digital technologies, including computer technology for the conclusion and execution of smart contracts. The article touches upon the issues of civil law regulation of smart contracts in the light of the introduction of Federal law No. 34-FZ, adopted by the State Duma on March 12, 2019 that amends to the Civil Code of the Russian Federation, including the legal definition of “smart contract”. The benefits and disadvantages of the practical use of smart contracts and the existing problems of applying the norms of civil legislation to smart contracts are examined. The purpose of the study of these issues is to identify and consider the theoretical and practical problems of using the distributed data ledger blockchain technology in smart contracts. The decisive research method for achieving this result was a system analysis of the “smart contract” category. The methods also include general scientific dialectical method of cognition, private scientific methods (formal-legal, method of interpretation of legal norms, method of legal modeling) and empirical methods (comparison, description, interpretation). In the end, the author concludes that the definition of “smart contract” should be technologically neutral. There is strong advocacy for the view that distributed ledger data, including blockchain technology, should not be part of the definition of a smart contract, since in the future it might be possible to conclude “smart contracts” created on the basis of a more advanced technology than blockchain. The results of the study formulated by the author can serve as a basis for further research of transactions made by electronic or other technical means, and other problems of the theory of civil law. Keywords: Smart-contract
Contract
Transaction
Written form
Electronic form
Distributed ledger
Blockchain technology
Civil law JEL Code: K12


K15

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 171–180, 2020. https://doi.org/10.1007/978-3-030-47945-9_19

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1 Research Methods The research methodology is based on the general scientific dialectical method of cognition and private scientific research methods: formal-legal, method of interpretation of legal norms, method of legal modeling. Empirical methods of comparison, description and interpretation were used as well. The defining method was a systematic analysis of the category “smart contract” in terms of its impact on the current state of civil law regulation of public relations.

2 Introduction As a result of the large-scale introduction of digital technologies, global changes are taking place in all spheres of public life. The use of computer technology in the conclusion and execution of contracts, in particular smart contracts (other names: selfexecuted contract, self-executed transaction), is one of the directions for introducing digital technologies in the sphere of economic turnover. In connection with the amendments by the Federal Law No. 34-FZ adopted by the State Duma on March 12, 2019 (Federal law No. 34-FZ dated March 18, 2019) to the Civil Code of the Russian Federation (hereinafter also the Civil Code of the Russian Federation), it becomes extremely relevant to look into the problem of legal regulation of smart contracts, including consideration of the legal definition of “smart contract”, the advantages and disadvantages of the practical use of smart contracts, and the existing problems applied to smart contracts of civil law. The purpose to study these issues is to identify and consider the theoretical and practical problems of using such distributed ledger technology as blockchain technology in smart contracts. Blockchain - is a built according to certain rules of a continuous sequential chain of blocks containing information, copies of which are often stored on many different computers independently.

3 The Results Based on the instructions of the President of the Russian Federation dated December 21, 2017 (List of instructions of the President of the Russian Federation No. Pr-2132 dated October 21, 2017), the Ministry of Finance of the Russian Federation (hereinafter - the Treasury of Russia) and the Bank of Russia (hereinafter - the CB RF) On January 25, 2018 submitted the texts of the draft laws “On Digital Financial Assets” (hereinafter referred to as the draft laws on the DFA) related to the regulation of cryptocurrencies, mining, as well as smart contracts (Debevoise & Plimpton. Information for clients 2018). The DFA bills introduce a definition of smart contract. In the draft law on the DFA version of the CB RF, it is understood as “an agreement in electronic form, the determination and performance of rights and obligations which is carried out by making automatic digital records in a strictly defined sequence and upon the occurrence of certain circumstances” (Draft Federal law “On digital financial assets”, prepared

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by the CB RF). As convincingly remarked A.M. Zaitsev, “although a smart contract in this definition is considered as a legal contract, its function comes down solely to making digital records. However, there is no mention of distributed ledger technology” (Zaitsev 2018). The draft law on DFA of the Ministry of Finance of Russia provides that “a smart contract is an electronic contract, the fulfillment of rights and obligations of which is carried out by automatically executing digital transactions in a distributed ledger of digital transactions in a strictly defined sequence and upon the occurrence of certain circumstances”. It is additionally stated that “the protection of the rights of participants (parties) to a smart contract is carried out in a manner analogous to the procedure for protecting the rights of the parties to a contract concluded in electronic form” (The draft Federal law “On digital of financial assets”, prepared by the Ministry of Finance; the text as 01/25/2018). Thus, specific ways to protect rights are not established. It is not difficult to see that the definition is offered through terms that themselves require a definition, which complicates the understanding of a smart contract (Volos 2018). In this definition, a distributed ledger database is a key feature, and the scope of a smart contract is limited to transactions in a distributed ledger (Zaitsev 2018). These draft laws on the DFA were widely criticized and were not submitted to Parliament. On March 20, 2018, the Committee on Financial Market submitted another draft law on DFA to the State Duma for consideration. The project contains the following wording: “A smart contract is an agreement in electronic form, the fulfillment of rights and obligations of which is carried out by automatically made digital transactions in a distributed ledger of digital transactions in the sequence strictly defined by such an agreement and upon the occurrence of circumstances determined by it” (The draft Federal law No. 419059-7 “On digital of financial assets”; the text as 03/20/2018). In this definition, transactions in a distributed ledger are also designated as constitutive. However, given the specific scope of regulation of the DFA draft law, the status of smart contracts that are not related to digital financial assets remained unspecified (Zaitsev 2018). On May 22, 2018, the State Duma of the Russian Federation adopted this draft law on DFA on first reading (The draft Federal law No. 419059-7 «On digital of financial assets», edition adopted by the state Duma in the first reading 22.05.2018). On the same day, two more draft laws were adopted on first reading, which, along with the DFA bill, may become the basis for regulating the digital economy: a draft law on crowdfunding and a draft law on amendments to the Civil code of the Russian Federation. The last of these draft laws today already has the status of federal law. On March 12, 2019, the State Duma adopted Federal Law No. 34-FZ “On Amendments to Parts One, Two and Article 1124 of Part Three of the Civil Code of the Russian Federation” (Federal law No. 34-FZ dated March 18, 2019) (hereinafter referred to as the Law or Federal Law No. 34-FZ). The law makes the following changes to the Civil Code of the Russian Federation (The civil code of the Russian Federation (part one) No. 51-FZ dated November 30, 1994): it fixes a new object of civil legal relations digital rights (Article 128 of the Civil Code of the Russian Federation); includes rules according to which a smart contract is equal to a written form of a transaction (Article 160 of the Civil Code of the Russian Federation).

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The very concept of “smart contract” is not used in the Law, however, it introduces some certainty in the scope of use of self-executing transactions (made using electronic or other technical means). Thus, the Law supplements Article 309 of the Civil Code of the Russian Federation with Part two in the following wording: “The Terms of the transaction may be provided for the fulfillment by its parties of obligations arising from it in the event of certain circumstances, without the obligation of the parties to the transaction being fulfilled separately expressed by additional expression of their will by the use of information technologies defined by the terms of the transaction. “Thus, according to the legislator, a smart contract is not a separate transaction, it is just a condition for the automatic execution of any civil law contract (sale, lease, contract, etc.). The Law also provides that the law, other legal acts and agreement of the parties may establish additional requirements for the form of the transaction and the consequences of non-compliance with it. If they are not provided, then the consequences of non-compliance with the simple written form of the transaction apply to smart contracts (Clause 1, Article 162 of the Civil Code of the Russian Federation). Thus, according to the concept of legislative regulation of smart contracts, they should not become a new independent entity. It is about recognizing the right of the parties to fully or partially conclude an agreement using electronic or other technical means (in the form of an electronic algorithm or, otherwise, a computer program). Moreover, this form is equivalent to a written form of the transaction. Despite the first unsuccessful attempts to regulate the digital economy (Inshakova et al. 2018) with the advent of amendments to the Civil Code of the Russian Federation, the chances of normal civil law regulation of smart contracts in Russia increased, which in turn can lead to their active implementation into Russian legal reality. Until that time, the use of smart contracts was limited due to the absence of any legislative regulation (in particular, civil law) and the protection of the rights of the parties (Savelyev 2017). Some researchers believe that such regulation will be sufficient at the initial stage. Detailed regulation of certain issues related to smart contracts will eventually find a place in special federal laws. Some foreign countries have already adopted laws defining a smart contract as a legal phenomenon. The first country in the legislation of which the concept of a smart contract was enshrined was the Republic of Belarus. In Belarusian legislation, a smart contract is understood as a program code intended for functioning in the registry of transaction blocks (blockchain) - another distributed information system for the purpose of automated execution and (or) execution of transactions or other legal actions. It is established that a person who made a transaction using a smart contract is considered to be properly aware of its terms, including those expressed by the program code, until proven otherwise (Decree of the President of the Republic of Belarus No. 8 dated December 21 2017). In March 2017, a draft law was signed in Arizona, according to which signatures on the blockchain and the use of smart contracts are officially recognized as legally valid, and in April 2018, the state legalized data storage on a blockchain. The new law legalizes digital signatures created using blockchain technology, as well as “smart contracts”. “A contract related to a transaction cannot be invalidated only on the grounds that it contains the terms of a smart contract,” the document says. A “smart contract” is defined in such legislation as an event-driven program that runs on a

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distributed, decentralized, shared and replicated ledger that executes a contract or any provision of a contract by taking custody over and instructing transfer of assets on the ledger. (The Governor of Arizona signed the historic smart contracts and blockchain technology act 2018). Thus, the legal definition of the concept of “smart contract” in foreign legislation involves the use of distributed ledger technology, in particular, blockchain, in conclusion and execution of such contracts. There is no legislative definition of the concept of “smart contract” in Russian law, so it is logical to turn our attention to a doctrine in which we can find several approaches to the definition of the concept of a smart contract. The interpretation of a smart contract as a computer program has become widespread. From this point of view, a smart contract refers to a program that is not related to legal obligations. It is believed that the term “smart contract” was first used by Nick Szabo in 1994; this phenomenon was understood as a computerized transaction protocol that fulfills the terms of the contract. From this definition A.M. Zaitsev reasonably draws two main conclusions: 1) a smart contract is not a form of legal agreement - it is a program created to fulfill the terms of the contract; 2) there is no binding to blockchain technology (Zaitsev 2018). The second conclusion seems to us especially important. It turns out that initially neither in theory nor in the first domestic bills on DFA it was not intended to apply distributed ledger technology, in particular blockchain technology, to smart contracts. V. Kislyi defines smart contracts as computer programs that emulate the logic of contractual provisions, which are a way to implement agreements between the parties by executing an embedded algorithm that excludes the impact of parties or third parties during its execution (Kislyi 2018). M. Raskin considers a smart contract as a contract, the execution of which is automated (Raskin 2016). Other authors consider the smart contract an agreement, the execution of which is both automated and has legal protection. A computer executes such a smart contract, but some parts of the execution may require human intervention. Moreover, the contract is subject to judicial protection and is protected from hacking or unauthorized access (Clack et al. 2017). Some experts define smart contracts as two phenomena: 1) smart contract code software agents that are not necessarily based on distributed registry technology (software intermediaries); 2) smart legal contracts - legal agreements expressed and executed by means of program code (Stark 2016). Individual projects are positioned precisely in this capacity: for example, commonaccord.org, legalese.com. Perhaps, considers A.M. Zaitsev, the approach of proponents of such a division will prevail in the future (Zaitsev 2018). Thus, as A.M. Zaitsev convincingly notes, the binding of a smart contract to technology of a distributed data registry is considered to be a well-established, but still not constitutive attribute of it (Zaitsev 2018). At the same time, a number of authors consider the technology of a distributed ledger database, which includes a blockchain, precisely as a constitutive feature of a smart contract. For example, D.V. Fedorov defines a smart contract as a programmed

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contract, the terms of which are written in the program code and which is automatically executed using the blockchain (Fedorov 2018). A.I. Saveliev defines a smart contract as “a contract that exists in the form of program code implemented on the Blockchain platform, which ensures the autonomy and self-fulfillment of the terms of such contract upon the occurrence of circumstances predetermined therein” (Savelyev 2016). So, is it necessary to limit the existence of a smart contract only to the blockchain platform? In our opinion, A.A. Volos reasonably believes that if in the future “smart contracts” are created on the basis of a more advanced system than blockchain (this cannot be ruled out due to the incredibly fast technological progress), then such a contract can hardly be considered as a smart contract (Volos 2018). Therefore, we share the opinion of A.M. Zaitsev that any definition of smart contracts should be technologically neutral. Accordingly, distributed ledgers cannot be part of the definition of smart contracts. The use of blockchain or other technologies should remain at the discretion of the parties (Zaitsev 2018). As for the emerging domestic practice, it follows the path of using blockchain technology in awarding smart contracts. So, on December 20, 2016, S7 Airlines concluded a deal with the opening of an irrevocable covered letter of credit and the use of a smart contract. Smart contracts were used to open and close the letter of credit: the TIN of the parties, the type of work performed for S7, the amount of the transaction, the dates of its opening and closing were recorded on the blockchain. Alfa Bank acted as an agent for both parties on the letter of credit. Apparently, to complete the transaction, the parties entered into an agreement on the use of public blockchain addresses as an electronic signature in advance. Meanwhile, experts note that the use of a smart contract in an S7 transaction can be reduced to providing exclusively technical rather than legal functions (Zaitsev 2018). In recent years, various examples of the use of smart contracts in the classical (noncrypto) business began to appear. For example, in the summer of 2017, S7 Airlines and Alfa Bank organized the sale of airline tickets using smart contracts. At the end of 2017, Alfa Bank, Sberbank Factoring and M.Video automated factoring operations on smart contracts. At the same time, Megafon placed on the blockchain the bonds that later were acquired by Raiffeisenbank (Zaitsev 2018). Other large Russian banks (Vnesheconombank, Sberbank, Otkritie Bank) are actively involved in the development of projects using blockchain technology and are preparing to implement new and expand existing projects in the near future. In this regard, individual authors argue that in the very near future, blockchain technology will become an integral part of the rule of law and the economy of the Russian Federation (Kalinina et al. 2019). Meanwhile, as G. Greenspan (founder and director of the Coin Sciences project) notes, blockchain-based smart contracts are unlikely to be widely used and will not always be really useful for the parties. According to the author, today people are trying to structure things that are impossible for technology through smart contracts. People are imagining autonomous artificial intelligence, which, based on the data of a smart contract, performs a huge number of operations. In fact, smart contracts are used in more mundane ways (Greenspan 2016; Zaitsev 2018). Currently, the trend is that smart contracts are gaining popularity, their usability is growing, a number of organizations are working on improving technologies that use

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smart contracts (Analytical review on «smart contracts» of the Central Bank of the Russian Federation, 2018). Smart contracts have several advantages. Such a contract allows you to quickly and without intermediaries to conclude various transactions. The smart contract mechanism is aimed at minimizing the participation of third parties and intermediaries (notaries, lawyers). In material terms, such contracts are more profitable. The creation of smart contracts entailed some simplification of the activities of individual entities. “Smart contracts can save human and material resources, provide some independence” (Volos 2018). Despite the advantages, smart contracts have disadvantages that have long been an obstacle to any regulation of them at the legislative level and their greater implementation not only in the sphere of civil law relations, but also in other spheres of life of the Russian state. In particular, to draw up such contracts, it is necessary to attract specialists who know the programming language, since such an agreement is not drawn up in a legal language. The theory of smart contracts itself includes scientific and practical provisions related to both jurisprudence and technical sciences. Lack of flexibility is another disadvantage of smart contracts. It is almost impossible to change the terms of a smart contract unilaterally. In order to do this it is necessary to initially provide an opportunity of changing the rules of contract in the process of determining the terms of it. The human factor is also an issue of smart contracts. Do not forget that, first of all, a smart contract is a computer program that runs on a decentralized system and is prone to bugs (a slang word that usually means errors in the program). It is based on program code, the incorrect spelling of which leads to errors and, as a result, to incorrect fulfillment of an obligation to the detriment of one of the parties. Even with the adoption of amendments to the Civil Code of the Russian Federation, there are problems of applying civil legislation to smart contracts. So, the debatable question is whether constructions generally accepted in civil law, in particular the principles of civil law, can be used to protect the rights and legitimate interests of the subjects of such relations (Volos 2018). Another frequently discussed question concerns the fundamental possibility of applying the general provisions on the contract and transactions to such contracts (Yankovsky 2018). In its structure and content, a smart contract is aimed at the emergence, change and termination of legal relations. The parties to such a contract have certain obligations, and they form the deal. However, if the legal status of smart contracts is determined by Federal Law No. 34-FZ not as an independent transaction, but as a condition for the automatic execution of any civil contract, then how true is it to say that smart contract is a transaction? Paragraph 1 of Art. 160 of the Civil Code of the Russian Federation as amended by Federal Law No. 34-FZ stipulates that “the written form of the transaction is also considered to be observed if the person completes the transaction using electronic or other technical means, allowing the contents of the transaction to be reproduced on a physical medium, with the requirement of availability signatures shall be deemed completed if any method is used to reliably determine the person who has expressed his will”. However, what should be understood by the will of the parties in the award of contracts?

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The issues of invalidation of the provisions of smart contracts are also controversial. Since they are executed automatically, the object of such an agreement may be a thing limited in circulation; it is possible to conclude a smart contract that is expressly prohibited by law, as well as with an unauthorized person, including a minor or a person recognized as legally incompetent. Foreign literature emphasizes that in the work with smart contracts, the possibility of applying the rules on invalidation of transactions causes additional complexity (Szczerbowski 2017). In this regard, some authors talk about the so-called “tokenization of law”, when the existence of the right is determined by technology (Savelyev 2018). But if smart contracts are reversible, then they will lose their main value - automatic execution of the terms of the transaction.

4 Conclusion Thus, as in the case with any innovative products at the initial stage of development, the use of smart contracts has drawbacks, and there are problems in the process of conclusion and execution of them, many of which can be eliminated in the process of improving related technologies and legal regulation. However, the existence of smart contracts should not be limited to the use of blockchain technology. Distributed ledger data, including blockchain technology, should not become a constitutive sign of a smart contract definition; it must be technologically neutral. Blockchain or other technologies can be used at the conclusion and execution of smart contracts at the discretion of the parties. All transactions made using any electronic or other technical means, and not just through blockchain technology, can be called smart contracts. Acknowledgments. The study was supported by the Volgograd Institute of management - a branch of the Russian Academy of National Economy and Public Administration under the President of the Russian Federation in the framework of the scientific project No. 04-2018 VIU “Actual problems of protection of rights and freedoms in the digital space.”

References Kalinina, A.E., Inshakova, A.O., Goncharov, A.I.: Polysubject jurisdictional Blockchain: electronic registration of facts to reduce economic conflicts. 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. 205–213. Springer Science+Business Media, Cham (2019) Analytical review on «smart contracts» of the Central Bank of the Russian Federation, p. 20. M (2018) Clack, C.D., Bakshi, A.V., Braine, L.: Smart Contract Templates: foundations, design landscape and research directions (2017). http://arxiv.org/pdf/1608.00771v2.pdf2842258. Accessed 11 Apr 2019

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Debevoise & Plimpton. Information for clients. The first draft laws on cryptocurrencies, ICO and crowdfunding (2018) are presented in Russia. https://www.debevoise.com/*/media/files/ insights/publications/2018/02/20180226%20ru_cryptocurrency_and_crowdfunding_bills_in_ russia.pdf. Accessed 13 Apr 2019 Decree of the President of the Republic of Belarus of 21 December 2017 No. 8 «On the development of the digital economy». http://president.gov.by/ru/official_documents_ru/view/ dekret-8-ot-21-dekabrja-2017-g-17716. Accessed 13 Apr 2019 Draft Federal law «On digital financial assets» (prepared by the CBR). https://www.cbr.ru/ Content/Document/File/48805/20180125_01.pdf. Accessed 27 Apr 2019 Federal law No. 34-FZ of 18 March 2019 «On amendments to parts one, two and article 1124 of part three of the Civil code of the Russian Federation» . Collection of Legislation of the Russian Federation. no. 12. Art. 1224 (2019) Fedorov, D.V.: Tokens, cryptocurrency and smart contracts in domestic bills from the perspective of foreign experience. Vestnik Civil Law 2, 30–74 (2018) Greenspan, G.: Why Many Smart Contract Use Cases Are Simply Impossible (2016). https:// www.coindesk.com/three-smart-contract-misconceptions. Accessed 14 Apr 2019 Inshakova, A.O., Goncharov, A.I., Kazachenok, O.P.: The imperatives of financial policy in the sphere of the digital economy: impacts on increasing investment activity and tax potential of Russian regions. In: Proceedings of the International Scientific Conference «Competitive, Sustainable and Secure Development of the Regional Economy: Response to Global Challenges» , CSSDRE 2018,. pp. 337–342. Atlantis Press, Amsterdam (2018) Kislyi, V.: Legal aspects of Blockchain application and token use (2018). https://docs.google. com/document/d/19U6F-BUCVNiJLVsLz0dvt1N7kZHLDCu_O8NEGiysVvE/edit. Accessed 11 Apr 2019 List of instructions of the President of the Russian Federation dated October 21, 2017 No. Pr2132 on the results of the meeting on the use of digital technologies in the financial sector, held on 10 October 2017. https://kremlin.ru/acts/assignments/orders/55899. Accessed 11 Apr 2019 Raskin, M.: The Law and Legality of Smart Contracts (22 September 2016). 1 Georgetown Law Technology Review 304 (2017). https://ssrn.com/abstract=2959166 or. http://dx.doi.org/10. 2139/ssrn.2842258. Accessed 11 Apr 2019 Saveliev, A.I.: Some of the risks of tokenization and bacchanale civil-legal relations. The Law 2, 36–51 (2018) Savelyev, A.I.: Some legal aspects of the use of smart contracts and Blockchain technologies under Russian law. The Law 5, 94–117 (2017) Savelyev, A.I.: Contract law 2.0: «Smart» contracts as the beginning of the end of classical contract law. Vestnik Civil Law 3, 32–60 (2016) Stark, J.: Making Sense of the Blockchain Smart Contracts (2016). http://www.coindesk.com/ making-sense-smart-contracts. Accessed 11 Apr 2019 Szczerbowski, J.J.: Place of Smart Contracts in Civil Law. In: A Few Comments on Form and Interpretation, p. 335. https://www.researchgate.net/publication/322231850_Place_of_Smart_ Contracts_in_Civil_Law_A_Few_Comments_on_Form_and_Interpretation. Accessed 11 Apr 2019 The civil code of the Russian Federation (part one) of 30 November 1994 No. 51-FZ (as amended on 03 August 2018, Revised from 03 July 2019). Collected Legislation of the Russian Federation. no. 32. Art. 3301 (1994)

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The draft Federal law «On digital of financial assets» (prepared by the Ministry of Finance) (ed to introduce in the state Duma, the text as 25 Jan 2018). LRS «Consultant». http://www. consultant.ru/cons/cgi/online.cgi?req=doc&ts=123484541603233977539170103&cacheid= DCDF76DD86006281686C739CE58597FF&mode=splus&base=PRJ&n=167908&rnd=0. 6206713123044345#1wngr6ene95. Accessed 19 Jun 2019 The draft Federal law No. 419059-7 «On digital of financial assets» (ed., introduced in the state Duma of the Federal Assembly of the Russian Federation, the text as 20.03.2018). LRS «Consultant» . http://www.consultant.ru/cons/cgi/online.cgi?req=doc&ts=12348454160 3233977539170103&cacheid=22D9FC020D85760999E7E3263967C40B&mode=splus &base=PRJ&n=170084&rnd=0.6206713123044345#2ixs28ftvq4. Accessed 19 Jun 2019 The draft Federal law No. 419059-7 «On digital of financial assets» (edition adopted by the state Duma in the first reading 22.05.2018). LRS «Consultant» . http://www.consultant.ru/cons/ cgi/online.cgi?req=doc&ts=123484541603233977539170103&cacheid=3BF17C99F2C1B4C 00D607A81E5132664&mode=splus&base=PRJ&n=172447&rnd=0.6206713123044345#5o gs4d1l7vc. Accessed 19 Jun 2019 The Governor of Arizona signed the historic smart contracts and Blockchain technology act (2018). https://www.avatar-network.org/blog/item?id=13. Accessed 11 Apr 2019 Volos, A.A.: Smart contracts and principles of civil law. Russian Justice 12, 5–7 (2018) Yankovsky, R.M.: Problems of legal regulation of decentralized systems on the example of Blockchain and smart contracts. Public Service. 2, 64–68 (2018) Zaitsev, A.M.: Smart contracts: concept and prospects of use. Arbitration Pract. Lawyers. Draft Federal law «On digital financial assets» (prepared by the CBR) 4(32), 28–34 (2018). https:// e.arbitr-praktika.ru/article.aspx?aid=633864. Accessed 03 Aug 2019

Methodological Approaches to a Comprehensive Assessment of the Economic Efficiency in Using Innovative Technologies in Agriculture: A No-till Example Natalia V. Bannikova(&), Alexander V. Tenishchev, Svetlana S. Vaytsekhovskaya, Natalya V. Vorobyova, and Elena G. Pupynina Stavropol State Agrarian University, Stavropol, Russian Federation [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The article substantiates the need to develop methodological approaches to assessing the effectiveness of using innovative technologies in agriculture, taking into account their characteristics. As an example, no-till technology was chosen, the use of which demonstrates both advantages and disadvantages associated with its specifics in specific production conditions. To substantiate management decisions on additional investments and technology changes in various practical situations, an algorithm and a system of criteria for a comprehensive assessment of the economic efficiency of using no-till technology are proposed. Testing of the proposed methodological support was carried out on the example of various soil and climatic zones of Stavropol, the southern region of Russia. Keywords: Agriculture
Methods of evaluating economic efficiency Innovative technologies
No-till JEL Classification Codes: Q160





O130

1 Introduction In recent years, Russian agriculture has been developing steadily, but the pace of this development is gradually slowing. For the period from 2011 to 2014 the volume of production in the industry increased by 30.1%, but over the next 4 years (from 2015 to 2018) the growth amounted to only 6.8%. This determines the growing importance of innovative aspects of agricultural development, including the expansion of the use of modern agricultural technologies. These technologies make it possible not only to increase the volume of crop and livestock production, but also to carefully use the available resources and implement environmental functions in the agricultural sector. Such technologies that have gained worldwide recognition include the no-till technology that underlies conservation agriculture. No-till is a modern model of tillage, © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 181–193, 2020. https://doi.org/10.1007/978-3-030-47945-9_20

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in which the soil is not processed in the traditional mechanical way using plowing but is covered with shredded crop residues. This technology provides for direct sowing of cultivated crops in untreated soil with the preservation of crop residues on the surface in the form of stubble and leaf-stem mass. Currently, about 7% of the total arable land in the world is cultivated using this system. It is widely used to combat wind erosion in the United States, to preserve moisture in the arid regions of Canada, Brazil, Argentina, Paraguay and Australia. Despite the fact that no-till has been used in different countries for 30–40 years, the literature continues to discuss its advantages and disadvantages. The advantages of this technology include, first of all, its environmental significance, including mitigation of the effects of climate change, maintenance and restoration of soil fertility (Pratibha et al. 2019; Zandersen et al. 2016; Zavalin et al. 2018; etc.) The authors also point out the cost-effectiveness of the technology under consideration (Canales et al. 2018; Hristovska et al. 2013; De Barros et al. 2017). However, in many publications it is noted that in some cases there are negative consequences of using no-till technology, which are manifested in a decrease in yield, weed accumulation (Pittelkow et al. 2015; Wilman 2011; etc.). As a result, some farmers refuse to use it, therefore, much attention is paid in the literature to studying the influence of the characteristics of farms and the farmers themselves on the decision to use no-till technology. Researchers note that making this decision depends on many subjective and objective factors: farmers’ risk appetite and awareness, farm size, combination of crops, soil conditions, climate (Wade and Claassen 2017; Lalani et al. 2017) Separately, scientists emphasize the importance of programs to disseminate knowledge about this technology (Ascough et al. 2009; Ntshangase et al. 2018), participation in which helps farmers to correctly assess existing production conditions, predict potential risks, and calculate the possibility of increasing production efficiency. Making decisions on the use of new technologies, the acquisition of more advanced equipment requires a mandatory comprehensive assessment of effectiveness, namely technological, social, environmental, economic. Technological efficiency reflects the level of development of farming systems, social - the degree to which the standard level of life of the rural population has been reached, environmental - the prevention of environmental degradation and its improvement, increased production of environmentally friendly products. But of key importance in a market economy is economic efficiency, the definition of which is the basis for technical and organizational decisions in order to improve the financial and economic results of agricultural production. This is especially important for Russian conditions due to the difficult financial condition of the industry. So, at the end of 2017, almost a fifth of agricultural enterprises were unprofitable, with a loss of 59 billion rubles. For such enterprises, an error in calculating the expected economic efficiency when changing technology is unacceptable. Economic efficiency is a traditional concept used to evaluate the quality of a production process from an input – output economics perspective. However, the complexity of this concept determines both ongoing theoretical discussions about its nature (Ptasinski and van der Stelt 2011; Scholz and Wellmer 2015), and the development of methodological approaches to assessing effectiveness in various practical situations.

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The current universal methods for assessing the effectiveness and changes in agricultural production technology do not always allow to fully consider both the features of individual technologies (especially no-till) and the specific conditions for growing crops. The aim of this study is to improve methodological support and develop criteria for assessing the effectiveness of the use of innovative technologies in agriculture using the no-till example, as well as testing the proposed methodological support.

2 Methodology The study used methods of systematic analysis of scientific literature, general and logical analysis, comparison and generalization, method of cost-benefit analysis. Given that the use of no-till technology is associated with the acquisition of special equipment, the basis for the study was the traditional methodology for determining the economic efficiency of technical solutions. The refinement of this methodology was carried out taking into account the features of no-till, as a result of which an algorithm was developed to conduct a comprehensive assessment of the economic efficiency of the technology under study. The proposed algorithm was tested using the example of the southern region of Russia - the Stavropol Territory. Its territory includes four soil and climatic zones, characterized by varying degrees of moisture and susceptibility to wind erosion, which allows us to expect different results from refusing plowing. Using the calculationconstructive method for each zone, we estimated the predicted economic efficiency of the transition to no-till based on a set of indicators.

3 Results The efficiency of production of individual crops based on the improvement of the technological process is expressed in the outstripping growth in the quantity and improvement in the quality of products compared to an increase (or even decrease) in the cost of its production. With regard to agriculture, this is the receipt, at the lowest unit cost, of the maximum possible amount of production per hectare of land, from each farm animal. This type of efficiency is attributed to comparative (or relative) effectiveness, the determination of which is necessary when substantiating alternative solutions (technical, technological, organizational) and selecting the most optimal one among them. At the present stage of scientific and technological development, the improvement of technologies in all sectors is accompanied by additional capital investments of greater or lesser value. Their introduction into production is justified only when it provides an economic effect, including reducing the cost of producing a unit of output, improving its quality, and increasing labor productivity. Additional capital investments aimed at improving technology should be offset by savings in production costs.

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In accordance with existing recommendations (Ershova et al. 2016), the currently used unified system of indicators for determining the economic efficiency of introducing new technologies, taking into account the necessary capital investments, includes: 1) 2) 3) 4) 5) 6)

the cost of capital investments necessary for the introduction of new technologies; the cost of production (costs of its production and sale); annual economic effect; the payback period of additional capital investments and the efficiency ratio; reduced costs; labor productivity.

Пoмимo ocнoвныx пoкaзaтeлeй пpи выбope экoнoмичecки нaибoлee эффeктивныx вapиaнтoв нoвыx тexнoлoгий мoгyт быть иcпoльзoвaны вcпoмoгaтeльныe нaтypaльныe пoкaзaтeли - pacxoд тoпливa, энepгии, cыpья, мaтepиaлoв нa eдиницy пpoдyкции, кoличecтвo выcвoбoждaeмыx paбoтникoв, кoэффициeнт иcпoльзoвaния oбopyдoвaния и т.д. In addition to the main indicators, when choosing the most cost-effective options for new technologies, auxiliary natural indicators can be used - fuel, energy, raw materials, materials consumption per unit of output, number of workers released, equipment utilization rate, etc. The main indicator of the effectiveness of introducing new technologies is the annual economic effect, the definition of which is based on a comparison of the reduced costs of the replaced (basic) and implemented technology. The above costs are an economic concept that reflects the value (in value terms) of the total costs (current and one-time) of production. It is economically incorrect to summarize current costs (costs that are immediately attributable to production) and non-recurring (costs associated with capital investments that will be used in the production process for several years). Therefore, the quoted costs are defined as the sum of the total current production costs (including depreciation) and capital investments, reduced to annual calculation. For each of the compared options for capital investments, the above costs are determined by the formula: Cred ¼ C þ Kn
I;

ð1Þ

Where Cred is for reduced costs; C—cost of production (total current operating costs, including depreciation); I—capital investments; Kn—the normative coefficient of economic efficiency of capital investments (the indicator, the reciprocal of the standard payback period, in general, is taken at the level of 0.15) In the economic aspect, the annual economic effect is the total saving of production resources (labor, materials, capital investments) that the farmer receives as a result of using new, improved technology. The calculation of the annual economic effect may differ in a certain way depending on the types of technology being introduced, the products manufactured, and some other conditions.

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The annual economic effect of the introduction of new technological processes, methods of organizing production and labor, ensuring the saving of production resources in the production of the same products, is determined by the formula:
0  0 Ea ¼ Cred1  Cred2 V2 ;

ð2Þ

where Ea is for annual economic effect, rub. 0 0 Cred1 and Cred2 are reduced costs per unit of production produced with the help of replaceable (basic) and new technology, rub. V2 is annual production volume using new technology, natural units. Formula (2) can be written as follows: Ea ¼

0

h
0 
0 i 0 0 C1 þ Kn I1  C2 þ Kn I2 V2 ;

ð3Þ

0

where C1 and C2 are unit cost of production by options, rub.; 0 0 I1 , I2 are specific capital investments by options, rubles. When calculating the annual economic effect according to the formula (2) in comparing the basic technology with the innovation, the annual economic effect is determined by the difference in cost and additional capital costs: 0

0

Ea ¼ ðC1  C2 ÞV2  EH DI;

ð4Þ

where DI is for additional capital investments for the introduction of new technology, million rubles The determination of the annual economic effect allows us to evaluate the company’s benefits in absolute terms, but the payback period of additional capital investments is also important for determining the effectiveness of the introduction of innovative technologies. PP ¼ DI=DC;

ð5Þ

where PP - payback of additional capital investments; DC - savings in operating costs, rubles, which is determined by the formula 0

0

DC = ðC1  C2 ÞV2

ð6Þ

In addition to those discussed above, a whole set of various specific factors also affects production efficiency under the conditions of introducing a new technology, therefore, to assess its level, it is necessary to use not only a whole system of indicators,

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but also to identify the relationships between them, conduct a comprehensive analysis of the proposed technological process from the point of view the impact of its various aspects on economic efficiency. As mentioned above, there are different opinions of experts regarding the influence of no-till on the change in the economic efficiency of crop production. According to some sources, no-till technology (it is also proposed to consider it as a farming system) is less profitable, according to others it is more profitable or, at least, not inferior in terms of profitability of traditional technology. As scientists emphasize, when conducting experiments, first of all, a prerequisite for an objective assessment is the need to take into account the features of each experiment, on the basis of which the costeffectiveness of various technologies was calculated (Dridiger 2016). The result can be affected by the location and duration of the experiments, questions studied during the experiment (crop rotation, sowing equipment, the use of fertilizers or other technological aspects), initial economic indicators of crop production, taken to calculate the relative profit from the use of the compared technologies, etc. Due to such uncertainty, it is not always possible to determine with certainty which farming system – traditional or based on no-till principles - turned out to be the best for producers with different systems for managing plant growth and development, location and economic conditions of their work. Calculations of economic efficiency will be inaccurate when the comparison does not take into account differences in technological parameters that are characteristic of each system. A review of information sources shows that the influence of no-till is very diverse and varies greatly depending on many factors, such as soil type, water temperature, crop rotation structure, etc. (Pittelkow et al. 2015; De Barros et al. 2017; etc.). There is an opinion that if slow growth was observed or there was a return to the traditional system, most likely, the no-till technology was not properly adapted to these conditions. As a result, she did not show all her advantages. Thus, when constructing a methodology for assessing the economic efficiency of using a no-till system, it is necessary to take into account its features that affect the economic aspects of using this farming system. 1. Correct crop rotation is the first condition for the successful application of no-till technology. There are several reasons for this. The use of no-till technology increases the moisture content in the soil and its availability. If this additional moisture is not used, but viewed solely as a success in combating drought, then, of course, the most obvious risk is reduced, but at a very high cost. In this case, the cost is the lost opportunity to grow crops that can use the extra moisture. Additional moisture is equal to the factor of increase in potential profit, if it is used with high intensity. In addition to increasing the intensity of crop production, improving crop rotation provides some other economic advantages: – the optimal distribution of the volume of field work in time, especially during sowing and harvesting, which reduces the need for equipment; – reduction of risks of sharp fluctuations in income and expenses over the years due to the diversity of crops in crop rotation.

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Thus, no-till should be evaluated as an integrated technology, and not as a separate agricultural method, and the study of this system should be carried out for at least 5–7 years in one place, in a crop rotation, where all crops are cultivated in no-till (Dridiger 2016). Therefore, when assessing the economic efficiency of the transition to a new technology, one should not consider the results of the production of individual crops, but the resulting effect on 1 ha of crop rotation. 2. Experts emphasize that many processes occurring in the soil become noticeable only after 5 or more years. Therefore, in order to fully evaluate any soil cultivation system, they must be considered in time dynamics. The no-till system especially requires this approach. In the first years of the transition to this system, the state of the soil noticeably worsens: its density increases, the upper layers dry up and form a crust. Negative consequences are also manifested in a phytosanitary state: unploughed plant debris is a source of diseases and pests, weeds abound in crops. This stage in a production environment is very painful. However, over time, the soil structure is restored, and its characteristics improve. The condition of plants cultivated using no-till technology can gradually improve due to environmental changes under the influence of improved crop rotation, improved circulation of nutrients in nature and the beneficial effects of soil organisms. Thus, when calculating economic efficiency, crop yield planning should take into account its likely decline in the first years of development of the system and a gradual increase in the following. 3. From the point of view of cost formation, the no-till system reduces energy costs for field work due to the rejection of energy-intensive technological operations for tillage. On the other hand, control over the spread of weeds and diseases implies an increase in the cost of herbicides and fungicides, therefore, attention should be paid to these cost items when assessing economic efficiency, while labor costs are not an important aspect of evaluating new technology. 4. To use the no-till technology, an agricultural enterprise must have appropriate agricultural equipment. These are special seeders sowing seeds and fertilizers in untreated soil and not injuring it, a combing header, a sprayer with high-quality spraying and a clear setting of the flow of working fluid and so on (Dridiger 2016). The acquisition of high-quality expensive equipment is an important management decision for the enterprise and requires a mandatory preliminary assessment of the effectiveness of investments according to the appropriate methodology. With the above principles for evaluating economic efficiency, as well as the features of no-till technology, we can propose the following algorithm for assessing the economic efficiency of using no-till as a special farming system (Fig. 1). Using the proposed algorithm requires clarification of a number of methodological provisions for the design of elements of no-till technology and technology adopted as the base, yield and cost planning in the basic and design options, recommendations for calculating economic efficiency indicators and updating them if necessary. As noted above, a properly built crop rotation is the first condition for the successful application of no-till technology. And this is due not only to the need for a

4-b. Development of technological maps based on basic technology

4-a. Development of technological maps with no-till technology

5-b. Calculation of costs for growing products using traditional technology

5- a. Calculation of costs for growing products using no-till technology

indicators: -Cost of manufactured products, including on 1 ha of crop rotation area -Reduced costs, incl. on 1 ha of crop rotation area - Profitability

6-b. Calculation of

6- a. Calculation of indicators: -Cost of manufactured products, including per 1 hectare of crop rotation area -Production costs, including per 1 hectare of crop rotation area -Profitability

Fig. 1. Algorithm for a comprehensive assessment of economic efficiency of no-till technology

3. The definition of the parameters of traditional technology, adopted as the base, and the results of its use

1. Crop rotation design

use

2. Determination of the parameters of no-till technology and the results of its

7. Calculation of a system of indicators: -Increase (decrease) in the cost of production -Increase (decrease) in production costs -Economic effect: - average annual - for the entire crop rotation period - per 1 hectare of crop rotation area - Estimated payback period for additional capital investments - Efficiency of additional capital investments - Estimated minimum effective load

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reasonable alternation of cultures from the point of view of the intensive use of production factors but is also generally determined by the systemic nature of this technology. The problems of production using no-till technology are closely interrelated, which is a prerequisite for a systematic approach both in the implementation and in the study of the economic advantages of this technology. In a comparative study of the effectiveness of the no-till system, there must necessarily be control, where all crops in the crop rotation are cultivated using traditional technology. In a comparative study of the no-till system and traditional technology, the unshakable “single difference principle” in experimental practice should be correctly interpreted, according to which the same varieties or hybrids should be sown in the compared technologies, the sowing should be done in one day, with the same seeding rate, with the same doses of fertilizers, an identical system of plant protection against weed pests and diseases, and so on. Undoubtedly, agrotechnical techniques that are acceptable for both technologies under the same conditions and at the same time should be carried out simultaneously, but if they are harmful to any of the studied systems when combined, then they must be applied in optimal terms and in optimal parameters for each technology. By and large, the principle of a single difference is not violated, since the system serves as an option (Dridiger 2016). Thus, an assessment of the cost-effectiveness of using no-till should begin with the design of crop rotation for this system. To further compare the economic parameters of the traditional technology and the no-till system, both the same crop rotation that is recommended for innovative technology and crop rotation, which is typical for the soil and climate zone under consideration, can be used. In the first case, it is possible to compare economic indicators (cost of production, costs, income, profitability) for individual crops, and in the second - only as a whole for crop rotation. But in both the first and second cases, the main result will be a comparison of economic parameters per 1 ha of crop rotation area, which is predetermined by the fact that two farming systems serve as compared options. That is why the proposed methodology for assessing the economic efficiency of using no-till is complex. In order to comply with the “principle of the only difference” at stage 3 of the methodology for a comprehensive assessment of economic efficiency in order to determine the parameters of a traditional technology adopted as a base, it is necessary to preserve, if possible, those technological operations that may be identical in the compared variants. The main difference should be in the processes associated with tillage, sowing, plant protection. It should be borne in mind that in the fields with no-till technology, about 98% of the soil bank of weeds is spent within three years after the start of its use. Therefore, it is believed that it is necessary to grow types of crops that allow controlling the distribution of weeds and their seed productivity with the help of herbicides. After three years, you can proceed to growing crops with minimal use of herbicides, since the initial problem associated with weeds will be significantly reduced. This principle does not apply to varied crop rotation using plowing, because if the soil is damaged during sowing, resting weed seeds can move to the surface of the soil and germinate.

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Given this situation, in the framework of the proposed methodology for evaluating economic efficiency, when planning costs for herbicides using no-till technology, the likely decrease in their consumption after the first three years of development of the system can be taken into account. Similarly, as mentioned above, when planning crop yields of crop rotation, it is necessary to take into account its likely decline in the first years of development of the system and a gradual increase in the subsequent ones. When designing (stages 4-a and 4-b) and calculating (stages 5-a and 5-b) technological maps for individual crops, it is also necessary to use, if possible, identical brands of equipment, standards of labor costs and material resources. Cost ratios should undoubtedly be the same. V. Dridiger notes that when publishing scientific papers on no-till, authors often do not provide detailed information about the conditions and methodology of the research, which leads to uncertainty and unreliability of the results. He believes that in publications on this system of agriculture it is necessary to indicate at least 20 different indicators of the conditions for conducting research, up to the brand of seeder, etc. (Dridiger 2016). Following this provision, our proposed methodology for a comprehensive assessment of the economic efficiency of using no-till should necessarily provide a demonstration of complete information about all technological operations for growing crops within the framework of the compared technological systems, as well as about the data used in the calculations. This is an important condition for confidence in the proposed methodology and the objectivity of its results. Given the diversity of soil, climatic and economic conditions of production in different agricultural enterprises, crop production technology, as well as its economic results, may have significant differences. Providing full information on production technology and calculations of economic parameters will allow making appropriate adjustments to the calculations and clarifying performance indicators for the conditions of individual agricultural enterprises. At stages 6-a and 6-b, the main economic indicators of production are calculated separately for each of the two compared technological systems. First of all, these are traditional indicators reflecting the cost of manufactured products and production costs. Based on them, the estimated level of profitability of production is determined. The name “estimated” is due to the fact that the real level of profitability is traditionally determined by the products sold, taking into account its marketability and costs of implementation. The difference between the calculations for no-till technology is the determination of reduced production costs, which take into account not only current costs, but also capital investments reduced to annual calculation. At the same time, an indicator is used as the normative coefficient of economic efficiency of capital investments, the inverse of the normative period of use of the acquired equipment. A comparison of these indicators for the same crops grown in different technological systems allows us to draw the first conclusions about production efficiency and, if necessary, identify the causes of differences. As integral indicators, the cost of manufactured products and production costs per 1 ha of crop rotation area, as well as the estimated level of profitability in crop rotation were used. At stage 7, comparative indicators are determined that characterize the differences between the considered technological systems. As a generalized effective indicator, the

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average annual economic effect (Ea) is calculated as the difference between an increase (decrease) in the cost of production and a decrease (increase) in production costs in the event of a transition to a new technology. It is advisable to calculate and analyze the specific indicator - the average annual economic effect per 1 ha of crop rotation area, as well as the economic effect for the entire crop rotation period. The estimated payback period for additional capital investments (PP) and their effectiveness are determined by comparing the costs of acquiring new equipment (DI) and the average annual economic effect (Ea). An important indicator for crop production (especially for small farms) is the estimated minimum effective load on the acquired set of technical equipment. This indicator is calculated based on a comparison of capital investments reduced to annual calculation using standard coefficients of economic efficiency and specific annual economic effect. The proposed method was tested on the example of soil and climatic zones of the Stavropol Territory. Four soil and climatic zones differ in production conditions. 1. Extremely arid zone is characterized by a combination of soil drought and dry winds. This requires the inclusion of anti-erosion measures in the farming system. The functions of accumulation and conservation of moisture are performed by fallow. The presence of salt marshes and solonchak soils dictates the need for reclamation. 2. Arid zone is characterized by moisture deficiency. therefore, all links of the farming system should be aimed at the conservation and rational use of moisture. 3. Unstable humidification zone. Black soil prevails in the soil cover. Plowed territory reaches 65–80%. The rugged topography, combined with the large specific weight of the plowed lands, leads to the development of erosion processes. Therefore, soil protection measures should be a necessary element of the agricultural system. 4. The zone of enough moisture is characterized by an abundance of rainfall, heavy soils, and clogging of root shoots and rhizome weeds. Large areas of the zone are occupied by sugar beets and potatoes; cultivation of these crops using no-till technology is unacceptable. In these conditions, experts consider it inappropriate to use no-till technology in 4 zones, therefore, the calculation of economic efficiency was done only in three zones (Table 1).

Table 1. The results of a comprehensive assessment of the economic efficiency of using no-till in various soil and climatic zones of the Stavropol region Indicator Economic effect for the entire crop rotation period, thousand rubles The average annual economic effect, thousand rubles Including on 1 ha of crop rotation area Additional capital investments, thousand rubles Estimated payback period add. cap. investments, years Estimated minimum effective load, ha The effectiveness of additional capital investment,%

Zone 1 10634,1

Zone 2 29969,8

Zone 3 51224,4

1772,4 2,95 14600 8,24 823,8 12,1

4281,4 6,12 14600 3,41 397,8 29,3

5691,6 6,32 14600 2,57 384,8 39,0

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Before calculating the economic feasibility of using no-till in the Stavropol Territory, crop rotations were compiled based on the use of data on the application of this technology by specific agricultural enterprises. The crop productivity of the recommended crop rotation was determined as the average value for a specific soil-climatic zone, taking into account the predecessors. Technological maps were developed for each crop, based on which the calculation of the need for equipment, production costs and the cost of production per unit was performed, as well as the financial results of crop cultivation were determined. According to calculations, the best economic results should be expected in the third soil and climate zone. The economic efficiency of using no-till technology varies significantly by zone, which once again confirms the importance of considering the specific conditions of agricultural production when substantiating management decisions.

4 Conclusions/Recommendations In modern conditions, technological innovation is a key factor in the development of agricultural production. However, the variety of soil and climatic conditions for growing crops causes the ambiguity of the results of technological changes. In the context of the high cost of investments necessary for the introduction of new technologies, and the riskiness of agricultural production, the need for a thorough justification of the feasibility of technological changes is becoming increasingly important. All this fully applies to the no-till farming system. Universal methods for evaluating the effectiveness do not always allow to fully consider the features of no-till and their manifestation in specific practical situations. This allows you to make the proposed algorithm for a comprehensive assessment of the economic efficiency of using no-till. The main difficulty in applying this methodological support is the significant complexity of the calculations, to reduce which it is advisable to create specialized software products. The system of indicators proposed in the algorithm sufficiently characterizes the relative advantages of using no-till in case of obtaining positive values of the economic effect. However, even if this technology does not increase productivity and reduce costs, it is advisable to use it to improve soil conditions and preserve soil fertility. In this case, the calculation of indicators of economic efficiency must be supplemented with indicators of environmental efficiency and, on this basis, make management decisions in the field of applied technologies. At the same time, the question about the purpose of applying innovations should be answered, bearing in mind the possibilities in the field of nature conservation, increasing soil fertility, reducing pesticidal load, and saving costs.

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References Ascough, J.C., Fathelrahman, E.M., Vandenberg, B.C., Green, T.R., Hoag, D.L.: Economic risk analysis of agricultural tillage systems using the SMART stochastic efficiency software package. In: 18th World IMACS Congress and MODSIM09 International Congress on Modelling and Simulation: Interfacing Modelling and Simulation with Mathematical and Computational Sciences, Proceedings, pp. 463–469 (2009) Canales, E., Bergtold, J.S., Williams, J.R.: Modeling the choice of tillage used for dryland corn, wheat and soybean production by farmers in Kansas. Agric. Resour. Econ. 47(1), 90–117 (2018) De Barros, I., Pacheco, E.P., De Carvalho, H.W.L.: Integrated emergy and economic performance assessments of maize production in semiarid tropics: comparing tillage systems. J. Environ. Account. Manage. 5(3), 211–232 (2017) Dridiger, V.K.: On the method of research technology No-Till. Achiev. Scie. Technol. AIC 30 (4), 30–32 (2016) Ershova, I.V., Baranchikova, S.G., Dashkova, T.E., et al.: Economic Efficiency of Technical Solutions, p. 140. Ural University Publishing House, Ekaterinburg (2016) Hristovska, T., Watkins, K.B., Anders, M.M.: An economic risk analysis of no-till management for the rice-soybean rotation system used in Arkansas. J. Soil Water Conserv. 68(2), 132–137 (2013) Lalani, B., Dorward, P., Holloway, G.: Farm-level economic analysis - is conservation agriculture helping the poor? Ecol. Econ. 141, 144–153 (2017) Ntshangase, N.L., Muroyiwa, B., Sibanda, M.: Farmers’ perceptions and factors influencing the adoption of no-till conservation agriculture by small-scale farmers in Zashuke, KwaZuluNatal province. Sustainability 10(2), 555 (2018) Pittelkow, C.M., Liang, X.B., Linquist, B.A., Van Groenigen, L.J., Lee, J., Lundy, M.E., Van Gestel, N., Six, J., Venterea, R.T., Van Kessel, C.: Productivity limits and potentials of the principles of conservation agriculture. Nature 517(7534), 365–368 (2015) Pratibha, G., Srinivas, I., Rao, K.V., Raju, B.M.K., Shanker, A.K., Jha, A., Kumar, M.U., Rao, K.S., Reddy, K.S.: Identification of environment friendly tillage implement as a strategy for energy efficiency and mitigation of climate change in semiarid rainfed agro ecosystems. J. Clean. Prod. 214, 524–535 (2019) Ptasinski, K.J., van der Stelt, M.J.C.: Extended exergy accounting (EEA) of the Dutch society. In: International Accounting in the 21st Century, pp. 3–48 (2011) Scholz, R.W., Wellmer, F.-W.: Losses and use efficiencies along the phosphorus cycle – Part 2: understanding the concept of efficiency. Resour. Conserv. Recycl. 105, 259–274 (2015) Wade, T., Claassen, R.: Modeling no-till adoption by corn and soybean producers: insights into sustained adoption. J. Agric. Appl. Econ. 49(2), 186–210 (2017) Wilman, E.A.: Carbon sequestration in agricultural soils. J. Agric. Resour. Econ. 36(1), 121–138 (2011) Zandersen, M., Jørgensen, S.L., Nainggolan, D., Gyldenkærne, S., Winding, A., Greve, M.H., Termansen, M.: Potential and economic efficiency of using reduced tillage to mitigate climate effects in Danish agriculture. Ecol. Econ. 123, 14–22 (2016) Zavalin, A.A., Dridiger, V.K., Belobrov, V.P., Yudin, S.A.: Nitrogen in chernozems under traditional and direct seeding cropping systems. Eurasian Soil Sci. 51(12), 1497–1506 (2018)

Hotel Tech Ecosystem: Adaptations to Online Distribution Natalia A. Zamyatina(&)

and Oksana G. Solntseva

Institute of Personnel Management, Social and Business Communications, The State University of Management, Moscow, Russia [email protected], [email protected]

Abstract. Digitalization is no longer a luxury – it is an opportunity. Over 60% of leisure and business travel arrangements are made online. Online Distribution Channels, including over 200 Online Travel Agencies (OTAs), and Channel Managers integrated with Property Management Systems (PMSs) are available for distribution of hotel services via the Internet. Hoteliers are challenged to work out effective strategy and should apply a multi-channel marketing approach to stay competitive. The assessment of distribution strategy tools in their typology, key characteristics, strengths, weaknesses, opportunities and risks is required to help the hotel management benefit from digitalization in increased efficiency, reduced operational costs, data analytics and lack of human error. The current study investigates adaptations of the hotel tech ecosystem to rapidly changing technologies in the digital travel market. The study utilizes a SWOT Analysis – a simple, yet powerful tool to streamline business strategy, and can be used for academic purposes in hospitality educational programs. Keywords: Hotel tech ecosystem JEL Code: F2


Smart hospitality
Online distribution


I2
R1

1 Introduction In the last 10 years every step in tourism has been re-invented and the hospitality industry has been re-shaped by online travel agencies (OTA) and mobile payment applications and 66,7% of travel arrangements were made online in 2018 (TrekkSoft 2019, p. 21). Hoteliers are challenged to work out effective strategies and should apply a multi-channel marketing approach to stay competitive. The assessment of distribution strategy tools in their typology, key characteristics, strengths, weaknesses, opportunities and risks is required to help the hotel management benefit from digitalization in increased efficiency, reduced operational costs, data analytics and lack of human error. Pressurized by high competition and changeable market of digital travel services, the hotel sector is expected to develop a smart networking business model, or ‘Smart Hospitality’ (Buhalis and Leung 2018). The current study investigates adaptations and integration capacity of the hotel tech ecosystem to be used for academic purposes in hospitality educational programs.

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 194–204, 2020. https://doi.org/10.1007/978-3-030-47945-9_21

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2 Methodology The study utilizes a comparative analysis to focus on key characteristics and typology and a SWOT Analysis to investigate strengths, weaknesses, opportunities and threats of the distribution strategy tools. A SWOT Analysis is a simple, yet powerful tool to streamline business strategy for the future growth.

3 Results 1. Distribution in the Travel & Hospitality includes both, online and offline sales: • • • • • • • • •

Voice channel e-Mail Front-of-House Operations Direct online channel Travel agent GDS travel agent channel Flash sales website channel OTA channel Mobile distribution channel

2. Online Distribution Channels • • • •

OTA Mobile distribution GDS travel agent Direct online channel

Online distribution is dependent from travel technology companies’ synchronized cloud-based Website Booking Engines (WBE), Central Reservations Systems (CRS) and channel management platforms. Three of the Online Travel Agencies (OTA) have become leaders in the Global eMarket in 2019 (Table 1).

Table 1. Leaders of B2C eCommerce in July 2019 (in billion U.S. dollars) Amazon Alibaba Naspers Booking Recruit JD.com eBay MercadoLibre PinDuoDuo CTrip Expedia Source: Statista report

946.4 455.8 107.9 82.2 56 45.5 34.8 30.5 23.8 21.4 19.8 (2019)

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The difference between Online Distribution Channels is in their strategy (i.e. extended functionality, sharing inventory with other OTAs, etc.) and target audience. For example, CTrip operates in the Chinese market (CTrip 2019), while the leaders apply universal approach to cover various segments of the eTravel market across the globe. Online distribution channels are ranked according to daily time spent on the site, daily page views per visitor, traffic percentage from search, linking sites and are dominated by OTAs: Booking.com [1], Tripadvisor [2], Agoda.com [3], Expedia.com [4], Hotels.com [5], Hostelworld [42]. Four hoteliers only are highly ranked: Mariott.com [6], Hilton.com [16], Accorhotels.com [28], Hyatt.com [37] (Alexa report 2019). Online Travel Agencies (OTAs) • hotel ranking • commission rates policy • branding OTAs’ main strategies include hotel ranking, commission rates policy and branding. Hotel ranking is based on customer inquiries and is defined by the number of views to bookings (as well as on price, feedback, etc.) and depends on online-competition between hotels for the same segment. All OTAs charge commission, it varies between 10–20% depending on the hotel location value. Booking.com charges hotels a flat rate per transaction with no monthly fee, whereas the commission rate is country specific for Expedia.com. The major OTAs utilize branding to cover various market segments (Table 2). Additional monthly fee can be taken in exchange for a better Search Engine ranking (Table 3). Table 2. The OTAs’ branding Booking Holdings Booking.com, Agoda.com, Priceline.com, Kayak.com Expedia Group, Inc. Expedia.com, Hotels.com, Orbitz.com, Travelocity.com, Hotwire.com, Wotif.com, eBookers.com, etc. TripAdvisor, Inc. Bookingbuddy.com, TheFork.com, Housetrip.com, etc. Smartertravel.com, Tingo.com, Viator.com, etc. Source: own elaboration

Currently the OTA market is undergoing adaptation to the Mobile Internet technologies, expansion to periphery segments, high competition and buyouts. Booking.com has entered the small accommodation market including family operated Bed and Breakfasts, Vacation Rentals and Self-Catering Apartments (Booking Holdings 2019). Expedia Group, the owner of 200 websites and 150 mobile websites, targeted at North America and Asia markets, has acquired Travelocity and Orbitz (Expedia Group 2019). Tripadvisor and Agoda utilize marketing practices, like authentic hotel reviews and special promotions and incentives (Tripadvisor 2019; Agoda 2019). The world’s leading hostel-focused OTA HostelWorld has recently acquired Hostelbookers (Verot 2018). Airbnb has re-shaped the hospitality industry when introduced the idea of home sharing. It was already indicated for 2016, «that hotels in London saw year-on-year declines of 2% in demand, 9% in revenues and 5% in occupancy. Over the same

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Table 3. Ranking of the Top 5 OTAs in 2019 Name Revenue

Booking.com Tripadvisor Agoda.com Expedia $14,5 bln $1,6 bln $1,2 bln $11,22 bln Countries 230+ 49 200 70 Language 40+ 28 38 35+ 15% 15% 18–25% Comission 10–15% no monthly fee Source: own elaboration

Hostelworld AirBnB $3,3 bln $38 bln 178 19 15%

190+ 62 3–5% host fee 6–12% guest fee

period, Airbnb saw 182% growth in revenues, 126% growth in occupancy and a 206% increase in demand» (Hotelanalyst 2017, p. 96). In 2018 AirBnB added four more property types to its platform – Vacation Home, Unique Space, B&B and Boutique (Hotelanalyst 2017, p. 49). The OTA channel has a great impact on additional consumer demand, which is driven by lower-price offer from OTAs, overall price reduction in the industry and OTA marketing policy (Green and Lomanno 2012). Mobile Distribution Channel The Mobile software market is one of the most vibrant: in 2018 over 70% of American travellers always use their smartphones when traveling (against 41% in 2015) and the hotel sector major players are ready to invest in mobile booking systems (Hotelanalyst 2018, pp. 94–96). Expedia already owns over 150 mobile websites and «more than one in three its transactions are booked via mobile» (Expedia Group 2019). GDS Travel Agent Channel Global Distribution Systems network enables B2B transactions between tour operators and carriers, hoteliers, etc. (Table 4). They differ in target markets and inventory.

Table 4. Global distribution systems Amadeus Group Sabre Holdings (Sabre, Abacus) Travelport (Galileo, Worldspan, Apollo) Travelsky (China) KIU System (Latin America) Source: HTR report (2019)

http://amadeus.com http://sabre.com http://travelport.com http://travelsky.com http://kiusys.com

Pressurized by high competition, GDS are changing business models, adopting the Mobile distribution (Travelport) or Revenue Management technologies (Amadeus).

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Direct Online Channel • • • • • •

commission-free responsive website user-friendly WBE smart hotel review SEM-based online visibility competitive room rates

The hotel ownership Direct online channel has a great potential (Parvez et al. 2018), however, stays neglected by hoteliers, focused on guest services, unlike OTAs involved in guest acquisition, retention and engagement (Starkov 2019). 3. Central Reservation System (CRS) CRS platforms (Table 5), based on Web Booking Engine (WBE), integrate with PMS and enable hotels to centralize management and distribution of room inventory, rates and bookings through a broad network of sales channels across the globe. Direct booking cost via WBE varies between 1–5% or a flat fee per booking is charged. Table 5. The best 3 Central Reservation System (CRS) providers in 2019 Pegasus CRS http://pegs.com Travelclick http://travelclick.com Windsurfer CRS (SHR) https://shr.global/windsurfer-crs-enterprise/ Source: HTR report (2019)

4. Revenue Management Systems (RMS) • Business Intelligence software • Channel Managers • Parity Managers Distribution is perpetual data analytics and connections. Business Intelligence (Hotel Analytics & Data Management) platforms (Tables 6, 7 and 8) highlight revenue opportunities and estimate risks. Channel Managers connect hotel’s PMS/CRS with Online Distribution Channels. Parity Management software compares rates across the sales channels and ensures their competitiveness for the Direct online channel. Table 6. The best 5 Business Intelligence software companies in 2019 HotelIQ (by Intelligent Hospitality) Scoreboard (by Duetto) Juyo Analytics OTA Insight M3 Operations Management Source: HTR report (2019)

https://www.intelligent-hospitality.com https://www.duettocloud.com/ https://www.juyoanalytics.com/ http://otainsight.com https://www.m3as.com/

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Table 7. The best 3 Channel Managers in 2019 Cloudbeds (MyAllocator) https://myallocator.com/ SiteMinder https://www.siteminder.com/ STAAH Mobile App https://staah.com/ Source: HTR report (2019)

Channel Managers • • • • •

Aggregation of Online Distribution Channel services on one platform B2B connections between sellers and buyers Online visibility for hotels Tracking reservations without overbooking Installation Fee: $200 (on average)

• Monthly subscription: $60–670 (depending on hotel capacity) Parity Management • adjustment of room rates across online distribution platforms • minimization of overbooking due to integration with PMS/CRS • Price Checker Widget on the website to prove the direct booking best deal

Table 8. The best 5 Parity Management companies in 2019 TravelClick http://travelclick.com OTA Insight http://otainsight.com The Hotels Network http://thehotelsnetwork.com Trilyo http://trilyo.com Pegasus https://www.pegs.com/ Source: HTR report (2019)

5. Hotel distribution strategy Seven-step strategy matrix for online distribution in tourism was designed by D. G. Pearce, basing on general distribution principles: 1) customers’ needs and required functionality; 2) networking partners’ objectives and needs; 3) functions to be performed to meet customers’ and partners’ needs; 4) alternatives and their objectives and constraints; 5) deciding on a ‘marketing mix’; 6) implementation; 7) monitoring and evaluation. Besides, a non-step approach was reviewed: channel analysis, metrics, web strategy, risk assessment and branding (Pearce 2009, p. 509–518). The first indepth independent report on the distribution channels for the hotel sector was issued by HSMAI Foundation in 2012 (Green and Lomanno 2012). However, according to the Kalibri Labs’ investigations, hotels stayed unconscious how much they really spend on guest acquisition, hotel investments in OTA commissions had increased 45% through

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2015–2018: «data collected from 19,000 hotels worldwide shows how much more hotels spend on distribution since 2015» (Fig. 1, HTR 2019b).

Fig. 1. Rise in OTA commissions in 2015–2018 (U.S.). Source: HTR (2019b)

When a reservation is made through a third party, commission is paid to all participants of the distribution chain and the value of the investment in guest acquisition is not always clear. It causes frustration in the hotel management and the distribution strategy requires revision (Raab et al. 2018). The hotel tech ecosystem is a complex structure including hoteliers and travel technology vendors. Numerous players of online distribution market have different functions and rates that can cause failures in intermediation and synchronization with hotel’s PMS and confusion about guest acquisition value. To follow advice to select an intermediary providing all Cloud-based distribution technologies, i.e. Website Booking Engine (WBE) with proven Customer Experience (CX) record, Central Reservation System (CRS), and Revenue Management services (Starkov 2019), the monitoring of the digital technologies and market development must become an ongoing process. The hotel tech ecosystem lacked centralized data control over technology developments and implied investments while the professional community association (HSMAI) was strongly focused on educational activities. The HSMAI (established in 1927) is a global organization for sales, marketing, and revenue management for professionals in all segments of the hospitality industry in Americas, Europe, Asia Pacific and Middle East (HSMAI 2019). The idea that in certain conditions high dynamics leads to increased organization has been discussed since ancient times and was conceptualized in social communications theory (Luhmann 1995) and in economics (Krugman 1996). Open, dynamic and interacting ecosystem goes through constant changes, growing constraints and frustration and is inclined to self-organization. If its elements are flexible and can be modified easily, the system adapts to changes and bifurcation will not necessarily lead to system termination, it can be re-shaped and re-launched, as it occurred to the hotel

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tech ecosystem in the years of the Internet expansion. The periphery of the eTravel tech ecosystem is formed by the hotel sector, which stayed conservative in regards to changing technologies until customers’ expectations went far beyond a traditional B&B concept. The hotel tech ecosystem self-organization has led to launch of an independent media platform that allows its members stay current on technology and marketing updates. The Hotel Tech Report (established in April 2017) is targeted at building a community of professional contributors and centralizing the information on technologies and data analytics. It streamlines business strategy for the hotel sector to develop a strong and vibrant hotel tech ecosystem featured as open, dynamic, interacting and adaptive to keep up with both, the technological progress and the competition in the industry. Today it unites over 25,000 hoteliers across 120+ countries and over 650 of the world’s leading hotel technology companies and provides reviews and assessment on software updates (HTR 2019a). The concept of ‘Smart Hospitality networking’, based on Cloud services to enable hoteliers use business data analytics and generate scenarios to enhance revenue management performance and decision making, was discussed beforehand. Some core insecurities were anticipated to be considered with care: a) ownership and subscription fee of the data, contributed by industry practitioners and public entities; b) barriers to data-sharing across organizations: for example, lack of trust to the new system and exposure of business data to competitors and other technical and political issues. «Any concern from ecosystem members can lower their participating intention on data contribution to the hospitality big data. To eliminate doubts and concerns from individual executives, public available data on the cloud should be consolidated, processed, and maintained anonymously so that no organization identity or customers’ details can be accessed or recognized by competitors» (Buhalis and Leung 2018, p. 49). The SWOT Analysis summarizes the major insights of the hotel distribution strategy (Table 9).

Table 9. Hotel distribution strategy tools SWOT-analysis Strengths: – price reduction in the industry – availability of technologies for online booking – Billboard Effect online visibility – extended functionality, reliability, instant updates – brand-friendliness – mobile friendliness Opportunities: – commission-free hotel channels – low-cost digital marketing – branding – new technologies for modification – additional consumer demand growth Source: own elaboration

Weaknesses: – high cost third-party channels – uneasy-to-use interface – incompliance with PCI/smart phones – failures in synchronization with PMS – rate parity failures – neglect of hotel sales channels Threats: – disruption in connection and security – lacking two-way communication – guest acquisition high value – negative effects of digital visibility

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Today the hotel online distribution strategy should be revised and diversified on a ‘marketing mix’ multi-channel approach basis: 1) OTA online visibility. Be listed on the most suitable for their location and target visitors Online Travel Agencies to take an advantage of the ‘billboard effect’ and gain more online visibility. Objectives: a) sales channel assessment; b) quest acquisition value monitoring; c) current technology and marketing updates. 2) Direct Online Booking. Maintain rate parity and promote the Direct online channel to motivate guests for direct booking with special offers and rates. Requirements: (a) a responsive, attractive and informative hotel website; (b) a user-friendly Booking Engine; (c) reliable and secure Payment Gates; (d) the Search Engine Marketing (SEM) strategy to control online visibility; (e) an optional Price Checker Widget on the hotel website to ensure the best deal; (f) rate parity synchronization. 3) Voice channel/e-Mail. Modification with instant messaging services (ChatBot) is required, as two-way guest-hotel communication and reservation completion via phone/messaging should be anticipated. 4) Third-party booking. To reduce disruption and lower costs a third-party booking provider should own all major cloud-based distribution technologies: Website Booking Engine (WBE) with proven Customer Experience (CX) record, Central Reservation System (CRS), and Revenue Management services. 5) Social media are not a distribution channel, but an influential tool of digital marketing for the Direct online channel promotion and customer engagement.

4 Conclusions The study has investigated adaptations of the hotel sector to the effects of the technology development and Cloud services expansion in the last 10 years. The hospitality industry has gone through chaos of rapidly emerging online distribution software with many short-life members. Some could not cope with the Mobile Internet expansion and demand for individual access to online booking and are going obsolete (GDS travel agent channel) or proved unsuitable for hotels (Flash sales websites). Numerous channels for distribution caused confusion in the hoteliers’ world and aggregating B2B media platform Channel Managers have come to hand enabling assessment, navigation and connection: they consolidate data about various services, customer preferences and experience and provide links and update with multiple distribution channels at a time. At the same time the frustration caused by growing hotel investments in online distribution with unclear each guest acquisition cost has risen. Established in 2017, the first media platform for hoteliers (Hotel Tech Report) facilitates highly competitive hotel sector to stay current on software and marketing updates and evolve into a vibrant Hotel tech ecosystem.

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Glossary Channel Manager B2B aggregator of online distribution services ChatBot Technology for two-way Instant Messaging Service CRS Computer Reservation System self-updating track keeper for inventory and rates integrating with other online distribution technologies CX Customer Experience a customer-value management tool Direct Online Channel A hotel’s own website for distribution of hotel services Flash Sales Websites Web-based dealers selling discounted products and services GDS Global Distribution Systems, CRS/WBE-based B2B software for direct booking from carriers and hoteliers with access for travel organizations HASMAI Hospitality Sales & Marketing Association International (U.S.) HTR Hotel Tech Report hotel sector media platform for updates on technologies Mobile Distribution Channel Smartphone-friendly software for eTravel Online Distribution Channels Online sales services for eTravel OTA Channel Online Travel Agencies selling customized travel services Payment Gates Online payment services PMS Property Management System for hotel business operations (check-in/out payments house keeping, etc.) RMS Revenue Management Systems Cloud-based services for data analytics and B2B connections SEM Search Engine Marketing Tech Ecosystem A dynamic adaptive interacting and interdependent network of actors working on a mutual innovative product or services Voice Channel A channel for reservations via hotel telephone lines WBE Website Booking Engine software to push bookings to a website

References Agoda: Agoda enhances traveler experience with new capabilities and offering for B2B2C partners (2019). https://ir.bookingholdings.com/node/24631/pdf. Accessed 15 Nov 2019 AirBnB: AirBnB news (2019). https://news.airbnb.com/about-us/. Accessed 15 Nov 2019 Alexa report: The top ranked sites in Travel category (2019). https://www.alexa.com/topsites/ category/Top/Recreation/Travel. Accessed 15 Nov 2019 Booking Holdings: About Booking Holdings (2019). https://www.bookingholdings.com/about/. Accessed 15 Nov 2019

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Booking.com: About Booking.com (2019). https://www.booking.com/. Accessed 15 Nov 2019 Buhalis, D., Leung, R.: Smart hospitality – interconnectivity and interoperability towards an ecosystem. Int. J. Hospitality Manage. 71, 41–50 (2018). https://www.researchgate.net/ publication/322209171. Accessed 15 Nov 2019 Douglas G.P.: Channel design for effective tourism distribution strategies. J. Travel Tourism Mark. 26(5–6), 507–521 2009. https://www.tandfonline.com/doi/full/10.1080/10548400903163046. Accessed 15 Nov 2019 Expedia Group: About Expedia Group (2019). https://www.expediagroup.com/about/Accessed 15 Nov 2019 Green, C.E., Lomanno, M.V.: Distribution channel analysis: a Guide for hotels. HSMAI Foundation, McLean (2012). https://www.academia.edu/6900249/Distribution_Channel_ Analysis_a_Guide_for_Hotels_PubLishEd_by_thE_hsMai_Foundation. Accessed 15 Nov 2019 Hostelworld: About Hostelworld (2019). http://www.hostelworldgroup.com/. Accessed 15 Nov 2019 Hotelanalyst report: The global hotel report 2017. Hotelanalyst (2017). https://hotelanalyst.co.uk/ wp-content/uploads/sites/2/2017/07/The-Global-Hotel-Report-17-Sample.pdf. Accessed 15 Nov 2019 Hotelanalyst report: The global hotel report 2018. Hotelanalyst (2018). https://hotelanalyst.co.uk/ wp-content/uploads/sites/2/2018/09/GHP-2018-Sample-2.pdf. Accessed 15 Nov 2019 HSMAI: About Hospitality Sales & Marketing Association International (HSMAI) (2019). https://global.hsmai.org/. Accessed 15 Nov 2019 HTR: About Hotel Tech Report (2019a). https://hoteltechreport.com/about/. Accessed 15 Nov 2019 HTR: 5 Reasons why you need the Triptease Direct Bookings platform (2019b). https:// hoteltechreport.com/news/5-reasons-why-you-need-direct-bookings. Accessed 15 Nov 2019 HTR report: Revenue Management (2019). https://hoteltechreport.com/revenue-management/. Accessed 15 Nov 2019 Krugman, P.: The Self Organizing Economy. Wiley-Blackwell, Oxford (1996) Luhmann, N.: Social Systems. Stanford University Press, Stanford (1995) Parvez, et al.: Digital marketing in hotel industry. Int. J. Eng. Technol. 7(2.21), 288–290 (2018). https://www.researchgate.net/publication/325117493. Accessed 15 Nov 2019 Raab, C., et al.: Creating strategic relationships with online travel agents to drive hotel room revenue: an OTA perspective. J. Hosp. Tour. Technol. 9(7) (2018). https://www.researchgate. net/publication/322782162. Accessed 15 Nov 2019 Solntseva, O.: Aspects of the use of artificial intelligence technologies. E-Manage. (1), 43–51 (2018). https://doi.org/10.26425/2658-3445-2018-1-43-51. Accessed 15 Nov 2019. (in Russian) Starkov, M.: Hospitality digital technology: challenges, priorities and buzzwords (2019). https:// www.hotelbusinessweekly.com/2019/03/04/hospitality-digital-technology-challengespriorities-and-buzzwords/. Accessed 15 Nov 2019 Statista report: Market cap of leading consumer Internet and online service companies worldwide as of July 2019 (2019). https://www.statista.com/statistics/208843/stock-market-value-of-webbased-companies/. Accessed 15 Nov 2019 Trekksoft report: Travel trends report 2019 (2019). https://www.trekksoft.com/en/resources/ ebooks/travel-trends-report-2019. Accessed 15 Nov 2019 TripAdvisor: About TripAdvisor (2019). https://tripadvisor.mediaroom.com/US-about-us. Accessed 15 Nov 2019 Verot, B.: 10 Online Travel Agencies you should connect to today (2018). https://hotelminder. com/10-online-travel-agencies-you-should-connect-to-today. Accessed 15 Nov 2019

Smart Contracts in the Russian Transaction Regulation Elena B. Zavyalova1(&), Ekaterina I. Shumskaia1, and Mikhail D. Kuzmin2 1

MGIMO University, Moscow, Russia [email protected], [email protected] 2 Lomonosov Moscow State University, Moscow, Russia [email protected]

Abstract. Purpose: Cryptocurrencies have become a mechanism for providing and guaranteeing the enforcement of smart contracts, which has made popular this type of agreement in the modern market. Today, smart contracts that are automatically executed using blockchain technology are the subject of debate in many countries, primarily because of questions that have arisen about their legal consolidation in the legislation regarding the regulation of digital assets and the legal recognition of the blockchain technology itself, which determined the purpose this scientific paper. Design/methodology/approach: The historical method was applied in the work on the features of the formation of smart contracts with the aim of a deeper understanding of the nature of this type of agreement. Findings: An assessment of such contracts is made from the point of view of existing civil law of the Russian Federation and further directions for study and development are proposed, including the improvement of the regulatory and institutional environment to maintain legal certainty. Originality/value: A formal legal and comparative analysis of smart contracts with classic contracts in electronic form was carried out to identify key differences. The areas of application of smart contracts in the world and in Russia, such as banking, healthcare, insurance and public services, were studied. Keywords: Smart contracts Regulation of digital assets JEL Code: K12


Cryptocurrency
Blockchain
Civil law



K23

1 Introduction Not so long ago, a new reality has formed in the world: the population of developed countries has almost ubiquitous Internet access, and the vast majority of users have a computer or smartphone, the cost of communication and modern equipment is reduced. All this made possible the intensive development and application of various digital technologies. In the business environment, securities, cash (in bank accounts) and the signing of contracts have already been digitized. One of the latest developments that has attracted © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 205–212, 2020. https://doi.org/10.1007/978-3-030-47945-9_22

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the attention of business, and then the state, is blockchain technology. At its core, it is a distributed registry: a record in the system is not stored on a single server, but on many connected computers (Anderson 2016). The second characteristic that makes the technology so attractive is the structure of the block itself, which contains information about all previous asset transitions. The above properties determine the reliability and complexity of unauthorized interference with the system. In addition, the problem of double sale of an asset is being addressed (Kalinina et al. 2019). That is why this technology has become so popular - it eliminates the disadvantages of classic registries.

2 Materials and Method The research methodology was composed of systemic, historical, formal-legal, comparative and analytical approaches.

3 Results The key results of the study in a theoretical aspect was the justification for the development of mandatory rules in contract law that eliminate market failures; protection mechanisms, such as consumer protection, investor protection, market competition protection; measures to preserve certain activities within socially acceptable boundaries; response to social needs. In terms of practical application in Russian legislation, the study justifies the need the understanding of a smart contract as a special form of contract complicates the interaction of the parties. In addition, after a smart contract is recognized as a contract, all the rules of contract law apply to it, both on the form and on the consequences of its termination and change. Blockchain Technology. After the widespread use of blockchain and cryptocurrency technologies (Fig. 1), in essence the creation of a new decentralized and independent financial system, the state began to attempt to regulate this area, which raised many questions, since users are in different jurisdictions and do not have a single operational center; new issues of public safety due to the possible financing of terrorism and criminal activity.

Fig. 1. Left: the dynamics of market capitalization in cryptocurrency. Right: the number of transactions per day on smart contracts. Source: coinmarketcap.com and etherscan.io, 2019.

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We must pay tribute to the domestic legislator, who took the first steps to resolve this area. So, the article of the second draft of the Federal Law “On Digital Financial Assets” (hereinafter referred to as the Draft Law) contains the option of defining cryptocurrency, mining, tokens and the blockchain technology itself (the part associated with the distributed registry), united under the single concept of digital financial assets. Under this Bill, digital law is created on the basis of an information system. In the new edition of Art. 128 of the Civil Code of the Russian Federation, crypto assets are defined as a special object of civil rights, but, according to Art. 141.1 of the Civil Code, they will only certify civil rights. At the same time, in the bill, tokens are paid much more attention than cryptocurrencies, there is no answer to the question of whether the token will be a security and which one. The necessary understanding, similar to the Howey Test in the United States, which makes it possible to recognize as a security any contract with an investment nature (Mendelson 2019), is currently absent in Russia. In the future, one of the sought-after and widespread instruments for transactions is the conclusion of smart contracts as a private use of blockchain technology (Bhargavan 2016). A smart contract is an algorithm that carries out operations with assets in automatic mode under predetermined conditions. For example, a person can conclude a purchase agreement for the sale of tokens on the terms of their automatic receipt when crediting funds to the issuer’s account. The contract, which has legal force, allows the parties to coordinate their actions and believe that their obligations with respect to each other will be fulfilled. Note that an integral limitation of traditional agreements is the need for the parties to trust the state, and often various private intermediaries, which contribute to the effective operation of the system. Legal enforcement of contracts can be burdensome and error prone. Just as there are reasons to use a decentralized system of digital currencies (see Fig. 1) even though traditional target currencies are extremely successful, decentralized digital contracts can similarly solve problems that a traditional system of contracts cannot fulfill. It is important to understand that a smart contract, unlike a classic contract in electronic form, is a larger and more complex agreement, whose use is limited to the blockchain registry (Deryugina et al. 2019). Its algorithm contains the possibility of independent decision-making on the fulfillment of the terms of the transaction, for example, the ability to automatically write off funds from accounts, in contrast to the classical type of contract concluded in electronic form, the enforcement of which is vested in the parties themselves. Therefore, the identification of a civil contract and a smart contract is impossible. Features of Smart Contracts. The main issue for decentralized contracts was the reliability of ensuring compliance with obligations and compliance by participants with the rules. The initial concept of smart contracts by N. Szabo (Szabo 1997) provided that cryptography would protect agreements, but did not have a mechanism to guarantee enforcement. However, this problem has a solution with the development of cryptocurrencies (Morris 2016). Smart contracts had to achieve four main goals: observability (both parties can observe each other’s work), verifiability (easy verification if and when transactions

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were completed), confidentiality (only the necessary details are disclosed to complete the contract) and the ability to enforce (automated execution) (Szabo 1997). Today it is expected that smart contracts will be able to significantly change the commercial world and require new legal responses, but will not crowd out contract law. They can potentially provide greater efficiency than traditional contracts, but we still need to explain how smart contracts can solve issues affecting contract law (Werbach and Cornell 2017). Table 1 presents an analysis of existing smart contracts in the field of their application in Russia and the world. They are already used in banking, healthcare, insurance, public services, etc. Table 1. Fields of application and distinctive characteristics of smart contracts Fields of application Banking sector

Application possibilities

Examples

The system of smart contracts helps reduce bank costs; helps reduce uncertainty and credit risks; eliminate intermediaries in the transaction

Healthcare

Privacy protection with the ability to share aggregated data Optimization of insurance accounting and document management and compensation payments in typical cases

- The British bank Barclays used smart contracts to conduct transactions with letters of credit as part of the international supply of goods - Banco Bilbao Vizcaya Argentaria (BBVA) uses smart contracts to provide loans - In 2016, the first transaction using smart contracts between S7 Airlines and Alfa Bank took place in Russia - The eHealth Foundation (Estonia) has been operating since 2005 - The German company Allianz uses smart contracts to automate insurance payments - Russian startup ReGa Risck Sharing uses Ethereum blockchain technology in pet insurance - The Swedish Cadastral Service is working to create a solution to eliminate errors associated with manual data entry and to increase the reliability of the transfer of documentation - In February 2018, Rosreestr used blockchain technology to register such an equity agreement

Insurance

Government services

Conducting voting procedures based on smart contracts

Source: compiled by the authors.

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To date, the most common use of smart contracts - crowdfunding - raising funds from an unlimited number of users to create a new product. The simplest smart contract for crowdfunding is as follows: users transfer funds to a specially created platform at a certain time period and receive tokens in return. An algorithm works inside the platform that allows, if the required amount is not collected by the end date of the fundraising, return the funds back by returning the token. If the amount has been collected, the function of withdrawing funds from the platform becomes available for the fundraising initiator. Evaluation of Smart Contracts in Terms of Civil Law of the Russian Federation. From the point of view of civil law, a smart contract is certainly a deal, but the question arises as to the qualification of such a transaction as a transaction made under a condition. At first glance, this legal structure is the closest to a smart contract, but it does not take into account a number of features of blockchain technology. Firstly, the contract operates only with assets located inside the system, and, most importantly, the data that describes the occurrence of an event, which is a condition, must also be loaded into the system. Secondly, as said earlier, no intervention in the algorithm after writing is possible, therefore, such a transaction is not conditional for the system, it is more consistent with deferred definition. Today, there are two concepts for understanding smart contracts. The first one already has official status and is contained in the Federal Law “On Amendments to Parts One, Two and Article 1124 of Part Three of the Civil Code of the Russian Federation”, which will enter into force on October 1, 2019. The second concept is presented in the draft Federal Law On Digital Financial Assets, adopted by the State Duma in the first reading. In order to execute smart contracts, legislators supplement the norm with Article 309 of the Civil Code of the Russian Federation. It states that the terms of the transaction may provide for the fulfillment by the parties of their obligations upon the occurrence of certain circumstances without the separately expressed additional will of the parties through the use of information technology. Therefore, a digital rights transaction is not a separate transaction. When analyzing this norm, several questions arise. Firstly, this supplement is systematically found in chapter 22 of the Civil Code “Fulfillment of Obligations”, which is not consistent with the text, since this is a “new” type of conditional transaction. Secondly, in the said novel, the legislator may not have consciously changed the general concept of understanding the execution of the transaction: now the will of the parties is required for execution, but smart contracts can avoid this, because their execution does not require a “separately expressed additional will”. This position of the legislator raises certain doubts, at least in connection with the unfinished dispute of jurists about the nature of the execution of the transaction. Another important issue that traditionally arises in transactions is the rules for contesting them. In the case of a smart contract, contesting a transaction on grounds related to the occurrence of the condition does not make sense, since the parties and third parties do not in any way influence the occurrence of the condition. Interestingly, initially the amendments to Article 309 of the Civil Code of the Russian Federation contained a provision on contesting smart contracts: “The challenge of the fulfillment

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of such obligations is allowed only in cases where the intervention of the parties to the transaction or third parties in the execution process has been proven.” At the same time, the internal logic of the blockchain technology itself does not allow any party to intervene after all the conditions of the smart contract are determined and it was launched, except for global technological disasters that would entail disconnecting all devices supporting the distributed registry from the network. It can be assumed that the contestability of a smart contract, its mechanics, contradicts the very purpose of this technology, the result of which is always defined and unchanged. Here again, you can return to the very understanding of a smart contract as an institution of civil law and a way to complete transactions. Let us turn to the draft Digital Assets Law. Article two contains the following definition of a smart contract: “A smart contract is an agreement in electronic form, the fulfillment of rights and obligations of which is carried out by automatically making digital transactions in a distributed registry of digital transactions in the sequence strictly defined by such an agreement and upon the occurrence of circumstances determined by it.” The noted shortcomings of the above draft bills do not reduce their significance due to the urgent need to develop such legislation in the field of regulation of digital financial assets and digital rights with the formation of the Fourth Industrial Revolution.

4 Conclusion When we consider not only the use of blockchain for transactions, but also its replacement with a traditional organization relations and management systems, we also need to take into account the problems that arise for society as a whole. Until now, they have been resolved with the help of national or international legal instruments, but if we get to work through decentralized organizations and platforms, we will also need new ways to reduce the risks that arise during their functioning. Security measures need to be implemented, given that technology can operate without central authorities such as the judiciary (Kaminska et al. 2016) or intermediaries such as banks (Veerpalu 2017). Accordingly, the normative and institutional task of states is to ensure the continued existence of security measures, such as, for example: • binding rules in contract law that eliminate market failures; • protection mechanisms, such as consumer protection, investor protection, protection of market competition; • measures to preserve certain types of activities within socially acceptable boundaries (the boundaries of the financing of terrorism or money laundering); • response to social needs. Regarding Russian legislation, the understanding of a smart contract as a special form of contract complicates the interaction of the parties. In addition, after a smart contract is recognized as a contract, all the rules of contract law apply to it, both on the form and on the consequences of its termination and change.

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It seems to us more successful the wording of the draft amendments to the Civil Code of the Russian Federation, introduced by deputies V.V. Volodin, P.V. Krasheninnikov in March 2018, in terms of indicating automatic fulfillment of obligations. At the same time, although blockchain technology has significant potential in the field of smart contracts (Mason 2017), traditional enforcement is necessary and still remains available as support. The existing legal regulation does not contain prohibitions on the use of smart contracts in the business practices of companies and individuals. But the simplicity of the transaction implementation algorithm based on the blockchain still requires some legal support: at least an agreement on the use of the blockchain between the partners must exist. Perhaps the best option for maintaining legal certainty and the existing structure of civil law institutions and structures would be to recognize a smart contract as a form of automatic fulfillment of obligations using computer algorithms and programs.

References

Laws and Legal Acts of the Russian Federation Civil Code of the Russian Federation [Electronic resource]. Access mode. http://www.consultant. ru/document/cons_doc_LAW_5142/. Accessed 20 Aug 2019 Draft Federal Law No. 419059-7 “On Digital Financial Assets” [Electronic resource]. Electronic reference legal system “Consultant Plus”. Accessed 28 Aug 2019 Draft Federal Law No. 424632-7 “On Amendments to Parts One, Two, and Four of the Civil Code of the Russian Federation” [Electronic resource]. Access mode. http://asozd2c.duma. gov.ru/addwork/scans.nsf/ID/B91DEDFBCF19B4E04325825C0032641E/$FILE/424632-7_ 26032018_424632-7.PDF?OpenElement. Accessed 28 Aug 2019 Federal Law of March 18, 2019 N 34-ФЗ “On Amendments to Parts One, Two and Article 1124 of Part Three of the Civil Code of the Russian Federation”, “Consultant Plus” electronic reference legal system. Accessed 20 Aug 2019

Other Sources Anderson, L., Holz, R., Ponomarev, A., Rimba, P., Weber, I.: New kids on the block: an analysis of modern blockchains. CoRR abs/1606.06530, pp. 91–96 (2016) Cassano, J.: What Are Smart Contracts? Cryptocurrency’s Killer App (2014) Deryugina, T.V., Inshakova, A.O., Sevostyanov, M.V.: Systemic issues of legal regulation for information aggregator operation. In: Popkova, E. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826, pp. 27–34. Springer, Cham (2019) Morris, D.: Bitcoin is Not Just Digital Currency. It’s Napster for Finance. FORTUNE (2016) Kaminska, I.: Decentralised courts and blockchains. FT Alphaville (2016)

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Kalinina, A.E., Inshakova, A.O., Goncharov, A.I.: Polysubject jurisdictional blockchain: electronic registration of facts to reduce economic conflicts. In: Popkova, E. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826, pp. 205–213. Springer, Cham (2019) Kim, H., Laskowski, M.: Towards an ontology-driven blockchain design for supply chain provenance. In: Proceedings of the Conference Paper for Workshop on Information Technology and Systems, WITS (2016) Kuo, T., et al.: ModelChain: decentralized privacy-preserving healthcare predictive modelling framework on private blockchain networks. In: ONC/NIST Blockchain in Healthcare and Research Workshop, Gaithersburg, MD (2016) Mason, S.: Artificial intelligence: oh really? And why judges and lawyers are central to the way we live now – but they don’t know it. Comput. Telecommun. Law Rev. 23(8), 213–225 (2017) Mendelson, M.: From initial coin offerings to security tokens: a U.S. federal securities law analysis. Stan. Tech. L. Rev. 22, 52 (2019) Szabo, N.: Formalizing and securing relationships on public networks. First Monday 2 (1997) Veerpalu, A.: Regulation of Blockchain Technology and its Challenges. Presentation at the ELSA Colloquium of IT LAW for PhD students and researchers. University of Aix-Marseille (2017) Werbach, K., Cornell, N.: Contracts ex machina. Duke Law J. 67, 313 (2017)

Artificial Intelligence and Its Impact on Economic Security: Trends, Estimates and Forecasts Evgeniya K. Karpunina1(&) , Sergey V. Dedov2, Marina V. Kholod3, Sergey V. Ponomarev4, and Elena A. Gorlova5 1

Tambov State University named after G.R. Derzhavin, Tambov, Russia [email protected] 2 Southwest State University, Kursk, Russia [email protected] 3 Plekhanov Russian University of Economics, Moscow, Russia [email protected] 4 Kaluga Branch, Financial University under the Government of the Russian Federation, Kaluga, Russia [email protected] 5 Kuban State Technological University, Krasnodar, Russia [email protected]

Abstract. The purpose of the scientific article is to study the impact of artificial intelligence technologies on the socio-economic development of modern States and global changes in the economic landscape. The analysis of the dynamics of the actual and forecast development of artificial intelligence sub-technologies allowed to draw a conclusion about the significant growth of this market until 2025, with annual growth dynamics. The authors analyzed the dependence of the level of penetration of AI technology in the industry on the level of coverage of industries with digital technologies, as well as the possible contribution of AI to the growth of revenue and revenues in the industry. In addition, the industries that claim to occupy leading positions in the level of use of artificial intelligence technologies in the near future and ensure maximum economic growth have been identified. The article examines the risks of economic and information security due to the introduction and development of artificial intelligence technologies. It is proved that the solution of problems of stimulation of process of use of AI in economic activity, and also regulation of a vector of development of technologies towards improvement of quality of life of the person and its wellbeing should be carried to the field of public administration. Keywords: Artificial intelligence
Economic development
Economic security
Artificial intelligence market
Risks
Current digital coverage JEL Classification Codes: O11


O14
O32
O33
O38

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1 Introduction Recently, the topic of artificial intelligence is extremely relevant. Products developed with the help of artificial intelligence technologies, which are endowed with new previously unattainable capabilities and functions, attract the attention of the scientific community and the public. Artificial intelligence as an algorithm that studies human behavior and tries to perform some human functions, is aimed at freeing a person from monotonous work and improving the quality of his life by automatically creating software, supporting him in decision-making, automating dangerous types of work, developing communications between people. The countries of the world are entering the next stage of growth of the digital economy - the development of “the Internet of things” based on artificial intelligence. On the one hand, scientists suggest that the new stage will be more effective, including from an economic point of view, because it increases the level of productivity. According to Price Waterhouse Coopers, productivity gains based on artificial intelligence will account for up to 55% of all GDP revenues with artificial intelligence between 2017 and 2030 (PwC 2017). On the other hand, the unexplored and uncertain implementation of artificial intelligence technologies in real life requires in-depth study and prediction of the possible negative consequences and security risks that may open up to future generations, assessment of the nature of the impact of artificial intelligence technologies on the global economy, industry analysis of its use.

2 Methodology Artificial intelligence (AI) in the current study will be understood as a set of new technologies for creating innovations in any field of human activity associated with the accumulation of significant amounts of information and decision-making with potentially unlimited returns. The aim of implementing AI technologies in commercial companies and government agencies is to automate routine intellectual actions and improve the quality of decisions to increase business efficiency. Some aspects of the study of artificial intelligence and the processes of implementation of AI technologies are reflected in the works of McCarthy (1960), Russell et al. (2015), Acemoglu and Restrepo (2017), Cronin (2009), Khatchadourian (2015). The economic benefits of the introduction of artificial intelligence technologies are described in the research Chen et al. (2016). The issues of economic security due to the intensification of the processes of introduction of artificial intelligence technologies in the activities of enterprises and public authorities are reflected in the research Arntz et al. (2016). With the help of methods of economic analysis, forecasting, grouping, analysis and synthesis, as well as the method of expert assessments, the nature of the influence of artificial intelligence technologies on the state of economic security of economic entities, industries and complexes, the state as a whole is proved in this article.

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The information base of the conducted research consists of materials of research companies and institutes, including Price Waterhouse Coopers (PwC), McKinsey Global Institute, McKinsey Digital Survey, Tractica, International Data Corporation, World Economic Forum.

3 Results So, what artificial intelligence is needed for, what opportunities it opens up to a person, and what hidden risks are, we will try to answer in this article. Artificial intelligence is a set of technological solutions that mimics the cognitive functions of a person, including self-learning and search for solutions without a predetermined algorithm and allows you to achieve results when performing tasks, at least comparable to the results of human intellectual activity. The complex of technological solutions includes information and communication infrastructure, software (which also uses machine learning methods), processes and services for data processing and decision-making. The concept of AI can not be separated from neurotechnologies, that is, technologies used or helping to understand the brain and thought processes, higher nervous activity (including technologies to strengthen, improve the brain and mental activity). Within the framework of artificial intelligence, several sub-technologies can be distinguished: 1) computer vision is a class of solutions that find, track and classify objects as well as synthesize video/images; 2) natural language processing is a class of solutions aimed at understanding language and generating meaningful text, as well as communicating in natural language through computer-human interaction; 3) speech recognition and synthesis is a class of solutions that allows you to translate a speech query into a text form, including the analysis of the timbre and tonality of the voice, to recognize emotions, and synthesize speech; 4) recommendation systems and intelligent decision support systems are a class of AI solutions that provide process execution without human intervention, as well as support in decision making and prediction of objects that will be of interest to users; 5) promising methods and technologies in AI are methods and technologies whose development affects all current AI sub-technologies as well as the creation of new technologies in this field; 6) neuroprosthetics is a class of solutions that allow restoring motor, sensory and cognitive functions and capabilities of a person; 7) neurointerfaces, neurostimulation, and neurosensing are a class of solutions that track and influence the human nervous system, through invasive and non-invasive techniques. At present, it can be stated that artificial intelligence has turned from separate disparate technologies into a powerful industry supported by the state and business, with significant investments, human resources and development prospects. Separate

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cases of implementation of artificial intelligence algorithms merge into continuous programs of integration of AI into digital products and technological processes, and also penetrate into many “non-digital” spheres of economy. This consolidated industry has a significant impact on the economic development of society. According to various forecasts, its impact will be that, the share of artificial intelligence in world GDP will be about 2.6% by 2030. This indicator includes not only the actual size of the AI solutions industry, but also productivity gains in various sectors of the economy, as well as other factors, such as the growth of related industries (McKinsey Global Institute 2018). In 2018, the global market for AI solutions amounted to about 21.5 billion dollars, by 2024 it is projected to increase to 137.2 billion dollars. The volume of the global market of solutions in the field of neurotechnologies in 2018 amounted to 1.3 billion dollars, by 2024 it is expected to grow to 7 billion dollars (ITU 2018). Let’s analyze the dynamics of the actual and forecast development of the artificial intelligence market (Fig. 1).

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Analysis of the dynamics of the artificial intelligence market allows us to conclude that the significant growth of this market until 2025, with an annual growth rate of 149% according to the forecast of Tractica and 121% annual growth according to the forecast of IDC. IDC predicts the artificial intelligence market will be around 90 billion dollars in 2025, with an actual market size of 7.3 billion dollars in 2018. It should be noted that the conservative IDC predicts a smoother growth of the AI market than that of Tractica, both in terms of the actual volume of the artificial intelligence market and the dynamics of growth of this market (Tractica 2019; IDC 2019).

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The forecast of development of the world market of solutions in the field of artificial intelligence and neurotechnologies in the context of subtechnologies for the period 2018–2024 is given in Fig. 2. 137.2

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Fig. 2. Forecast of the world market of solutions in the field of AI and neurotechnologies, billion dollars (compiled by the authors)

The total market for AI solutions will grow 6.4-fold to 137 billion dollars by 2024. In the context of AI sub-technologies, the greatest growth dynamics will be shown by the computer vision sub-technology-an increase of 10.7 times to 37.6 billion dollars. Also, the sub-technology “recommendation systems and intelligent decision support systems” will grow more significantly than the AI market - 10 times to 65.9 billion dollars. The neurostimulation and neurosensing sub-technology will grow 7.7 times faster than the AI market to 2.3 billion dollars. Slower than the AI market will grow subtechnology “natural language processing” - 2.9 times to 30.2 billion dollars. The speech recognition and synthesis, neurotechnologies and neuroprosthetics and neurointerfaces sub-technologies will grow 4.5 times slower on average than the overall growth of the AI market, and their contribution to the economic performance of the industry will be minimal. This forecast gives a more optimistic market growth of all AI sub-technologies than the earlier forecast from Tractica and IDC (Tractica 2019; IDC 2019).

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At the same time, almost all experts agree that AI has great potential for its contribution to economic growth and global change in the economic landscape. According to experts, up to 70% of companies will be able to actively use at least one type of AI technology in their processes, about half of companies will be able to fully use all artificial intelligence sub-technologies by 2030. Such active use of AI could potentially generate an additional 16 trillion dollars in global economic growth by 2030, or result in a 16% increase in aggregate GDP compared to today’s level, representing about 1.2% additional GDP growth per year (Fig. 3). Chine; 26,1 % 7 tr.$

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According to PwC experts, artificial intelligence will make the largest contribution to China’s GDP (26.1% and 7 trillion dollars) and the economy of North America (14.5% and 3.7 trillion dollars) (PwC 2017). Northern and southern Europe, as well as Asia, will also have a significant share of the contribution of artificial intelligence to the economies of these countries – about 10% of the contribution to GDP. In North America, GDP growth with artificial intelligence will be boosted by huge opportunities to introduce the most productive systems. This growth will be accelerated by advanced technologies and consumers’ willingness to introduce and use artificial intelligence products. In China, artificial intelligence will lead to a rise in GDP through the use of productive technologies, and a key part of the increase will depend on the high rate of reinvestment of capital in the AI industry. The smallest contribution of artificial

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intelligence to GDP growth will be in the economy of Latin America - 5.4% or 0.5 trillion dollars, due to the lag of this continent from other countries in terms of development and introduction of new technologies. It is necessary to understand that the impact of AI on the economy will not be linear, will increase as it increasingly penetrates into all spheres of activity and will require significant investments associated with the training and deployment of these technologies, which will ultimately lead to a synergistic effect of its impact in the global economy. According to experts, the leaders in the use of AI will be developed countries, which will be able to increase their advantage in the use of AI over developing countries. Thus, it is projected that the leading countries could receive an additional 20 to 25% of net economic benefits compared to today, while developing countries may receive only about 5 to 15% of economic growth. And developing countries with higher wages will have to more actively replace expensive human labor with cheap robotic labor than countries with low-wage labor, which will not have such an incentive. But at the same time, developing countries tend to have other ways to increase the productivity of their economies, such as a global restructuring of their industry and the active introduction of ready-made advanced technologies that will flow from developed countries. This idea of capturing leadership in the use of AI can be confirmed by the list of countries that have adopted AI at the national level: Canada (2017), China, Japan (2018), USA, EU, France, South Korea, Singapore, Germany, UAE, Russia (2019) (CBInsights 2018). The introduction of AI will have a significant impact on the state of the labor market and employment (McKinsey Global Institute 2018). On the one hand, differences in the level of potential use of AI by different countries, companies and specific employees can be directed to stimulate the creation of an economy with higher productivity and job growth. On the other hand, increased competition, which will be stimulated by high levels of AI, may lead to some firms leaving the market altogether or being absorbed by more successful companies, and many workers losing their jobs. So, in addition to the positive impact on the economy, AI through the influence of robotics and smart manufacturing, can lead to a significant change in the working landscape, in terms of training workers’ qualifications and priorities in their training and retraining (Spiezia 2016). Active adoption of AI can lead to jobs characterized by repetitive tasks and functions that do not require strong digital skills may experience the greatest decline in the share of total employment - a 30 to 40% decline by 2030. At the same time, jobs that are characterized by unstable functionality and require significant digital skills may increase in the proportions of use in the economy. Experts of the world economic forum (WEF) Express a more positive view of the problems that AI will create in the future. Thus, the WEF report “the Future of the labor market-2018” States that the growth of automation through the introduction of new technologies will reduce by 2025 about 75 million jobs, while new technologies and AI will generate 133 million new jobs over the same period. WEF also predicts that robots

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will perform 42% of current work tasks by 2022 and 52% by 2025. More than half of current workers will be forced to either change jobs or undergo a global reforging on a digital scale, but at the same time, at least half of today’s professions will remain by 2022 (World Economic Forum 2018). Positive and negative shifts in employment should have an impact on wages. So, modeling conducted by experts McKinsey Global Institute shows that about 13% of the total payroll can go to the latter category, which perform non-repetitive functions and require high digital skills (Acemoglu and Restrepo 2017). On the other hand, workers in repetitive roles with low digital skills could potentially see their wages fall - up to a 30% drop in total pay by 2030. Let’s move on to forecasting and modeling the impact of AI on the state of economic security of specific industries. The healthcare and automotive industries are the undisputed leaders in AI influence. The financial sector, transport and logistics, communications and telecommunications and retail follow. The weaker impact of AI will have on economic growth directly in the areas of electricity production and distribution. The level of adoption of AI technologies in each particular industry will be influenced by a number of factors, for example, the degree of competition in the market and the demand for new products is relatively higher in the field of high technology, which leads to rapid adoption and absorption of AI. The current level of adoption by a particular industry of digital technologies is another important factor that helps to increase the penetration rate of AI technologies in the industry. We analyze the dependence of the projected level of penetration of AI technology in specific industries on the current level of coverage of industries with digital technologies, as well as the possible contribution of AI to revenue growth and revenues in the industry. To assess the level of current digital coverage of various industries, we propose to use an integrated indicator calculated by McKinsey Global Institute Agency on the basis of 27 indicators of various industries, including: business spending on computers, software and telecommunications equipment, the current share of assets with digital communications, and so on. To assess the future level of AI penetration, McKinsey Global Institute evaluates 16 different metrics, including AI spending, the number of AI technologies adopted in the industry, the use of AI by companies in various industry functions, AI spending per employee, and so on (McKinsey Global Institute 2017). Let’s systematize the levels of possible adoption of AI technologies by different industries and their economic contribution to each industry by 2030 (Table 1).

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Table 1. Analysis of AI level relationship and digital index. (Source: McKinsey Global Institute analysis (McKinsey Global Institute 2018)) The level of adoption and absorption of the AI (forecast for 2030)

Sector High tech and telecoms Very high Automotive and Very high assembly Financial services High Resources and High utilities Media and entertainment Average Consumer packaged goods Average Transport and logistics Average Public and social sector Average Retail Average Healthcare Below the average Agriculture Below the average Building materials and Below the average construction Travel and tourism Low Assessment of the level graphs in color very high high average below the average low very low

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The industries that will be leaders in the use of AI technologies by 2030 are: the high-tech and telecommunications industries, the automotive industry, the financial sector and the sector of extraction and processing of natural resources. The view that the current level of use of digital technologies by the industry directly affects the choice of future winners and recipients of the main economic benefits from artificial intelligence technologies will be true only for the high-tech and telecommunications industries. It can be concluded that there is no correlation between these indicators in the automotive industry and the industry of extraction and processing of natural resources, as well as an average correlation between these indicators in the financial sector. The speed of AI penetration and functional coverage is not the most important indicator from an economic point of view, more important in this aspect is the very financial benefit from AI for a particular sector of the economy. The financial sector, the automotive industry, and the high-tech and telecommunications industries are losing out in the financial race in terms of AI’s contribution to industry revenue and

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profits, such as retail, consumer goods, transportation, logistics, and tourism. The leader in AI’s contribution to the industry’s finances will be retail, which will receive an additional 0.8 trillion dollars in benefits. The tourism industry in terms of economic contribution from AI will also overtake the leaders (McKinsey Global Institute 2018). According to the forecast for 2030, the impact of AI on industry revenues will be 11.6% in the tourism industry, in the high-tech and telecommunications industry10.2%, in the media and entertainment sector -7%, in transport and logistics - 6.4%. The digital automotive industry is more than twice as inferior to these industries in terms of the contribution of artificial intelligence to industry revenues (ITU 2018). These contradictions, in our opinion, can be explained only by the influence of AI on intra-industry and General competition. The “non-digital” tourism industry is already using AI technology and travel startups are developing around the world, which allows them to attract significant investment. Hilton has already launched an online Concierge service, Facebook analyzes the data of its customers and then with the help of contextual advertising makes individual offers for tours, and the service Booking.com with the help of AI helps tourists without waiting in line and on the basis of individual preferences to organize a vacation. In our view, the willingness to market their products or services to a wide range of retail customers will be a major driver for AI’s rapid penetration into various industries, in addition to the high level of intra-industry competition. It is this interaction that will create extensive databases within industry companies. Artificial intelligence algorithms that create new products and services and generate new databases will be created and implemented in the industry to improve the quality of analysis of the resulting databases and find ways to best meet customer demand. Such industries include retail, financial sector, tourism and entertainment sector, media, partly automotive industry and transport with logistics. On the other hand, industries that do not focus on marketing products in retail markets and focus on marketing products to a wide range of wholesale customers and other major players are less susceptible to intra-industry competition. In such industries, less significant data sets are generated than in the retail markets. In these industries, AI technologies are auxiliary in nature and are not aimed at creating new products, but at improving and optimizing intra-industry costs and other costs. In these industries, AI penetration will be smooth and gradual. Such industries include industry, industry for the extraction and processing of natural resources, energy and construction sectors, agriculture. But there are industries that operate in retail markets, when serving customers form large amounts of information, but do not have serious intra-industry competition. These are industries with state participation. Such industries are often prone to problems with poor quality and incomplete data, lack of unified infrastructure, insufficient training. Society and business, as well as government agencies at this stage should clearly understand that the AI industry is still new and is experiencing problems of its initial development, which also include the contradiction between the level of practical tasks that are set for developers of new technologies to accelerate their introduction to the market, and security threats that accompany the development of new technologies. New processes are associated with the creation of global arrays of information and data, which carries new threats and risks. For example, the leakage of data or their

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consolidation in private hands for the purpose of manipulating the person and society. Thus, the widespread introduction of control systems with elements of facial recognition and voice, which use AI, is aimed at global surveillance and data collection about human actions, preferences and tastes. Development of artificial intelligence technologies in face and voice recognition systems for smart services, including “smart city” technology. This technology is aimed at fast barrier-free access to events, search for wanted persons and missing people, support for loyalty programs without the use of club cards, control of employee movements and optimization of passenger traffic, audience Analytics for shops and cafes, analysis of the workload of stadiums or train stations, optimization of traffic flows and accounting of working time. At the same time, huge amounts of data about society are consolidated in the hands of private companies (Evstafiev 2017). So, in China, there is a boom in the installation of facial recognition systems and voices. They are installed everywhere, from crowded areas-train stations and airports, to specific places-garbage cans and storage rooms. The question arises about the need to regulate the activities of private companies in this market in order to protect human privacy. Thus, new AI technologies are not only opportunities for economic growth, but also serious social and economic risks (Karpunina et al. 2020). The introduction of new technologies will be synchronized with the processes of economic restructuring at the global and regional levels, they will be nonlinear, multifactorial, with the risk of transition of these processes into the zone of global crisis or social explosion. At the same time, there is a high probability that speculative capital in this industry will be directed not to solving global problems of mankind, but to creating new products with a minimum practical return. Significant speculative investments will probably be detached from the real economy and there is a risk of an AI bubble similar to the cryptocurrency market boom. Also a serious risk is the risk of a global race to mass accelerated implementation of AI technologies in all sectors of the economy without a preliminary preparatory stage under strict state control. With such uncontrolled introduction of AI technologies into real sectors of the economy, the risk of disintegration of many existing chains of capital and resources flow within the industries of countries established by globalization will be created. The diversity of AI technologies within the same economic space is unacceptable, as this will lead to management distortions and errors in assessing the effectiveness of the process of introducing new technologies into existing economic processes and technologies. These processes of mass introduction of new technologies in many industries can lead to the formation of a global system of manipulation in social processes and lead to the establishment of total control over the person by the state and private corporations (Karpunina et al. 2019). Already in the near future, there may be a problem of complication of existing social services, including in health and education, which may have a risk of social conflicts. At the same time, the state should direct the vector of AI technology development from purely commercial projects to the vector of solving many social problems for strategic and qualitative change in the quality of human life.

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4 Conclusions/Recommendations As a result of the study, it was possible to reveal the specifics of artificial intelligence technologies, to characterize its components. The authors presented an assessment of the current state of the artificial intelligence market and analyzed the dynamics of its actual and forecast development, including in the context of sub-technologies. The study allowed to substantiate the importance of artificial intelligence technologies for economic growth and global changes in the economic landscape. The evaluation of the implementation process of artificial intelligence technologies in the global namespace: selected countries-leaders who will be able to strengthen its leading position in the future; countries that the introduction of artificial intelligence in production processes will provide opportunities for advanced development; countries that are lagging behind in development because of their rejection of the development and implementation of new technologies AI. The dependence of the projected level of penetration of AI technology in specific industries on the current level of coverage of industries with digital technologies, as well as the possible contribution of AI to revenue growth and revenues in the industry, is analyzed. The risks of economic and information security due to the introduction and development of artificial intelligence technologies are disclosed. It is proved that the risks of implementation in production processes and human activity technologies AI should monitor and anticipate their negative consequences, primarily through the mechanism of control for the “usefulness” of new technologies. It is proved that the key task of public administration is not only to stimulate the use of AI in economic activities, but also to regulate the vector of technology development in the direction of improving the quality of human life and well-being.

References Acemoglu, D., Restrepo, P.: Low-skill and high skill automation. NBER Working Paper, N 24119, December 2017 (2017) Arntz, M., Gregory, T., Zierahn, M.: The risk for automation of jobs in OECD countries: a comparative analysis. OECD Social, Employment and Migration Working Papers, no. 189 (2016) CBInsights: Top AI trends to watch in 2017 (2018). https://www.unrealengine.com/en-US/techblog/four-emerging-ai-trends-to-watch-in-2018. Accessed 1 Nov 2019 Chen, N., Christensen, L., Gallagher, K., Mate, R., Rafert, G.: Global economic impacts associated with artificial intelligence. Analysis Group (2016) Cronin, M.: Futurists’ report reviews dangers of smart robots. Pittsburgh Tribune-Review, 6 November (2009) Evstafiev, D.: Artificial intelligence as a focus of economic development: risks and potential (2017). https://www.if24.ru/ai-fokus-ekonomicheskogo-razvitia/. Accessed 7 Oct 2019 IDC: IDC FutureScape: Worldwide IT Industry 2019 Predictions (2019). https://www.idc.com/ getdoc.jsp?containerId=US44403818. Accessed 12 Nov 2019

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International Telecommunication Union (ITU): Assessing the Economic Impact of Artificial Intelligence (2018). https://www.itu.int/pub/S-GEN-ISSUEPAPER-2018-1. Accessed 20 Sept 2019 Karpunina, E.K., Konovalova, M.E., Shurchkova, J.V., Isaeva, E.A., Abalakin, A.A.: Economic security of businesses as the determinant of digital transformation strategy. In: Popkova, E., Sergi, B. (eds.) Digital Economy: Complexity and Variety vs. Rationality. Lecture Notes in Networks and Systems, pp. 251–260. Springer, Cham (2020) Karpunina, E., Shurchkova, J., Konovalova, M., Levchenko, L., Borshchevskaya, E.: Opportunities of advanced development of the digital economy ecosystem. In: Vision 2020: Education Excellence and Management of Innovations through Sustainable Economic Competitive Advantage Proceedings of the 33rd International Business Information Management Association (IBIMA) Conference, Granada, Spain, pp. 7454–7461 (2019) Khatchadourian, R.: The Doomsday Invention: Will artificial intelligence bring us utopia or destruction? The New Yorker, 23 November (2015) McCarthy, J.: Recursive functions of symbolic expressions and their computation by machine. Commun. ACM 3(4), 184–195 (1960) McKinsey Global Institute: Artificial intelligence: The next digital frontier? (2017). https://www. mckinsey.com/de/*/media/McKinsey/Locations/Europe%20and%20Middle%20East/Deutsch land/News/Presse/2017/2017-06-20/170620_studie_ai.ashx. Accessed 5 May 2019 McKinsey Global Institute: AI, automation, and the future of work: Ten things to solve for (2018). https://www.mckinsey.com/featured-insights/future-of-work/ai-automation-and-thefuture-of-work-ten-things-to-solve-for. Accessed 13 Nov 2019 PwC: Sizing the prize What’s the real value of AI for your business and how can you capitalise? (2017). https://www.pwc.com/gx/en/news-room/docs/report-pwc-ai-analysis-sizing-the-prize. pdf. Accessed 15 Oct 2019 Russell, S., Hauert, S., Altman, R., Veloso, M.: Robotics: ethics of artificial intelligence. Nature 521(7553), 415–418 (2015) Spiezia, V.: Measuring the demand for skills in the digital economy. OECD (2016) Tractica: Virtual Digital Assistants for Enterprise Applications (2019). https://www.tractica.com/ research/virtual-digital-assistants/. Accessed 19 Oct 2019 World Economic Forum: The Future of Jobs Report 2018 (2018). https://www.weforum.org/ reports/the-future-of-jobs-report-2018. Accessed 13 Oct 2019

Contemporary Trends in International Maritime Organization’s Navigation Safety Activities A. V. Grinevich(&) and S. M. Kopylov RUDN University, Moscow, Russia {1042180276,kopylov-sm}@rudn.ru

Abstract. This article is devoted to the problems and challenges which face upto-date navigation and examines some issues within the work of the International Maritime Organization aimed at improving safety in this area. The authors are primarily concerned in the problem of security in the broadest sense of that term: in the light of environmental protection, the operation of vessels, in the context of minimizing negative consequences and damages; the conservation of property and vessels themselves, undoubtedly, in such matters as keeping crewmembers, passengers, personnel and third parties’ life and their health safe. All of these aspects mentioned above should be taken into account in the implementation of activities undertaken by the International Maritime Organization because only fulfilling all these conditions, some improvements and results can be brought about. The authors come to the conclusion that the use of modern technologies, countries’ fruitful international cooperation, the exchange of experience will help to minimize the negative consequences, improve the effectiveness of measures aimed at improving safety in the field of navigation. The following research objectives have been set for in the research process and they are the following: studying the current methods and identifying the most effective and fruitful among them, analyzing existing conventions, instruments, provisions, resolutions, strategic plans in order to identify gaps which would be worth paying attention to, as well as recommendations to eradicate problems have also been highlighted. Keywords: International Maritime Organization Contemporary trends JEL Code: K320


Ecology
Safety



K330

1 Introduction In this article we would like to demonstrate some applications of modern tools used by the International Maritime Organization to seek a solution to the problems which arise in the field of navigation.

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 226–232, 2020. https://doi.org/10.1007/978-3-030-47945-9_24

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One of the important tasks is safety of ships and cargo. However, the safety of human lives is considered to be the essential priority. It is important to enhance safety for ship crew, seaport and service personnel, passengers, and other people. First of all, safety of navigations should guarantee the preservation of peoples’ life and health. In addition to this, shipping and maritime activities do harm to the environment, marine life, thus, the concept of safety also comprises/covers minimizing the impact of environmental harm. Resolutions, protocols, reports of the sessions and plenary settings as well as the activities of the International Maritime Organization (IMO) aimed at improving safety in the light of advances in technology (advances in aerial navigation, improvements in monitoring ship ballast water and harmful anti-fouling systems and etc.) will be under our consideration.

2 Materials and Methods The methodological basis of the study involves a combination of general scientific (dialectical, historical, inductive, deductive, analytical, synthetic) and private scientific methods (formal legal, comparative legal, interpretative, statistical, procedural and dynamic).

3 Results In 1914, after one of the greatest catastrophes of the twentieth century, the sinking of the British transatlantic ship, passenger liner Titanic1, a Special International Conference was convened, which resulted in the adoption of the International Convention for the Safety of Life at Sea, now also known as SOLAS-74. Consequently, during the First and Second World Wars various types of organizations were established to assume control of the activities carried out in the world’s oceans and seas, however, such organizations, basically, met military interests. Towards the end of the Second World War the UN organization was gradually introduced with the objective of maintaining peace and stability. In 1967 one of the largest oil tanker’s (Torrey Canyon) wreck occurred off the coat of Great Britain resulted in environmental disaster led to immense harm to the environment and negatively affected the coastal zone, significantly reduced bird and sea inhabitants’ population. Efforts to eliminate the consequences of this catastrophe had been carried out for a long time and a considerable amount of resources, both human and financial ones were spent. Torrey Canyon accident was a starting point for the development and adoption of the International Convention for the Prevention of Pollution from Ships, MARPOL

1

The Titanic was a British passenger liner that sank in the North Atlantic Ocean in 1912 after the ship struck an iceberg.

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73/78. It was adopted on 2 November 1973. Torrey Canyon accident has had a large impact on rescue operations at sea2. Since the establishment till nowadays the International Maritime Organization is considered the key international, intergovernmental organization in establishing safety and reliability standards on international environmental transportation. Navigation is supposed to be the most international and at the same time the most dangerous among all economic sectors in the world. Despite the danger of navigation, the demand for its use is constantly growing and never plummets. However, due to the high growth rate in the industry and taking into account the fact that all measures taken are subject to a certain approval and adoption procedure, the relevance of some of them can be forfeited. Moreover, some new problems, that have to be addressed, arise over time. It has always been recognized that the best way to improve safety at sea is to develop international rules that all countries should follow. The International Maritime Organization (IMO) is a specialized agency with very broad competencies; its work covers all activities in the oceans and seas worldwide including drafting of the said regulations. In view of wide range of the agency’s activities several specialized committees and subcommittees responsible for more narrowly focused actions are established in order to tackle some issues more quickly and efficiently and in, addition, to implement quality work at IMO. Some examples can be: Legal Committee, Marine Environment Protection Committee, Facilitation International Maritime Traffic Committee, Maritime Safety Committee, MSC and etc. Such a complex and diverse international mechanism, which is the Marines/the Navy, cannot operate smoothly, without errors in functioning: according to statistics (published by the European Maritime Safety Agency (EMSA)) on accidents at sea for the II quarter of 2018, the number of marine accidents decreased by comparison with the I quarter of 2018 and the II quarter of 2017. As the media reported - in April-June 2018, a total of 639 incidents were recorded at sea, in the corresponding period last year – 836, in the first quarter of 2018 – 704. The National Maritime Union of Russia3 (seafarers take part in this union) underlined the fact that despite the decrease in the total number of marine incidents, statistics on maritime-related mortality rates and people who are injured is growing, which means that ship owners should provide special care for the crew members, and seafarers shall satisfy the following requirements: to comply with safety regulations; to be timely instructed in the tasks they are expected to perform, to wear overalls and to act with extreme caution while performing work on a navy vessel. The causes of casualties on board the vessels can be different. The impact of external factors (such as changing weather patterns, elements, involvement of marine life) play an important role. However, most accidents occur because of the so-called human factor, they are stemming from human errors. Such human factors as incompetence, carelessness, arrogance and even banal fatigue can play a decisive and sometimes deplorable role in arbitrarily causing maritime distress situations. Even the

2 3

The Torrey Canyon oil spill was one of the world’s most serious oil spills. I’s a common practice among the national shipping companies.

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most insignificant mistake made by the master or sailor of any vessel may become fatal and lead to disastrous consequences. Amid carrying out formal procedures for processing and documenting cargo and vessels the delay of which a little more than the allotted time may cause an accident. Procedures and formal arrangements are regulated by the Convention on the Facilitation of International Maritime Navigation. The work of IMO aimed at enhancing the international cooperation and exchange of successful experiences in the prevention of accidents or mitigation of their consequences. In particular, the Strategic plan adopted by the IMO Assembly for the next six years (2018 to 2023) is as follows: Mission statement: “The mission of the International Maritime Organization, as the United Nations specialized Agency, is to promote safe, reliable, environmentally friendly, efficient and sustainable delivery through cooperation. This will be achieved through the adoption of the highest practical standards of safety and security at sea, the effectiveness of navigation and the prevention and control of pollution from ships, as well as by addressing relevant legal issues and the effective application of IMO instruments with a view to their universal and uniform application.” Promotion of a shared vision, from which it appeared: «IMO will maintain its leadership role as a global regulator authority of navigation, is to promote greater recognition of the importance of the sector and ensure the development of navigation, by while addressing problems associated with constant development of technology and world trade (Inshakova et al. 2016), and the need for the implementation of the Agenda for sustainable development for the period up to 2030. Development» To achieve this objective, the IMO will focus on the review, development, implementation and compliance with IMO instruments in its activities on identification, analysis and resolution of issues and supporting member States in their implementation of the Agenda for sustainable development for the period till 2030. General principles which should be taken into account across the work of the Organization; Strategic lines SD 1 To improve the implementation SD 2 To generate/Promote new and advanced technologies into the regulatory framework SD 3 To respond to climate change SD 4 To participate in the management of the oceans SD 5 To enhance global cooperation and security of international trade SD 6 To ensure the effectiveness of regulation SD 7 Ensure organizational effectiveness Parameters of effectiveness to assess the performance of the Organization in relation to strategic directions; and a list of activities which are about to be undertaken by the Organization for a two-year period, thereby providing a link between the organization’s strategy and the activities of the various IMO bodies and the budget.”

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The International Maritime Organization (IMO) - is a specialized agency with very broad competencies, it comprises specialized committees and subcommittees which carry out activities in the field of maritime safety (Maritime safety Committee), provide technical cooperation (Technical Cooperation Committee), protection of marine flora and fauna (Marine Environment Protection Committee) and such subcommittees as Human Factors Subcommittee, Certification and Watchkeeping Committee for Seafarers; Subcommittee on Navigation, Communications and Search and Rescue; Subcommittee on Pollution Prevention and Response; Subcommittee on Ship Systems and Equipment. These units on a regular basis hold sessions, trainings and conferences, which develop measures in response to the most acute problems. In particular, the Maritime Safety Committee (MSC) held its 101st session, the agenda of which included maritime autonomous navy surface ships, polar navigation, target standards and others. A number of draft amendments have been adopted, including amendments to mandatory codes relating to the transportation of potentially dangerous goods: the MSC is considering a draft consolidated edition of the International code for the carriage of bulk materials/powdered products by sea (IMSBC Code) and a comprehensive set of draft amendments to the International code for the construction and equipment of vessels carrying dangerous chemical goods in bulk (IBC code). The issue of polar navigation was considered separately. Navigation in the polar zone has its own specificity and differs from navigation in other areas of the world ocean. With regard to polar navigation, the MSC plans to approve the draft guidance for navigation and communications equipment for use on vessels operating in polar waters, and will consider how to move forward with the development of requirements for vessels operating in polar waters but not currently covered by the Polar code. The issue of fuel safety was considered. A number of amendments to the navigation equipment performance standards related to the development of electronic navigation were approved. At the conference held from 29 April till 3 may 2019 the Subcommittee on Human factor, Certification and Watchkeeping was proposed to review: a new draft model of further training courses for masters, officers and other personnel on vessels who are subject to the International Safety Management Code of vessels using gases and other low-temperature fuels (IGF Code); basic training for masters, officers and other personnel on vessels in accordance with the IGF Code; passenger safety, cargo safety and hull integrity training; and the draft of the revised model courses of advanced training in the field of firefighting. The Subcommittee also considered the issue of transformation of IMO model courses into e-learning versions to optimize financial and time resources. Besides, the Subcommittee continued its review of the International Convention on Standards of Training, Certification and Watchkeeping for Fishing Vessel Personnel (STCW-F). This is a key element among the international instruments on the safety of fishing vessels for the preparation of the relevant Code. Under the agenda item “the Role of the human factor”, the Subcommittee made a decision to develop guidelines/implementation manual in vessel accidents which comprise educational forms of training for seafarers, taking into account the negative experiences of the past.

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The key IMO meeting on environmental protection was held on 13–17 may 2019. The main agenda item was the reduction of greenhouse gas emissions from vessels. Other important items on the agenda include: the adoption of amendments to MARPOL 73/78 to strengthen the requirements for the discharge of high-viscosity substances, such as certain vegetable oils and paraffin-like cargoes; the implementation of the IMO action Plan for the control of marine plastic debris from ships; the implementation of the International Convention for the control and management of ships’ ballast water and sediments; and the adoption of draft amendments to the International Convention on the control of harmful anti-fouling systems on ships, including measures for the control of biocidal products. At the conference on oil spill in the Adriatic Sea (ADRIASPILLCON 2019), organized with the support of IMO on 28–30 May, 2019 in Opatija (Croatia), it has been proven that the prevention of any pollution causality or accident of the marine environment requires constant exchange of views, communication and collaboration. Regional and subregional emergency planning is an effective way to share resources and experience. The conference provided an opportunity for States to discuss the level of region’s risk management preparedness to respond to oil and chemical pollution of the marine environment, as well as to consider reducing the risk and challenges of (further) Maritime operations in the Adriatic Sea. At that time, training was conducted in Singapore to assist in the implementing key IMO treaties on the protection of the marine environment. Within the framework of MEPSEAS project launched last year, participants were trained how to apply IMO measures to protect the seas in the region. The training focused on the provisions of the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78); the International Convention on the Control of Harmful Anti-Fouling Systems in Ships (AFS) Convention; Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter; and International Convention for the Control and Management of Ships’ Ballast Water and Sediments (BWM).

4 Conclusion/Recommendations As we can see, the international Maritime organization is very active in the development and adoption of measures to improve safety in the implementation of navigation, both in the technical part (training of vessel personnel, training in emergency settings, improvement of equipment), and in terms of environmental protection (prevention of negative consequences, prompt and robust elimination system of such consequences). To sum up, the authors of this article suppose that the IMO committees and subcommittee should also give greater emphasis to the Convention on Facilitation of International Maritime Traffic (FAL). The last amendments to the Convention were drafted three years ago. Since then, due to the active and global computerization, mass development of technologies which at the same time resulted in a tremendous acceleration in the pace of technological innovations that can further facilitate the procedures of registration and unify them. Such key concepts as simplicity, understanding and

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uniformity of different procedures will have a beneficial impact on all areas of maritime navigation. It may also make sense to review the procedure for decision-making, adoption and ratification of amendments in such a way that during the Committees’ review they still remain relevant but do not become obsolete. Acknowledgments. The publication has been prepared with the support of «RUDN University Program 5–100».

References Abashidze, A.Kh., Vasilev, Yu.G., Solntsev, A.M.: Mezhdunarodnoe ekologicheskoe pravo: Dokumenty i kommentarii. Vypusk 3. Ekologicheskie prava cheloveka. RUDN, Moscow (2010) Inshakova, A., Frolov, D., Kazachenok, S., Maruschak, I.: Institutionalization of intellectual property on resource-saving technologies and materials: a comparative institutional study of USA and Russia. J. Adv. Res. Law Econ. VII(6(20)), 1373–1382 (2016). Fall 2016 Canada: The National Pollutant Release Inventory (2018). http://www.ec.gc.ca/inrp-npri/default. asp?lang=En&n=4A577BB9-1/. Accessed 03 May 2019 Decision. http://legal.un.org/icjsummaries/documents/russian/208.pdf. Accessed 05 May 2019 IMO work. http://www.imo.org/en/OurWork/Pages/Home.aspx. Accessed 01 May 2019 «The world merchant fleet - statistics from Equasis». http://www.emsa.europa.eu/publications/ technical-reports-studies-and-plans/item/472-annual-statistical-report-on-the-world-merchantstatistics-from-equasisics-from-equasis.html. Accessed 05 May 2019 Rechtschaffen, C.L.: Shining the spotlight on European Union environmental compliance. Pace Environ. Law Rev. 24(1) (2017) Resolutions. https://docs.imo.org/Search.aspx?keywords=A%2030%2FD. Accessed 05 May 2019 Flammable oil with the «Torrey Canyon». http://wordweb.ru/sto_kat/79.htm. Accessed 03 May 2019 United Nations, International law. https://www.un.org/ru/sections/what-we-do/upholdinternational-law/. Accessed 03 May 2019 U.S. Toxics (2018). http://www.epa.gov/tri. Accessed 03 May 2019

The Use of Information and Communication Technologies in the Practice of Special Education Svetlana E. Uromova(&), Elena Y. Medvedeva, Elena E. Dmitrieva, Elena A. Olkhina, and Elena V. Zhulina Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. Materials of this article are devoted to the use of information and communication technologies in the practice of special education, as the basis for building a new information culture of Russian society. Theoretical analysis of the problem is presented, and ICT competences of future teachers are revealed. The article pays attention to the use of digital technologies in the activities of students with disabilities. The goal of our work was the formation of a data bank of digital technologies used in special education. The basis was prolonged observation in organizations of the educational process special corrective schools in the city Nizhny Novgorod on the use of computer programs, informative analysis of educational programs of pedagogical universities from the perspective of formation of ICT competences of future teachers, survey and conversations with practical workers of special education. In the focus of attention are presented results of the experimental study, reflecting the content in working with different categories of students with disabilities. The problem areas associated with the need to change the form of information presentation in order to simplify communicative, cognitive and social competences of students with disabilities The result of the study was the analysis of specifics of the use of information and communication technologies with different categories of students with disabilities. Keywords: Information and communication technologies
Special education
Information culture JEL Classification Codes: I 120

1 Introduction Considering the problem of computerization of education, it is necessary to note the fact of rapid growth of the share of used digital technologies in activities of not only a teacher, but also students themselves, that is confirmed by the very form of final state © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 233–238, 2020. https://doi.org/10.1007/978-3-030-47945-9_25

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attestation at the stage of obtaining secondary general education, assuming, and including passing tests in the on-line mode. According to E.I. Mashbits, the use of a computer in the learning process significantly expands possibilities of presentation of educational information taking into account interests of students and their individual capabilities, increases the degree of activity of involvement of all subjects of interaction in solving the educational problem. The need for an independent search of knowledge in the course of working with various sources of information forms students not only new knowledge but also a reflective assessment of their own actions (Mashbits 1988). The use of media technology products allows a teacher to exercise flexible management and control of the educational process at all levels of education (Ponachugin and Lapygin 2018). However, considering the possibility of using digital resources in the field of special education, a situation looks somewhat different, due, in our view, to contradictions between understanding of the need and effectiveness of digital technologies for the education for persons with disabilities, and the lack of proper practical and knowledge experience of teachers and technologies maximizing the potential of these resources.

2 Methodology The basis of our study was prolonged observation of organizations of the educational process of special correctional schools in Nizhny Novgorod which use computer programs; meaningful analysis of educational programs of pedagogical universities from the perspective of formation of ICT competence of future teachers; survey and conversations with practical workers of special education.

3 Results Leading specialists of the Institute of Correctional Pedagogy of RAO (Galanina et al. 1996) notes the need to develop new teaching technologies that would allow to achieve the maximum possible results in the field of correction, rehabilitation and education of children with disabilities based on their special educational needs. Computer programs that are available for mass use in the field of special education have already been established. At the same time, a review of existing digital technologies used in special education shows the existence of differences both in the purpose of the resource and technology used in training (Malofeev and Goncharova 2000). In some cases we are talking about ready-made educational and methodical complexes, such as the training program “The world behind your window” (Goncharova et al. 1996), designed to expand knowledge about the surrounding world of senior preschoolers with various developmental disorders or “Games for the Tiger”, which is a complex speech therapy program for correction of different aspects of speech activity in children of senior preschool and primary school age with disabilities. In other cases, it is a corrective work software. Directly used in the course of interaction of specialist and person and providing conditions for formation of individual skills and abilities.

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In cases where it is necessary to change the form of presentation of information in order to simplify formation of communicative, cognitive and social competences of persons with disabilities, it is advisable to speak only about a technical side of the question: about software that allows to carry out analog-to-digital conversion (file format conversion) with preservation of the basic logical-structural content of information. This use of computer technologies is applicable, especially when a traditional channel of reading the information presented on a screen is not available. Recently, distance learning has been actively developed for such a category of students with disabilities as children with autism spectrum disorders (ASD). Concerning this group, it should be noted that an exchange of information with others through a mediator, in absentia, allows in many cases to avoid both problematic behaviors and take into account peculiarities of perception of themselves and processing of information in an individual and comfortable way for them. The teacher, selecting material and visualizing it with the help of various illustrative material, varying in complexity, can form an algorithm of translation and sorting at remote distance information of different modality for the formation of adequate images and models in the knowledge system of a learner with ASD. The use of Power Point and interactive whiteboard allows you to use tasks of varying degrees of complexity in class conditions that do not require direct interaction between a teacher and student: in this case, the most demanded tasks for classification, sorting, and ranking. Successfully proved itself in the practice of teaching persons with ASD method of video modeling as a sample method of adequate execution of the task or sequence of behavior, which needs to be taught to a child with autism. Studies carried out by Christie et al. (2000) proved a greater efficiency of using video modeling in comparison with real modeling of situations involving people when it comes to the speed of generalization of skills of social behavior in situations of the introduction of new incentives, situations, changes in habitual stereotypes and routines. The reason for success is largely related to capabilities of the technical side of this method: ability to edit a video fragment using Vegas Video, Microsoft Movie Maker programs by time, selecting a material to be viewed, to an ability to use titles as verbal advice, the use of audio accompaniment with a change of person acting as a commentator. Finally, a video recorded on an electronic media can be viewed unlimited number of times, as opposed to the situation of real modeling, being able to purposefully change and control actions, replicas, and development of the situation itself, thereby gradually forming the ability to flexibly change routines (Higby et al. 2012). However, despite a wide representation of scientific and practical developments and availability of Internet resources, the problem of using correctional educational institutions in mass practice remains relevant. In our opinion, the negative role in this process is played by the presence of time shortage against labor intensity necessary to search and select, filter the necessary information and its subsequent transformation for students with disabilities format. Another factor impeding the active introduction of information technologies and digital resources in the daily educational practice of special education is the lack of staff corrective schools with the necessary complete set of equipment, lack of constant updating of versions of the software already available. Analysis of the age structure of correctional educational institutions of Nizhny Novgorod region shows the dominance among teachers of pre-retirement age, which is

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significant is reflected in the initial information and communication readiness to change not only the format of training but their thinking (Uromova and Rastoropov 2018). Thus, 38.8% of respondents answered the question about completion of advanced training courses in the field of ICT in the educational process in last three years, while 38.8% of respondents answered positive, while 100% of teachers and specialists experience difficulties of various nature. The absolute majority (100%) of participants recognize the need to improve their own ICT competence. The majority of teachers (80.1%) have insufficient methodological support for the use of these technologies in the correctional and educational process, as evidenced by answer “methodological assistance is provided not in full, only as far as appeals” as preferred, while asking “Is your educational organization created conditions for the use of ICT in the educational process?” among the 5 options, “yes, full” and “yes, mostly created” were chosen as priorities, individually, for 44.9%. Only 7.1% of respondents consider the technological capabilities of an institution to be insufficient to use ICT as a mandatory component of the technology side of the lesson. As the main argument against the first option were called “teacher’s lack of access to the Internet (56.8% among those who chose this variant)” and “absence in a classroom of the corresponding equipment (relative index 34.1% and absolute 25.5%). This may indicate an understanding of the importance and necessity of updating conditions for improving the quality of educational services through equipping educational institutions with the necessary equipment. The lowest indicators were observed in the assessment of knowledge competence of teachers on issues of existing technologies used in the education of children with disabilities. So, to the question, “Are you familiar with ICT technologies and software used in teaching children with disabilities”, 88.7% of respondents answered positive, but to the next question “list them”, only 35.7% named 1–2 technologies of the above mentioned earlier, while all teachers were employees of educational organizations implementing AEP for students with sensory disorders and motor pathologies. Other survey participants named Power Paint, Word, Microsoft Office Excel, Vegas Video, which relate to the standard set of Windows but not specifically designed for teaching children with disabilities. Among the most familiar software were Smart Notebook, the program “Games for the tiger”, “Tonus”, “Visible speech”, “Microsoft Word Pad”, which seems to us rather narrow on compared to publicly available software. Extreme variability of students with disabilities, due to a different structure of the defect and different educational needs, causes unequal opportunities as technologies of use digital pedagogy products and ICT tools. This assumption may be supported by the fact that the vast majority of teachers who took part in the survey note that there are various difficulties in using these programs. Comparing answers of teachers teaching different categories of children with disabilities, it can be stated that the most successful in the field of application of modern educational tools is the experience of using computer programs in training of persons with sensory disorders, which is caused by the direct need for means of alternative communication for the formation of communicative competences in the system of universal educational actions. The use of ICT in the education of people with autism is seen as one of the basic tools that act as a mediator between subjects of social and

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communicative relations, that is, in the area where are the most difficulties. However, with correct and well-organized approach to management of the process of computer modeling of objects and phenomena in any sign forms in all the above cases it is possible to achieve the maximum possible success of mastering universal educational activities and the whole set of competencies necessary for subsequent independent inclusion in modern society and adaptation to rapidly changing conditions on the basis of global informatization. However, there is a category of persons for whom independence is not a criterion of readiness for subsequent personal autonomy. In the case of mental retardation, we assume the formation of not universal, but only basic educational actions. This is due precisely to violations of an arbitrary component and the lack of adequate and rational search and use of various types of information, its selection, reprocessing, critical assessment and, if necessary, subsequent transformation. Therefore, when it comes to a new generation of digital pedagogy, it is more appropriate to refer not to the system but to elements of a system that will concern, especially forms of presentation of information and training on how to use it in specific types of tasks. In the latter case, we are talking about a rather narrow range of tools, among which it has established itself as a universal Smart Notebook - a program that includes different ways of transmitting information, linking, connecting and integrating information about the object online with direct output of results in a form accessible to children with mental disabilities and demonstrating in out of possible transformations of actions that change performance, demonstrating variants of correct (adequate) solutions. Such limited ways of dealing with information by students can be compensated by teachers with investments, sites, and other electronic products during the preparation stage lessons. Lessons in order to use new ways of qualitative individualization of training based on design programs.

4 Conclusion Thus, the study made it possible to state among dominates of difficulties preventing the dissemination of computer technologies into the practice of special education at high quality level, lack of a single interface and standardized programs that allow them to be used as a template, an algorithm that would facilitate the creation of their own electronic educational product with minimal time costs for education of children with disabilities regardless of deviation and geographical location of the educational institution. In addition, there are no available methodological recommendations, training programs that provide methodological support to teachers at the stage of computer literacy development (primarily technical parties) in the process of self-education of teachers. The problem areas identified in the course of our research indicate the need to expand the list and spectrum of ICT use in special education, as well as to take these data into account in the preparation of students’ defectological directions of training, including the creation of models of inclusive educational space of the university.

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References Bryksina, O.F., Krupoderova, E.P., Krupoderova, K.R.: Design course “Information Technologies in Education” in the context of the introduction of professional standards of a teacher. Vestnik of Minin University, no. 1 (2016). https://vestnik.mininuniver.ru/jour/article/view/ 138 Colin, K.K.: On the image structure of the educational field “Informatics”. Informatics and Education, no. 10 (2000) Royal, T.K.: “Visible speech”: ten years in Russia. Defectology, no. 4 (2001) Kuzmicheva, O.A.: Tonus: methodological manual. The development and restoration of motor function, the method of functional biocontrol. NPF Amalthea, SPb. (2015), 67 p. Kukushkina, O.I., Royal, T.K., Zelenskaya, Yu.B.: Information technology in pronunciation training: a manual for sign teachers and speech therapists. Polygraphservice, Moscow (2004). 160 p. Malofeev, N.N., Goncharova, E.L.: The position of IKP RAO in assessing the current stage of development of the state system of special education in Russia. Almanac Institute of Correctional Pedagogy of RAO, issue 1, p. 16 23 (2000) Mashbits, E.I.: Psychological and pedagogical problems of the computerization of education: (Pedagogical science of school reform). Pedagogy, Moscow (1988). 192 p. Ponachugin, A.V., Lapygin, Yu.N.: Virtual educational company environment as a means of organizing independent work of the university structure. Vestnik of Minin University, vol. 6, no. 4 (2018). https://vestnik.mininununiver.ru/jour/article/view/890/692 Samerkhanova, E.Kh., Imzharova, Z.U.: Organizational and pedagogical conditions for the formation of future teachers’ readiness for project activities in the context of digitalization of education. Vestnik of Minin University, vol. 6, no. 2 (2018). https://vestnik.mininununiver.ru/ jour/article/view/805 Smirnova, Zh.V., Krasikova, O.G.: Modern tools and technologies for assessing learning outcomes. Vestnik of Minin University, vol. 6, no. 2 (2018). https://vestnik.mininununiver.ru/ jour/article/view/870/682 Sokhadze, E.M.: Biological (biotechnical) feedback-monitoring and arbitrary control of the physical parameters of physiological systems in line with a computer. Sokhadze M.B. Stark. Perprint no. 239, Novosibirsk (1984). 43 p. Higby, T.S.: Promoting the use of evidence-based interventions for preschool children with autism. http://metodich.ru/sodejstvie-ispolezovaniyu-nauchno-obosnovannih-mervmeshateles/index.pdf Uromova, S.E., Rastoropov, A.V.: Designing variative educational and methodical complexes for educational subjects in a correctional school for students with mental retardation. International Educational Work in Educational Institutions, no. 6, S. 192–197 (2018). https:// applied-research.ru/pdf/2018/6/12317.pdf Christie, M., Lee, L., Freeman, K.A.: Comparison of video modeling in vivo modeling for teaching children with autism. J. Autism Dev. Disord. 30(6), 537–552 (2000)

Cluster Model in Medicine, Healthcare and Pharmacy as a Platform for Public-Private Partnership Ekaterina A. Pogrebinskaya1(&), Galina A. Rybina2 , Valentina V. Kuznetsova3 , and Nadezhda P. Tishkina4 1

4

Sechenov University, Moscow, Russia [email protected] 2 Bauman Moscow State Technical University, Moscow, Russia [email protected] 3 Moscow State University, Moscow, Russia [email protected] Moscow Financial and Industrial University «Synergy», Moscow, Russia [email protected]

Abstract. The article aims to analyze different types of clusters in medicine, healthcare and pharmacy. The General features of the business model optimal for biomedical cluster are systematized. The conclusion is made about the advantages of using the business model of the medical cluster for effective interaction within the framework of public-private partnership. Keywords: Biomedical and pharmaceutical cluster
Business model of cluster
Public-private partnership
Innovations
Synergetic effect JEL Code: 115


I18
O33
O35

1 Introduction The relevance of the topic is associated with a number of problems. These are the new challenges of economic development, reduction of state funding resources to support the social sphere, search for successful investment objects by private investors, and unprecedented opportunities for innovative development of medicine, health care and pharmacy. It is the cluster that appears to be a successful model combining resources and interests of all stakeholders. At the same time, the topic of public-private partnership and the issues of using it already have a significant theoretical basis and a retrospective of best practices. Understanding the biomedical cluster as a territorial concentration of clinics, specialized scientific and educational organizations, biotechnological and pharmacological enterprises, infrastructure facilities related to functional dependence and implementing joint projects makes the development of medical technologies and improving the quality of health care more effective. In accordance with the profile of activities, services or products can be identified: clusters of medical services, clusters of medical equipment and medical support, pharmaceutical clusters, clusters of biotechnology and innovation in health care. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 239–248, 2020. https://doi.org/10.1007/978-3-030-47945-9_26

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2 Methodology There is an objective phenomenon of penetration of economic relations in the sphere, traditionally regulated by moral imperatives, impatience, fundamental attitudes of the state. The cluster, being a conglomerate of interrelated and complementary economic entities, research and educational organizations, which are in a relationship of functional dependence in the process of production and implementation of innovations in a certain area, gives a synergistic effect from the concentration of various resources. In the modern economy cluster policy is an integral part of the economic policy of the state, it is aimed at creating conditions for competitiveness and effective interaction of participants for the formation and development of clusters in certain areas. Publicprivate partnership is an effective tool for solving a number of important socioeconomic problems, including improving the quality of patient care and the availability of expensive types of treatment, as well as the modernization of the information system, improving the level of qualification of medical personnel. These problems can be a serious motivation to find productive ways to solve them. As for the new challenges of economic development, Russia lags behind the leading innovative economies in most indicators of the impact of innovations on the economy and society, including the growth rate of labor productivity and life expectancy. The country has not yet become a global leader in high-tech markets, domestic products are characterized by insufficient competitiveness. In the US, in health care (generating 17% of GDP), asymmetric information and moral hazard problems mean that increased public spending results in little or no improvement in the health outcomes package (Cowen 2011). However, medicine and health care show good potential. Thus, the strategy for the development of medical science in the Russian Federation for the period up to 2025 focuses on the modernization of more than 50% of scientific laboratories and up to 100% of clinical units to levels that meet the requirements of good laboratory and clinical practices. This strategy attempts to capture the request of medicine and related branches of innovation: it is based on the Programme of fundamental research at state academies of Sciences for 2013–2020, approved by decree of the Government of the Russian Federation of 3 December 2012 No. 2237-R; National project «Health» aimed to solve urgent issues and adapt people to new conditions of life, and ecology. The purpose of the national project, which allocates more than 1.36 trillion rubles - increase the life expectancy of citizens by 2030 to 80 years. It is also aimed at reducing hospital mortality from acute coronary syndrome to 8%, from acute cerebrovascular circulatory disorders - to 14%, increasing the proportion of x-ray endovascular interventions for therapeutic purposes, conducted in patients with acute coronary syndrome, to the total number of survivors up to 60% (332,3 thousand). The fight against cancer in the framework of the National project involves an increase in the proportion of malignant neoplasms detected in the early stages to 63%, as well as an increase in the number of patients registered for five years or more, to 60%. The rate of one-year mortality of patients with malignant neoplasms should be reduced to 17,3%. Health and health expenditure per capita is one of the main indicators of quality of the health system observed by the world health organization according to established

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evaluation criteria. In Russia public-private partnership, the rise of the absolute average per capita standards of financing under the program of state guarantees (excluding expenses of the Federal budget): at the expense of budgetary appropriations of the respective budgets (in per capita) in 2019 – 3488,6 ruble (100% by 2018), in 2020 – 3621,1 ruble (103,8% by 2019), in 2021 3765,9 ruble (104% by 2020); at the expense of means of compulsory medical insurance (per insured person) in 2019 – 11 800,2 ruble (109,1% by 2018), in 2020 – 12 696,9 ruble (107,6% by 2019), in 2021 – 13 531,4 ruble (106.6% compared to 2020). Touching upon the problems of the investment crisis in particular in the financial sector and the crisis of confidence in the economy as a whole, it is impossible not to mention the potential of healthcare medicine and pharmacy as a full-fledged object of investment. Now the absolute value of the indicator of the contribution of the business sector in research and development Russia is comparable to Chile (32,8%), Greece (31,4%), Slovakia (25,1%), lower than Latvia and Cyprus (about 20%). This is 2–2. 5 times lower than most developed and fast-growing economies: Japan (78%), China (74,7%), the United States (64,2%), Germany (65,6%), France (55,7%), where business funds are the main source of funding for research and development. In a broad sense, projects implemented within the medical, biomedical, pharmaceutical clusters can attract potential investors by concentrating various resources on the front lines of medical science and implementing their achievements in practical health care; both complex and step-by-step integration of research and educational processes; transparency of efficiency criteria at the stage of project development (due to the quality and evidence of the results of medical research and independent examination of their results); personalization of funding for research projects; high degree and transparency of scientific competition in medical research. In addition, medicine and health care show significant results in marginality (12,8%), lagging behind only agriculture (20,3%), extractive industries (15,9%) and industrial production (13,5%). By the end of 2012, biopharmaceutical clusters managed to attract more than 50% of all investments in the field of pharmaceuticals and medical devices to Russia. Examples of major investment projects implemented by the founders of the Union of pharmaceutical and biomedical clusters are the construction of pharmaceutical production companies such as Novartis, STADA, Berlin-Hemi, General electric, the creation of seed investment projects with Johnson & Johnson, large research projects with Abbott, technology transfer and the creation of Pfizer laboratories. Russian companies such as Biocad Akrikhin, Sotex, Geropharm, NearmedicPlus and MIR-FARM, opened its new research laboratory and production technology parks and business incubators, farm - and biomedical clusters in St. Petersburg, Kaluga and Moscow regions. Biomedical and pharmaceutical clusters are innovative in essence: they use the relationship of innovative organizations, innovative equipment, model innovative services, infrastructure (information networks, research institutes, universities, technology parks). Emerging complementarity enhances the competitive advantages of medical and pharmaceutical companies and the cluster as a whole as the result of synergies additional benefits from intra-cluster competition and cooperation that arise due to the nature of interaction between firms of the cluster core with other supporting organizations involved in the cluster through vertical and horizontal linkages (Islankina et al. 2019).

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The main characteristics of clusters, a combination of which is based on the choice of a cluster strategy clearly manifest themselves in Russia. • geographical: the Kaluga pharmaceutical cluster is a good example of building a spatial cluster of global economic activity. Already at the stage of creation it includes 10 major international and Russian pharmaceutical companies: «Novo Nordisk», «Hemofarm» (structural division of STADA, as part of an international Group of Companies STADA AG), «Nearmedic Plus», «Berlin Chemie» (structural division of Berlin-Chemie AG, in the company of Menarini), as well as small and medium-sized pharmaceutical companies: «MIR-PHARM», «Obninsk Chemical and Pharmaceutical company», the Group of Companies «Medbiopharm», «BION», and Medical Radiological Research Center of the Ministry of health of the Russian Federation. At the moment, more than 50 sectoral regional entities participate in scientific and practical developments, and 16 companies and research organizations support funding. The cluster approach is a specific mechanism of territorial and inter-sectoral integration interaction, which can stimulate investment in the health sector. This is largely due to the fact that the formation of territorial clusters has a synergistic effect from the interaction of its participants, surpassing such an effect from the activities of vertically and horizontally embedded structures. • horizontal: project, bringing together several industries and research was the development of 3D Bioprinting Solutions. The Russian laboratory, which for many years has been developing a technology that allows to produce three-dimensional bioprinting, has extended its technology to print organs on high-tech 3D printers. The first demonstration of this project was held in the summer of 2017. Laboratory of the center of living systems of the National research University Moscow Institute of physics and technology combines the research chains of many laboratories: bioanalytics, special medical equipment, technology and pharmaceuticals of cellular and molecular technologies of genetics of aging and life expectancy, design of dosage forms, development of innovative drugs, sequencing and mathematical modeling of transcriptome, medical instrumentation, systems biology, translational research and personalized medicine and many others. • vertical: clusters may contain adjacent stages of the production process. At the same time, it is important which of the network participants is the initiator and final executor of innovations within the cluster, being at the beginning and end of the chain of creation and promotion of an innovative product. Thanks to close cooperation cluster in Nizhny Novgorod region of Russia (Sarov innovation cluster, the IT cluster in Nizhny Novgorod region, Nizhny Novgorod industrial innovation cluster in the automotive and petrochemical cluster of light industry of the Nizhny Novgorod region) in the mega-cluster «Integration. Technological industry 4.0», Russian and foreign industry clusters, developed and launched into mass production unique products: – neurofeedback vehicles (wheelchairs, cars, high-speed vessels); – exoskeletons and prostheses with integrated neural interfaces, system neurorehabilitation;

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– a wide range of gadgets (bracelets, contact lenses, implantable devices) and clothing with built-in sensors that allow remote collection of comprehensive information about the human condition; – individual implants for various purposes, made using 3D technologies; – world-class stationary equipment for treatment and diagnostics, developed on the basis of advanced scientific research. lateral: the cluster brings together different sectors that can provide economies of scale, and innovations are actively implemented not only in various areas of health, but also in the system of interaction between the doctor and patients. For example, the service «Teledoctor», recognized as the best startup in 2014, allows you to get remote advice from a specialist. The development Institute of «Special economic zones» has created a platform for four pharmaceutical clusters located in Tomsk, St. Petersburg, Moscow and Dubna (Moscow region); technology: a set of industries using the same technology (e.g., a biotechnology cluster). In the Kobe innovation cluster in Japan, the business Support Centre for Biomedical Research Activities (BMA) provides participants with the opportunity to use laboratories to study radioactive isotopes. In addition, the BMA allows cluster members to share the costs of animal testing by specialized companies (Collins 2008). The participants of the French biomedical cluster Lyonbiopôle can use its resources for their own research. focus: during the formation of the biopharmaceutical cluster «Severny» there was a concentration of small innovative companies, research organizations, production companies, carried out with the support of the Ministry of industry and trade of the Russian Federation, the Government of the Moscow region, the administrations of Dolgoprudny and Khimki. This has led to effective cooperation in more than twenty laboratories (including laboratory bioanalytica, special medical equipment, technology and pharmaceutics, cellular and molecular techniques, genetics of aging and life expectancy, design of dosage forms, etc.) In the cluster «North» are included the Fund «Skolkovo», Center for High Technology «Khimrar», the company «Akrikhin», «PROTEK», «Parsemeta», etc. quality: it is not only whether firms actually cooperate but also how they do so that is essential. The cluster of pharmaceutical and medical industry in St. Petersburg was established in 2010 in order to effectively address one of the priorities of the city Government for the development of the pharmaceutical and medical industry and biotechnology. To date, investment projects have been initiated to create laboratory complexes and pharmaceutical industries with a total investment of more than 29 billion rubles. The network of enterprises automatically stimulates the development of innovations, the creation of new drugs and medical equipment.

In all these clusters it is possible to obtain visible synergetic effects from the cooperation of the state and private initiatives: 1. Concentration of resources for complex development: qualified labor resources, scientific and technical base, industrial enterprises, training system, equipment and technologies. 2. Using the benefits of geographical location, development of regional infrastructure.

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3. Flexibility of the legislative base of the region, expanding aspects of the functioning of clusters and forms of interaction within the framework of public-private partnership, the growth of a variety of tax benefits. 4. Involvement of state development institutions in the implementation of programs for the development of innovative territorial clusters, expansion of forms of coordination in the promotion of cluster initiatives. Examples of the creation of pharmaceutical clusters in other developing and economically developed countries prove that the successful implementation of the project requires both the assistance of research centers and strong state support through a set of national targeted programs. So, in India the development of the pharmaceutical industry is regulated by industry programs: «Pharmaceutical research» (Drugs and Pharmaceuticals Research), «Program biotechnology industrial partnership» (Biotechnology Industrial Partnership Program), projects on development pharmaceutics (Open Source Drug Discovery, OSDD), which are implemented through the Ministry of science and technology of India. The same trends can be traced in China (Shanghai cluster «Zhangjiang»), Canada (Technological cluster «life Sciences» in Montreal), the Netherlands (network of biomedical institutions «Valley health», biotech Park Leiden) (Topleninov 2012). In the United States, more than half of enterprises work within clusters, and the share of GDP produced in them exceeded 60%. There are over 2000 clusters in the EU, employing 38% of its workforce. Danish, Finnish, Norwegian and Swedish industries are fully covered by clustering. For example, Finland, whose economic policy is based on clustering, during the 2000s occupies a leading place in the world competitiveness rankings.

3 Results The business model of a cluster can be represented as a tool that contains a set of elements and their relationship to each other, and allows the cluster to profit from its activities. Each of the described characteristics of the cluster determines its business model. This model includes ways to generate and directions of profit. Secondly, it includes the selection of the method of financing, methods and sources of investment of the cluster. Thirdly, an organizational scheme for the implementation of the theoretical business model is proposed: cluster infrastructure, key competitive advantages, benefits from placement and coordination. The infrastructure of the cluster allows implementing a comprehensive approach to support innovation: through infrastructure, support for startups, effective participation of universities. It is no coincidence that most biomedical clusters are located in the centers of concentration of world-class infrastructure facilities. Cluster organizations implement partnership agreements with them, providing, among other things, special conditions for startups (exemption from membership fees, have free access to services). Young innovative companies are important for clusters as a source of breakthrough non-standard solutions at the intersection of healthcare and high technologies. The task of a cluster organization is to properly assess their potential and help realize it. The

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implementation of innovative projects in the vast majority of biomedical clusters is based on the intellectual base of universities, which are almost always among the participants, and in some cases are the initiators of the creation of clusters. The analysis of functioning of clusters of medical, biomedical, pharmaceutical orientation allowed to reveal necessary elements of business model of private-public partnership. 1. Development. Conducting joint R & d, including the research base of educational institutions of higher education. R & d in the framework of small innovative organizations created on the basis of educational institutions of higher education. The acceleration of innovations in Russia requires ensuring the competitive qualities of goods, updating products by manufacturers, great interest in introducing innovations by participants, as well as high innovation activity. These characteristics are important for evaluating innovation. 2. Supply. Formation of procurement pools to reduce prices for widely used materials and components. Formation of supply chains within the cluster based on the analysis of the capabilities of its participants. Involvement of specialized logistics organizations in the cluster. Localization of production of components based on the needs and capabilities of the organizations of the corresponding geographical center. 3. Production. Exchange of information on production opportunities and needs of cluster members, implementation of joint projects. Building production chains within the cluster through rational separation and optimization of technological operations. Building a chain of full cycle product development: R & d - pilot production batch - production. Creation of conditions for cooperation and interaction between Russian and foreign specialists, attraction of foreign investments. 4. Sale. Formation of complex offers (for example, registration of medical and obstetric points) a full set of the equipment and medical furniture. Creation of a collective sales network. Lobbying the interests of the cluster in the framework of state orders. 5. Marketing. Organization of joint marketing research. Exchange of positive experience. Collective participation in exhibitions. 6. Service. The creation of shared service centers (where possible product). It is advisable to note the factors contributing to the potential interest of the private party in participation in clusters in Russia, although they are universal, and manifest themselves in the world everywhere: • • • •

increase in morbidity and an aging population; the development of medical insurance system; the development of health infrastructure in Russia; the need to implement and achieve the declared health indicators of the population of Russia, provided for by the State program «Health Development».

The main weaknesses of the cluster are associated with the complexity of commercialization of scientific developments and registration (re-registration) of medical products, low level of industry marketing, insufficient communication with end users, low volume of investment in the biomedical industry. The business model at the

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development stage allows to identify the weaknesses of the cluster and propose preventive measures and measures aimed at improving the efficiency of interaction between private partners and the state. We can propose an algorithm to solve typical problems. 1. Lack of marketing information (customer needs, prospective market segments, conditions for entering foreign markets, opinions of all stakeholders): • targeted training and retraining of specialists-marketers taking into account the specifics of the biomedical industry; • closer cooperation with representatives of medical organizations, industry experts and representatives of governmental and commercial organizations, the procuring of medical equipment; • organization of joint marketing research (where possible), involvement of specialized marketing companies; • cooperation foreign industry clusters; • involvement in the cluster of the consumers. 2. Difficulties in determining the commercial prospects of scientific developments: • market and technological trends; • the formation of expert councils on technological directions, the choice of the most promising projects; • cooperation with industry venture capital funds; • preparation of sectoral innovation brokers; • cooperation with foreign industry clusters, specialized international organizations that support collaborative R & d; • research and development with foreign partners; • conducting specialized medical and pharmaceutical foresights. 3. Difficulties with registration and re-registration of medical devices • lobbying for the creation of interregional and international certification; • the development of a database for pre-clinical and clinical trials; • a specialized contract research organization. 4. Lack of sites for the organization of new production or expansion of existing • the development of technical specifications for platforms, search platforms with involvement of relevant structures of the state; • use free production areas of other cluster members; • the creation of specialized technoparks and business incubators. 5. Lack of investment • cooperation with industry venture capital funds; • insurance, hedging and guarantees for investment projects to increase their attractiveness; • attracting government support in the form of grants, concessional loans, grants; • bond issue and IPO in the section high-tech companies on the exchange.

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6. High share of imported components • identifying the need for components, participation in trade order for import substitution to specialized organizations; • resolution of conflicts of interests of large and small organizations; • integration of small and medium-sized organizations in the supply chain importsubstituting large organizations in the framework of cluster cooperation. 7. Shortage of qualified specialized personnel (specialists in the field of foreign economic activity, project managers with medical education) • targeted training and retraining of specialists taking into account the specifics of Biomedicine, pharmacy and health; • organization of professional foresight with the participation of all stakeholders in the cluster. 8. Technological lag and relatively low productivity in comparison with foreign competitors in a number of enterprises • re-production on the principles of «Technological industry 4.0»; • the creation of joint ventures with foreign partners, organizations and research centers within the clusters. 9. Relatively low level of innovation activity • studying and replicating the experience of creation of small innovative organizations; • organizing and conducting innovative foresight with the participation of all stakeholders in the cluster. Integration of production, scientific, technical and marketing activities within the cluster allows to eliminate the weaknesses of interaction between private entrepreneurs and the state. Conclusion. In the modern world, health is recognized as an element of social relations, determined by a variety of biomedical factors, the state of human organisms, their ecology, socio-cultural and institutional environment. The importance of any of the determinants should not be underestimated. The value characteristics of health are also increasing significantly, and the state is losing key levers of influence on public health, leaving behind more pre-social and Supervisory functions. Such a gap in public expectations and public management resources makes the cluster model in medicine, healthcare and pharmacy a solid basis for the relationship between the state and business in this area, a model for overcoming the current crisis. World practice demonstrates the effectiveness of interaction between the state and business in the system of compulsory health insurance, in projects to modernize the health care system on the basis of public-private partnership, and much higher than in cases where the health care system is exclusively administered by the state. In Russia, the integration of private investors in public health is just beginning to develop. It is already possible to note the desire of the state to use the professionalism and experience of the private sector in the development of modern forms of project financing, organization of property management and economic activities of objects. The business model described

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in the article makes it possible to effectively build relationships between public and private parties in the creation and development of clusters in medicine, health care and pharmacy.

References A new global health map. https://medvestnik.ru/content/articles/Novaya-karta-globalnogozdravoohraneniya.html. Accessed 10 Mar 2019 Alenkina, E.A., Kutsenko, E.S., Filin, F.N., Pankevich, V.I., et al.: Biomedical clusters in the world: success factors and stories the best, 160 p. Foundation for International Medical Cluster, Higher School of Economics, Moscow (2019) Collins, S.W.: Knowledge clusters and the revitalization of regional economies in Japan: a case study of the biomedical industry in Kobe. Prometheus 26(1), 111–122 (2008) Cowen, T.: The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. Dutton, 9 June 2011. ISBN 0525952713. https://www.mercatus.org/publication/great-stagnation. Accessed 1 Aug 2019 Islankina, E., Kutsenko, E., Filina, F., Pankevich, V., Popova, E., Moiseeva, V.: Biomedical clusters worldwide: success factors and best practices. In: Gokhberg, L., Yugay, M. (eds.) Higher School of Economics. National Research University (2019) Lyonbiopôle Auvergne-Rhône-Alpes. https://lyonbiopole.com/en/facilities/our-labsoffer. Accessed 1 Aug 2019 Meshcheryakova, Zh.V.: Medical cluster in the health care system of the region as an innovative model of integration of subjects of public-private partnership. Econ. Bus. Theory Pract. (3), 43–45 (2017) Porter, M.E.: Towards a dynamic theory of strategy. Strateg. Manag. J. 12(Winter Special Issue), 95–117 (1991) Porter, M.E., Teisberg, E.O.: Redefining Health Care: Creating Value-Based Competition on Results, pp. 50–56. Harvard Business School Press, Boston (2006) Strategy for the development of medical science in the Russian Federation for the period up to 2025. https://www.rosminzdrav.ru/ministry/61/23/stranitsa-967/strategiya-razvitiya-meditsinskoynauki-v-rossiyskoy-federatsii-na-period-do-2025-goda. Accessed 01 Mar 2019 Topleninov, E.O.: Experience in the creation of biopharmaceutical clusters abroad and in the regions of the Russian Federation and its application in the development of the pharmaceutical industry of the Republic of Tatarstan. Actual Prob. Econ. Law (3), 159– 163 (2012) Zemtsov, S., Barinova, V., Pankratov, A., Kutsenko, E.S.: Potential high-tech clusters in Russian regions: from current policy to new growth areas. Foresight STI Gov. 10(3), 34–52 (2016)

Information Technology as a Tool for Learning Market Narrative Vladimir V. Skalkin(&) , Sofia A. Sidorova , Vladimir V. Maltsev , and Violetta S. Tsarckova Financial University under the Government of the Russian Federation, Moscow, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. This study examines the benefits of the Fourth Industrial Revolution from the point of view of a tool that promotes the implementation of a market narrative as an honest and fair exchange of two parties (seller and buyer) in the institutional design of the economy. It assumes that the market is the most effective social technology, as well as the condition for the survival of not only an individual society, but also of human civilization as a whole. It concludes that the fourth industrial revolution is the path to achieving a perfect market, as the transparency of doing business and an individual economic agent with interpersonal and intergroup social interaction increases. At the same time, a sufficient level of transparency is due to the solution of such problems as the presence of information asymmetry, opportunistic behavior, the presence of transaction costs that previously impeded the adoption of rational managerial decisions, which are based on the sovereignty of individual choice. Keywords: Fourth industrial revolution
Market narrative
Perfect market Institutional design
Information asymmetry
Opportunistic behavior
Transaction costs JEL Code: A13





M14
M41
O14
O15
O17
O35
O43
P16

1 Introduction The scientific and technological development has entered the next stage accompanied by the fourth industrial revolution, which involves the creation of a single information space. Bifurcation is taking place in public life, inevitably accompanied by structural and managerial transformations, the essence of which is the phenomenon of network diffusion, when various organizations begin to emerge on a network basis (Dordick and Wang 1993). A network is a complex of nodes connected by information, transport, financial, commodity and other flows. A node can be a person or some social entity that accepts, accumulates, processes and creates new information. A network node can be a group, cell, laboratory, company, enterprise, organization, state, etc. Network structures bring © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 249–256, 2020. https://doi.org/10.1007/978-3-030-47945-9_27

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together equal entities for the purpose of cooperation and collaboration to achieve common goals. The leadership in network structures, is only partial, not accompanied by power monopoly which is the biggest opposite to a concept to “perfect market”. Networks rely on new communication and computer technologies that make it possible to disseminate and process information at a tremendous speed, fundamentally changing the traditional institutions, organizations and practices of modern society (Solovykh et al. 2018). The technological infrastructure of networks has created a qualitatively new space for the further development of human society, even more significant than railroads at one time. Modern society organizes itself around the flow of information, financial capital, and organizational interaction. Networks determine the shape and structure of interactions in society. The paradigm of the economy as a whole is changing: discourses are replacing economic theories (Maesse 2015). The emerging subjects of economic research are: the economics of impressions, the economics of human perception and thinking, in particular, the narrative economy. Therefore, it is necessary to determine the narrative, the teaching of which may become a subject for promotion by the fourth industrial revolution. It assumes that through the introduction of new technologies the transparency of doing business and an individual economic agent in all spheres of life increases, since “economics is the science of the business of human life” (Marshall 1890).

2 Methodology The research methodology bases on the opposition of subjective idealism to objective materialism, metaphysics and dialectics. The authors proceed from the assumption that it is necessary to consider interpersonal and intergroup social interactions through the prism of a narrative economy. The assumption is that a change in the physical conditions of existence cannot change a human value, cultural and moral orientations. However, it can become a tool for teaching a certain narrative; in particular, the fourth industrial revolution is allowed to promote the imposition of a market narrative as an honest and fair exchange between the two parties, based on the principle of individual choice sovereignty.

3 Results The scientific and technological revolution is currently associated with the fourth industrial revolution, which was the next stage of development in the organization and management of the value chain in the industrial sector of the economy (Schwab 2015). It bases on the achievements of the digital revolution, on the development of artificial intelligence and the widespread introduction of an information network, which leads to the creation of a single information space (Elliott 2015). Studying the phenomenon of the previously unprecedented distribution of networks, many scientists call this process the network revolution. The latter occurs everywhere, affecting all spheres of human society: economic, social, political, military, cultural, scientific, etc. M. Castells introduced the term “network society” and

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substantiated that its emergence connects with the technological revolution and the information (post-industrial) phase of social development. He has noted, “In the conditions of the information era, the historical trend leads to the fact that the dominant functions and processes are increasingly organized according to the principle of networks. It is networks that make up the new social morphology of our societies, and the spread of “network” logic has a significant effect on the course and results of processes related to production, everyday life, culture and power” (Castells 2010). The restructuring of the economy coincided with the appearance of the phenomenon, which Castells called the “information method of development” (Castells 2010). However, in the future, some of these communities will be able to move from resistance to future-oriented identities and thereby be able to create something similar to a “new civil society” and a new state. “A new identity, looking to the future, emphasizes Castells, does not arise from the former identity of civil society, which characterized the industrial era, but from the development of today’s identity of resistance” (Castells 2010). Social values of the information society defined in different ways by the writers reflecting their original culture. For instance, Masuda reflected Japanese view and stressed the role of the ‘voluntary community’ in which a group of people work together to achieve their common goals. According to him, the materialistic values of satisfying physiological and physical needs are the basic values of an industrial society, while the satisfaction of achieved goals will be the basic social value in an information society (Masuda 1980). In contrast to Masuda, Crawford defined the social values of the information society by observing the changes emerging in American society (Crawford 1991) (Table 1). Table 1. Basic social values of industrial and information societies Industrial society Hierarchy Conformity Standardization Centralization Efficiency Specialization Maximization of material wealth Emphasis on quantitative content Security

Information society Equality Individuality and creativity Diversity Decentralization Effectiveness Generalist, interdisciplinary, holistic Quality of life Emphasis on quality of output Self-expression and self-actualization

Source: R Crawford R.D., (1991), In the era of human capital, Harper Collins, United States, US, p. 82. According to Crawford, the information society organizes itself around individuality and creativity. The term ‘individuality’ reflects the main difference between Masuda, who stressed the role of voluntary community, and Crawford. However, other values such as the effectiveness, equality and creativity are the basic values that every information society should have.

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The American anthropologist Ruth Benedict, who became famous for her essay “Patterns of Culture”, developed the ethical aspect of the concept of «synergy». Synergy in its anthropological and ethical sense reveals the secret of uniting subjects in the social environment, when the division of labor or teamwork gives an undeniable advantage to any social group and puts it on the market, political arena or in the geopolitical space. Social formations with high synergy, in other words with an optimal, correct network structure, reduce aggression to a minimum and maximize cooperation. They distinguish greater trust, less centralization and a greater sense of responsibility (Benedict 1989). Psychologist A. Maslow emphasized that in social media with high synergy, «the order of things has been instituted in which the actions of an individual aimed at achieving personal gain are beneficial to society as a whole». Such a society is deprived of aggressiveness not because people are unselfish and place social interests above their personal interests, but because with this social structure these interests are inseparable. In this sense, the individual’s dispositions towards action, cognition and creativity pour into the movements of the social structure, work on it, stimulating by the inverse effect the actions of each individual (Maslow and Honigmann 1970). Thus, network organization is the antithesis of hierarchical structure. Strengthening horizontal ties expands the potential for the development of economic relations, enhances the effect of non-economic factors of the organization’s competitiveness. Network structures contribute to the promotion of new ideas and the development of human creativity. Typically, the following features of network structures distinguish themselves from structures of hierarchical type: strategic interdependence of subjects, as a part of a market mechanism and strategic dependence of the periphery on the center as a part of a hierarchical mechanism. The essential role of informal relationships, personal relationships; coordination as a basic principle of management, in contrast to the combination of centralization with decentralization with a hierarchical mechanism. Contrasting the hierarchical network structure, bears the following advantages of the network structure: • High degree of flexibility, which allows the network structure to adapt to changes in the external environment quickly; • An open, mutually beneficial atmosphere that stimulates the activities of participants, in contrast to the bureaucratic atmosphere, which in many cases serves as a brake on the effective activities of subjects; • A high level of obligations of the parties, when the participants take on greater responsibility, while with a bureaucratic structure, participants often seek to evade responsibility, which affects the results of activities; • Interdependence, cooperation between actors. Successful network enterprises have now formed a mass production standard with which enterprises of a different type cannot compete. These features make the network structure most effective for the implementation of innovative activities. In this regard, not only the transparency of doing business, but also the individual as a subject of economic life, is increasing. Moreover, according to the famous futurologist Michio Kaku, “the world is moving towards a perfect market” (Kaku 2011), because the market is the most efficient social technology (Hanauer 2013).

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In general, microeconomic theory defines the market as a social construction consisting of a set of institutions serving to mitigate existing social conflicts, in particular, on the distribution of available resources (Elsner et al. 2015). Institutions are laws, informal rules, and conventions that provide a long-term basis for social interactions among members of a population (Bowles 2003). Such institutions form through the deduction of the so-called universal behavior of individual individuals in response to the resolution of a specific situation. Universal behavior is inherent in the humanity as a whole and persists for a long time, forming a narrative. Bowles notes the possibility of institutional or individual evolution that arises from the competitive clash of groups following the principles of certain institutions. In accordance with this, the most effective institutions make the most tangible contribution to the prosperity of whole nations, companies, etc. At the same time, Hayek sees in the spread of the market system the evolutionary condition for the survival of all humankind (Hayek 1988). The authors propose to consider the category of the market as one of the visions of the world - narrative. Market narrative is a moral imperative of honest and fair exchange between two entities (a person, a company, a state), which should be laid in the foundation of the institutional design of any economy (Skalkin and Sidorova 2019). At the same time, the market is not a tool or model, not a description of reality; it is, first, the set of principles of economic design, and in the nations, where they teach it as a part of general education curriculum, the economic system is most efficient in functioning (Skalkin and Sidorova 2019). In accordance with this, the following definition of free market category formulate: The market is a system of public relations in which the moral imperative of fair and just exchange embeds in the current system of public and private institutions: legal, administrative, social and regulatory, which serves as the basis for public discourse and self-awareness (Skalkin and Sidorova 2019). It is worth emphasizing that the role of narratives in the economy is difficult to overestimate, especially in interpersonal, intergroup and network interactions. According to Robert Schiller, the reaction of people to economic phenomena is not so much a feedback, as actions due to the individual vision of a particular situation (Shiller 2017). At the same time, Deidra McCloskey believes that narrative is born in continuous discussions and interpretation of institutional facts, giving rise to a certain culture (McCloskey 2010). According to Marxist theory, a specific narrative, changing a person’s consciousness, ideas about ethics and morality, is formed as a result of changes in material conditions of existence that are caused by biological and social evolution (Marx and Engels 1975). Speaking of a change in technological and material structure, according to Deirdre McCloskey, culture is self-sufficient. Nevertheless, the thesis does not refute that the material world does not at all influence the value orientations that guide individual individuals in interacting with each other. The evolution of the material world contributes to the emergence of an idea, which subsequently begins to live its own life, breaking away from its “parent” and constantly changing under the influence of discourses.

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The authors reject the materialistic understanding of history in favor of subjective idealism. Because they believe that human nature is not treason. An example is the Bible, which considers the same ideas and relationships between people, emphasizing the same vices and benefactors 2000 years ago as the same vices and benefactors exist nowadays. Nevertheless, due to a change in social patterns and material conditions of existence, a human discovers new facets in themselves, thereby knowing themselves much better. The fourth industrial revolution significantly changes the material conditions of existence between people. New technologies increase the level of transparency of the business and the individual, thereby solving problems such as the presence of asymmetry of information, opportunistic behavior, and the presence of transaction costs. However, according to Ronald Coase’s theory (Coase 1937), transaction costs separate conditions in which humanity lives, from the perfect market reality. From this statement, a conclusion follows: when zero transaction costs become zero, the humankind reaches the state of perfect market. However, does this mean that the metaphysical essence of man will change, evolve, or become better? The answer is far from certain (Skalkin and Sidorova 2018). Information and technological benefits can only become a tool for teaching, learning and accepting a market narrative - an honest, just, and fair exchange, which is based on a fundamental principle - the sovereignty of individual choice. The category of honesty refers to information openness, the exclusion of information asymmetry. Under the category of justice is what two parties to the transaction voluntarily agree to: the seller and the buyer. It emphasizes that the concept of justice is not identical with the concept of equivalence; therefore, the determination, for example, of fair price or fair value, which are not always equal, is discretion to the two parties of the transaction. For example, in accounting, the fair market value category defines self by the concept of “willing buyer and willing seller”. In accordance with US standard IRS RR 59-60, in order to calculate market value, it is necessary to consider all relevant factors that influence it. It assumes that the exchange between the seller and the buyer carries out at arm’s length, excluding any coercion by third parties. If the actual exchange at arm’s length is not possible, then the fair market value determines by the price that could suit the potential buyer and potential seller when concluding a hypothetical transaction. However, individual characteristics of the actual transaction take into account. At the same time, it assumes that the potential seller and potential buyer have information about the necessary, relevant facts relating to a hypothetical transaction at a certain date of the market value assessment. Since the potential seller and potential buyer have subjective views on this or that information, their opinions must take into account equally. Otherwise, the determination of fair market value is not possible, because of which no market exchange will occur. The principle of sovereignty of individual choice largely determines using the voluntariness of the two sides of the exchange. That is, the primary motives, not coercion. The exclusion of information asymmetry and opportunistic behavior of one of the parties or two sides of the market exchange allows the potential seller and potential buyer to make a rational management decision. It is worth noting that the fourth industrial revolution largely solves the problem of rationality of choice.

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According to Herbert Simon, human beings are limited in their rational choice because they cannot collect complete and reliable information about an object, because they are limited in time under rapidly changing market conditions, and do not have the means to process it (Simon 1997). When creating a single information space, and networking the adoption of rational choice acquires bigger possibility.

4 Conclusions/Recommendations Thus, the fourth industrial revolution contributes to the achievement of a perfect market. It is acting not as a basis for spreading and teaching the market narrative of an honest and fair exchange between the two parties, but as a tool to eliminate information asymmetry, opportunistic behavior, and also transaction costs. That stipulates the adoption of rational individual decisions in accordance with the principle of sovereignty of individual choice. The fourth industrial revolution leads to the openness of business and individual economic agents, increasing the level of trust in society, and, consequently, its evolutionary development, due to which humans can discover new facets, thereby learning their metaphysical essence, which does not change due to changes in material world. The study of market narrative is necessary for countries with undeveloped market economies, since a market system is an evolutionary condition for the survival of all humankind. Market narrative may lay in the foundation of the institutional design of the economy of any nation, which will contribute to effective and efficient interpersonal and intergroup interaction between people.

References Benedict, R.: Patterns of Culture. Houghton Mifflin Harcourt, Mariner Books, Boston (1989) Bowles, S.: Microeconomics: Behavior, Institutions, and Evolution. Princeton University Press, New York (2003) Castells, M.: The Information Age: Economy Society and Culture. The rise of the Network Society. Blackwell Publishers, London (2010) Crawford, R.D.: In the Era of Human Capital. Harper Collins, New York (1991) Dordick, S.H., Wang, G.: The Information Society. Sage Publications, London (1993) Elsner, W., Heinrich, T., Schwardt, H.: The Microeconomics of Complex Economies. Elsevier, Amsterdam (2015) Hayek, F.: The Fatal Conceit: The Errors of Socialism. University of Chicago Press, Routledge Press, Chicago, Abingdon (1988) Kaku, M.: Physics of the Future. Doubleday, New York (2011) Marshall, A.: Principles of Economics. Macmillan, London (1890) Masuda, Y.: The Information Society as Post-Industrial Society. Transaction Publishers, Piscataway (1980) Marx, K., Engels, F.: Sobranie sochinenij. Political publishing house, Moscow (1975). 40 tom. [Set of works. Vol. 40]. (in Russian) McCloskey, D.: Bourgeois dignity: Why Economics Can’t Explain the Modern World. University of Chicago Press, Chicago (2010)

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Simon, H.: Administrative Behavior: A Study of Decision-Making Processes Organizations, 4th edn. Free Press, New York (1997) Skalkin, V., Sidorova, S.: Osnovy teorii rynka: metafizika, epistemologiya, etika. [Market theory fundamentals: metaphysics, epistemology, ethics]. Moscow, Prometej (2019). (in Russian) Coase, R.: The nature of the firm. In: Economica. Blackwell Publishing, November 1937 Maesse, J.: Economic experts: a discursive political economy of economics. J. Multicult. Discourses 10(3), 279–305 (2015) Maslow, A.H., Honigmann, J.J.: Synergy: Some Notes of Ruth Benedict. Am. Anthropol. 72(2), 320–330 (1970) Shiller, R.: Narrative economics, Cowles foundation discussion paper no. 2069. Yale university (2017) Skalkin, V., Sidorova, S.: Chipizaciya naseleniya: ekonomicheskij i filosofskij aspekty [Chipization of population: economic and philosophical aspects]. Econ. Entrepreneurship 2 (91), 1289–1292 (2018). (in Russian) Solovykh, N., Korolkov, V., Moreva, E., Smirnova, I.: The problems of the digital economy development in the aspiring countries (the Russian case analysis). Int. J. Civ. Eng. Technol. (IJCIET) 9(11), 1655–1661 (2018) Elliott, L.: Fourth Industrial Revolution brings promise and peril for humanity (2015). http:// www.theguardian.com/business/economics-blog/2016/jan/24/4th-industrial-revolition-bringspromise-andperil-for-humanity-technology-davos. Accessed 24 Jan 2015 Hanauer, N.: The capitalist's case for a $15 minimum wage (2013). https://www.bloomberg.com/ opinion/articles/2013-06-19/the-capitalist-s-case-for-a-15-minimum-wage. Accessed 20 June 2013 Schwab, K.: The Fourth Industrial Revolution. https://www.foreignaffairs.com/articles/2015-1212/fourth-industrial-revolution. Accessed 12 Dec 2015

Analysis of the Factors and Scenarios of Forming a New Direction in the 21st Century Energy – Intelligent Energy Networks (Smart Grid) Pavel V. Trifonov(&) , Maria A. Kirpicheva, and Astkhik A. Khachatryan Financial University under the Government of the Russian Federation, Moscow, Russia {PVTrifonov,MAKirpicheva,AAHachatryan}@fa.ru

Abstract. The Purpose of this article is to identify the factors influencing the change in the macroeconomic situation in the international energy sector in the XXI century. The methodology of the study is to analyze the opinions of experts in the field of energy to assess the factors affecting the development of modern energy. Also, to formulate the hypothesis of the study, the literature on the topics of “network energy”, “industry 4.0”, “digital economy” was reviewed among the scientific articles of leading economic journals, monographs of scientists and reviews of leading consulting agencies. The main scenarios of the energy market development based on the behavior of its key components are developed: generation, transport, transformation, distribution and accumulation. The role of intelligent energy networks in the overall system of the international energy market is highlighted. The influence of digital technologies on the development of intelligent energy networks is shown. The structure of a new type of energy market in the context of its new technological components is determined. Keywords: Smart grid
New economy
Intelligent energy networks
Industry 4.0
Digital technologies
Internet energy JEL: O330

1 Introduction In the economy of the 21st century, major structural changes are taking place, based on the technologies of Industry 4.0, which define the contours of the “new” economy. Characteristic features and differences of the new millennium economy are “digitalization”, “networkization”, “intellectualization” and “globalization” of the infrastructure of economic sectors. The advanced technologies and drivers for the development of these characteristics are artificial intelligence, big data, robotization and a number of other technical solutions that determine the modern profile of the functioning of industries and the current market conditions. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 257–264, 2020. https://doi.org/10.1007/978-3-030-47945-9_28

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It should be noted that the countries issuing these technologies, creating and supporting technology platforms, innovative economic zones and high-tech clusters and global value chains, gain a leading role in the 21st century in the geopolitical and economic transnational space. It is on the basis of these technologies that innovation will scale up and standards of new economic relations will be created. However, patent holders and, accordingly, holders of rights to use technologies in the production of products, will be selected high-tech corporations included in global value chains, not the territory of the states that supported the introduction of SMART class technologies into national industries, and to make an early transition to new production standards and exploitation of innovative products in the 1st quarter of the XXI century (Sergey and Evgeny 2010). The greatest challenge for modern large energy companies is the emergence of digital technologies in the energy sector is a serious challenge, because ordinary consumers have the opportunity to receive individual service due to innovations in the field of generation, transmission, distribution, control, accumulation, and getting communication. Such changes will not affect all markets and will not occur in a short periodof time. Changes in the landscape of the energy market begin with the advent of intelligent technologies in the energy market (electronic platforms for the sale of electricity) and the emergence of such a phenomenon as the “Internet energy”, as well as with such innovations as mobile charging of electric vehicles (plug & play). Digital economy technologies have influenced the creation of a new policy by the major players of the energy market “Intelligent Electricity Networks” (eng. Smart grid), which is aimed at increasing the efficiency of resource use and significantly reducing the cost of building and operating power grid facilities. Such networks use information and communication technologies to collect information about energy production and energy consumption, which automatically allows to increase efficiency, reliability, economic benefits, and also sustainability of the production and distribution of electricity (Al-saleh and Mahroum 2014). According to forecasts from the International Energy Agency, a full transition to a new technology platform in the global energy sector will require more than 300 billion US dollars of investment by 2030, with the current market capacity in the USA of about 1 billion dollars (Fig. 1). Power system operators are faced with uncertainty and greater complexity in the work, due to the emergence of new technologies for the production of electricity and digital technologies, changes in consumption patterns and new market opportunities.

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Fig. 1. The market of intelligent network management systems in the US (million dollars.)

2 Methodology In order to formulate scenarios for the future development of the electric power industry, this study conducted a survey among experts to clarify the factors influencing the technological development of the industry. The survey resulted in the following factors: 1) 2) 3) 4) 5)

Efficient distribution of energy, taking into account modern technologies Solid State electronics; Use of renewable energy sources; Participation of consumers in the process of energy creation and/or conservation; Feedback from consumers and utility companies on real-time energy consumption via smart meters; 6) The use of electric vehicle batteries for storage and distribution of energy in homes, and distributed energy resources. Many of the technological advances described above can have a significant impact on the business of power generation companies, grid companies, distribution companies or power sector solution providers. In this study, we look at five possible scenarios for the future that may affect companies in the electricity sector as new technologies evolve (Yanez et al. 2018): “Loss of connection”: a future in which companies of the electricity sector will lose communication with its clients on as other players will get control of the “energy hub” of the client. Existing companies in the electricity sector will only supply electricity in

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bulk at the lowest price, with all value-added transactions within the framework of the relationship with the client will be carried out by those who control the “energy node”. “Autonomy”: the center of attraction will shift from the main grid to local generation and storage of electricity, as well as to distributed generation of electricity tied to micro grids. The network is more likely to become a source of backup electricity, and electricity companies will face certain challenges that will have to be addressed, such as what role they should play in a more decentralized electricity supply system and how to maintain an underutilized and expensive electricity infrastructure. “Mobility and virtuality” – electric vehicles are becoming the norm, which leads to the need for significant investment in infrastructure, as well as the opportunity to use vehicles as a source of electricity storage. Power grids and power capacities of local electric power companies are under heavy load. In such circumstances, electric power companies have the opportunity to cover several sources of value creation, but they will face fierce competition from other players. Intensive data processing: ubiquitous smart sensors will collect information on energy flow and performance at all levels of the grid, and regulators will require electricity companies to provide access to third-party data. The value will shift from traditional electricity companies to companies that can collect, process, interpret and use this data, offering customers knowledge-intensive energy services with additional features. “Rolling back”: large customers will start using their own decentralized and scalable power generation capacity to meet their needs. As technology advances, smaller commercial and industrial consumers will enter a new era of local power generation. Larger customers will increasingly place an insignificant role in their business with traditional electric power companies and will not be able to avoid the process of abandoning intermediaries in the operation of facilities with the largest energy load. One of the key prerequisites and at the same time factors influencing the formation of a new form of the electricity market is “distributed technologies for the production and storage of electricity”. Their appearance is a consequence of lowering the cost of energy equipment, which in turn stimulates the growth of localized electricity production. This circumstance is a risk for the further development of power grid companies and casts doubt on the ability of grid companies to manage electricity flows on a large scale and lead to consumer withdrawal to private generation companies or selfgeneration. For example, in Australia, relatively inexpensive installation costs for solar generators have led to the fact that electricity generated by transformation from solar energy provides up to 40% of market demand. The development of “storage or accumulation of electricity” technologies can help network operators manage demand peaks and prevent overloads, reducing the need for additional financial investments in the creation of new capacities. Also, the next important factor in the development of a new electricity market is the change in the consumer role and their preferences. The growing popularity of electric vehicles and air-conditioning equipment is a new impetus for the formation of market conditions. Home-charging electric cars (which usually happens during peak evening hours), combined with midday peaks of electricity consumption that consumers can produce through solar installations on the roof, and its surplus sell back to grid companies, can lead to more volatile patterns of daily electricity demand. Increased use of climate control equipment for buildings can also

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lead to system overloads. To cope with these new requirements and to avoid overloads, companies will have to invest in increasing capacity, upgrading transformers and protective devices.

3 Results A major support for the development of the energy market and the possibilities for optimizing the costs of its development are digital technologies that are designed to transform network operations. Every year, unmanned aerial vehicles will carry out work, replacing field workers, while sensors provide real-time network monitoring (Table 1). Table 1. Digital technologies used for the development of intelligent energy networks Object of application Control centers Utility services Operational services

Dispatch

HR services

Service and customer service

Resulting effect Predictive analytics based on artificial intelligence technology allows to make decisions in real time Improving workforce planning mechanisms, job routes, capacity utilization rates Robots and drones perform work with inaccessible objects (high-rise buildings and constructions, energy infrastructure facilities, advertising structures, etc.) Smart sensors and measuring devices can efficiently and quickly collect data on overloads and short-circuits in the network during periods of peak energy consumption Machinery mentorsand engineers train workers to perform complex technical tasks on simulators implemented with virtual and augmented reality technologies Improving the efficiency and accuracy of data for notifications of planned outages and preventive maintenance Providing workers with additional digital devices (smartphones and tablets) for on-site communications and decision making

Predictive maintenance based on machine learning and artificial intelligence will reduce power outages and improve the investment and operational decisions of companies. A robotic process automation will speed up the “back office”. According to BCG, the following digital technologies will lead to economic effects: – advanced analytics and artificial intelligence will significantly improve the predictive service, using computer modeling and new sources to obtain data over the network to reduce errors in predicting asset failures. This will reduce maintenance costs by up to 20%. – data from smart meters and machine learning technologies allow computer systems to detect faults accurately and automatically assign workers to eliminate them. Customers can also be notified by the smartphone text of the status of the problems

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and their likely duration. These methods will allow a number of companies to reduce infrastructure management costs by 20%. – big data analysis can be used to reduce distribution losses and increase the efficiency of meter reading by identifying cases of fraudulent use of meters and providing fictitious consumption indications and other suspicious consumer behavior. Advanced analytics can reduce losses up to 15% (Cardenas et al. 2014).

4 Conclusions A number of industry research agencies and consulting organizations consider several market development scenarios with the advent of smart networks, each of which depends on how the regulatory framework changes in the case of transition to distributed generation (Agüero et al. 2019): 1. Widespread loss of customers and reduced demand for network services. Significant disconnection from the general network caused by distributed generation, coupled with the lack of feedback that prompts operators to digitize and offer new products, can lead to the collapse of some companies. Power grid companies will be forced to raise rates to pay for existing investment plans, which will lead to an increase in debts and the emergence of inefficient assets. The challenge for grid companies will be to reduce such assets that are outdated as a result of changes in energy consumption. This scenario is unlikely because distributed generation is expensive and at the moment less reliable than a centralized power grid. 2. Limited defects, but an increase in distributed generation in some markets. Traditional network companies, faced with a limited number of customers, will strive to reduce costs by introducing new digital technologies in order to improve work efficiency. To manage the demand for periodically renewable sources of energy, they will have to invest in intelligent technologies that will allow them to balance demand and supply dynamically in real time. 3. Significant distributed generation and perspective regulation. In markets with significant distributed generation, for some consumers, there is still a connection with networks and reacting to changes in regulation, operators will be free to generate revenues from new products and services. With the support of regulators, they will develop and manage market platforms that allow distributed energy producers to trade electricity with the network. In this case, regulators can legalize a number of new services to create competition. Consequently, network companies accustomed to operating in a regulated, uncompetitive environment will need to develop modernization plans that go beyond the growth of their asset base and instead prepare them for potentially successful future developments. Network companies need to act urgently and in several directions, as they establish plans for the future. Despite many changes, managers must act boldly and create a strategy based on where they want to play in the value chain. They will also have to work hand in hand with regulatory authorities and resist the temptation to replicate traditional business models.

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Acknowledgments. We Express our gratitude when searching for information about the scenarios of development of the world and Russian energy markets of the National Technological Initiative “Energonet”, Ministry of energy of the Russian Federation, Boston Consulting Group.

References Galyukov, V.S.: Problems and ways of development of distributed generation. Innov. Sci. 12(2), 176–186 (2016) Valentina, V.R., Natalia, G.I.: Tendencies of innovative development of the electric power industry in Russia. Adv. Chem. Chem. Technol. 188(7), 70–72 (2017) Sergey, A.F.: “Smart Grid” - a logical development of power supply systems. Century of Qual. (2), 30–39 (2017) Sergey, I.C., Evgeny, I.G.: “Smart Power Grid”, energy security and energy saving. (6), 27–31 (2010) National Technology Initiative (2019). http://www.nti2035.ru/nti/. Accessed 10 Apr 2019 The action plan (“road map”) “Energynet” National Technology Initiative (2019). http://fasie.ru/ upload/docs/DK_energynet.pdf. Accessed 10 Apr 2019 Official site of the Ministry of Energy of the Russian Federation (2019). https://minenergo.gov. ru/node/8916. Accessed 10 Apr 2019 Cardenas, J.A., et al.: A literature survey of Smart Grid distribution: an analytical approach. J. Clean. Prod. 65, 202–216 (2014) Agüero, J.R. et al.: Grid modernization: challenges and opportunities. Electricity J. (2019, in press) Data portal CNEWS (2019). http://www.cnews.ru/news/top/2017-02-06_putina_prosyat_sozdat_ v_rossii_internet_energij. Accessed 10 Apr 2019 The data of the Foundation for Strategic Energy Development “Foresight” Al-saleh, Y., Mahroum, S.: A critical review of the interplay between policy instruments and business models: greening the built environment a case in point. J. Clean. Prod. pp.1–11 (2014) Acampora, G., et al.: Exploiting timed automata based fuzzy controllers for voltage regulation in Smart Grids. In: IEEE International Conference on Fuzzy Systems (FUZZ-IEEE 2011), pp. 223–230. IEEE (2011) Andreotti, A., Carpinelli, G., Mottola, F., Proto, D.: A review of single-objective optimization models for plug-in vehicles operation in Smart Grids part I: theoretical aspects. In: IEEE Power & Energy Society General Meeting, pp. 1–8 (2012) Battaglini, A., Lilliestam, J., Haas, A., Patt, A.: Development of SuperSmart Grids for a more efficient utilisation of electricity from renewable sources. J. Clean. Prod. 17(10), 911–918 (2009) Belkacemi, R., Feliachi, A., Choudhry, M.A., Saymansky, J.E.: Multi-agent systems hardware development and deployment for smart grid control applications. In: IEEE Power & Energy Society General Meeting, pp. 1–8 (2011) Bilgin, B.E., Güngör, V.C.: On the performance of multi-channel wireless sensor networks in smart grid environments. In: 20th International Conference on Computer Communications and Networks (ICCCN), pp. 1–6 (2011) Bosselmann, T.: A paradigm change in energy: the new electricity age. In: Santos, J.L., Culshaw, B., López-Higuera, J.M., MacPherson, W.N. (eds.) Fourth European Workshop on Optical Fibre Sensors, vol. 7653, p. 765302 (2010)

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Yanez, M. et al.: The Power grid in the future. The Boston Consulting Group Review (2018) Electricity beyond the grid Accelerating access to sustainable power for all. Price Waterhouse Coopers review, May 2016 The Boston Consulting Group Review. https://www.bcg.com/ru-ru/publications/2018/poweringreturns-from-energy-network-deals.aspx. Accessed 10 Apr 2019

Methodology of Risk Management Assessment at an Industrial Enterprise Yaroslav S. Potashnik(&), Elena P. Kozlova, Svetlana N. Kuznetsova, Sergey D. Tsymbalov, and Elena A. Chelnokova Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. This article presents the theoretical foundations of risk management at an industrial enterprise. The essence of the concepts “uncertainty”, “risk” is described, and reasons for uncertainty in the management of an industrial enterprise are given. A brief description of the main elements of the risk management process is also presented. Information exchange and consultation are identified as components of risk management; definition of the scope of application, context and risk criteria; risk assessment (including identification, analysis, and risk assessment); risk response; risk management monitoring and verification, documentation and reporting. Approaches to assessment of quality and efficiency of risk management at an industrial enterprise are recommended. In particular, it is proposed to assess risk management on the basis of its compliance with the requirements and expectations of external regulators and stakeholders; to analyze the completeness and literacy of the underlying riskmanagement principles; success of management decisions implementation that are taken with the use of risk management, as well as on the basis of methods used to analyze the attractiveness of investments. We believe that the use of described approaches will contribute to improving the quality and efficiency of risk management, as well as achieving goals of industrial enterprises. In this study used a complex of scientific methods, including a systematic approach, logical analysis, and synthesis, the study of scientific literature and formalization. Keywords: Risk


Risk management
Assessment
Industrial enterprise

1 Introduction Most management decisions in industrial enterprises are developed and made in conditions of uncertainty. These conditions are characterized by the complete or partial lack of accurate knowledge of the persons involved about random events, which, in case of occurrence, may affect the achievement of the purpose of given decisions, including the nature of events, time, probability and consequences of their occurrence. There are four main causes of uncertainty: © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 265–271, 2020. https://doi.org/10.1007/978-3-030-47945-9_29

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1) insufficiency and inaccuracy of available information; 2) inability of the responsible persons to correctly process and interpret the available information; 3) non-deterministic (randomness) of many processes; 4) opposition (conscious or unconscious). Due to uncertainty in the implementation of adopted decisions, events or risks may cause positive or negative deviations of results when implementing decisions from expected values. This impact of uncertainty on targets can be defined as a risk [2]. Positive deviations allow enterprises to obtain additional benefits, while negative deviations result in damage that may in some cases exceed critical values and cause loss of stability and viability of an enterprise. Therefore, development, adoption, and implementation of organizational decisions must be carried out taking into account risk, i.e. to carry out risk management. Various aspects of risk management are devoted to the work of many domestic and foreign scientists, including R.M. Kachalov, G.B. Kleiner, A. Demodaran, F. Knight et al. At the same time, in our opinion, certain methodological aspects of risk management need further elaboration. In particular, the approaches to assessment of the quality and efficiency of risk management carried out in industrial enterprises require clarification, which this study is devoted to.

2 Theoretical Basis of Research The risk management process is iterative and includes information exchange and consultation; definition of the scope, context and risk criteria; risk assessment (including identification, analysis, and risk assessment); risk exposure; risk management monitoring and verification, documentation and reporting (Fig. 1).

Definition of scope, context and criteria Risk identification Exchange of information and advice

Risk analysis Risk assessment Response to risks

Documentation and reporting Fig. 1. Risk management process [6]

Monitoring and verification

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Information exchange and consultation are conducted to assist stakeholders in understanding risks and assumptions on which decisions are made and the reasons why certain actions needed. The exchange of information is aimed at raising awareness and understanding of risk. Consulting includes receiving feedback and information to support decisions. Information exchange and consultation are carried out at all stages of the risk management process. The purpose of determining the scope, context, and criteria is to configure the risk management process to ensure an effective risk assessment and a corresponding impact on it. In the process defines the scope and understanding of an external and internal context. Since risk management can be applied at different levels, it is important to clearly define the scope affected by risk management, as well relevant objectives to be considered and their coherence with objectives of an enterprise. The external and internal context refers to the environment in which an enterprise defines its objectives and seek to achieve them. In the context of the risk management process is defined from an understanding of the external and internal environment in which an enterprise operates and reflects the specific field of activity to which the risk management process applies. Criteria refer to the magnitude and type of risk that an enterprise may or may not accept in the light of its objectives. The criteria are adapted to specific goals and the scope of the activity in question, reflect the values of the enterprise, its goals and resources, are determined considering obligations and views of interested parties. Risk identification involves identifying them, determining the causes and negative consequences, and describing other significant characteristics. Risk identification is usually carried out by participants in the development of management decisions, involving, if necessary, internal and external experts with the required information. To identify risks, their causes and consequences, specialists propose different approaches. A brief description of some of them is given in Table 1. Table 1. Methods of identification of risks [5] e

Brief description

List of events, their causes and consequences

A detailed list of potential negative events common to the industry, process or activity in question shall be drawn up. Their causes and consequences are identified

Specialized discussions and seminars

Discussions and workshops are held in which participants identify and discuss risks, their causes, and consequences based on knowledge and experience

Continuous questionnaire

A specialized questionnaire is prepared, filling in which respondents (employees of the enterprise, experts) express their opinion on possible risks, their causes, and consequences

Process chain analysis

It involves the study of input data, tasks, responsibilities and results, the totality of which is a process. By studying internal and external factors, the events that can negatively affect the achievement of the goals of this process, their causes and consequences are determined

Generating charts

On the basis of knowledge and experience, additional research, diagrams (for example, Ishikawa, fishbon, flowcharts of processes) reflecting cause-effect relationships between risk, its causes, and consequences

SWOT analysis

The strengths and weaknesses of the enterprise are identified; any threats arising from weaknesses are identified; strength of the enterprise compensates for threats is determined

PESTLE-analysis

Political, economic, social, technological, legislative and environmental risks are identified

Analysis of assumptions

The assumptions underlying decisions are examined for accuracy, stability, consistency of completeness. Problems are identified as risks

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Individual methods or combinations of risk factors may be used to identify risk factors. Risk analysis is carried out to diagnose the levels of individual risks, acceptability of the levels, and to rank them in terms of priority implementation of response measures. The purpose of responding to risks is to ensure that their levels meet acceptable values [10–12]. Five main risk response options can be identified (Fig. 2).

RISK RESPONSE OPTIONS

Promotion

Promotion

Acceptance

Redistribution

Reducing

Fig. 2. Risk response options

The content of the risk response options presented in Fig. 2 is presented in [1]. The purpose of monitoring and revision is to ensure and improve the quality and efficiency of development, implementation, and results of risk management. Continuous monitoring and periodic review of the risk management process and its results are a planned part of the risk management for which a clearly defined responsibility. Monitoring and review should be carried out at all stages of the risk management process. Documentation is intended to show the risk management process and its results in the reporting process. Documentation and reporting are aimed at the exchange of information on the activities and results of risk management at the enterprise, providing information for decision-making, improving risk management activities; facilitating interaction with stakeholders, including those responsible and accountable for risk management activities. Risk management has a significant impact on the activities of industrial enterprises and requires costs. Therefore, it is necessary to constantly assess the quality of risk management and its effectiveness.

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3 Analysis of the Results of the Study Analysis of normative and literary sources, as well as risk management practices of industrial enterprises of Nizhny Novgorod region, allowed to highlight several main aspects, which, in our opinion, should be taken into account when assessing the quality and effectiveness of risk management. First, risk management must meet the requirements and expectations of external regulators and stakeholders. For example, risk management of joint-stock companies with state participation should comply with the requirements of the Methodical Recommendations on organization of risk management system [3]. In turn, shareholders expect that the risk management implemented at their enterprises will comply with the provisions of modern international standards, for example, such as ISO 31000:2018 “Management risk. Direction” and COSO 2014 “Risk management of the organization”. An enterprise that hopes for successful interaction with creditors, insurers should consider their idea of quality and effective risk management and strive to comply with it. At the same time, it is necessary to achieve the above correspondence with the optimal cost of resources. As a basis for comparison of resource intensity of risk management, it is possible to use indicators of the enterprise in previous periods, the best competitors and enterprises engaged in similar activities in similar conditions (benchmarking). Secondly, the effectiveness of risk management is largely determined by the literacy of underlying assumptions. Effective risk management should be based on the following principles [2, p. 7]: – Integration - risk management should be an integral part of the enterprise’s activities; it should be implemented in all areas of activity and functions of the enterprise, including the decision-making process; – Structurality and comprehensiveness - risk management should be structured and integrated approach leading to consistent and comparable results; – Adaptability - the structure and process of risk management should be correlated and adjusted to the internal and external context of the enterprise, which means the environment in which the enterprise takes its decisions and seeks to achieve them; Inclusivity—the appropriate and timely involvement of stakeholders allows for their knowledge, views, and opinions to be taken into account. This leads to increased awareness and validity of risk management; – Dynamic - risks can arise, change or disappear as the external and internal context of the organization changes. Risk management anticipates, detects, recognizes and responds to these changes and events in an appropriate and timely manner; – Based on the best available information - historical and factual data, as well as forecast expectations are used as input data for the risk management process. Risk management explicitly takes into account any limitations and uncertainties associated with available data and expectations. The information used should be relevant, clear and accessible to interested parties;

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– Considering human and cultural factors - human behavior and culture significantly affect all aspects of risk management at each level and stage; – Constantly improved - risk management is constantly improving thanks to training and experience accumulation. Thirdly, since the implementation of risk management is aimed at improving the quality and feasibility of management decisions, as well as achieving the objectives of the enterprise, then assess risk management can be based on an analysis of the success of these decisions. For example, enterprises often consider creating and increasing their value as an integral economic objective. Therefore, it is possible to assess the success of risk management by the degree of achievement of this goal. If risk management has ensured the achievement of the target value, then risk management can be recognized as quality and effective if it does not provide it means its quality and effectiveness can be assessed as insufficient. Fourth, the effectiveness of risk management can be assessed using the methods used in the analysis of the attractiveness of investments. For this, it is necessary to identify the explicit and imputed costs associated with the implementation of risk management and compare them with the effect obtained from risk management, including additional income and prevented damage. Conclusions about efficiency can be drawn on the basis of calculation of NPV, IRR and other indicators. For example, the forecast data on the cost of risk management and the economic impact of its implementation over a five-year period are presented in Table 2. Table 2. Forecast of costs and effectiveness of risk management (monetary units) Indicators

Calculation period step numbers 0 1 2 3 4 Effect (inflow) 0 90 140 180 170 Costs (outflow) −100 −40 −60 −80 −70 Net inflow −100 50 80 100 100 Discount ratio (E = 0.1) 1 0.909 0.826 0.751 0.683 Discounted net cash flow −100 45.45 66.08 75.1 68.3 Discounted costs −100 0 0 0 0 NPV 154.93 IRR,% 61

Total

1. 2. 3. 4. 5. 6. 7. 8.

580 −350 230 – 154.93 −100

According to calculations, NPV from the implementation of risk management will be 154, 94 monetary units, IRR—61%. If these values of calculated indicators suit the management of the enterprise, risk management can be recognized as effective.

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4 Conclusions Approaches to assessment of quality and efficiency of risk management at an industrial enterprise are offered. In particular, it is recommended to assess risk management on the basis of its compliance with the requirements and expectations of external regulators and stakeholders; to analyze the completeness and literacy of underlying risk management principles; success of the implementation of management decisions taken with the use of risk management, as well as on the basis of methods used to analyze the attractiveness of investments. We believe that the use of the described approaches will contribute to improving the quality and efficiency of risk management, as well as achieving the goals of industrial enterprises.

References 1. Gracheva, M.V., Lyapina, S.Yu.: Risk Management in Innovation Activity: Textbook for University Students Studying in Economic Specialties. M.: UNITI-DANA (2010) p. 351 2. ISO 31000:2018: Risk management. Direction, p. 18 (2018) 3. Methodical recommendations on the organization of risk management and internal control in the field of prevention and counteraction of corruption in joint-stock companies with the participation of the Russian Federation. http://www.garant.ru/products/ipo/prime/doc/ 71250868/. Accessed 24 June 2019 4. Knight, F.H.: Risk, Uncertainty and Profit/Translation from English. M.: Case (2003) p. 360 5. Potashnik, Ya.S., Sevryukova, A.A.: Management of the level of risk of innovative projects of industrial enterprises. Sci. Rev. 16, 202–204 (2016) 6. Risk management of organizations: Integrated model. Committee of Sponsorship Organizations of the Tredway Commission (COSO)—111c (2014) 7. Gifford, A.: Standardizing risk management—business enabler or the risk manager’s straitjacket? In: Managing Business Risk: A Practical Guide to Protecting your Business/ (Consultant Editor), Jonathan Reuvid, 7th edn. Kogan Page (2010) 8. Hardy, K.: Enterprise Risk Management: A Guide for Government Professionals/by Karen Hardy. Wiley, Hoboken (2015). Published by Jossey-Basse 9. Kuznetsov, V.P., Romanovskaya, E.V., Egorova, A.O., Andryashina, N.S., Kozlova, E.P.: Approaches to developing a new product in the car building industry. Adv. Intell. Syst. Comput. 622, 494–501 (2018). https://doi.org/10.1007/978-3-319-75383-6_63 10. Garina, E.P., Garin, A.P., Kuznetsov, V.P., Popkova, E.G., Potashnik, Y.S.: Comparison of approaches to development of industrial production in the context of the development of a complex product. Adv. Intell. Syst. Comput. 622, 422–431 (2018). https://doi.org/10.1007/ 978-3-319-75383-6_54 11. 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) 12. Markova, S.M., Narkoziev, A.K.: Industrial training as an integral part of professional training of future workers. Vestn. Minin Univ. 6(1) (2018)

Improvement of Strategic Planning in the Forest Sector of the Economy (Regional Level of Analysis) Yana Y. Radyukova1(&), Elena A. Kolesnichenko1, Svetlana V. Zenchenko2, Anna V. Savtsova2, and Nikolay N. Pakhomov1 1

Department of the Tambov State University named after G.R. Derzhavina, Tambov, Russia [email protected], [email protected], [email protected] 2 North Caucasus Federal University, Stavropol, Russia [email protected], [email protected]

Abstract. The goal of this study is to develop recommendations for improving the system of government strategic planning in the forest sector of the economy. The research results are based on the justification of the need to form a way for improving the system of government strategic planning. Firstly, the authors identified determinants of the development of the forest sector, which are defining directions of strategic planning. Secondly, on the basis of identified problems hindering the development of the forest sector, organizational and managerial prerequisites for improving planning have been established. Thirdly, methodological basis for the formation of strategic program documents within the framework of a holistic system of government strategic planning in the forest sector of the region, based on a strategic planning document for the region’s forest sector. Theoretical significance of this research lies in the development of methodological foundations for formation of strategic program documents within the framework of a holistic system of the government strategic planning in the forest sector of the economy. In addition, results of the study can serve as a basis for finding new solutions to this problem. Practical significance consists in the possibility of application of organizational and managerial tools in a process of improvement of the planning system of development of the forest sector of the economy; proposed methodological framework will assist in the development of documents for government strategic planning of the Russian forest sector. Keywords: Forest sector


Strategic planning
Performance

1 Introduction The forest sector of the Russian Federation consists of two main economic spheres: forestry and forest industry (Fig. 1).

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 272–279, 2020. https://doi.org/10.1007/978-3-030-47945-9_30

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Forestry

Ministry Natural Resources and Ecology of the Russian Federation, Federal Forestry Agency (Rosleskhoz)

Forest industry

Ministry of Industry and Trade of the Russian

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Forest sector

Fig. 1. Structure of the forest sector of the Russian economy

In multi-forest regions are being formed, such documents as “Strategy of development of timber industry complex”. In such regions, valuable wood sorts are limited and grow in protected forests. In this regard, wood processing industry, represented by furniture production and production of door and window blocks, develops on imported raw materials and is oriented towards the consumer. Therefore, this industry in the study region is under the jurisdiction of the Department of Industry and Transport. The relevance of this research comes, on the one hand, from the specificity and significance of the forest sector of the economy, and on the other hand, due to the insufficient development of an effective system of government strategic planning for the industry.

2 Methodology of Research In conducting this research used a combination of techniques and methods of scientific knowledge. Among them system and program-target approaches, method of expert assessment, prioritization, methods of statistical, comparative analysis, and methods of management theory. To determine directions of improvement of the system of government strategic planning in the forest sector of the economy determinants of development of the forest sector are identified: government internal and foreign policy; federal laws, government regulations; tax and customs policy; geographical location; availability of natural resources, forest coverage; policy of regional authorities; level of development of business support infrastructure; level of solvent demand; anthropogenic burden on environment; financing of industry, level of its grant; existence of priority projects; working conditions; economic conditions for business; state and prospects of development of science and technology; level of material, scientific and personnel technology and technology used, efficiency of forest processes. Examination of the totality of determinants presented by the authors is quite complex. In order to reduce their number it is rational to use the expert method, in particular the Delphi method [10].

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3 Results and Discussion In the government program of the Russian Federation “Development of forestry for 2013–2020”, one of the main target indicators is “ratio of the actual volume of wood harvesting to the established allowable amount of wood harvesting”, and achievement of this indicator on the level of 33% (29.3% in 2015). Data on all forests, including economically inaccessible, are used in calculating this indicator. Given that the real level of use of economically accessible forests is close to 100%, and achievement of this indicator is possible only through further exploitation and depletion of forests [13]. Despite a system-wide optimization of the federal budget, financing of forestry not only remained at the same level but also increased in certain areas. In 2018, federal budget subventions amounted to 25.8 billion rubles, which is 4.1 billion rubles more than in 2017. However, this amount covers only 70% of the needs of forestry (it is necessary not less than 40 billion rubles) [13]. Moreover, a new draft order of the Ministry of Natural Resources of Russia “On Amendments to the Standard Lease Agreement for Forest Land for Logging”, approved by Order of the Ministry of Natural Resources and Ecology of the Russian Federation of December 20, 2017 No. 693 additionally suggests the introduction of significant fines for underutilization of a contract lease of the annual amount of timber harvested and use the contract as amended for several years as a basis for early termination of a lease. Adoption of this law will not lead to an increase of efficiency of residents of forest fund which is declared as the purpose of the document but would increase corruption, non-production expenses, and loss of markets. At the same time, the adoption of this law will make it impossible to fulfill obligations of companies on the preservation of valuable habitats assumed by them in the framework of voluntary forest certification under Forest Stewardship Council (FSC). Based on the analysis of the authors as prospects of government strategic planning in the forest sector it is necessary to note the following directions: 1. Methodical unity of indicators formed by enterprises and organizations, integrated corporate structures and the Ministry of Economic Development of the Russian Federation, as well as various strategic planning documents. 2. Rational combination of natural and cost, qualitative economic and technical and economic indicators characterizing the efficiency of innovative development of enterprises, integrated structures, and economic activities. 3. Providing the ability to aggregate information from enterprises and vertical integrated structures of the industry and the national economy as a whole. 4. Renewal—periodic introduction of changes due to the influence of scientific and technological progress.

4 Conclusions and Recommendations To formulate recommendations on defining directions of strategic planning of forest sector development of the region, it is necessary, first of all, to identify determinants influencing this definition (see Table 1).

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Table 1. Determinants of forest sector development of the region, defining directions of strategic planning Group 1 Federal level Regional level

Industry level

Determinants 2 Government structure, internal and foreign policy, level of stability of the political system, federal regulations, tax policy, customs policy, credit, and environmental policy, procedures for registration, licensing, certification, etc. Geographical location, availability of natural resources, forest coverage, regional laws, degree of market monopolization, demographic situation, employment rate, unemployment rate, decline professional and qualification level of enterprise employees of a number of branches, consumer culture, level of information support, development of social infrastructure, transit potential, level of criminogenic situation in a region, availability of strategically important industries, use of modern materials and technologies, anthropogenic burden on the environment, policy of local government (financial, credit, tax, anti-monopoly), level of effective demand Financing of industry, the level of its support, career opportunities, working conditions, state and prospects of science and technology development, development level of support infrastructure, logistics, scientific and human resources, access to information, efficiency of forest management processes (reforestation, and protection of forests)

To determine specific determinants influencing strategic planning of the forest sector, the authors propose to use a systematic approach, the main components of which are building a system of specific factors through the application of expert evaluations and the method of prioritization to determine their relevance. As a result of Delphi method implementation by an expert group consisting of managers and specialists of the industry, eight factors were selected that affect the relationship of business entities with the district administration (Table 2).

Table 2. Determinants of forest sector development of the region, defining directions of strategic planning Group 1 Federal level

Determinants 2 1. Government internal and foreign policy 2. Federal laws, government regulations 3. The level of the political system stability 4. Government structure 5. Changes in legislation 6. Procedures for registration, licensing, certification 7. Tax and customs policy 8. Economic and political reforms (continued)

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Y. Y. Radyukova et al. Table 2. (continued) Group Determinants Regional level 1. Geographic location 2. Availability of natural resources, forest area 3. Availability of strategically important industries 4. Scientific and technical potential of the region 5. Policies of regional governments 6. Level of business support infrastructure development 7. Level of effective demand 8. Anthropogenic pressure on the environment Industry level 1. Financing industry, level of subsidization 2. Availability of priority projects 3. Working conditions 4. Economic conditions for business 5. Status and prospects of science and technology development 6. The level of resource provision 7. Applied machinery and technology 8. Effectiveness of forest processes

As a result of calculations [10] 17 factors that have the greatest relative weight in their group were selected. The names of the factors and their relative weights are shown in Table 3.

Table 3. Priority determinants of forest sector development of the region, defining directions of strategic planning Name of factors 1 Government internal and foreign policy 2 Federal laws, government regulations 3 Tax and customs policy 4 Geographic location 5 Availability of natural resources, forest area 6 Policies of regional governments 7 Level of business support infrastructure development 8 Level of effective demand 9 Anthropogenic pressure on the environment 10 Financing industry, the level of its support 11 Availability of priority projects 12 Working conditions 13 Economic conditions for business 14 Status and prospects of science and technology 15 Level of logistics, scientific and personnel support 16 Used machinery and technology 17 Effectiveness of forest processes

Significance of a factor 0.15882 0.16382 0.14428 0.12906 0.13781 0.12016 0.13363 0.13828 0.12016 0.12441 0.12001 0.12001 0.12001 0.12889 0.12889 0.12889 0.12889

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Based on the data obtained from Table 3, the following conclusions can be drawn. The determinants of the regional and sectoral level have the greatest impact. The influence of determinants at the federal level is more indirect. Improving public strategic planning in the forest sector should be based on the following recommendations: – Provide economic and managerial link between wood growing, harvesting and processing; – Assess reserves of the remaining most productive and attractive forests for industry, including by remote sensing method; – Finalize the methodology of the government inventory of forests according to comments of scientific and public organizations; – Provide prompt and reliable accounting of losses of forest resources from forest fires and other similar phenomena for the purpose of operational recalculation of inexhaustible volume of timber removal; – Stimulate development and ensure implementation of new methods for calculating the allowable volumes of timber removal; – Development and finalization of forest sector policy documents, which ensure the introduction of quantitative indicators of forest management performance, depending on the purpose of forests and reflecting results rather than processes; – Information on the measures taken on forest planting should be publicly available with a geographical reference; – Forest management performance indicators and activities planned to achieve them should be different in forest leased for timber industry purposes; – Develop and implement a set of measures to encourage long - term investments by forest users in improving the quality of the forest fund; – Improve land legislation; – Develop and implement biodiversity conservation requirements in intensive forest management; – Ensure the preservation of the most valuable low-disturbed forest areas; – Develop and launch a road map for the adaptation of forestry in the region for global climate change; – Develop high-tech systems of operational monitoring of forest condition. For public control, it is necessary to be able to establish exactly who carried out or will conduct economic activities in the forest. In this regard, it is necessary to have information on the boundaries of the leased areas of the forest fund, as well as forest declarations (as they relate to the placement of planned cutting areas). Information on forest areas transferred to the implementation of priority investment projects; information on implementation of priority investment projects (as regards the use of forests). It is necessary to publish information on the areas allocated for implementation of priority investment projects linked to the quarterly network. Detailed information on all protective forests, including specially protected natural areas, in areas where timber is being harvested, with a geographical reference.

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5 Conclusion Based on the identified problems that hinder the development of the forest sector, organizational and managerial prerequisites for improving planning for development of the forest sector in the region are established: economic and managerial relationship between wood growing (forestry), harvesting and processing; estimation of reserves of the most productive and attractive forests for industry; methodology of forest inventory in accordance with comments of scientific and public organizations; prompt and reliable accounting of losses of forest resources from fires and other similar phenomena; stimulating the development and ensuring the implementation of new methods for calculating the allowable volumes of timber removals (estimated cutting area); the introduction of quantitative indicators of forest management effectiveness, different depending on the intended purpose of forests; open access to information on events held in forests; different indicators of forest management effectiveness and measures planned for their achievement, depending on the use of forests; stimulation of long-term investments of forest users in improving the quality of the forest fund; an intensive forest management model; conservation with intensive forest management; digitalization of forestry. The prospects, factors, organizational and managerial prerequisites identified during the study made it possible to determine the methodology for formation of strategic program documents within the framework of an integrated system of state strategic planning in the forest sector, which is based on a strategic planning document for the development of the region’s forest sector (Region’s forest sector plan). Proposed measures will allow, firstly, to solve the above problems, secondly, would stimulate the development of the forest sector; thirdly, would improve conditions for forestry.

References 1. Structure and brief description of the forest complex of the Russian Federation. https:// proderevo.net/analytics/main-analytics/struktura-i-kratkaya-kharakteristika-lesnogokompleksa-rossijskoj-federatsii.html 2. Order of the Ministry of Natural Resources of the Russian Federation dated 20.12.2017 No. 692 On approval of the standard form and composition of the forest plan of the subject of the Russian Federation, the procedure for its preparation and introduction of changes. http://www.consultant.ru/document/cons_doc_LAW_295497/ 3. Kolesnichenko, E.A., Torzhkov, I.O., Radyukova, Y.Yu.: Variability of plantation afforestation based on an assessment of its profitability. Izv. KSTU 45, 257–266 (2017) 4. Baydakov, S.L.: Theory and Methodology of Strategic Management of the Metropolis and its Territorial Units, Moscow (2010). 37 p. 5. Ilyina, I.N., Plisetsky, E.E., Kopychenko, G.S., Rybina, E.G.: Assessment of the quality of development of regional development strategies in Russia. Reg. Econ. Theory Pract. 4(427), 178–196 (2016) 6. Klimanov, V.V., Safina, A.I.: Variability in strategic planning documents in the country. Manag. Bus. Adm. 1, 46–65 (2017)

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7. Lebedeva, N.A., Zhiharevich, B.S.: Strategy on strategic planning. Reg. Econ. S. Russ. 1, 6–15 (2018) 8. Lipina, S.A., Smirnova, O.O.: Strategic planning in the subjects of the Russian Federation: methodological bases and recommendations. Reg. Econ. S. Russ. 1(15), 25–35 (2017) 9. Modeling of social phenomena and processes using mathematical methods. M.: SRC INFRA-M (2014) p. 192. edition V.A. Sadovnichy 10. Law no. 168-OZ of 20.12.2018 On the Strategy of socio-economic development of the Voronezh region for the period up to 2035. https://econom.govvrn.ru/its/strategiya-sotsialnoekonomicheskogo-razvitiya 11. Schwartz, E., Shmatkov, N.: Forest sector of Russia: how to get out of the crisis and not make mistakes? https://lesprominform.ru/jarticles.html?id=5075 12. Over the past 5 years, profitability of forestry in Russia has increased almost twice. https:// lesprominform.ru/jarticles.html?id=5216

The Process of Technological Re-equipment Planning of an Enterprise in a Complex Industrial Production Elena V. Romanovskaya(&), Ekaterina P. Garina, Natalia S. Andryashina, Svetlana N. Kuznetsova, and Alexander P. Garin Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. Based on the analysis of theoretical principles, this article reveals the concept, essence, and necessity of technological re-equipment of production. It is concluded that reconstruction and technological re-equipment involves a whole range of measures, which is associated with the introduction into production of new capacities, as well as the use of new equipment, with improvement of organization and structure of production sites, equipment change and its location, introduction of automation and mechanization of production on already active areas. In the practical study, the activity of the company “Technology Pro” LLC was considered. In the course of the analysis, it was concluded that the main problems of the LLC “Technology Pro” workshop on the use of production capacities are deterioration of fixed assets and underproduction of products. To increase the level of utilization of production capacities, the authors proposed to revise the existing equipment. In this regard, it is proposed to consider the expediency of the acquisition of a laser cutting machine for metal sheet by LLC “Technology Pro”. The authors give sources of financing and necessary amount of financial resources for implementation of a financial project. This article presents results of an economic evaluation of the implemented project. It is concluded that technological re-equipment in conditions of complex industrial production will increase the efficiency of the enterprise “Technology Pro”, and will provide competitiveness on the industry market. Keywords: Enterprise Re-equipment JEL Code: L6


Industry
Engineering
Planning
Technology



M5

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1 Introduction Relevance of our research topic is determined by the fact that achievement by the Russian industry of a level of efficiency and competitiveness, which meets requirements of the world market of high-tech products, cannot be realized outside the innovative development of enterprises and organizations with appropriate growth rates, with indicators of economic efficiency and volume indicators. According to experts, the depreciation of equipment of most engineering enterprises in the country currently ranges from 65% to 85% [5, 6, 8]. Any enterprise requires technological re-equipment of production to increase its production potential and optimize interaction between its divisions [3]. Technological re-equipment of existing enterprises is called reconstruction, measures for the introduction of new technology, as well as mechanization and automation of production processes, which include upgrading of equipment and replacement of obsolete equipment with more productive equipment, and elimination of bottlenecks and other activities related to renewal of existing fixed assets enterprises, which are aimed at reducing cost, increasing productivity, increasing production efficiency, but without expanding a production area of an enterprise. Technological re-equipment includes carrying out measures that increase the technical level of production in order to increase the volume of production, as well as improve its qualities and productivity growth labor that do not belong to new construction and expansion [4]. These activities include: introduction of new technology, mechanization, and automation of production processes, modernization, replacement of worn and obsolete equipment, organizational improvement of production processes, improving the quality of products, as well as improving organization of work and its conditions. Modernization of production is a set of measures that increase technical and economic indicators of fixed assets on the basis of innovative solutions. These measures involve increasing the level of automation of production, replacing worn and obsolete equipment with new and more productive. The modernization of production includes all kinds of works that change the technological process and increase the load on the equipment [1, 10]. Thus, technological re-equipment is a whole range of activities, which can be carried out both for individual sites or workshops of production, and for the entire enterprise. Replacement of worn and obsolete equipment, mechanization and automation of production sites also reduce jobs, which have a direct impact on the cost of production. Technological re-equipment of enterprises involves the introduction of new modern methods of management and control over production.

2 Theoretical Bases of the Study On the basis of the research results of Chelomin [2], it is advisable to allocate three types of reconstruction: small, medium and complete (Table 1).

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Type

Characteristic

Small reconstruction

Provides for a small scale of capital investments aimed at partial re-equipment or rearrangement of production facilities of main and auxiliary shops Is characterized by introduction of complex mechanization and automation of individual production processes, increase of fixed assets in the main and auxiliary shops of production and enterprise due to redevelopment of existing buildings and structures or expansion (new construction) of ancillary facilities Is characterized by significant volumes of capital investments aimed at radical renewal of means of labor, increase of existing production capacities, construction of new auxiliary objects

Medium reconstruction

Complete reconstruction

Fixed asset renewal rate 0,1–0,35

0,36–0,55

0,6–0,84

However, according to Stepa [9], for a more comprehensive and objective assessment of the potential of the enterprise and possibility of its technological reequipment, requires a number of indicators. For example, the author divides technological re-equipment into two main types: – Replacement of obsolete equipment with similar but newer equipment; – Replacement of equipment with a fundamentally new and more efficient. In addition, reconstruction of production provides for expansion of existing workshops of enterprises by adding additional enlargement to existing buildings and workshops or creating new workshops and sections by construction of new production facilities in place of the old ones or on free space. It is important to note that costs of repairing fixed assets of an enterprise are current expenses and sum in the total amount of actual costs are taken into account in other expenses when calculating income tax in that reporting period in which: – Signed an act of performed works, if the work was performed by a contractor; – Works were completed if they were carried out by the organization on its own. It is also worth noting that in order to solve problems of perspective design it is necessary to conduct a pre-project survey of existing production to assess its technological level in comparison with best domestic and foreign productions - analogs, which will reveal the so-called “bottlenecks” and problematic issues of product development [7]. Based on analysis of the pre-project survey, management can make decisions, which will determine the main directions of its technological re-equipment.

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3 Results and Discussions Technology Pro LLC is Russia’s largest producer of paper products. The company annually produces more than 100 million rollers of paper products. This is more than 2.5 thousand tons of finished products monthly. It’s share in the domestic market is more than 50%. Analyzed shop LLC Technology Pro manufactures a wide range of technological equipment: – – – – –

Machine tools: Stamp for hot and cold metal processing; Cutting tools, including monolithic hard alloys; Measuring tool; In the production of parts were made on universal machines.

The main stock of technological equipment was renewed in 2001–2002. Equipment of LLC “Technologiya Pro” includes: – Machining equipment, which includes milling and turning universal machines, including CNC machines Goodway GS-200MS; GS-260YS; – Robotic line of mechanical processing of case products; – Automated electronics assembly lines such as Mirae Mx120P element installers, MIRTEC MV-3L optical inspection, ESSEMTEC automatic installers, TWS 1100 furnace, selective installation SPA 300-F soldering machines, Juki 2060 Light installers, Weller and PACE SD25 soldering station, SP210 AVI automatic printers, etc.; – Equipment for automated argon arc welding; – A spillage verification plant one of the largest in Europe. The main share in the total value of fixed assets of the shop have machinery and equipment: 67.6% in 2015, 68.1% in 2016, 68.9% in 2017. The age structure of equipment of LLC “Technology Pro” in 2015–2017 is presented in Table 2. Table 2. Age structure of equipment of “Technology Pro” LLC in 2015–2017 2015 2016 2017 Deviation (+; −) 2016 from 2015 2017 from 2016 Up to 5 5.4 5.1 4.3 −0.3 −0.8 5–10 years 9.9 9.9 9.7 0.0 −0.2 10–20 years 18.4 18.4 19.2 0.0 0.8 More than 20 years 66.3 66.6 66.8 0.3 0.2 Total equipment 100 100 100 0.0 0.0

No. Indicators 2 3 4 5 6

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These tables show a large array of physically and morally obsolete equipment in the shop: 66.3% in 2015, 66.6% in 2016, 66.8% in 2017. In age groups of equipment 16–20 years, it is possible to expect production of lowcost products, and unprofitable use after more than 20 years. Based on the age composition of “Technology Pro” equipment, it can be argued that the zone of profitable operation of the enterprise cannot exceed 50%. Thus, the main problems of the shop of LLC “Technology Pro” are deterioration of fixed assets and underproduction of products. In order to increase the level of utilization of production capacity, it is necessary to review the existing equipment and, if necessary, to carry out modernization, i.e. to introduce a new more progressive equipment. In this regard, in the course of this study, it is proposed to consider expediency of acquisition of a laser cutting machine for metal sheet by LLC “Technology Pro”. In machines that are designed for laser cutting of metals, the main cutting tool is a laser beam (Fig. 1).

Laser beam Cutting direction

Cutting nozzle

Metal

Slag Gas Fig. 1. The essence of laser metal cutting process

It is just enough to focus on almost any surface. Under the influence of a laser beam, the metal is destroyed due to the high density of energy that comes from it to the surface. This can be achieved due to some unique properties of such beam. The laser cutting machine has many advantages, thanks to which it is used in various industries from manufacture of decorative products and souvenirs to mechanical engineering:

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– – – – –

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Minimum time spent on production of billets; Waste-free, high accuracy, availability for staff of different qualifications; Minimization of the cost of products; Absence of deformation, chipping and microcracks of the surface; Ability to work with fragile materials.

Laser cutting machine of all kinds of metal blanks and parts among all existing equipment of this type is considered the most technological and perfect. Thanks to this device, cutting is obtained as accurate and high-quality as possible, without requiring additional processing. The equipment for laser cutting of metal can be set up simply by the operator, and then the entire workflow is carried out exclusively in automatic mode. Laser cutting machines KS-3 V “Navigator” are designed for cutting metal surfaces of any complexity, can perform milling and cutting troughs according to specified parameters. Cutting thickness is the first important value in the characteristics of laser cutting machines, which is determined by the power of a laser resonator. The more powerful the laser source of a machine, the thicker a cutting sheet can be. Laser cutting machines KS-3 V “Navigator” are equipped with IPG Photonics resonators with power from 500 to 4400 W. In this case, it is possible to cut sheets and billets of black carbon steel thickness, thus obtaining maximum energy savings: – – – – – – –

up up up up up up up

to to to to to to to

6 mm - at the power of the resonator 500 W; 7 mm - at the power of the resonator 700 W; 10 mm - at the power of the resonator 1000 W; 14 mm—at the power of the resonator 2000 W; 16 mm - at the power of the resonator 3000 W; 19 mm - at 3800 W resonator power; 25 mm at 4400 W resonator power.

The more powerful a laser source installed on a laser cutting machine, the greater the maximum thickness of sheets undercut and higher cutting speed can be at a certain thickness of a sheet. For example, on the machine KS-3 V “Navigator” the maximum contour speed of cutting black steel with a thickness of 1 mm can reach 50 m/min at a laser source with a power of 4400 W. In this case, the cut is in a straight line or on a simple geometric contour (large square, rectangle, hexagon, etc.). It is necessary to understand that the cutting speed of small parts or workpieces of complex geometric shape will always be lower than contour speeds.

4 Conclusion Table 3 shows sources of financing of the project on technical re-equipment of LLC “Technology Pro”.

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Table 3. Sources of financing of the project on technical re-equipment of LLC “Technology Pro”, rub. Name of funding source Own funds Bank loan (18%) Total cost of the project

Amount, rub. 530,000 4 315 000 4 845 000

The required amount of financial resources for implementation of the declared financial project is 4845 thousand rubles, of which 4315 thousand rubles are borrowed funds. In the course of this project, it is necessary to purchase and install equipment, obtain a license, recruit personnel, and carry out repair of production premises. Requirement for property, plant, and equipment is presented in Table 4. Composition of the equipment depends on the type of manufactured products and chosen production technology. Table 4. The need for equipment, rub. No.

Name of equipment

Quantity

1

Laser cutting machine KS3 V “Navigator” Delivery and installation Total:

2

1

Price, thousands of rubles 4420

Cost, thousands of rubles 4420

X

425 X

425 4845

In order to implement proposed measures, it is necessary to envisage additional costs for personnel who will work on new equipment. Consequently, after installation and operation of new equipment, the costs of the enterprise in terms of remuneration will increase. Determine the required number of employees for specific positions and their monthly salary (Table 5). Table 5. Additional staff costs, RUB No.

Position

1

Machine operator Total:

Number of people 3

Average salary per month, rub. 48 000

Costs per year, rub. 1 728 000

3

48 000

1 728 000

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Table 6 presents a calendar plan for the implementation of the project. Table 6. Calendar plan for the implementation of the project, rub. No.

Project phase name

1

Installation of laser machines for metal cutting KS-3 V “Navigator” Date of achievement of full production capacity

Start date 06.2019

End date 06.2019

The cost of the stage 4 845 000 rubles

07.2019

Planned increase in sales volume due to the measure on technological re-equipment of production “Technology Pro” LLC is 5%. The planned dynamics of sales volumes are presented in Table 7. Table 7. Planned dynamics of sales volumes of the shop “Technology Pro”, thousands of rubles. No. 1 2 3 4

Product types Gas turbine equipment Devices for control and regulation of technological processes Control devices for heating and hot water supply systems Other Total:

2019 35450 22611

2020 37223 23742

2021 39084 24929

2022 41038 26175

27028

28379

29798

31288

8694 93783

9129 98472

9585 103396

10064 108566

Thus, for 2019 it is planned to get profit by 4689 thousand rubles more. Technical, economic and financial indicators of the project will be presented in Table 8. Table 8. Technical, economic and financial indicators of the project No. Technical, economic and financial indicators of the project Units of measurement Amount 1 2 3 3.1 3.2 4 5 6 7 8

Area of premises Number of additional staff Investment costs of the project, including Loan funds Own funds Revenue from sales of products (annual average) Profit from sales (annual average) Payback period of the project Profitability Simple rate of return

sq.m pers. rub. rub. rub. rub./year rub./year years % %

240 3 4 845 000 4 315 000 530000 4 689 150 1 376 750 3.5 28.42 13.50

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After conducting an economic evaluation of the proposed project, we can conclude that the modernization of production facilities and equipment will increase the production efficiency of the company Technology Pro LLC and ensure competitiveness in the industry market.

References 1. 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) 2. Chelomin, A.V.: Industrial enterprises: modernization for development. Reconstruction and technical re-equipment: the main direction of innovative development of industrial enterprises. Russian entrepreneurship, 1–1, pp. 24–27 (2011) 3. Garina, E.P., Kuznetsov, V.P., Romanovskaya, E.V., Andryashina, N.S., Efremova, A.D.: Research and generalization of design practice of industrial product development (by the example of domestic automotive industry). Qual. Access Success 19(S2), 135–140 (2018) 4. Kuznetsova, S.N., Romanovskaya, E.V., Artemyeva, M.V., Andryashina, N.S., Egorova, A. O.: Advantages of residents of industrial parks (by the example of AVTOVAZ). In: Advances in Intelligent Systems and Computing. vol. 622, pp. 502–509 (2018) 5. Kuznetsov, V.P., Romanovskaya, E.V., Egorova, A.O., Andryashina, N.S., Kozlova, E.P.: Approaches to developing a new product in the car building industry. In: Advances in Intelligent Systems and Computing, vol. 622. pp. 494–501 (2018) 6. Markova, S.M., Narkoziev, A.K.: Industrial training as an integral part of professional training of future workers. Vestn. Minin Univ. 6(1), 4–20 (2018) 7. Potashnik, Y.S., Garina, E.P., Romanovskaya, E.V., Garin, A.P., Tsymbalov, S.D.: Determining the value of own investment capital of industrial enterprises. In: Advances in Intelligent Systems and Computing, vol. 622, pp. 170–178 (2018) 8. Sergi, B.S. (ed.): Exploring the Future of Russia’s Economy and Markets: Towards Sustainable Economic Development. Emerald Publishing, Bingley (2018) 9. Shtepa, M.V.: Evaluation of technological development of enterprises in the conditions of competition. Russ. Entrepreneurship 5(227), 33–40 (2015) 10. Smirnova, Zh.V, Gruzdeva, M.L., Krasikova, O.G.: Open electronic courses in the educational activity of the university. Vestn. Minin Univ. 4(21), 3 (2017)

Product Creation System in the Conditions of High-Tech Transformation of the Economic System Elena V. Romanovskaya(&) , Ekaterina P. Garina , Natalia S. Andryashina , Victor P. Kuznetsov , and Alexander P. Garin 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 study is to consider the product creation system in conditions of high-tech transformation of the economic system, highlight problems and suggest solutions for them. Design/methodology/approach: The historical aspect is presented in the context of creating a complex high-tech product. The authors address the problem of limited information and ideas in the process of serial production, and the lack of involvement of professionals in the decision on product design stage. Findings: The article considers the fundamental task of production development in the context of creating a complex high-tech product. The authors propose solutions to the identified problem, on formation of a system for creating an industrial product as a condition for development of production. They note the decisive influence of design decisions on product cost, time, development and quality. Solutions imply an assessment of the manufacturability of the product in the initial designs and stages of creation. This makes it possible to integrate the production systems available to the manufacturer as a production facility as a production facility. Originality/value: A promising method for solving the problem is to use the developed and presented approaches for development of production in the context of creating a complex high-tech product. The approaches presented by the authors reflect conditions under which it is possible to optimize the design of an industrial product with regard to production issues and thereby minimize production costs. Keywords: System
Industrial product
Sustainable development
High-tech product JEL Code: L230

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 289–295, 2020. https://doi.org/10.1007/978-3-030-47945-9_32

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1 Introduction It is believed that the issue of creating an industrial environment in the context of the development of the production process of high-tech products was first reviewed by Skinner in 1969 (Schätz 2006). The author considers the problem in conditions of increasing market complexity, when the manufacturer seeks to maximize the product, and accordingly profit, by actively promoting mass production. Further, the theory develops in the 1970s, when the main aspect of the issue is improving the quality of products by ensuring uniform and defect-free production; in the 1980s, when the dominant of maintaining high productivity of production processes and product quality was formed with a wide variety of nomenclature and production flexibility. In the 1990s, consumer demand was transformed in the direction of novelty - the demand for products with new features is growing (MacCormack et al. 2001), and in the 2000s for high-tech products as well. Constant changes in approaches to production and consumption lead to the need for sustainable modernization of complex processes, production lines and organization of production in general (Chelnokova et al. 2017). This, in turn, determines the need to change the theoretical and methodological base of production management. In fact, the fundamental task of developing production is being formed in the context of creating a complex high-tech product (Kuznetsov et al. 2018).

2 Materials and Method Historically, the product development process is part of the production development process (Fig. 1). Product development process Product design Production process development Supply

Production

Placing product on the market

Sales

Value chain production

Fig. 1. The classic process of product development in an industrial environment (Schätz 2006)

In the context of research, production development is understood as implementation of the management function through planning and control of resources used to produce product (Egorova and Kuznetsov 2014). Sustainable development is determined by the process of formation of production capacities, a change in the organization of the production process. It is creating a system of adaptive tools and developing new technologies, including product creation technologies.

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The creation of a manufacturing product in this system is highlighted by a separate procedure, and, at best, by a separate business process. The product itself acts as an object of influence. Participation of production personnel directly in product design is minimal. As a result, the weakness of the system is poor adaptability of methods and tools for modeling of integrated high-tech processes and complex high-tech products for production systems of the manufacturer. In addition, the long-term development of production capacities increases the product life cycle and determines the appearance of lost profits effect (Fig. 2) (Garina et al. 2017).

Project Delay Planned time to enter the market

Planned profit Shortfall in profit Real profit Break even point Time

Expected cost point Maximum cost point

Fig. 2. Product development project life cycle (Lapaev 2010)

In this approach, the product creation process solves the general strategic task of the enterprise, and production system ensures the effective interaction of information flows, materials, personnel, equipment and money within corresponding business goal. Changes in the production elements of the system are implemented through the development of technology and production. The process of developing a new production product is included in the second group and acts as an interface. A set of capabilities, ways, and methods of simultaneous interaction of two in more systems. Interactions of regular preparation, planning of new production lines and elements of the production system (Fig. 3). Moreover, the process of development of production itself, as noted earlier, is part of the overall process of designing a production system. Product new

Product design

classical

Continuous change / improvement classical

Production development Technological development new

Fig. 3. Product-production matrix (Garina and Garin 2013a, b)

Production

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3 Results A process of development of production involves consideration not only of the appropriate technology, but also of all its elements: resources, logistics, economics, etc. It integrates processes from the production concept to the implementation of economically viable production processes in a defined time period (Schätz 2006). The task of developing a complex integrated product is solved in conditions of an endless growth of technical, market and organizational interdependencies with implementation of sequential and parallel production. Their main difference is the differentiation of production development cycles and decision-making stages (Sergi et al. 2019). A study of the works of the authors (Ulrich and Eppinger 2000), (Kuznetsov and Romanovskaya 2011) allows us to determine that the main disadvantage of sequential production is development of the product in conditions of limited exchange of information and ideas, and the absence of involvement of specialists in decisions on the stage of product design. The product and process of its creation is not primary process of production development (Smirnova et al. 2017). There are certain changes on the identified problem, that is, on the formation of an industrial product creation system, as conditions for development of production, were reflected in the works of Wu (Wu et al. 2000), in which the author focused on developing a series of production processes and characteristics of production elements within the framework of life product creation cycle. Wu believed that the product creation system is primary in development of the enterprise’s production system and cannot be formed “in isolation” from it. It is for this author that the stage “product design” for the first time becomes the “reference point” in the methodology of production development. This position is also held by such scientists as Ulrich (Ulrich and Eppinger 2000), Roozenburg (Roozenburg and Eckels 1995), who, following the theme of development of production, distinguish three central stages of product creation: marketing, design, production. Ulrich argues that measures to form a production system/production lines should be present already in the early stages of product design. Roozenburg advises an iterative product development process to form in a continuous production development system. All approaches emphasize the decisive influence of proposed design solutions on the cost of production, development time and quality of the created product. In the early 2010s the process of development of production has traditionally been considered as part of the overall design/product creation system. Verification of manufacturability in the initial stages of the process reveals the shortcomings and threats of product design in relation to production issues. Later in the product design process, manufacturability becomes a criterion in the decision-making process to achieve the best product design (Lapaev 2010). This approach requires very early involvement of technologists in the product creation system, and therefore, a close relationship between the various departments/structures of the enterprise is already initially ensured. A typical management tool in this case is FMEA. This method can be applied for design and production of a selected process. Other well-known methods are DFM, and DFA. They use milestones to improve manufacturability (Garina and Garin 2013a, b).

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Creation of multidisciplinary teams allowed manufacturers to only relatively reduce the time to bring the created product to the market. Therefore, already at the turn of the 1980s–1990s, the philosophy of parallel design of production systems and production of products was formed, which significantly reduced the time of product development and its commercialization (Garina and Garin 2013a, b). However, the classic approach to consistent workflows is still the basis for planning and developing new production facilities. The problem of the separation between elements of systems “product design” and “production” regarding the final product specification from the design to the production department. It is solved by implementing three potentially different points of view on the development of production (Shushkin 2013): – The traditional process of development of production - a consistent approach; – From top-to-bottom approach - from the upper divisions to the performers; – From bottom-to-top approach is from the primary units in ascending order. The traditional process of production development in its classical sense originated in the 1950s and was described by German researchers. The basis for the traditional process of production development is the manufacturer’s business strategy, and production activity is carried out through a sequence of iterative steps. The process is aimed at combining the positions of “designer” and “operator of production”. Product changes or customer requirements give rise to new intensive iterations in the process of development, and implementation of which, according to a number of scientists, is possible through a number of measures (Udalov et al. 2011), (Romanovskaya et al. 2014): – early involvement of the production developer in the product design - in the process of its development; – involvement of production personnel in the detailed planning of facility; – creation of a department for the development of production as an independent functional unit of the enterprise, which will act as a link between the design and production. However, the authors do not mention the need for the participation of production personnel in the product design process. The general top-to-bottom approach is based on a systematic approach to solving problems and focuses on production along the value chain, on development of production processes aimed at turning raw materials into finished products (Wu et al. 2000). This approach describes implementation of production technologies in the context of a production development system. The purpose of this approach is not the systematization of individual departments, but the effective interaction of the information flow, materials, personnel, equipment and money, guaranteeing a smooth and efficient work as a whole. This process is part of the overall process of transforming incoming resource flows into a finished product. Development of the full project is most often based on the philosophy of concurrent engineering, and implementation of multidisciplinary teams. The bottom-to-up approach - from primary units to ascending means the development of production in the product creation system as a separate stage of the project.

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Processes of product design and sustainable development of production are considered as parallel. This approach highlights three central product development functions (Garina and Garin 2013a, b): marketing, design, production. The authors argue that activities related to production should be present at very early stages of design, in contrast to the traditional process of production development. The works of (Lapaev 2010), (Romanovskaya et al. 2014) emphasize the need for early involvement of production in the process of creating a product, and non-observance of which leads to an increase in product development time.

4 Conclusion All approaches emphasize the decisive influence of design decisions on the cost of production, time, development and quality. Solutions imply an assessment of the manufacturability of the product in the initial designs and stages of creation. This makes it possible to integrate the production systems available to the manufacturer as a production facility. Evaluation of the manufacturability shows weaknesses and threats regarding the organization of production. Later in the product design process, manufacturability becomes a criterion for making decisions to achieve a better design. This requires a very early involvement of technologists and, consequently, improved communication between different departments. Most authors (Miroshkin et al. 2015), (Schätz 2006) recommend the inclusion of production engineers as design experts in the team and decision-making process for product design. A typical tool for evaluating the manufacturability of product creation processes is the FMEA method. This method can be applied to the design of selected production processes along with DFA, DFM, and CAM system. They use reference points and guidelines to improve product manufacturability. DFM allows you to optimize the design of an industrial product with regard to production issues and thereby minimizes production costs (Romanovskaya et al. 2014). Therefore, DFM is a way to solve production issues without the need for engineers to integrate into production development. These principles and checklists can be integrated into the CAM system. It is a kind of best engineering practices of production and product design. All DFM and DFA methods consider product design as part of the organization of production at the beginning of the product design process.

References 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) Egorova, A.O., Kuznetsov, V.P.: The mechanism for development and implementation of the competitive strategy of engineering enterprises: monograph. Nizhny Novgorod State Pedagogical University. p. 180 (2014)

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Garina, E.P., Garin, A.P.: Accelerating the process of developing new products at industrial enterprises through development of a landscape of new generation business processes. Bull. Chuvash Univ.1, 242–246 (2013a) Garina, E.P., Garin, A.P.: Trends and prospects for the development of the domestic automotive industry based on the implementation of the PLM strategy. Mod. High Technol. Reg. Annex, 2(34), 26–32 (2013b) 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) 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) Kuznetsov, V.P., Romanovskaya, E.V.: Theoretical aspects of enterprise restructuring: monograph. Ministry of Education and Science of the Russian Federation, GOU VPO Cherepovets State university, GOU VPO Volzhsky State Engineering University, Cherepovets, p. 112 (2011) Lapaev, D.N.: Multi-criteria assessment of the economic condition of industrial enterprises: monograph. Ministry of Education and Science of the Russian Federation, “Volzhsky State Engineering and Pedagogical University”. Nizhny Novgorod, p. 259 (2010) MacCormack, A., Verganti, R., Iansiti, M.: Developing products on «internet time» : the anatomy of a flexible development time. Manag. Sci. 47(1), 133–150 (2001) Miroshkin, P.P., Neklyudov, V.S., Klyuev, Yu.S.: Organizational and economic mechanism to ensure the effectiveness of holdings of trade enterprises. Bull. Michurinsk State Agrarian Univ. 1, 66–72 (2015) Romanovskaya, E.V., Semakhin, E.A., Andryashina, N.S.: Lean manufacturing management system in the automotive industry. Actual Probl. Humanit. Nat. Sci. 4–1, 264–267 (2014) Roozenburg, N.F.M., Eckels, J.: Product Design: Fundamentals and Methods. Wiley, Hoboken (1995) Schätz, C.: A methodology for production development. Doctoral thesis, Norwegian University of Science and Technology, p. 126 (2006) Sergi, B.S., Popkova, E.G., Bogoviz, A.V., Ragulina J.V.: Entrepreneurship and economic growth: the experience of developed and developing countries. In: Entrepreneurship and Development in the 21st Century, Emerald publishing limited, Bingley, pp. 3–32 (2019) Shushkin, M.A.: The development of domestic enterprises in the automotive industry based on the strategy of industrial partnership. Bull. of Kazan Technol. Univ. 16(3), 259–261 (2013) Smirnova, Zh.V., Gruzdeva, M.L., Krasikova, O.G.: Open electronic courses in the educational activity of the university. Vestn. Minin Univ. 4(21), 3 (2017) Udalov, F.E., Kuznetsov, V.P., Garina, E.P.: Studying the methods of process management of an industrial enterprise. Bull. Nizhny Novgorod Univ. Lobachevsky 5–2, 232–237 (2011) Ulrich, K.T., Eppinger, S.D.: Product Design and Development, 2nd edn. McGraw Hill Inc, New York (2000) Wu, B., Kay, J.M., Looks, V., Bennett, M.: The design of business processes within manufacturing systems management. Int. J. Prod. Res. 38(17), 4097–4111 (2000)

Competence of AI: Measuring and Management Irina S. Bagdasarian(&) Siberian Federal University, Krasnoyarsk, Russia [email protected] Abstract. Purpose: The purpose of the paper is to substantiate the differences between the needs of economic subjects in different spheres of economy in competencies of AI and to develop the scientific and methodological recommendations for measuring and managing the competence of AI. Design/methodology/approach: The author develops and uses the scientific and methodological approach to measuring the competence of AI. The approach includes the algorithm, (sequence of actions), set of questions for expert evaluation, formula, and scale for treatment of the results. Findings: It is substantiated that in each sphere of economy AI could improve its business process and this is assigned specific functions, which execution requires the presence of various competencies. In this paper, a general classification of AI competencies within the main spheres of economy – service, trade, industry, and agriculture – is performed. The scientific and methodological recommendations for measuring and managing the competence of AI are offered. Originality/value: It is proved that the competence-based approach allows ensuring the necessary flexibility of AI and is thus preferable for its management. The offered recommendations for applying this approach allow achieving successful commercialization of AI. This will allow preventing a possible crisis of overproduction, connected to impossibility to sell the universal AI, developed by universities and research institutes by the order of the government, to companies. The competence-based approach will ensure the necessary adaptation of AI to the needs and specifics of each company. Due to this, AI will be in demand not only in theory but also in practice, and will allow increasing the effectiveness of economic activities. Keywords: Competence Commercialization JEL Code: D83


Competencies
AI
Machine learning



G34
O31
O32
O33
O38

1 Introduction Demand for AI is acknowledged at the global level. This is confirmed by its inclusion into national lists of strategic technologies and adoption and implementation of the special policy in the sphere of AI and creation of the specialized Centre on Artificial Intelligence and Robotics based on the United Nations (2019). Manifestation of initiatives on development of AI by regulators became a reason of its treatment as an object of state management with acknowledgment of the necessity for its further © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 296–302, 2020. https://doi.org/10.1007/978-3-030-47945-9_33

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implementation into the corporate and consumer economic practice. Thus, for example, the government provides financing for R&D in the sphere of AI and compiles reports as a result of conducting R&D. Thus, AI is a universal technology that could be used in various economic processes. While AI was studied primarily by representatives of the engineering and technical sciences, this treatment was applicable. However, now there are a lot of results of successful R&D in the sphere of AI that require commercialization. That’s why representatives of economic sciences began studying AI in recent years – which showed a contradiction of its treatment. On the one hand, AI does have wide perspectives of practical application. On the other hand, it is not universal. The offered hypothesis is like human intellect, which requires training for profession, AI also performs different functions in different spheres of economy and requires specialized training. In each direction of economic activities there’s a need for special AI, and its creation requires the competence-based approach. The purpose of this paper is to substantiate differences between the needs of economic subjects in different spheres of economy in competencies of AI and to develop the scientific and methodological recommendations for measuring and managing the competence of AI.

2 Materials and Method Fundamental and applied issues of application of AI in various spheres of the modern economy, as well as the issues of machine learning, are studied in the works Petrenko et al. (2018), Popkova (2019), Popkova et al. (2019), Popkova et al. (2018), Popkova and Parakhina (2019), Popkova and Sergi (2018), Popkova and Sergi (2019), Ragulina (2019), Sergi et al. (2019), and Sergi (2019). The main provisions of the competencebased approach for preparation and development of intellectual resources are studied in the works Bagdasarian et al. (2019a), Bagdasaryan et al. (2019b), Bouhdidi et al. (2016), Keator et al. (2016), Kytmanov et al. (2016), and Wojcik et al. (2019). Thus, the existing sources describe the competence-based approach in detail, but do not adapt it to machine learning. Due to this, the scientific & theoretical basis and methodology of measuring and managing the competence of AI is not yet formed. A general scientific and methodological approach to measuring the AI competence, which is based on expert evaluations and which envisages the following sequence of actions, is offered: 1. 2. 3. 4.

Determining sphere for which the evaluation of AI competence is performed; Selecting the preferable subject of evaluation of AI competence is this sphere; Forming a list of criteria of evaluation of AI competence in this sphere; Conducting the expert evaluation and generalizing the results with the help of the following formula: CAI ¼ ½ðx1 þ x2 þ . . . þ xn Þ=n  p,

where CAI – competence of AI, points 1-10;

ð1Þ

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xi – evaluation according to the criterion i, i = 1,…n, points 1-10; n – total number of criteria; p – preferability of AI as compared to human intellect (human intellect is the basis and equals 1), shares of 1. 5. Qualitative treatment of the obtained results according to the offered scale: • if CAI  8, AI is competent and preferable; • if 5 < CAI < 8, AI is competent, but not preferable and thus requires improvement; • if CAI  5, AI is not competent.

3 Results As a result of studying the modern practice of applying AI, sectorial peculiarities are determined – which allows determining competencies of AI that are in demand in different spheres of economy (Table 1). Table 1. AI competencies that are in demand in different spheres of economy. Sphere

Service sphere and trade

Business process that could be improved with the help of AI* Marketing and sales

Industry

Production

Agriculture

Production

Functions of AI*

Competencies that are necessary for AI* for executing functions

Offer of goods and services

Politeness, individual approach to each customer, logical thinking (multicriterial segmentation of the market) Quick response, ability to process different forms of orders Multi-parametric optimization of production Ability for integration with various digital devices Knowledge of technology and standards of quality Ability to process Big Data

Accepting orders Production planning Organization of production Control of production

Source: developed and compiled by the authors.

As shown in Table 1, AI could improve marketing and sales in the service sphere and trade. Its functions include offer of goods and services and receipt of orders from consumers. For executing these functions, AI requires the following competencies: • politeness, individual approach to each customer: ability to create information messages, to which consumers will be loyal and which will stimulate consumers for purchases;

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• logical thinking (multi-criterial segmentation of market): ability to distinguish different categories of consumers; • quick response: quick processing of data; • ability to process different forms of orders: ability to receive data with the help of different templates. AI could improve production in industry. Its functions are connected to planning and organization of production. For executing these functions, AI requires the following competencies: • multi-parametric optimization of production: considering a range of parameters of production and ability for their systemic optimization; • ability for integration with various digital devices: ability to connect and issue clear orders to various digital devices (production equipment). In agriculture, AI could improve production. Its function is control of production. For this, AI requires the following competencies: • knowledge of the technology and standards of quality of agricultural products; • ability to process Big Data. The offered criteria of evaluating the AI competence in different spheres of economy are shown in Table 2. Table 2. Criteria of evaluation of AI competence in various spheres of economy. Sphere Service sphere and trade

Industry

Agriculture

AI competencies Politeness, individual approach to each customer logical thinking (multi-criterial segmentation of the market) Quick response, ability to process different forms of orders Multi-parametric optimization of production Ability to integrate with various digital devices Knowledge of technology and standards of quality Ability to process Big Data

Criteria of evaluation of AI competence Are information messages from AI interesting and attractive for you?

Is the system of orders to AI convenient for you& Are production plans that are compiled by AI effective? What is the level of coverage of production digital devices by AI? (level of automatization)? What is the level of fullness and precision of AI’s control of production and quality of finished products? What is the share of AI errors? Are tips from AI timely?

Source: developed and compiled by the authors.

As shown in Table 2, evaluation of AI competence in the service sphere and trade is performed by consumers (sociological survey), and in industry and agriculture – by

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production managers (expert evaluation). For developers of AI, the following management model is offered (Fig. 1).

1. Selection of the sphere for which AI is created

2. Development of AI for this sphere

 For service sphere and trade: teaching AI new models of communications and new criteria of sorting;  For industry: teaching AI communications with new devices and new approaches to production planning;  For agriculture: teaching AI new production technologies, standards, and new technologies of Big Data processing.

3. Starting partnership in a company from the sphere

6. Development of competencies of AI

4. Adapting AI to the specifics of the partner company

5. Evaluation of competency of AI

Fig. 1. The model of AI management based on the competence-based approach. Source: developed and compiled by the authors.

As shown in Fig. 1, the first stage envisages selection of the sphere for which AI is created. At the second stage, R&D is performed, and AI is developed for the selected sphere. The third stage envisages conclusion of partnership agreement with the company of the selected sphere regarding the delivery of AI. At the fourth stage, AI is adapted to the specifics of a partner company. At the fifth stage, AI competence is evaluated. At the six stage, competencies of AI are developed based on machine learning. For the service sphere and trade, this envisages teaching AI new models of communications and new criteria of sorting. For industry, this means teaching AI communications with new devices and new approaches to production planning. For agriculture, this envisages teaching AI new technologies of production, standards, and new technologies of Big Data processing.

4 Conclusion Thus, as a result of the research, the hypothesis has been confirmed: AI could improve its business process in each sphere of economy, and thus is assigned specific functions, which execution requires various competencies. This paper presents a general classification of AI competencies within the main spheres of economy: service sphere and trade, industry, and agriculture. The scientific and methodological recommendations for measuring and managing the competence of AI are offered. It could be concluded that the competence-based approach allows ensuring the necessary flexibility of AI and is thus preferable for its management. The offered recommendations for applying this approach will allow achieving successful

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commercialization of AI. This will allow preventing a possible crisis of overproduction, connected to impossibility to sell the universal AI, developed by universities and research institutes by the order of the government, to companies. The competencebased approach will ensure the necessary adaptation of AI to the needs and specifics of each company. Due to this, AI will be in demand not only in theory but also in practice, and will allow increasing the effectiveness of economic activities.

References Bagdasarian, I., Vasilyeva, Z., Almabekova, O., Titiberiya, R.: National system of qualifications as a mechanism for ensuring an integrated approach to the development of human capacity in the Yenisei SiberiaInt. Multi. Sci. GeoConference Surveying Geol. Min.Ecol. Manag. SGEM, 19, 223–228 (2019a) Bagdasaryan, I., Stupina, A., Zhanna, S., Titiberiya, R., Vaitekunene, E.: Training of it-personnel in the interior of “Digital economy”. Int. Multi. Sci. GeoConference Surveying Geol. Min. Ecol. Manag. SGEM, 19, 385–392 (2019b) Bouhdidi, J.E., Ghailani, M., Douas, F., Fennan, A.: Modelling an adaptive e-learning system for implementing competencies-based approach. Int. J. Knowl. Learn. 11(1), 82–92 (2016) Keator, C.S., Dickinson, B.L., Lackey, W.L., Vanden Heuvel, G.B., Vandre, D.D.: Explorations: a new approach to self-directed learning in a competency-based curriculum. Med. Sci. Educ. 26(4), 777–785 (2016) Kytmanov, A.A., Noskov, M.V., Safonov, K.V., Savelyeva, M.V., Shershneva, V.A.: Competency-based learning in higher mathematics education as a cluster of efficient approaches. Bolema – Math. Educ. Bull. 30(56), 1113–1126 (2016) Petrenko, E., Pritvorova, T., Dzhazykbaeva, B.: Sustainable developmet processes: service sector in post-industrial economy. J. Secur. Sustain. Issues 7(4), 781–791 (2018). https://doi.org/10. 9770/jssi.2018.7.4(14) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. Studies Syst. Decis. Control 169(1), 65–72 (2019) Popkova, E.G., Egorova, E.N., Popova, E., Pozdnyakova, U.A.: The model of state management of economy on the basis of the internet of things. Studies Comput. Intell. 826(1), 1137–1144 (2019) Popkova, E.G., Morozova, I.A., Litvinova, T.N.: Transformational processes in the media system under industry conditions 4.0: future outlines and perspectives (reflections on the article by Alexander P. Sukhodolov, DSc. In Economics, Professor and Irina A. Kuznetsova, PhD in Engineering, Associate Professor “Designing the mass media as a homeostatic system by means of automation engineering: Basic concepts, structure, components”). Theor. Pract. Issues Journalism, 7(1), 145–154 (2018) Popkova, E.G., Parakhina, V.N.: Managing the global financial system on the basis of artificial intelligence: possibilities and limitations. Lect Notes Netw. Syst 57(1), 939–946 (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, New York (2019)

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Ragulina, Y.V.: Priorities of development of industry 4.0 in modern economic systems with different progress in formation of knowledge economy. Stud. Syst. Decision Control, 169, 167–174 (2019) Sergi, B.S., Popkova, E.G., Sozinova, A.A., Fetisova, O.V.: Modeling russian industrial, tech, and financial cooperation with the Asia-Pacific Region. In: Sergi, B.S. (ed.) Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) Sergi, B.S. (ed.): Tech, Smart Cities, and Regional Development in Contemporary Russia. Emerald Publishing Limited, Bingley (2019) United Nations: AI policy (2019). URL: https://futureoflife.org/ai-policy-united-nations. Accessed 19 Oct 2019 Wojcik, W., Kubekov, B., Naumenko, V., Toibayeva, S., Utegenova, A.: Project - Competency based approach and the ontological model of knowledge representation of the planned learning. Int. J. Electron. Telecommun. 65(1), 45–49 (2019)

Artificial Intelligence and Its Role in the Development of Small and Medium Businesses Aliya M. Bazieva(&), Asylbu I. Ermatova, Aida S. Umuralieva, Gulbara N. Borubaeva, and Zairbek A. Osmonov Batken State University, Kyzyl-Kiya, Kyrgyzstan [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The authors of the paper examine the role of Artificial Intelligence in small and medium businesses; they suggest using their computer program that was developed with the use of recurrent model of a small enterprise which allows forecasting the indicators of the operating performance of an agricultural enterprise in the short-run and in the long-run period. Keywords: Artificial Intelligence
Small and medium businesses
Management
Agriculture
Recurrent model
Computer program

In 1950 [2], Alan Turing published a paper in which he put forward his assumption of the possible creation of “thinking machines”. This can be considered one of the first mentions of Artificial Intelligence [14]. About 70 years ago, the first definition of Artificial Intelligence (AI) was formulated, which was subsequently expanded and supplemented over the next decades by many scientists and researchers [1, 7]. Today, in our opinion, the following definition of Artificial Intelligence remains pertinent: “AI is the science and technology of developing computer systems which are able to accomplish the tasks which are usually solved with the use of human intelligence, for example: understanding of language, memory, learning, ability to solve mathematical and logical problems, ability to recognize images, etc.” Until the early 80s, Artificial Intelligence did not have widespread application in the business world. Today, Artificial Intelligence changes the business identity. AI has long become a reality, not a future concept. Most companies, from technology giants like Apple, Amazon and Google to customer-focused Starbucks and Uber, use AI for improving their customer service [6]. A question arises: whether only major corporations can benefit from AI, or small businesses (for example, in the Kyrgyz Republic) should pay their attention to it as well? In our opinion, the answer is unambiguous – small enterprises in Kyrgyzstan should implement AI in their activity as soon as possible, because this will give great competitive edge and will increase the operating performance, which has been proved by this research. At the moment, our research is of great relevance and importance, since it corresponds to the line of development of the economy of Kyrgyzstan and the country as a © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 303–313, 2020. https://doi.org/10.1007/978-3-030-47945-9_34

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whole: The President of the Kyrgyz Republic Sooronbay Sharipovich Jeenbekov announced that 2019 will be the year of regional development and digitalization of the country [10]. Until 2023, digital technologies should be introduced in education, healthcare, tourism, agriculture, telecommunications, banking, consumer goods industry, and construction [11]. In order to fulfil the task set by the President, it is necessary to primarily give consideration to the field and examples of application of Artificial Intelligence. Starbucks is a fine example of a company using AI for customer service. Starbucks used voice ordering feature via Alexa (Amazon’s virtual cloud assistant). Alexa has feature called Starbucks Reorder, which allows customers to make orders with their voice (for example, they can ask for a regular coffee or check the balance of their card account. Using AI, major corporations mainly focus on advertising, and small businesses will be able to implement options which will be really helpful for the customers. As soon as consumers get used to solutions with AI components (like Alexa in Starbucks), they eventually will expect the same from small companies. However, there are certain peculiarities of application of Artificial Intelligence in small business. Small enterprises should not start working with AI without a concrete plan. The definition of specific features of application of Artificial Intelligence is an essential prerequisite. For example, for a furniture store AI can be used for studying the predictive analytics, for reducing the inefficiency of personnel. The owners of pizza restaurants and delivery services will likely be interested in the idea of using drones or cars. Thanks to correct goal setting, taking account of specific features of an enterprise, it will be easier to small businesses to develop a strategy for achieving them. Even if a small enterprise is not yet ready to apply Artificial Intelligence, it is important to monitor the market situation, to be aware of recent developments and achievements in the field of AI that can be used to the benefit of the company, and to observe the actions of competitors in this field. Through active examination of Artificial Intelligence, small businesses will be able to prepare for the future implementation of Artificial Intelligence for the optimization of business processes and the improvement of the quality of customer service. Perhaps, turning a small enterprise into a strong company primarily focused on data management is simpler than it may seem. We will offer several directions for the use of AI in a small company to prove it: 1. CRM systems. CRM systems were designed to collect information about customers obtained from phone calls, e-mail, and social networks. The sales department is provided with information for the management of interaction with current or potential customers. Hence, marketing and lead generation—marketing tactics focused on searching for potential customers with particular contact details—become automated. CRM-applications help companies to analyze consumer sentiments, obtaining data from the posts in social networks and reviews published by the customers, records of their phone conversations, email messages. In addition, they evaluate customer reviews by adjusting marketing activity in a proper way. Thanks to CRM supported by Artificial Intelligence, small companies are able to obtain more information about their customers, improve the efficiency of marketing and sales departments, as well as the level of customer satisfaction.

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2. Artificial Intelligence for marketing activity. High level of competency is an essential prerequisite for the efficient management of marketing budget. However, this entails incremental costs. Thanks to solutions based on Artificial Intelligence, small enterprises can effectively manage a fairly meager budget. Small businesses can entrust their marketing campaigns to AI platforms that manage marketing activities through several channels (for example, Adwords, Facebook, Bing), analyze the advertising effectiveness and make reasoned proposals regarding the optimum distribution of funds in terms of PPC (pay-per-click). 3. Intellectual solutions for customer service. Customer service and support are the key components of company’s service that are required for the retention of customers and preservation of the high level of satisfaction of the audience. Nevertheless, the quality of service may decrease, if the employees are forced to perform monotonous and routine tasks instead of focusing on the creation of a unique experience for the consumer. In order to improve efficiency of employees, small companies can implement AI into in-house support service. For example, solutions like Digital Genius can offer answers or generate them automatically, as well as categorize messages to quickly send them to the right department or team, effectively freeing up time of support staff for the solution of issues which require human participation. Small businesses can apply AI solutions to significantly reduce the average time required for the processing of an application, as well as automate answers to repeated questions, coming close to the ultimate goal — increasing the level of satisfaction of employees and customers. 4. The use of Artificial Intelligence in competitive struggle. In order to maintain competitiveness and respond quickly to trends of the market, one should stay tuned to the news about competitors. In order to track their strategy, one can use the tools for the competitive analysis based on AI. These are the programs that are able to track activity of competitive companies using various channels (on websites or on pages of social networks), changes in prices, in mailing lists or PR messages. AI provides small companies with a better insight into current situation and the strategy of competitors. In addition, solid analytical tools allow quickly identifying gaps in the schemes of competitors, their strengths and weaknesses. This knowledge can be used for the elaboration and improvement of a specific strategy; hence, competitors will never be able to deal an unexpected blow. 5. Software and pilot projects based on Artificial Intelligence. Small companies can use ready-made software projects at any stage of the business, where data management is required. The use of the latest algorithms for the analysis of attitudes (Monkey Learn) and desires of customers, calculation of forecasts and formation of classification, will provide small enterprises with the opportunity to quickly obtain necessary information. The key information from Google Sheets, CSV or Excel documents can be obtained and used without programming at all. Monkey Learn platform can be used for the analysis of product reviews and their subsequent conversion into reports with necessary information. This allows saving time and money that a small enterprise needs for information processing. The AI market is booming at the moment, and small enterprises have many opportunities to build their own strategy with the use of AI. The use of tools with a

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simple interface and built-in machine learning functionality instead of engagement of marketing and data analysis experts will save time and money for small companies, at the same time giving them an opportunity to be competitive in the age of a new marketdriven economy based on data management [13]. Creating an optimal management structure of an agricultural cooperative with the use of AI – way of improving the assessment of the production efficiency. The Kyrgyz Republic is an agricultural country with a mountain terrain. About 65% of the population of the country live in rural districts, 34% of the total number of employees are employed in agriculture; at the same time, the operating performance of small businesses in this field leaves much to be desired. Kyrgyzstan needs the creation and development of small businesses, especially in agriculture. There is an urgent need for increasing the efficiency of management of existing and newly-created enterprises, and Artificial Intelligence may turn out to be the most efficient tool for this. In our opinion, to effectively manage activities means to be able to simultaneously give an adequate estimate of the achieved level of efficiency and make the necessary management decisions to further increase it. The assessment of not only individual aspects of efficiency, but also of possible ways to achieve the operating efficiency of an enterprise, is of paramount importance. One of such ways consists in the management process and the creation of an optimal management structure. The optimal management structure in itself means an efficient alternative, since the management expenses in this particular case originate from socially necessary labor costs. There are various methods of assessment; we shall give consideration to making an optimal management alternative based on recurrent modeling. In models of this type, a year-wise recalculation of indicators of an enterprise is carried out: calculation of current year indicators is based on indicators for the previous year. Recurrent models can be reasonably used if the analyzed object is characterized by cyclicality – in that case, the period of cycle is selected as the time iteration step Dt. The operation of agricultural enterprises is particularly characterized by cyclicality with a period of one year, which is due to the production activity from spring till autumn (for the temperate north latitudes zone), harvesting in autumn (or in summer and autumn), and processing of the crop (from summer till winter), sale of the crop (in autumn and winter). Hence, the time step Dt = 1 year is the most intrinsic to the recurrent model. And such recurrent model should be characterized by a high level of adequacy. There is an alternation of the two events in the operation of an agricultural cooperative: 1) management of an enterprise (expenditure of funds under various items, the number of worked hours, etc.). 2) economic response of an enterprise to management actions (net profit, sales revenues, production output etc.). It is the recurrent model that describes the alternation of these interrelated stages. Recurrent interrelation is designated by the analytic expressions obtained above, which

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relate the indicators for the current year (i index) to the indicators for the previous year (i − 1 index) [4]. Recurrent modeling consists in repetition of the two stages for every year: 1. “Management”: setting of controlled parameters LCi, CRMSi, FCi (one can either set “forcibly” set parameters for the validation of various management algorithms, or calculate them via indicators for the previous year for forecasting the development of an enterprise). 2. “Response”: calculation of performance indicators NPi, SRi, POi for the controlled parameters set LCi, CRMSi, FCi, parameters of an enterprise in the past year NPi−1, SR i−1 etc., as well as macroeconomic indicators for the previous year CPI i−1, EVA i−1 etc. Such a step-by-step model of agricultural cooperative development is outlined in Fig. 1.

... Year i–1

Management action LCi-1, CRMSi-1, FCi-1, ОЧi-1

Response - performance indicators

Macroeconomic indicators

NPi-1, SRi-1, POi-1

IPi-1, PPIi-1, CPIi-1, EVAi-1, CIi-1

Response - performance indicators

Macroeconomic indicators

NPi, SRi, POi

IPi, PPIi, CPIi, EVAi, CIi

Management action

Year i

LCi, CRMSi, FCi, ОЧi

Year i+1

Management action LCi+1, CRMSi+1, FCi+1, ОЧi+1

Response - performance indicators

Macroeconomic indicators

NPi+1, SRi+1, POi+1

IPi+1, PPI i+1, CPIi+1, EVAi+1, CIi+1

... Fig. 1. Recurrent model of agricultural cooperative development

Recurrent model is based on recursion formulas, which allow calculating the indicators for i-year using the indicators for i-year and i − 1 year.

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A computer program for recurrent modeling has been developed in Object Pascal in the integrated software development environment Borland Delphi 7 (Fig. 2). This program is designed to calculate performance indicators of an agricultural cooperative for a preset number of years to come using recursion formulas and indicators of the start year which are preset in the program code. The program allows displaying a table of the forecast of performance indicators for 20 years, as well as corresponding graphs. When we carry out computer-assisted experiments with the program, vary peculiarities of selection of parameters LC, CRMS, FC, OЧ in them, and observe the changes in performance indicators NP, SR, PO, we are able to find an optimal enterprise management algorithm that ensures its maximum efficiency.

Fig. 2. Interface form “Programs for the forecasting of agricultural cooperative development and searching for the optimal management algorithm”

The accuracy of forecasting based on recurrent model increases with an increase in the interval of preliminary surveillance over agricultural cooperative and is reflected at the stage of obtainment of analytic dependences [3, 5, 12, 16]. Because of its versatility and adaptability, the developed recurrent model allows obtaining extensive information about this agricultural cooperative, features of its operation and management, forecasting its development, and optimizing the cooperative management algorithm.

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Recurrent model can be used to simulate the operation of an agricultural enterprise for an extended period (10–20 years) with constant macroeconomic parameters. In this case, parameters and indicators of an enterprise gradually attain constant values (Fig. 3).

NP, SR, PO, thousand

20000

Sales revenues

15000 Total of output

10000 5000 0 2014

Net profit

2016

2018

t, years

Fig. 3. Time changes in performance indicators of an agricultural cooperative

Thus, net profit runs up to 3463 thousand soms; sales revenues - to 19,569 thousand soms; the volume of products made (exclusive of VAT and excise tax) - to 12,211 thousand soms. Such values are the most natural for this agricultural cooperative given the existing operating mode and organization of production, psychological characteristics of senior executives and employees, typical macroeconomic conditions. Therefore, recurrent model allows identifying fundamental peculiarities of the enterprise under consideration. The developed model allows forecasting performance indicators of an enterprise both for the near future (for a year to come) – short-range forecasting, and for several years to come, yet with lower accuracy – long-range forecasting [8, 9, 15, 17]. Thus, recurrent model presented the following forecast for 2015: NP2015 = 3756 thousand soms; SR2015 = 20104 thousand soms; PO2015 = 12570 thousand soms. Estimates have shown that the forecast error for a year to come is about ±15%, i.e. NP2015 = 3756 ± 563 thousand soms; SR2015 = 20104 ± 3016 thousand soms; PO2015 = 12570 ± 1886 thousand soms. This model allows forecasting performance indicators of an agricultural cooperative for many years to come (10–20 years), yet the question arises about the accuracy of this forecast. The forecast for the next 5 years that has been made with the use of this model is presented in Table 1.

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Table 1. Long-range forecast of performance indicators of an agricultural cooperative under consideration (made in 2014) Year 2015 2016 2017 2018 2019

Net profit, thousand soms 3,756 3,287 3,536 3,430 3,477

Sales revenues, thousand soms 20,104 19,358 19,659 19,530 19,586

Sales volume, thousand soms 12,570 12,064 12,274 12,184 12,223

Estimation of confidential interval ±15% ±25% ±33% ±38% ±41%

Forecast accuracy depends on peculiarities of a particular enterprise and is determined at the stage of analysis of interrelations between indicators for the previous years. The forecast for 2015 and 2016 for this agricultural cooperative turned out to be acceptable in terms of accuracy, but the longer-range forecast was used only for the determination of development trend of an enterprise. One way or another, the forecast with high error margin of 15–25% or even perception of trends can provide substantial aid to the manager of an enterprise in long-range development planning. Recurrent model, by simulating the development of an enterprise, allows assessing the influence of various accidental events on the performance of an enterprise. Thus, for example, it can be tested what will be the performance of an enterprise in case of significant depreciation of som, in case of changes in volumes of imports and exports to Commonwealth countries and some other countries, in case of change in GDP and other national measures. For example, Fig. 4 presents the modeling results with random annual changes of macroeconomic indicators IP, PPI, CPI, EVA, CI within the range of ±20%. This was implemented in the program through the use of random-number generator with uniform distribution law. Judging by the graph, net profit fluctuates in this case as well, but in general the enterprise responds quite quickly to changes in external conditions and is in a more or less stable condition, providing net profit within the range of 3,200 to 3,800 thousand soms. NP, thousand soms

4000 3000 2000 1000 0

2016

2020

2024

2028 t, years

Fig. 4. Time changes of net profit of an agricultural cooperative in case of random changes in macroeconomic conditions

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Three parameters - LC, CRMS and FC - are considered as facilities for management of this agricultural cooperative in this paper. Labor costs LC allow managing the concernment of employees and the quality of their work. Costs for raw materials and supplies CRMS allow managing the total output volume and product quality. Costs for fuel and fuel products FC allow managing the timeliness of delivery of materials and supplies, as well as finished products. Recurrent model allows verifying the way LC, CRMS and FC influence performance indicators of an enterprise. In this case, one can consider the tasks of tactical and strategic management. When solving the task of tactical management, it is necessary to determine the costs - that is, LC, CRMS and FC, that will be required in the current year, so that performance indicators NP, SR, PO were the best this year. Whereas, when solving the task of strategic management, there is a need to define the way costs should change over time (i.e. it is necessary to find out functions LC(t), CRMS(t) and FC(t)), so that consolidated indicators of NP, SR, PO for several years (or the same indicators as compared to a particular year) were as high as possible. We shall illustrate with simple examples how the developed model allows solving the tasks of management of an agricultural cooperative. Recurrent model has been used for studying the dependence of net profit in the current year on labor costs and costs for raw materials and supplies NP2015 (LC2015, CRMS2015). For this purpose, nine computer-assisted experiments were carried out on the development of an enterprise, in which LC varied at the levels of 200, 400, 600 thousand soms, while CRMS varied at the levels of 10,000, 15,000, 20,000 thousand soms. The results were approximated by the second-degree surface (Fig. 5).

NP, thousand soms

LC, thousand soms

CRMS, thousand soms

400

15000

300 200

17500 20000

Fig. 5. Dependence of net profit in 2015 on planned labor costs LC in 2015 and costs for raw materials and supplies CRMS

Judging by the graph of the NP (LC, CRMS) function, net profit depends very heavily on CRMS and is negligibly dependent on LC. As costs for raw materials and supplies increase, net profit decreases. Apparently, this is because the production capacities of cooperative do not allow efficient processing of a large amount of raw

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materials. Therefore, in 2015, costs for raw materials and supplies should not have significantly exceeded 10,000 thousand soms. As labor costs increase, net profit slightly increases as well. Since the number of employees for this agricultural cooperative has remained unchanged for the last several years (58 employees), increased remuneration of labor does not lead to higher working efficiency of employees, yet it reduces the profit of an enterprise. Similarly, the influence of costs on performance indicators SR and PO can be determined. As a result, the methods for identifying the optimal alternative of performance management of an agricultural cooperative have been developed. In particular, according to the forecast, costs for raw materials and supplies in 2015 for a small enterprise under consideration should have been 5000–10000 thousand soms, in 2016 – 9000–11000 thousand soms. In this case, the total net profit for two years should be at least 7500 thousand soms, and the cumulative volume of production will be at least 24,000 thousand soms. The data obtained during the research demonstrated the validity and correctness of forecasts made, and proved the efficiency of the use of Artificial Intelligence in the activity of small agricultural enterprises of the Kyrgyz Republic. Conclusions: 1. A scheme that is representative of the structure and the degree of interrelation of controlled, uncontrolled and initial indicators was found for the cooperative under consideration. 2. Recurrent model of agricultural cooperative development has been set forward, which allows forecasting performance indicators of a cooperative for several years to come. This model has been implemented in the form of a computer program. 3. Fundamental economic peculiarities of the cooperative under consideration were found: the most natural performance indicators under stable external conditions have been determined. 4. Short-range (for a year) and long-range (for 5–10 years) forecasts of efficiency of cooperative have been made. 5. It has been found that in case of random changes in macroeconomic indicators within ±20%, the agricultural cooperative under consideration will demonstrate seamless operation, providing net profit within the range of 3200 to 3800 thousand soms every year. 6. Ways of searching for the optimal alternatives for tactical (for a year to come) and strategic (for several years to come) management of an agricultural cooperative have been suggested.

References 1. Averkin, A.N., Gaaze-Rapoport, M.G., Pospelov, D.A.: Artificial Intelligence Definition Dictionary, 256 p. Radio i Svyaz, Moscow (1992) 2. Alan Turing: Wikipedia. https://en.wikipedia.org/wiki/Alan_Turing. Accessed 12 Nov 2018 3. Anderson, T.: Statistical time-series analysis [text], 757 p. Mir, Moscow (1976)

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4. Bazieva, A.M., Gyiazov, A.T.: Making an optimal management structure of an agricultural cooperative – way of improving the production efficiency. Agroprodovol’stvennaya Ekonomika (5), 6–14 (2016) 5. Box, J., Jenkins, G.: Time-series analysis. Forecast and management [text], no. 1, 406 p. Mir, Moscow (1974) 6. John Swanciger, CEO Manta: How small companies can benefit from using AI in business. https://rb.ru/story/small-business-AI/ 7. McCarthy, J.: What is artificial intelligence? (2007) 8. Dubrova, T.A.: Statistical methods of forecasting [Text], 133 p. YUNITI-DANA, Moscow (2003) 9. Dubrova, T.A., Bakumenko, L.P., et al.: Time-series analysis and forecasting in statistica system [text], 83 p. Moscow State University of Economics, Statistics and Informatics, Moscow (2002) 10. “Sputnik” publication: The president of the Kyrgyz Republic announced that 2019 will be the year of regional development and digitalization of the country. https://sptnkne.ws/kzjn 11. Publication by Evropa media group “Novosti.Kg”. http://novosti.kg/2019/01/2019-god-vkyrgyzstane-obyavlen-godom-razvitiya-regionov-i-tsifrovizatsii-strany/ 12. Lukashin, Y.P.: Adaptive methods for short-range time-series forecasting [text], 415 p. Finansy i Statistika, Moscow (2003) 13. Solobozov, O.: 5 benefits from application of AI in small business. https://8d9.ru/5-vygodot-primeneniya-iskusstvennogo-intellekta-v-malom-biznese-uzhe-segodnya. Accessed 03 Dec 2017 14. Russell & Norvig, pp. 2–3 and 948 (2003) 15. Gambarov, G.M., Zhuravel’, N.M., Koroliov, Y.G., et al.: Statistical modelling and forecasting [text]: a learning guide. Under the editorship of Granberg, A.G, 340 p. Finansy i Statistika (2000) 16. Chetyrkin, E.N.: Statistical methods of forecasting [text], 200 p. Statistika, Moscow (1975) 17. Yuzbasiev, M.M., Manell, A.M.: Statistical analysis of trends and variability [text], 207 p. Finansy i Statistika, Moscow (1998)

The Scientific and Methodological Approach to Studying the Social Nature of AI Evgeniy V. Krasnov1(&), Alexander A. Bondarenko1, Svetlana V. Ponomareva2, and Roman P. Bulyga3 1

State University of Management, Moscow, Russia [email protected], [email protected] 2 St. Petersburg State University of Economics (UNECON), St. Petersburg, Russia [email protected] 3 Financial University under the Government of the Russian Federation, Moscow, Russia [email protected]

Abstract. Purpose: The purpose of the paper is to develop a scientific and methodological approach to studying the social nature of AI from the positions of economic and management, which would allow forming the technology of not technical but social machine learning – considering the individual peculiarities of human as a subject of communications with machine intellect. Design/methodology/approach: The authors study the international statistics of skills and activity of usage of digital technologies by population in 2019 and the structure of barriers on the path of usage of digital technologies by the Russian population in 2019. Findings: Overview of the international statistics showed that as of now (2019) the population does not have sufficient skills for complex technical communications with AI with the usage of special forms. Most of the population do not want or cannot think in the anthropogenic manner – i.e., formulate thoughts in the form that is clear to AI. This proves the necessity for studying the social nature of AI, which would allow for “live”, emotional communication with human, which would be comfortable for the human. Originality/value: The developed scientific and methodological approach to studying the social nature of AI reflects the algorithm of communication AI with human, due to which its shows the logic of this communication, its sequence and structure. The approach has the following advantages. Firstly, it is accessible regardless of whether human or AI initiates the communication. Secondly, the approach envisages usage of a flexible algorithm of communication, which is accessible for any type of subject – consumer or employee. Thirdly, the approach shows the methods of consideration of social factors that are recommended for application by AI in each moment of social interactions. Keywords: Scientific methodology
Social nature
AI Industry 4.0
Communication of machines and humans JEL Code: A13


Digital economy



C31
O31
O32
O33
O34
O35
O38

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 314–320, 2020. https://doi.org/10.1007/978-3-030-47945-9_35

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1 Introduction AI was initially created as a subject of machine communications, used for organization and management of fully automatized economic processes. The scientific and methodological basis of the technical role of AI is clearly determined and elaborated and is based on the concept of Industry 4.0. Machine communications could be divided into two generalized types. 1st type: corporate management of a “smart” company. In this case, the ideal model envisages that humans are fully absent in the building of a “smart” company, of which the most typical example is automatized industrial production. In it, each technical device is equipped by the Internet of Things, through which is conducts communications with AI. As a regulatory center of a company, AI receives constant signals with information on the state of technical devices and regarding the course of the production process, analyzes this information with the help of the technologies of Big Data processing, specified production plans, and transfers orders to technical devices. Also, AI could control the quality of the manufactured products. 2nd type: state management of a “smart” territory (e.g., city or region). Humans are present here, but their role is passive, they do not communicate with AI. Automatization of state management takes place based on a system of sensors that are equipped on humans, which, through ubiquitous computing, pass the data to AI. It also received information with the help of machine control of humans. The obtained information is analyzed with the help of technologies of Big Data processing, and reports are passed to government employees. In the course of development of the digital economy, its gaps become more vivid and violate its stability. Thus, in most spheres of economic activities humans cannot be fully eliminated from the process of collation of data and management, and communications with human participation are mandatory. The existing ideal models are applicable in very narrow economic activities and thus cause serious limitations of the digital economy. The most perspective directions of automatization are online trade (for obtaining the scale effect) and provision of online government services (for growth of efficiency and fighting corruption), as well as automatization of management of company’s personnel (for increasing the level of social justice of labor). Thus, the problem of socialization of AI is very important. The first attempts of solving this problem within technical sciences, with the help of technologies of face and speech recognition, did not allow achieving the desires effect in the form of its mass distribution. This was caused by the fact that communications with humans are always “live”, that is flexible, not built based on clear algorithms. Emotions could change the face expression, making it strange for machine AI, as AI does not understand the emotional character of human speech, which sense changes depending on the context. Thus, there is a necessity for scientific and methodological approach to studying the social nature of AI from the positions of economic and management, which would allow forming the technology of not technical but social machine learning – considering the individual peculiarities of human as a subject of communications with machine intellect. The working hypothesis is that insufficient social character of AI restrains its mass usage in the spheres in which communications with humans are necessary.

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2 Materials and Method The perspectives of implementing AI into certain economic processes with human participation and involving AI into specialized social communications are reflected in the works Capatina et al. (2020), Popkova (2019), Popkova et al. (2019), Popkova et al. (2018), Popkova and Parakhina (2019), Popkova and Sergi (2018), Popkova et al. (2019), Ragulina et al. (2019), Senthil Kumar et al. (2020), Sergi et al. (2019), Sergi (2019), Stolyarov et al. (2020), and Vardarlier and Zafer (2020). However, the existing studies are limited by separate conceptual and applied solutions, while a comprehensive scientific and methodological approach to studying the social nature of AI has not yet been formed, which is a gap in the system of economic and managerial scientific knowledge. It is to be filled by this paper. For verification of the offered hypothesis, let us study the international statistics of skills and activity of usage of digital technologies by the population in 2019 (Fig. 1).

100 90 80 70 60 50 40 30 20 10 0

Working with text editor File transfer between PC and peripheral devices Software for editing photo, video, and audio files Using Internet for sending and receiving e-mails Using Internet for ordering goods and services

Czech Germany Finland France Republic Sweden Estonia

Russia

UK

42

65

62

70

54

58

70

54

27

58

64

67

60

66

53

54

21

50

46

54

33

27

47

36

44

91

93

95

87

93

94

89

29

82

75

71

67

56

81

58

Fig. 1. International statistics of skills and activity of usage of digital technologies by population in 2019, %. Source: compiled by the authors based on National Research University “Higher School of Economics” (2020).

As shown in Fig. 1, the skills of work with text editor are observed with 59.37% of population in the studied countries of the world; the skills of transfer of files between PC and peripheral devices are observed with 56.12% of the population. 39.25% of the

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population use software for editing photo, video, and audio materials. 85.75% of population use Internet for sending and receiving e-mails; 64.87% of population use Internet for ordering goods and services. On the whole, basic technologies are moderately available for wide groups of population. Let us study the structure of barriers on the path of usage of digital technologies by the Russian population in 2019 (Fig. 2).

Absence of technical possibility for Internet connection, 4.1 High expenditures for Internet connection, 11.5

Lack of skills for working with Internet, 29

Due to security and confidentiality issues, 3.2

Absence of necessity (reluctance to use, no interest), 70.1

Fig. 2. The structure of barriers on the path of usage of digital technologies by the Russian population in 2019, %. Source: compiled by the authors based on National Research University “Higher School of Economics” (2020).

As shown in Fig. 2, absence of the technical possibility (4.1%), problems of security and confidentiality (3.2%), and high expenditures (11.5%) are the most significant barriers on the path of usage of digital technologies by the Russian population in 2019 that could be overcome very quickly. The more serious barriers are lack of special skills (29%) and absence of the necessity and interest (70.1%). As digital skills cannot be mastered quickly, and AI uses only anthropogenic communications, consumers prefer communications with humans, which slows down the development of the digital economy and Industry 2.0.

3 Results The developed scientific and methodological approach to studying the social nature of AI is presented in Fig. 3.

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1. Emotional (positive) greeting

2. Identification of communication subject (human)

No

− identification of face and speech; − search for coincidence in the data base with the method of Big Data processing. Yes

Is human known/acquainted? − using templates; − gestures and intonations.

3.1. Emotional acquaintance

3.2. Reading emotions and determining individual − peculiarities of communication

Consumer

4. Emotional discussion of the order

− using greeting templates; − gestures and intonations.

3. Overview of specific features of communication and human’s personality that were determined during previous communication

− Intellectual analysis of gestures and speech with the help of social machine learning.

Employee

What is the category of human? − using templates; − gestures and intonations.

4.1. Discussing work

− determining

individual motives as to the set templates

4.2. Motivation, − considering individual stimulation peculiarities.

− −

5.1. Results of communication Agree, confirms correctness

disagree, points out mistakes

Human Agree with results?

5.2. Specifying the results of communication with the possibility of printing in the interactive form

6. Emotional (positive) good-bye

− using templates of greetings; − gestures and intonations. −

Fig. 3. Scientific and methodological approach to studying the social nature of AI. Source: developed and compiled by the authors.

Figure 3 shows that the offered approach allows AI to communicate “live” with human, with emotions and consideration of individual peculiarities of the human. Due to emphasis on the social nature of AI, communication with it becomes attractive for human. Communication between AI and human according to the developed approach

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is built according to the following algorithm. 1st stage envisages emotional greeting of human and AI with the usage of templates of greeting, with gestures and intonations. The 2nd stage envisages identification – AI “remembers” human’s face and speech and looks for the data about the human in the data base with the help of the method of Big Data processing. If the human is known to AI, AI uses the accumulated knowledge for making the communication comfortable for the human. In the opposite case, emotional acquaintance takes place, with reading the emotions and individual peculiarities of human communication. For this, intellectual analysis of gestures and speech with the help of social machine learning is performed. Then, emotional discussion of work takes place with consumer; and discussion of low or high efficiency, successes and problems takes place with employee. The employee is motivated, and a program of his stimulation is developed in view of his individual peculiarities. The 5th stage envisages AI’s considering the results of the communication. If human does not agree with the results and points out the mistakes, the results and specified, and human is given the possibility for printing the data in the interactive form. Finally, emotional good-bye takes place.

4 Conclusion Thus, the offered hypothesis has been proved in the course of the research. As the overview of the international statistics showed, population does not have sufficient skills for complex technical communications with AI with the usage of special forms. Most of the population do not want or cannot think in the anthropogenic manner – i.e., formulate thoughts in the form that is clear to AI. This proves the necessity for studying the social nature of AI, which would allow for “live”, emotional communication with human, which would be confortable for the human. The developed scientific and methodological approach reflects the algorithm of communication between AI and human, due to which it shows the logic of this communication, its sequence, and structure. The approach has the following advantages. Firstly, it is accessible regardless of whether human or AI initiates the communication. Secondly, the approach envisages usage of a flexible algorithm of communication, which is accessible for any type of subject – consumer or employee. Thirdly, the approach shows the methods of consideration of social factors that are recommended for application by AI in each moment of social interactions.

References Capatina, A., Kachour, M., Lichy, J., Micu, A., Micu, A.-E., Codignola, F.: Matching the future capabilities of an artificial intelligence-based software for social media marketing with potential users’ expectations. Technol. Forecast. Soc. Change 151, 119794 (2020) Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions 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. 65–72. Springer, Cham (2019)

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Popkova, E.G., Egorova, E.N., Popova, E., Pozdnyakova, U.A.: The model of state management of economy on the basis of the internet of things. In: Popkova, E. (ed.) Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT. Studies in Computational Intelligence, vol. 826, pp. 1137–1144. Springer, Cham (2019) Popkova, E.G., Morozova, I.A., Litvinova, T.N.: Transformational processes in the media system under industry conditions 4.0: future outlines and perspectives (reflections on the article by Alexander P. Sukhodolov, DSc. In Economics, Professor and Irina A. Kuznetsova, PhD in Engineering, Associate Professor “Designing the mass media as a homeostatic system by means of automation engineering: Basic concepts, structure, components”). Theor. Pract. Issues Journal. 7(1), 145–154 (2018) Popkova, E.G., Parakhina, V.N.: Managing the global financial system on the basis of artificial intelligence: possibilities and limitations. Lecture Notes in Networks and Systems, vol. 57, no. 1, pp. 939–946 (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., 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) Senthil Kumar, J., Sivasankar, G., Selva Nidhyananthan, S.: An artificial intelligence approach for enhancing trust between social IoT devices in a network. In: Hassanien, A., Bhatnagar, R., Khalifa, N., Taha, M. (eds.) Toward Social Internet of Things (SIoT): Enabling Technologies, Architectures and Applications. Studies in Computational Intelligence, vol. 846, pp. 183–196. Springer, Cham (2020) 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) Stolyarov, N.O., Petrenko, E.S., Serova, O.A., Umuralieva, A.S.: The digital reality of the modern economy: new actors and new decision-making logic. Lecture Notes in Networks and Systems, vol. 87, pp. 882–888 (2020) Vardarlier, P., Zafer, C.: Use of artificial intelligence as business strategy in recruitment process and social perspective. In: Hacioglu, U. (ed.) Digital Business Strategies in Blockchain Ecosystems. Contributions Management Science, pp. 355–373. Springer, Cham (2020) National Research University “Higher School of Economics”. Digital economy – 2019 (2020). https://www.hse.ru/primarydata/ice2019kr/. Accessed 15 Jan 2020

The Choice of the Regularization Parameter for Solving Linear Volterra-Stieltjes Integral Equations of the Third Kind Nurgul Bedelova(&) Osh State University, Osh, Kyrgyzstan [email protected]

Abstract. For solving one class of Volterra linear integral equations of the third kind, the regularization parameter for the regularizing operator was chosen by Lavrentiev. In general case, the Volterra-Stieltjes integral equations do not always reduce to Volterra integral equations, since the Stieltjes integral equation does not always reduce to the Riemann integral or Lebesgue integral. Therefore, a Volterra-Stieltjes integral equation was of independent interest. The aim of the study was to construct a regularizing operator and prove the uniqueness theorem. In this study we used the notion of a derivative with respect to an increasing function, regularization method according to M.M. Lavrentiev, methods of functional analysis, methods for transforming equations, methods of integral and differential equations. Proposed methods can be used to study integral and integro-differential equations of the Volterra-Stieltjes type of high orders, as well as in qualitative study of some processes in fields of applied physics, ecology, medicine, and the theory of complex systems control. Furthermore, they can be used in development of the integral equations theory in classes of inaccurate problems, for the numerical solution of Volterra-Stieltjes integral equations of the third kind and in solving specific applied problems that lead to equations of the third kind. Keywords: Regularization
Solutions
Volterra-Stieltjes linear integral equations
Third kind
Choice of the regularization parameter

1 Introduction Various questions on the integral equations were investigated recently [1–4]. The Volterra – Stieltjes integral equations were studied for application to infinite systems of nonlinear integral equations of fractional orders [5]. Earlier, a new approach to the study of functional integral equations of fractional order was presented [6]. Also, functional analytic methods with linear constraints have been described for the Volterra Stieltjes-Integral Equations [7]. The Volterra, Fredholm, Wiener–Hopf, Hammerstein, Uryson, and other equations that arise in mathematics, physics, engineering sciences, and economics were described including methods for solving the integral equations [8]. Integral equations of fractional order can be considered with help of the theory of the Volterra-Stieltjes integral equations [9]. A class of operator-integral equations VolterraStieltjes type were studied and the solvability of those equations in the space of © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 321–328, 2020. https://doi.org/10.1007/978-3-030-47945-9_36

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continuous functions were investigated [10]. The Volterra-Stieltjes integral operators with kernels depending on two variables were established [11]. In this article the regularization parameter was chosen to solve the Volterra-Stieltjes equation of the third kind. Let us consider the following equation: Zt mðtÞvðtÞ þ

Kðt; sÞvðsÞd/ðsÞ ¼ f ðtÞ;

t 2 ½t0 ; T;

T [ t0

ð1Þ

t0

where, K(t, s), f(t), m(t) - are given functions, mðt0 Þ ¼ 0, m(t) - is a non-decreasing continuous function on [t0, T], vðtÞ- is an unknown function on [t0, T], uðtÞ- is an increasing continuous function on [t0, T]. Along with Eq. (1), we will consider the equation: Zt ðe þ mðtÞÞ#ðt; eÞ þ

Kðt; sÞ#ðs; eÞd/ðsÞ ¼ f ðtÞ þ euðt0 Þ;

t 2 ½t0 ; T

ð2Þ

t0

where 0\e – small parameter, ðt; sÞ 2 G ¼ fðt; sÞ : t0  s  t  T g. Fundamental results of the first kind Fredholm integral equations were obtained [12], where, to solve linear Fredholm integral equations of the first kind, regularizing operators were constructed according to M. M. Lavrentiev. In [13], based on the concept of the derivative of a function with respect to an increasing function introduced in [14], linear and nonlinear Volterra-Stieltjes integral equations of the first and second kind were studied. Here, to solve the Volterra-Stieltjes linear integral equation of the third kind (1), the regularization parameter is chosen. Let us suppose that following conditions will meet: a) Kðt; sÞ 2 CðGÞ, Kðt; tÞ  0; at t 2 ½t0 ; T; b) at s [ g for any ðs; sÞ; ðg; sÞ 2 G ¼ fðt; sÞ : t0  s  t  T g fair assessment Zs jKðs; sÞ  Kðg; sÞj  lðsÞ

Kðs; sÞduðsÞ; g

where, lðtÞ  0 at t 2 ½t0 ; T and lðtÞ 2 C ½t0 ; T ; q  1. Here, C½t0 ; T – the space of all continuous functions tðtÞ, defined on ½t0 ; T with the norm ktðtÞkc ¼ maxktðtÞk : t2½t0 ;T

The Choice of the Regularization Parameter

323

Let us denote Cwc ½t0 ; T; 0\c  1 as the linear space of all functions tðtÞ, defined on ½t0 ; T and satisfying the condition jtðtÞ  tðsÞj  M jwðtÞ  wðsÞjc ; wðtÞ ¼ Rt Kðs; sÞduðsÞ t0

where M is a positive constant depending on tðtÞ, but not on t and s. Lemma 1. Let be Rt Kðs;sÞ Rt Kðs;sÞ Zt e tðtÞ  t0 e þ mðsÞduðsÞ Kðs; sÞ  s e þ mðsÞduðsÞ e½tðtÞ  tðsÞ e e duðsÞ Fðt; eÞ ¼   e þ mðtÞ e þ mðtÞ e þ mðsÞ

ð3Þ

t0

where e [ 0;

Kðt; tÞ 2 C½t0 ; T;

Kðt; tÞ  0 at t 2 ½t0 ; T.

Then, 1) if tðtÞ 2 C½t0 ; T; and wðtÞ ¼

Rt

tðt0 Þ ¼ 0;

Kðs; sÞd/ðsÞ;

Kðt; tÞ [ 0 almost at all t 2 ½t0 ; T

t 2 ½t0 ; T, then on the segment ½t0 ; T fair the following

t0

assessment: kFðt; eÞkc  3e1 ktðtÞkc e1b þ -t ðeb Þ; where b- arbitrary number from interval (0,1).   -t ðdÞ ¼ sup tðw1 ðv: ÞÞ  tðw1 ðmÞÞ;

ð4Þ

x; m 2 ½0; wðTÞ:

jxmj  d

w1 ðxÞ- inverse function to function wðtÞ; t 2 ½t0 ; T. 2) if tðtÞ 2 Cwc ½t0 ; T;

0\c\1;

tðt0 Þ ¼ 0; then

kFðt; eÞkc  MðM1 þ M2 Þec ; where M ¼ sup jtðtÞ  tðsÞj=jwðtÞ  wðsÞjc t;se½t0 ;T 

M1 ¼ sup ½lc el ; M2 ¼ l0

ð5Þ R1

ez zc dz:

0

Lemma 2. Let the conditions a) and b) be fulfilled, and: 1 ½Kðt; sÞ  Kðs; sÞ þ Hðt; s; eÞ ¼  e þ mðtÞ 

Zt s

Rt Kðs;sÞ Kðs; sÞ  s e þ mðsÞduðsÞ e e þ mðtÞ

1 ½Kðs; sÞ  Kðs; sÞduðsÞ: e þ mðsÞ

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Then the following assessment will be fair: jHðt; s; eÞj  ðe1 þ 1ÞlðsÞ; ðt; sÞ 2 G; e  0:

ð6Þ

On the basis of Lemmas 1 and 2, the following Theorem 1 was proved Theorem 1. Let the conditions a) and b) be fulfilled: if K(t,t) > 0 almost at all t 2 ½t0 ; T and Eq. (1) has a solution tðtÞ 2 C½t0 ; T, then the solution #ðt; eÞ Eqs. (2) at e ! 0 converges in the norm C½t0 ; T to tðtÞ. Wherein the following assessment is fair: k#ðt; eÞ  tðtÞkc  3e1 M3 ktðtÞkc e1b þ M3 -t ðeb Þ;

ð7Þ

where b- arbitrary number from interval (0, 1).   -t ðdÞ ¼ sup tðw1 ðxÞ  tðw1 ðmÞÞ; jxmj  d

Zt wðtÞ ¼

Kðs; sÞduðsÞ t0

w1 ðxÞ – inverse function to function wðtÞ; if an Eq. (1) has solution tðtÞ 2

ðe1 þ 1Þ

M3 ¼ e

Cwc ½t0 ; T; 0\c  1; wðtÞ

RT

lðsÞduðsÞ

t0

¼

Rt

: Kðs; sÞd/ðsÞ; then

t0

solution #ðt; eÞ of Eq. (2) at e ! 0 converges on the norm C½t0 ; T к tðtÞ. At the same time fair the following assessment:

k#ðt; eÞ  tðtÞkc  M4 ec ;

ð8Þ

where, M4 ¼ MðM1 þ M2 ÞM3 ; M; M1 ; M2 ; c1 ; c2 determined in the Lemma 1. Further let us suppose, that given function fd ðtÞ 2 C½t0 ; T and number u0 , such as kf ðtÞ  fd ðtÞkc  d;

juðt0 Þ  u0 j  ad;

ð9Þ

where 0\a – is a constant number. If we consider an equation Zt ðe þ mðtÞÞ#d ðt; eÞ þ

Kðt; sÞ#d ðs; eÞd/ðsÞ ¼ fd ðtÞ þ eu0 ; t0

t 2 ½t0 ; T:

ð10Þ

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325

By subtracting an Eq. (10) from an Eq. (2) and introducing the notation ud ðt; eÞ ¼ tðt; eÞ  td ðt; eÞ; t 2 ½t0 ; T;

ð11Þ

we can have Zt ðe þ mðtÞÞud ðt; eÞ þ

Kðt; sÞud ðs; eÞd/ðsÞ ¼ f ðtÞ  fd ðtÞ þ eðuðt0 Þ  u0 Þ; t 2 ½t0 ; T: t0

ð12Þ Equation (12) can be written as: Zt ud ðt; eÞ þ t0

Kðs; sÞ ud ðs; eÞd/ðsÞ þ e þ mðtÞ

Zt t0

1 ½Kðt; sÞ  Kðs; sÞud ðs; eÞd/ðsÞ e þ mðtÞ

f ðtÞ  fd ðtÞ e½uðt0 Þ  u0  þ ; e þ mðtÞ e þ mðtÞ

¼

t 2 ½t0 ; T:

ð13Þ

Using the kernel resolvents ½ eKðs;sÞ þ mðtÞ, we reduce Eq. (13) to the equivalent state Zt ud ðt; eÞ ¼

Hðt; s; eÞud ðs; eÞd/ðsÞ þ Fd ðt; eÞ;

ð14Þ

t0

where, Hðt; s; eÞ- was determined in Lemma 2, d ðtÞ Fd ðt; eÞ ¼ f eðtÞf þ mðtÞ þ



1 e þ mðtÞ

Rt t0



Kðs; sÞe

e½uðt0 Þu0  e þ mðtÞ

Rt s

Kðs;sÞ d/ðsÞ e þ mðsÞ

h

f ðsÞfd ðsÞ e þ mðsÞ

þ

i

e½uðt0 Þu0  e þ mðsÞ

ð15Þ d/ðsÞ:

On the strength of Lemma 2, from (12) we will have Zt jud ðt; eÞj 

ðe1 þ 1ÞlðsÞjud ðs; eÞjd/ðsÞ þ jFd ðt; eÞj;

t 2 ½t0 ; T:

ð16Þ

t0

Considering an Eq. (9) from the Eq. (15) we will have d kFd ðt; eÞkc  2ð þ adÞ: e

ð17Þ

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N. Bedelova

On the strength of Eq. (17) from Eq. (16) we will get Zt jud ðt; eÞj  t0

d ðe1 þ 1ÞlðsÞjud ðs; eÞjd/ðsÞ þ 2ð þ adÞ; e

t 2 ½t0 ; T:

ð18Þ

By taking into account the generalized Gronwall-Bellman inequality [15], from the Eq. (18) we can obtain the following estimate: d kud ðt; eÞkc  2M3 ð þ adÞ; e RT

ð19Þ

ðe1 þ 1ÞlðsÞduðsÞ

where, M3 ¼ e t0 . It is known that kvd ðt; eÞ  vðtÞkc  kud ðt; eÞkc þ kvðt; eÞ  vðtÞkc : From here, by taking into account an Eq. (19), we will have the following: kvd ðt; eÞ  vðtÞkc  2M3

  d þ ad þ kvðt; eÞ  vðtÞkc ; e

ð20Þ

here, number M4 was determined in the Eq. (8). If K(t,t) > 0 at almost all t 2 ½t0 ; T, and if Eq. (1) have solution tðtÞ 2 C½t0 ; T, then on the strength of an Eq. (7), from an Eq. (20) we will have:   d þ ad þ 3e1 M3 ktðtÞkc e1b þ M3 -t ðeb Þ: kvd ðt; eÞ  vðtÞkc  2M3 e If an Eq. (1) has a solution tðtÞ 2 Cwc ½t0 ; T; 0\c  1; wðtÞ ¼

Rt

ð21Þ

Kðs; sÞd/ðsÞ; then

t0

Taking into account Eq. (8) from an Eq. (20), we will have kvd ðt; eÞ  vðtÞkc  2M3

  d þ ad þ M4 ec : e

ð22Þ

1

Assuming e ¼ d2 from Eqs. (21) and (22) we will obtain   1b b 1 1   vd ðt; d2 Þ  vðtÞ  2M3 ðd2 þ adÞ þ 3e1 M3 ktðtÞkc d 2 þ M3 -t ðd2 Þ; c

  c 1 1   vd ðt; d2 Þ  uðtÞ  2M3 ðd2 þ adÞ þ M4 d2 : c

Theorem 1 was proved.

ð23Þ ð24Þ

The Choice of the Regularization Parameter

327

Theorem 2. Let the conditions a) and b) be fulfilled. Then, 1) If K(t,t) > 0 for almost at all t 2 ½t0 ; T, and Eq. (1) has a solution tðtÞ 2 C½t0 ; T, 1 then the solution vd ðt; eÞ of Eq. (10) at e ¼ d2 ! 0 converges on the norm C½t0 ; T to tðtÞ. At the same time fair assessment (23). Here, b- arbitrary number of (0, 1).   -t ðdÞ ¼ sup tðw1 ðxÞ  tðw1 ðmÞÞ; jxmj  d

Zt wðtÞ ¼

Kðs; sÞduðsÞ; t0

ðe1 þ 1Þ

w1 ðxÞ-opposite function to the function wðtÞ;

M3 ¼ e

RT

lðsÞduðsÞ

t0

2) If an Eq. (1) has a solution tðtÞ 2 Cwc ½t0 ; T; 0\c  1; wðtÞ ¼

Rt

:

Kðs; sÞd/ðsÞ; then

t0

1

solution vd ðt; eÞ of the Eq. (10) at e ¼ d2 ! 0 converges the norm C½t0 ; T j tðtÞ. Herein fair assessment (24). Example. Let us consider an Eq. (1) at pffi pffiffi t0 ¼ 0; T ¼ 1; mðsÞ ¼ s; Kðt; sÞ ¼ ð1 þ tÞð1  sÞ; uðtÞ ¼ t; let us look at the following equation: Zt tuðtÞ þ

ð1 þ tÞð1 

pffiffi pffiffi sÞuðsÞdð sÞ þ f ðtÞ ;

t 2 ½0; 1, i.e.,

t 2 ½0; 1:

ð25Þ

0

Here, in this case, conditions a) and b) of Theorems 1 and 2 are performing. Because at s [ g; s; g 2 ½0; 1 following assessment is fair: Zs jKðs; sÞ  Kðg; sÞj ¼ s  g  s ¼ mðsÞ  ½

Kðs; sÞduðsÞ þ mðsÞ: g

Here l ¼ 1:

2 Conclusions After choosing of the regularization parameter for solving linear Volterra-Stieltjes integral equations of the third kind, we made the following conclusions: 1. Sufficient uniqueness conditions and regularization of solutions of linear VolterraStieltjes integral equations of the third kind were found;

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2. The choice of the regularization parameter for solving a class of Volterra-Stieltjes linear equations of the third kind was considered; 3. Uniqueness theorems for solutions were proved for the linear Volterra-Stieltjes integral equations of the third kind. Acknowledgements. Authors are thankful to professor A. Asanov for discussions and advices during solving the equations.

References 1. Asanov, A., Hazar, E., Mustafa, E., Matanova, K., Abdyldaeva, E.: Approximate solution of Volterra-Stieltjes linear integral equations of the second kind with the generalized trapezoid rule. Adv. Math. Phys. (2016). https://doi.org/10.1155/2016/1798050. ID1798050:6 2. Ashirbayev, N.K., Banaś, J., Bekmoldayeva, R.: A unified approach to some classes of nonlinear integral equations. J. Funct. Spaces (2014). https://doi.org/10.1155/2014/306231. ID306231:9 3. Yang, Z.W.: Second-kind linear Volterra Integral equations with noncompact operators. Numer. Funct. Anal. Optim. 36(1), 104–131 (2015). https://doi.org/10.1080/01630563.2014. 951769 4. Bharucha-Reid, A.T.: Chapter 4 random linear integral equations. Math. Sci. Eng. 96, 134– 173 (1972). https://doi.org/10.1016/S0076-5392(08)60807-3. ISBN 9780120957507 5. Banaś, J., Rzepka, B.: The technique of Volterra-Stieltjes integral equations in the application to infinite systems of nonlinear integral equations of fractional orders. Comput. Math Appl. 64(10), 3108–3116 (2012). https://doi.org/10.1016/j.camwa.2012.03.006 6. Banaś, J., Zajac, T.: A new approach to the theory of functional integral equations of fractional order. J. Math. Anal. Appl. 375(2), 375–387 (2011). https://doi.org/10.1016/j. jmaa.2010.09.004 7. Nachbin, L.: Volterra Stieltjes-Integral Equations. Functional Analytic Methods, Linear Constraints, 1st edn, vol. 16, p. 156. North Holland. eBook ISBN: 9780080871271 8. Polyanin, A., Manzhirov, A.: Handbook of Integral Equations. CRC Press, Boca Raton (1998). ISBN 978-0849328763 9. Darwish, M.A., Banaś, J.: Existence and characterization of solutions of nonlinear VolterraStieltjes integral equations in two variables. Abstr. Appl. Anal. (2014). https://doi.org/10. 1155/2014/618434. ID 618434:11 10. Banaś, J., Kishin, S.: Solvability of Volterra-Stieltjes operator-integral equations and their applications. Comput. Math Appl. 41(12), 1535–1544 (2001). https://doi.org/10.1016/ S0898-1221(01)00118-3 11. Banaś, J., Dronka, J.: Integral operators of Volterra-Stieltjes type, their properties and applications. Math. Comput. Model. 32(11–13), 1321–1331 (2000). https://doi.org/10.1016/ S0895-7177(00)00207-7 12. Lavrentiev, M.M.: On integral equations of the first kind. SSSR 127(1), 31–38 (1959) 13. Asanov, A.: Volterra-Stieltjes integral equations of the second and first kind. J. Nat. Sci. KTUM. 2, 79–95 (2002) 14. Asanov, A.: Derivative function with increasing function. J. Nat. Sci. KTUM 1, 18–64 (2001) 15. Shao, J., Meng, F.: Gronwall-Bellman type inequalities and their applications to fractional differential equations. Abstr. Appl. Anal. (2013). https://doi.org/10.1155/2013/217641. ID217641:7

The Model of Organization of “Green” Digital Production and Consumption Based on the Internet of Things and AI Gulzat K. Tashkulova1(&) and Elena V. Kletskova2 1

Kyrgyz National University named after Jusup Balasagyn, Bishkek, Kyrgyzstan [email protected] 2 Altai State University, Barnaul, Russia [email protected]

Abstract. Purpose: The purpose of the work is to analyze the achieved progress in the sphere of “green” digital economy as a result of the first three-year period of its implementation and to develop a perspective model of organization of “green” digital production and consumption, which allows correcting the first results in the targeted direction and increasing them. Design/methodology/approach: For studying the dynamics of development of the green and digital economy in 2017–2019 the authors use trend analysis, and for comparing them the authors use comparative analysis. The values of the index of application of digital technologies, which is calculated by the IMD, and the index of the green economy, calculated by Dual Citizen, are used. The research objects are the OECD and BRICS countries. Findings: It is shown – by the example of the BRICS countries – that developing countries actively develop the green digital economy. It is shown by the example of the OECD countries that developing countries experience difficulties on the path of the “green” digital future. In all countries, responsible production and consumption are presented in the form of separate unstable practices, which institutionalization is hindered by the absence of the idea of their organization at the national scale. Originality/value: A model of organization of “green” digital production and consumption based on the Internet of Things (IoT) and AI is developed; it has a range of advantages. In particular, the model moves expenditures and responsibility for sorting of waste to digital production and consumption, which allows increasing the level of automatization and reducing the cost of recycling. Automatized control over waste disposal in the developed model allows increasing the level of ecological responsibility of production and consumption. Information support of the state allows using the marketing mechanism of market stimulation of responsible production and consumption. Keywords: Model of organization
“green” digital production
Responsible consumption
Internet of things
AI
Countries of the OECD
Countries of BRICS JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47


O31
O32
O33


© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 329–336, 2020. https://doi.org/10.1007/978-3-030-47945-9_37

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1 Introduction The end of the second decade of the 21st century is a unique period for studying the “green” digital economy due to the two following reasons. Firstly, this is the time when it is already possible to evaluate the first results on the path to the “green” digital future of the modern global economy. Though preparation of the social and business “ground” for starting the goals of sustainable development has been active since the second half of the 20th century, it ended only in 2015, when these goals were formulated and adopted, and their implementation began. Similarly, despite the pilot programs of development of the information and communication technologies, formation and e-government, and creation of the information society, which were popular in the global practice in 2000’s, the main official programs of digital modernization of the leading countries’ economies were started in 2011–2015. Therefore, starting in 2017, it is possible to expect clear efficiency in the both studied directions and their symbiosis due to realization of the possibility and necessity for systemic implementation of these directions. Secondly, this is the moment in which only a half of the path to the “green” digital future of the modern global economy is passed, and the possibilities to correct this path are the highest. Years 2017–2019 are the first relative period – so called three-year period of implementation of the “green” digital future of the global economic system. This period sets the rate and defines the general perspectives of the studied future, and, at the same time, allows introducing changes if necessary. According to the global schedule of implementing the model of the “green” digital future, it should come in 6–9 years. All programs envisage the second three-year period: 2020–2022; some programs envisage also a third three-year period: 2023–2025. In view of the set schedule and acknowledging the importance of monitoring of its execution, the modern science is to provide the methodological provision of its implementation. However, it is difficult due to the fact that despite the mass acknowledgment from population and business around the world, as well as close attention from mass media, governments, and international organizations, statistical accounting of “green” and digital economies is not integrated and lacks precision. Thus, statistics of the digital economy is limited by the IMD digital competitiveness index, which is brought down to ranking of countries, not to evaluation of the progress of their digitization. Statistics of the green economy are scattered and include the index of green economy by Dual Citizen, the sustainable development index from the UNDP, and indices that are calculated during integral evaluation of various indicators – e.g., index of waste and index of climate changes, which are calculated by Numbeo. The logical connections between the existing indices are not clear, which complicates their treatment and application in scientific studies. Uselessness of the available statistical basis for simple (the most preferable due to simplicity and clarity) plant-fact analysis, which envisages comparison of the target and factually achieved values of the indicators, actualizes the scientific search for more complex and flexible methodological approaches to evaluating the level of ecological

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responsibility of the modern digital economies. The result of low reliability of the empirical basis is underdevelopment of the scientific vision of the model of organization of “green” digital production and consumption. Here we offer a hypothesis that the first three-year period showed moderate results in formation of the “green” digital future. The purpose of the work is to analyze the achieved progress in the sphere of “green” digital economy as a result of the first threeyear period of its implementation and to develop a perspective model of organization of “green” digital production and consumption, which allows correcting the first results in the targeted direction and increasing them.

2 Materials and Method The performed overview and analysis of the contents of the existing research and publications showed that the issue of the digital economy is studied in the works Belokurova et al. (2020), Petrenko and Shevyakova (2019), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Zmiyak (2019), Popkova and Sergi (2019), Ragulina (2019), Ragulina et al. (2019), Sergi et al. (2019a), Sergi et al. (2019b), Sergi et al. (2019c), and Shulus et al. (2020), and the issue of the green economy is studied in Frolov et al. (2017), Inshakov et al. (2019), Morozova et al. (2019), Popkova et al. (2014), Popkova et al. (2017), Popkova et al. (2016), and Pozdnyakova et al. (2017). Despite the high level of elaboration of these topics, the issue of the green digital economy is peculiar for gaps in its scientific elaboration. The existing literature sources contain only application of the method of statistical analysis o the result of formation of the “green” digital economy at a certain moment of tine, and dynamics of these results are poorly studied. Also, there are multiple recommendations for organization of certain economic processes of responsible production and consumption in the “green” digital economy, but there is no general organizational model. This paper is to fill the determined gaps. For studying the dynamics of development of the green and digital economy in 2017–2019 the authors use trend analysis, and for comparing them the authors use comparative analysis. The values of the index of application of digital technologies, which is calculated by the IMD, and the index of the green economy, calculated by Dual Citizen, are used. The research objects are top 5 developed countries (from the OECD) in the rating of the index of application of digital technologies by IMD for 2017 and countries of BRICS (developing countries). The statistical basis of the research is shown in Table 1, which also contains calculation of direct average for years, indicators, and groups of countries.

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Table 1. Index of application of digital technologies and index of green economy in the OECD countries and countries of BRICS in 2017 and 2019. Category of countries

Country

Index of application of digital technologies, points 1–100 2017 2019

OECD

Index of the green economy, shares of 1

2017 (as a result of 2016) 0.6184 0.947 0.5561 0.6783 0.7761 0.7152 0.6029 0.3808 0.4043 0.4177 0.4286

2019 (as a result of 2018) 0.68 0.5471 0.5937 0.6997 0.7608 0.6563 0.5417 0.4115 0.5398 0.5531 0.4376

Denmark 94.745 94.519 USA 94.009 98.427 Netherlands 93.736 91.352 Finland 91.857 88.552 Sweden 90.235 89.034 On average 92.916 92.377 BRICS Brazil 50.220 55.519 Russia 46.427 56.539 India 46.577 54.946 China 62.097 80.743 51.861 55.588 South Africa On average 51.436 60.667 0.4469 0.4967 Source: compiled and calculated by the authors based on Dual Citizen (2020) and IMD (2020).

Based on the data of Table 1, we determine growth of the index of application of digital technologies and the index of the green economy in the OECD countries and countries of BRICS in 2019 as compared to 2017 (Fig. 1).

17.9457

20.0000

11.1623 10.0000 0.0000

-0.5807 Страны ОЭСР

-10.0000

Страны БРИКС

-8.2385 Прирост индекса применения цифровых технологий, % Прирост индекса зеленой экономики, %

Fig. 1. Growth of the index of application of digital technologies and the index of the green economy in the OECD and BRICS countries (2019/2017), %. Source: calculated and built by the authors.

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As is shown in Fig. 1, in the OECD countries there was decline of the green economy by 8.2385% in 2019, as compared to 2017. Also, against the background of general growth of digital competitiveness in the OECD countries, instead of increase there was decline of activity of application of digital technologies by 0.5807%. In countries of BRICS, the index of application of digital technologies grew by 17.9457%, and the index of the green economy grew by 11.1623%. Regression models of dependence of the studied indicators based on the data of Table 1 are shown in Fig. 2.

1 0.8 0.6 0.4 y = -0.0132x + 1.9407 R² = 0.0252 0.2 0 90.000 92.000 94.000 96.000 Index of application of digital technologies

OECD countries in 2019 Index of the green economy\

Index of the green economy\

OECD countries in 2017 0.8 0.6 0.4

y = -0.0156x + 2.0967 R² = 0.5665

0.2 0 85

0.8 0.6 0.4 0.2 0 0.000

y = 0.0002x + 0.4377 R² = 0.0002 20.000 40.000 60.000 80.000 Index of application of digital technologies

Countries of BRICS in 2019 Index of the green economy

Index of the green economy\

Countries of BRICS in 2017

90 95 100 Index of application of digital technologies

0.6 0.5 0.4 0.3 0.2 0.1 0

y = 0.0026x + 0.3399 R² = 0.1895

0

50 100 Index of application of digital technologies

Fig. 2. Regression models of influence of the index of application of digital technologies on the index of the green economy in the OECD countries and countries of BRICS in 2017 and 2019. Source: calculated and built by the authors.

As shown in Fig. 2, in 2017 correlation of the index of application of digital technologies and the index of the green economy was low in countries of BRICS (0.002%), and negative in the OECD countries (2.52%). In 2019, in the OECD countries correlation grew substantially, constituting 56.65%, remaining negative. In countries of BRICS correlation was positive and moderate in 2019 (18.95%). Systemic analysis in view of the data of Figs. 1 and 2 showed that in developing countries the progress in formation of the “green” digital economy is more vivid, while the green digital future is not implemented in developed countries. This could be caused by the absence of a general vision of this future, which emphasizes the importance of development of the scientific model of organization of “green” digital production and consumption.

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3 Results Logical analysis showed that the most perspective technologies of organization of “green” digital production and consumption are the IoT and AI, which allows developing a model of organization of “green” digital production and consumption based on these technologies (Fig. 3).

Socio-economic eco-system control IoT production waste Digital production AI saving, sorting

IoT

control IoT

State

production waste

control

consumption waste

AI Data base on ecoresponsibility of manufacturers and consumers

“green” products in eco-package recycling resources Suppliers of recycling resources

Established place of disposal of solid industrial waste sorted waste

Digital consumption AI

consumption waste

sorting

control

IoT

Established place of disposal of solid household waste

Fig. 3. The model of organization of “green” digital production and consumption based on the Internet of Things (IoT) and AI (AI). Source: developed and compiled by the authors.

As shown in Fig. 3, the offered model is oriented at a relatively closed socioeconomic eco-system, which could be a territory (e.g., city), region, or a whole country. Digital production with the help of corporate AI spends resources effectively and sorts out waste and disposes of them in a strictly established place under the control of the IoT of the resources’ suppliers. Industrial waste disposal is paid for, and violation of the requirements to their sorting entails fines. The finished “green” products in eco-packaging are transferred to digital consumption, consumption waste is sorted under control of household AI, and they are disposed of in a strictly established place under the control of the IoT of resources’ suppliers. Industrial waste disposal is paid for (payment is lower that with business), and violation of the requirements to their sorting entails fines. Sorted waste is transferred to suppliers of recycled resources, where they are recycled, and then passed to production and consumption.

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The state uses the IoT to control and find the cases of waste disposal in wrong places, automatically imposes fined, and forms a cloud open data base on ecoresponsibility of manufacturers and consumers, which determines their “green” status, competitiveness (for business), and social reputation (for population).

4 Conclusion It is shown – by the example of the BRICS countries – that developing countries actively develop the green digital economy. It is shown by the example of the OECD countries that developing countries experience difficulties on the path of the “green” digital future. In all countries, responsible production and consumption are presented in the form of separate unstable practices, which institutionalization is hindered by the absence of the idea of their organization at the national scale. For this, a model of organization of “green” digital production and consumption based on the Internet of Things (IoT) and AI, which has a range of advantages, is developed. The model moves expenditures and responsibility for sorting of waste to digital production and consumption, which allows raising the level of automatization and reducing the cost of recycling. Automatized control over waste disposal in the developed model allows increasing the level of ecological responsibility of production and consumption. Information support from the state allows using the marketing mechanism of market stimulation of responsible production and consumption. It should be noted that together with implementation of the offered model the recommendations for improving the practice of statistical accounting should be developed – as well as for scientific analysis of the final results of the “green” digital future. This should be done in further studies.

References Belokurova, E.V., Pizikov, S.V., Petrenko, E.S., Koshebayeva, G.K.: The institutional model of building the digital economy in modern Russia. Lecture Notes in Networks and Systems, vol. 87, pp. 64–70 (2020) Dual Citizen: The Global Green Economy Index (2020). https://dualcitizeninc.com/global-greeneconomy-index/index.php#interior_section_link. Accessed 17 Jan 2020 Frolov, D.P., Popkova, E.G., Strekalova, A.S., Marushchak, I.V.: Strategic planning of regional ecological development: adaptation of Elinor Ostrom’s principles in Russia. In: Contributions to Economics, pp. 39–45 (2017). (9783319552569) IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 17 Jan 2020 Inshakov, O.V., Bogachkova, L.Y., Popkova, E.G.: The transformation of the global energy markets and the problem of ensuring the sustainability of their development. Lecture Notes in Networks and Systems, vol. 44, pp. 135–148 (2019) Morozova, I.A., Popkova, E.G., Litvinova, T.N.: Sustainable development of global entrepreneurship: infrastructure and perspectives. Int. Entrep. Manage. J. 15(2), 589–597 (2019)

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Petrenko, E.S., Shevyakova, A.L.: Features and perspectives of digitization in Kazakhstan. Studies in Computational Intelligence, vol. 826, pp. 889–899 (2019) 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., Dubova, Y.I., Yakovleva, E.A., Azarova, N.A., Titova, E.V.: Role of ecological marketing in formation and development of ecological cluster. Asian Soc. Sci. 10(23), 1–8 (2014) 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., Poluyufta, L., Beshanova, Y., Popova, L.V., Kolesnikova, E.: Innovations as a basis for marketing strategies of Russian oil companies in the conditions of oil prices reduction. In: Contributions to Economics, pp. 449–455 (2017). (9783319606958) Popkova, E.G., Shakhovskaya, L.S., Abramov, S.A., Natsubidze, A.S.: Ecological clusters as a tool of improving the environmental safety in developing countries. Environ. Dev. Sustain. 18 (4), 1049–1057 (2016) Popkova, E.G., Zmiyak, K.V.: Priorities of training of digital personnel for industry 40: social competencies vs technical competencies. Horizon 27(3–4), 138–144 (2019) Popkova, E.G., Sergi, B.S. (eds.): Digital Economy: Complexity and Variety vs Rationality. Springer International Publishing, Heidelberg (2019) Pozdnyakova, U.A., Popkova, E.G., Kuzlaeva, I.M., Lisova, O.M., Saveleva, N.A.: Strategic management of clustering policy during provision of sustainable development. In: Contributions to Economics, pp. 413–421 (2017). (9783319454610) 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., Semenova, E.I., Avkopashvili, P.T., Dmitrieva, E.A., Cherepukhin, T.Y.: Toppriority directions of implementing new internet technologies on the territories of rapid economic development. Advances in Intelligent Systems and Computing, vol. 726, pp. 182– 188 (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 (2019a) Sergi, B.S., Popkova, E.G., Sozinova, A.A., Fetisova, O.V.: Modeling Russian industrial, tech, and financial cooperation with the Asia-Pacific region. In: Sergi, B.S. (ed.) Tech, Smart Cities, and Regional Development in Contemporary Russia, pp. 195–223, Emerald Publishing Limited, Bingley (2019b) Sergi, B.S., Popkova, E.G., Borzenko, K.V., Przhedetskaya, N.V.: Public-private partnerships as a mechanism of financing sustainable development. In: Magdalena, Z., Sergi, B.S. (eds.) Financing Sustainable Development: Key Challenges and Prospects, pp. 313–339. Palgrave Macmillan (2019c) 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)

Modernization of State Management of the Digital Economy Based on AI Tatiana M. Rogulenko(&), Alexander A. Turovsky, Anna V. Bodiako, and Yuri V. Sinyakov State University of Management, Moscow, Russia [email protected], [email protected]

Abstract. Purpose: The purpose of the paper is to compare various scenarios of state management of the digital economy, to determine the differences between them in developed and developing countries, and to substantiate the expedience and to develop recommendations for modernization of state management of the digital economy based on AI. Design/methodology/approach: The methodological basis of the research is comprised of the Theory of Games and the systemic approach, according to which regression analysis, Monte Carlo method, and the simplex method are used. The research objects are 10 developed and 10 developing countries from different geographical regions of the world. Findings: It is substantiated that modernization of state management of the digital economy based on AI is the most preferable scenario of this management, as it allows achieving the best results for the institutional environment and has the higher probability – i.e., simplicity of implementation. Originality/value: The authors offer recommendations for modernization of state management of the digital economy based on AI, which will ensure its systemic character. Significant differences between the categories of countries are established. In developed countries, digitization could have a reverse effect, aggravating the institutional environment and thus should be accompanied by increased monitoring. Keywords: Modernization
Digitization
State management
e-government
Digital economy
AI
Developed countries
Developing countries JEL Code: A13


C31
O31
O32
O33
O34
O35
O38

1 Introduction Formation of the digital economy led to a contradiction of state management, which is seen in the modern economic practice. On the one hand, technological progress opens new opportunities for increasing the effectiveness of state regulation of economic activities, which usage should stimulate the acceleration of economic growth and increase of population’s living standards. Digitization of state management is a logical continuation of the tendency of digitization of society and business. Limitation of digitization contradicts the natural course of the Fourth industrial revolution, does not allow implementing the potential of © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 337–344, 2020. https://doi.org/10.1007/978-3-030-47945-9_38

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optimization of state regulation, and causes vivid disproportions in digitization of the spheres of economic activities, which contradict the goals of sustainable and wellbalanced development. On the other hand, formation of e-government causes a range of new complexities and risks. They include the risks of provision of cyber security, which management raises the resource intensity of digital modernization of state management. Secondly, complexity of social adaptation – the process of formation of the digital society is not yet finished, which leads to the situation when not all people support the practice of egovernment; there are dissatisfied people, who do not possess digital competencies and/or digital technologies for obtaining online state services. Thirdly, rationalization of state regulation of economy due to its digitization is not connected to the concept of provision of social justice and formation of sociallyoriented market economy. AI is absolutely objective – that’s why its usage in state management could cause unlimited growth of poverty, increase of disproportions in population’s incomes, and a wave of social protests. Solving this contradiction is an important problem of the modern economic science. Due to absence of sufficient scientific substantiation, the measures that are implemented are very restrained – leading to conservation of the problem. Limited digitization of state regulation of economy based on mass digital technologies – computer equipment and Internet communications – with preservation of state services that are provided in the traditional form, allows bringing down to the minimum the risks and complexities, but does not allow increasing the effectiveness of regulation or even leads to its reduction. Acknowledging the revolutionary character of AI, which is officially considered a breakthrough digital technology of modern times, and in view of the achieved successful practical experience of its application in corporate management, we offer a hypothesis that there’s a necessity for full-scale modernization of state management of the digital economy based on AI. However, we allow for the existence of substantial differences in developed and developing countries, which should be taken into account in this process. The purpose of the paper is to compare various scenarios of state management of the digital economy, to determine the differences between them in developed and developing countries, and to substantiate the expedience and to develop recommendations for modernization of state management of the digital economy based on AI.

2 Materials and Method The theoretical basis of the research contains the scientific publications on the issue of modernization of state management of the digital economy based on AI: Popkova (2019), Popkova et al. (2019), Popkova et al. (2018), Popkova and Parakhina (2019), Popkova and Sergi (2018), Popkova et al. (2019), Ragulina et al. (2019), Sergi et al. (2019), Sergi (2019), and Stolyarov et al. (2020). The literature overview showed that the sources focus on advantages, while there is no systemic view of the consequences of modernization of state management of the

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digital economy based on AI. This gap is to be filled by this work. The methodological basis of the research includes the Theory of Games and the systemic approach, according to which regression analysis, Monte Carlo method, and the simplex method are used. The research objects are 10 developed and 10 developing countries from different geographical regions of the world. The algorithm of the research is as follows. 1st state – determining the influence of the level of digitization of state management (indicator “Future Readiness”, which reflects the data on e-government, cyber security, involvement of population into activities of e-government, and adjacent information) on the institutional environment as a result of state management (The Institutions pillar of the Global Competitiveness Index 4.0, which reflects the efficiency of the main directions of state management of economy). The initial statistical data for 2019 are shown in Table 1. Table 1. The level of digitization of state management and the institutional environment in developed and developing countries in 2019. Category

Country

– USA Singapore Sweden Denmark Switzerland Netherlands Finland Norway South Korea Canada Direct average, points Standard deviation, points Coefficient of variation, % Developing – countries China Brazil India South Africa Mexico Chile Turkey Mongolia Kazakhstan Russia

Developed countries

Level of digitization of state management, points 1–100 x1 98.427 86.407 89.034 94.519 87.593 91.352 88.552 88.206 89.662 82.816 89.66 4.33 4.83 x2 80.743 55.919 54.946 55.588 52.930 63.156 57.567 42.936 63.595 56.539

Institutional environment as a result of state management, points 1–100 y1 74.2 80.4 77.4 77.4 77.5 78.6 81.2 76.9 65.8 74.1 76.35 4.34 5.69 y2 56.8 42.1 56.8 57.1 48.3 63.9 53.9 49.8 55.6 52.6 (continued)

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Category

Country

Level of digitization of state Institutional environment as a result management, points 1–100 of state management, points 1–100 Direct average, points 58.39 53.69 Standard deviation, points 9.71 5.95 Coefficient of variation, % 16.62 11.08 Source: compiled by the authors based on IMD (2020), World Economic Forum (2020).

2nd stage – compiling scenarios of the change of independent variables (x1, x2) and determining the consequences for dependent variables (y1, y2) and their probability. As a result, the scenario that ensures the best results of state management for institutional environment of economy in view of consequences and probability is selected.

3 Results Based on the data of Table 1, we build regression curves that reflect the influence of digitization of state management on its results in developed and developing countries in 2019.

80.0 60.0 40.0

y = -0.1004x + 85.352 R² = 0.01

20.0 0.0 80.000 85.000 90.000 95.000 100.000 Digitization of state management

Developing countries Institutionalenvironment

Institutional environment

Developed countries 100.0

70.0 60.0 50.0 40.0 y = 0.2687x + 37.999 30.0 R² = 0.1922 20.0 10.0 0.0 0.000 50.000 100.000 5 Digitization of state management

Fig. 1. Regression curves of the influence of digitization of state management on its results in developed and developing countries in 2019. Source: calculated and compiled by the authors.

As shown in Fig. 1, in developed countries the increase of the level of digitization of state management by 1 point leads to reduction of its efficiency by 0.1004 points, correlation is almost zero (1%). In developing countries, increase of the level of digitization of state management by 1 point leads to increase of its efficiency by 0.2687

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points, correlation is weak (19.22%). Monte Carlo method is used – in view of direct average and standard deviations from Table 1 – to find 100 random numbers of the level of digitization of state management for developed and developing countries and to build their histograms (Figs. 2 and 3).

Frequency

Histogram 25 20 15 10 5 0

120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00%

Pocket Frequency

Integral

Fig. 2. Histogram of normal distribution of digitization of state management in developed countries (x1). Source: calculated and compiled by the authors.

Frequency

Histogram 25 20 15 10 5 0

120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00%

Pocket Frequency

Integral

Fig. 3. Histogram of normal distribution of digitization of state management в developed countries (x2). Source: calculated and compiled by the authors.

Four scenarios of the future state management have been determined: – Basic scenario: preservation of digitization (x1, x2) at the 2019 level; – Scenario of de-digitization: intervals of the values of the level of digitization are below the 2019 level, based on Figs. 2 and 3 – for developed countries it’s 79–86 points, for developing countries it’s 37–57 points;

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– Scenario of further digitization based on AI: intervals of the values of the level of digitization above the 2019 level, based on Fig. 2–3 – for developed countries it’s 91–97 points, for developing countries it’s 63–79 points; – Optimization scenario: the institutional environment has to be at the level of direct average of top 3 countries from the rating of the World Economic Forum (2020) – Finland (81.2 points), Singapore (80.4 points), and New Zealand (78.8 points) – 80.13 points. Probabilities of scenarios are determined based on the data of Figs. 1, 2 and 3. Results of scenario analysis are shown in Table 2.

Table 2. Results of scenario analysis of the future state management in developed and developing countries. Scenario

Basic scenario

Scenario of de-digitization

Developed countries 0.15 0.23 Probability according to the scenario x1 89.66 79 y1 76.35 77.42 Result according 11.4525 17.8066 to the scenario Developing countries x2 58.39 37 y2 53.69 47.94 Result according 12.3487 15.8202 to the scenario Source: calculated and compiled by the authors.

Scenario of further digitization based on AI

Optimization scenario

0.58

0.04

97 (+8.19%) 75.61 (−0.97%) 43.8538

52.01 80.13 3.2052

79 (+35.29%) 59.23 (+10.32%) 24.2843

156.8 80.13 2.4039

As shown in Table 2, the optimization scenario is less efficient due to low probability, and the most preferable scenario is the scenario of further digitization based on AI, which ensures slight aggravation of the institutional environment in developed countries by 0.97%, to 75.61 points and its improvement in developing countries by 10.32% up to 59.23 points. For practical implementation of the substantiated optimal scenario, we determine perspective directions of modernization of state management of the digital economy based on AI according to the structure of the institutional environment in the World Economic Forum report (Table 3).

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Table 3. Perspective directions of modernization of state management of the digital economy based on AI. Direction of regulation Provision of physical security Fighting the “shadow” economy and corruption Social support for population Regulation of markets and business Formation of budget and implementation of interbudget relations Provision of stability, sustainability, and responsibility of regulation Regulation (guarantees, protection) of property rights

Perspective form of AI Machine control of AI

Intellectual analysis of Big Data by AI Intellectual decision support by AI

Automatic collection of queries by AI Source: developed and compiled by the authors.

Advantages of using AI Creation of “smart” cities with increased level of security Automatized monitoring of the process of provision of state services Intellectual determination of financial categories of population Intellectual analysis of the market situation Scenario analysis of the state budget

Multi-factor analysis and poly-criterial optimization of decisions Simplified filing of complaints on violation of property rights and quick regulation of conflicts

As shown in Table 3, modernization of state management of the digital economy based on AI allows improving provision of physical security and fighting the “shadow” economy and corruption. Machine control by AI will allow creating “smart” cities with increased level of security and conducting automatized monitoring of the process of provision of state services. Social support for population and regulation of markets and business could also be improved. Intellectual analysis of Big Data by AI will allow starting intellectual determination of the financial categories of population and intellectual analysis of the market situation. Formation of the budget and implementation of the inter-budget relations and provision of stability, sustainability, and responsibility of regulation could also be improved. Intellectual decision support by AI will allow for scenario analysis of the state budget, multi-factor analysis and poly-criterial optimization of decisions. Regulation (execution of guarantees and protection) of property rights based on automatic collection of queries by AI will ensure the simplified applications on violation of property rights and accelerated regulation of conflicts.

4 Conclusion Thus, the offered hypothesis has been proved – modernization of state management of the digital economy based on AI is the most preferable scenario of this management, as it allows achieving the best results for the institutional environment and has the highest

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probability – i.e., simplicity of implementation. The offered recommendations for modernization of state management of the digital economy based on AI will ensure its systemic character. Substantial differences between the categories of countries have been determined. In developed countries, digitization could have a reverse effect, aggravating the institutional environment – so it should be accompanied by increased monitoring. However, management of complexities and risks should be an inseparable component of the strategy of modernization of state management of the digital economy based on AI. The scientific and methodological basis of this management should be studied in further works on this issue.

References IMD: The Digital Competitiveness Report 2019 (2020). https://www.imd.org/wcc/world-competiti veness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 14 Jan 2020 Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the conditions of knowledge economy. In: Studies in Systems, Decision and Control, vol. 169, no. 1, pp. 65–72 (2019) Popkova, E.G., Egorova, E.N., Popova, E., Pozdnyakova, U.A.: The model of state management of economy on the basis of the Internet of Things. In: Studies in Computational Intelligence, vol. 826, no. 1, pp. 1137–1144 (2019) Popkova, E.G., Morozova, I.A., Litvinova, T.N.: Transformational processes in the media system under industry conditions 4.0: future outlines and perspectives. Theor. Pract. Issues J. 7(1), 145–154 (2018). (reflections on the article by Alexander P. Sukhodolov, DSc. In Economics, Professor and Irina A. Kuznetsova, PhD in Engineering, Associate Professor “Designing the mass media as a homeostatic system by means of automation engineering: Basic concepts, structure, components”) Popkova, E.G., Parakhina, V.N.: Managing the global financial system on the basis of artificial intelligence: possibilities and limitations. In: Lecture Notes in Networks and Systems, vol. 57, no. 1, pp. 939–946 (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, Heidelberg (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: Studies in Systems, Decision and Control, vol. 169, pp. 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) Stolyarov, N.O., Petrenko, E.S., Serova, O.A., Umuralieva, A.S.: The digital reality of the modern economy: new actors and new decision-making logic. In: Lecture Notes in Networks and Systems, vol. 87, pp. 882–888 (2020) World Economic Forum: The Global Competitiveness Report 2019 (2020). http://reports. weforum.org/global-competitiveness-report-2019/competitiveness-rankings/#series=GCI4.A. 01. Accessed 14 Jan 2020

Digital Workforce for the “Green” Economy “Smart” Enterprises: Training and Management Features Aida Ya. Tamakhina1(&), Stepan I. Mezhov2, and Sergey V. Yungblyudt3 1

3

Kabardino-Balkarian State Agrarian University, Nalchik, Russia [email protected] 2 Altai State University, Barnaul, Russia [email protected] Kemerovo Regional Advanced Training Institute, Kemerovo, Russia [email protected]

Abstract. Purpose: The aim of the work is to determine the meaning and sufficiency of existing social infrastructure for the development of a “green” digital economy, as well as to justify the prospects and provide scientific and methodological recommendations to overcome the deficit in this infrastructure by taking into account the peculiarities of training and digital human resources management for “smart” enterprises of the “green” economy. Design/methodology/approach: Regression characteristics of the dependence of the “green” economy on robotization and robotization on the digital economy workforce have been compiled, and existing statistics on these indicators have been reviewed and analyzed. The objects of the study are top 10 countries in terms of the number of robots per 10,000 workers in the manufacturing sector, that is, the level of robotization (the development of “smart” entrepreneurship). Findings: It has been proved that digital human resources for “smart” enterprises of “green” digital economy have a pronounced specificity related to the need to possess both digital and “green” competencies at the same time. This specificity determines the peculiarities of their training and digital human resources management for “smart” enterprises of “green” digital economy. Originality/value: It is substantiated that insufficient consideration of these features currently leads to a shortage of human resources in this segment of the labour market, which hinders the sustainable development of the digital economy. The author’s recommendations to take into account the peculiarities of training and management of digital human resources for “smart” enterprises of “green” economy on the basis of competency approach will solve this problem. Keywords: Digital workforce
“Smart” enterprises
Robotization
“Green” economy
Training
Human resources management
Responsible production
Sustainable development JEL-codes: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47


O31
O32
O33


© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 345–353, 2020. https://doi.org/10.1007/978-3-030-47945-9_39

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1 Introduction “Smart” enterprises should be the key actors in a “green” digital economy. Currently, the size of this structural component of entrepreneurship is small, even in advanced economies with high levels of digital competitiveness, and in many developing countries it is virtually non-existent. The main constraint on the way of formation and development of “smart” entrepreneurship in the modern economy is the non-formation of its infrastructure. While the needs of “smart” entrepreneurship in institutional, financial and technological infrastructure are not in doubt and are gradually met by means of state regulation, its needs in social (human) infrastructure are not defined, which prevents its formation. The reason for this uncertainty is the contradictory nature of labour as one of the factors of production in industry 4.0. On the one hand, “smart” entrepreneurship implies the highest degree of automation and organization of production and distribution based on robots and artificial intelligence. In other words, it is dominated by machine labour, which almost completely excludes human participation. On the other hand, even the most advanced technologies of our time do not allow to achieve full autonomy of intellectual digital devices, which cannot independently make any decisions related to social factors. With an underdeveloped information society and intellectual consumption, the need to collect data from consumers persists, while humanmachine communication is difficult for both sides. Therefore, human labour is necessary even for “smart” enterprises. While in the study of economic growth, this contradiction is often resolved in favour of automation as a source of maximum rationality, in the study of sustainable development goals it is necessary to make a choice in favour of people because only they are able to make flexible decisions in different situations, balancing the economic and environmental efficiency of economic activity. While recognizing the high digital workforce needs of green economy “smart” enterprises, it is also necessary to note their specificity—the possession of unique personal characteristics and professional abilities. Based on this, the working hypothesis of this study (H0) is that the specificity of digital personnel for “smart” enterprises of “green” digital economy determines the features of their training and management, which need scientific study and justification. The purpose of this work is to determine the meaning and sufficiency of existing social infrastructure for the development of a “green” digital economy, as well as to justify the prospects and make scientific and methodological recommendations to overcome the deficit in this infrastructure by taking into account the peculiarities of training and management of digital personnel for “smart” enterprises of “green” economy.

2 Materials and Method Training in the digital economy is reflected in the publications of Behrendt et al. (2019), Bode et al. (2019), Genz et al. (2019), Hildebrandt et al. (2019), Park and Han (2019), Sergi et al. (2019a), Solis (2019), Wentrup et al. (2019), Hildebrandt et al. (2019), Park and Han (2019), Sergi (2019). Topics of responsible production and

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consumption are covered in Gunawan et al. (2020), Parra and Trapero (2018), Tseng et al. (2018). Conceptual and applied questions of organization of activity of “smart” enterprises are considered in works by Belik et al. (2020), Popkova (2019), Popkova and Sergi (2020), Popkova and Zmiyak (2019), Popkova and Sergi (2018), Ragulina (2019), Ragulina et al. (2019), Sergi (2003), Sergi (2019), Stolyarov et al. (2020), and the functioning and development of a green economy in Frolov et al. (2017), Inshakov et al. (2019), Morozova et al. (2019), Pozdnyakova et al. (2017), Sergi et al. (2019b). The analysis of the content of the cited literature sources has shown that although they have studied in sufficient detail the individual components of the problem on which they are focused, a holistic scientific understanding of the peculiarities of training and management of digital personnel for “smart” enterprises of “green” economy has not yet been formed, and its absence is a gap in the scientific economic paradigm of our time. The logic of this study and its scientific methodology is reflected in Fig. 1.

Hypothesis H1: Rb=F(Kn)

Digital workforce knowledge index for the digital economy (knowledge, Kn), calculated by IMD

Hypothesis H2: GE=F(Rb)

Level of robotization

Sustainable

number of robots per development 10,000 employees (Rb), "Green" economy index calculated by the (GE), calculated by Dual International Federation of Citizen Robotics Methodology: determination of the Methodology: determination of regression characteristic of the regression characteristics function GE=F(Rb) функции Rb=F(Kn)

Fig. 1. Logic and scientific methodology of the research

As shown in Fig. 1, we assume that digital frames determine the level of robotization. Hypothesis H1: Rb = F(Kn). The methodology to test this hypothesis suggests determining the regression characteristic of the function GE = F(Rb). We also assume that the robotization level defines sustainable development. Hypothesis H2:: GE = F(Rb). The methodology for checking this hypothesis suggests determining the regression characteristic of the function Rb = F(Kn). We also review and analyze existing statistics on selected indicators. The objects of the research are top 10 countries by the number of robots per 10 thousand workers in the manufacturing industry, that is, by the level of robotization (the development of “smart” entrepreneurship).

3 Results The statistics on robotization, “green” economy and knowledge in the digital economy are shown in Figs. 2, 3 and 4.

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631 488

309

350

303 223

211

189

185

184

177

175 3 0 South Korea

Germany

Sweden

The USA

Belgium

Russia

Fig. 2. Number of robots per 10,000 manufacturing workers in the sample countries, pcs. Source: compiled by the authors based on the International Federation of Robotics (2020).

0.7608

0.8000 0.689 0.6154

0.6000

0.5591

0.68 0.5927

0.6669 0.5737 0.5471 0.5606 0.4115

0.4000

0.2000

0.0000 South Korea

Germany

Sweden

The USA

Belgium

Russia

Fig. 3. “Green” economy index in sample countries in 2019, shares from 1 Source: compiled by the authors based on Dual Citizen (2020).

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100.000

90.503 83.36

89.727 83.072

85.987

90.998 74.99

74.687

75.000

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78.886

75.017

59.979

50.000

25.000

0.000 South Korea

Germany

Sweden

The USA

Belgium

Russia

Fig. 4. Knowledge index in the digital economy in sample countries in 2019, points 1–100. Source: built by the authors based on IMD (2020).

As can be seen from Fig. 2, the largest number of robots per 10,000 workers in the manufacturing industry has been achieved in South Korea (631 pcs.), Singapore (488 pcs.), Germany (309 pcs.) and Japan (303 pcs.). According to Fig. 3, the highest level of “green” economy development in 2019 is observed in Sweden (0.7608) and Taiwan (China, 0.6669), as well as in Germany (0.6890) and Denmark (0.6800). According to Fig. 4, the greatest value of the knowledge index in the digital economy in 2019 is observed in the USA (90,998 points), Singapore (90,503 points) and Sweden (89,727 points). Based on the data in Figs. 2, 3 and 4, we have identified regression characteristics of the dependence of “green” economy on robotization and robotization on digital economy personnel (Fig. 5).

700 y = 0,0001x + 0,574 R² = 0,0461

0.6000 0.4000 0.2000 0.0000 0

175 350 525 700 Robotization ("smart" enterprises)

Robotization ("smart" enterprises)

"Green" economy

0.8000

525 350

y = 6,2431x - 239,63 R² = 0,1166

175 0 0.000 25.000 50.000 75.000 100.000 Training for the digital economy

Fig. 5. Regression characteristics of dependence of “green” economy on robotization and robotization on digital economy personnel. Source: IMD (2020).

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Figure 5 showed that the hypotheses H1 and H2 are correct—there is a positive relationship between the studied indicators. Thus, when the level of robotization increases by 1 robot per 10 thousand workers in the manufacturing industry, the “green” economy index increases by 0.0001. When the knowledge index for the digital economy rises by 1 point, the number of robots increases by 6,2431 per 10,000 workers in manufacturing. Nevertheless, the determination coefficient (R2) is much higher for the function Rb = F(Kn)—0.1166, while the function GE = F(Rb) is very small and is 0.0461. This means that, in 2019, robotization had little control over the achievement of sustainable development goals, but was largely dependent on the human resources of the digital economy. In order to link the indicators considered systematically and to create synergies in the form of accelerated development of a “green” digital economy, it is necessary to modernize the training and management of digital human resources for “green” economy “smart” enterprises on the basis of a competency-based approach. As shown in Table 1, the competencies of digital personnel of “smart” enterprises of “green” economy include both digital and “green” competencies, which determines the features and causes increased complexity of their training and education. One of the

Table 1. Features of digital workforce training and management for “smart” enterprises of “green” economy based on competency-based approach. Source: designed and compiled by the authors. Competencies of digital personnel in “green” economy “smart” enterprises

Competency type

Digital competences

General

“Green” competencies

Flexible thinking, ability to acquire new knowledge and technologies Digital technology mastery Knowing how to use “green” digital technology Environmental responsibility

Professional

Professional

General

Requirements for digital training for “green” economy “smart” enterprises Artistic development

Requirements for digital workforce management in “green” economy “smart” enterprises

Artistic potential development, innovation support

Instruction on directions and basics of digital technology use training

Corporate training and professional development, promotion of selflearning

Setting the standard for sustainable development

“Green” corporate culture development

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competencies is flexibility in thinking, the ability to absorb new knowledge and technology. This is a general digital competency. Its formation requires development of creative abilities, and its activation through management requires artistic potential development and stimulation of innovations. The other competency is digital technologies. This is a professional digital competency. Closely related to the aforementioned competency is the professional “green” competency—knowledge of the possibilities of “green” use of digital technologies. Formation of these competencies in personnel training involves instruction on directions and training in the basics of using digital technologies, and activation in personnel management depends on corporate training and professional development, as well as promotion of self-learning. And the last competency we have allocated is environmental responsibility, a general “green” competency. Its development implies the formation of sustainable development values, and its intensification requires the development of “green” corporate culture in a “smart” company.

4 Conclusion So, the basic hypothesis of the study (H0) is confirmed: digital personnel for “smart” enterprises of “green” digital economy have a pronounced specificity associated with the need to possess both digital and “green” competences. This specificity determines the peculiarities of their training and digital human resources management for “smart” enterprises of “green” digital economy. Insufficient consideration of these features currently leads to a shortage of human resources in this segment of the labour market, which hinders the sustainable development of the digital economy. This problem can be solved by the author’s recommendations to take into account the peculiarities of training and management of digital human resources for “smart” enterprises of “green” economy on the basis of competency approach.

References Behrendt, C., Nguyen, Q.A., Rani, U.: Social protection systems and the future of work: ensuring social security for digital platform workers. Int. Soc. Secur. Rev. 72(3), 17–41 (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) Bode, E., Brunow, S., Ott, I., Sorgner, A.: Worker personality: another skill bias beyond education in the digital age. Ger. Econ. Rev. 20(4), e254–e294 (2019) Dual Citizen: The Global Green Economy Index (2020). https://dualcitizeninc.com/global-greeneconomy-index/index.php#interior_section_link. Accessed 11 Jan 2020 Frolov, D.P., Popkova, E.G., Strekalova, A.S., Marushchak, I.V.: Strategic planning of regional ecological development: adaptation of Elinor Ostrom’s principles in Russia. In: Contributions to Economics, pp. 39–45 (2017). (9783319552569)

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Digital Transformations of Modern Economic and Social Systems

Relationship of Economic Communications and Productive Consumption: Theoretical Aspect Svetlana L. Sazanova1(&), Radim Valenczyk2, Bagrat A. Yerznkyan3,4, and Galina N. Ryazanova4 1

3

Financial University under the Government of the Russian Federation and State University of Management, Moscow, Russia [email protected] 2 University of Finance and Administration, Prague, Czech Republic [email protected] Central Economics and Mathematics Institute of the Russian Academy of Sciences, Moscow, Russia [email protected] 4 State University of Management, Moscow, Russia [email protected]

Abstract. The article examines the formation and development of the theory of economic behavior as one of the basic theories of modern economic science. The authors studied the features of approaches to the study of the behavior of economic agents from the point of view of representatives of the Austrian neoclassical school, Keynesian economic theory, the Russian economic and mathematical school of the late XIX - early XX centuries, monetarism, and the modern Russian economic and mathematical school. The authors revealed a limited heuristic value of the studied approaches. The authors revealed a dichotomy of the theory of behavior of an economic agent and proved that it is a methodological problem, since it contradicts the principle of methodological atomism, according to which an economic agent should be a single and indivisible basic “particle” of the economic system. It has been established that modern economic theory cannot overcome the neoclassical dichotomy “producer – consumer”, which contradicts the principle of methodological atomism and therefore is a methodological problem. The producer – consumer dichotomy is partially solved with the help of theoretical tools such as the equilibrium approach and the balance method, but this is not a methodological solution. The authors also investigated the heuristic potential of the theory of productive consumption and the theory of economic communications to solve the problem of the producer-consumer dichotomy. It has been established that consumer orientation to the future to a greater extent than to the present, his desire to increase human capital, stimulates the manufacturer to search for opportunities to meet future consumer needs. It is established that economic communications form the internal environment of systems and subsystems of various types and levels, affect the coordination mechanisms within systems and between systems. The role of economic communications is growing in direct proportion to the growing role of human and social capital in the economy.

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 357–364, 2020. https://doi.org/10.1007/978-3-030-47945-9_40

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S. L. Sazanova et al. The authors formulated two working hypotheses for further research. The first hypothesis is the assumption that the image of the future becomes the main condition for coordinating the interests and actions of both the producer and the consumer, since they both strive to maximize their well-being and their human capital in the future. The second hypothesis is that economic communications are the connecting link between economic agents (consumers and producers) in the present and future. These hypotheses are supposed to be used in the future to construct a general theory of economic behavior. The authors proved that the neoclassical dichotomy “consumer - producer” can be resolved on the basis of the theory of productive consumption and the theory of economic communications. Keywords: Productive consumption
Economic communications
Complete rationality
Limited rationality
Irrationality
Human capital
Dichotomy “consumer - producer”
Theory of economic communications JEL Code: B13


B25
B41
B53
D01
D11
D21
P42
P46

1 Introduction The theory of consumer behavior and the theory of producer behavior are the foundation of modern economic theory. Their foundations were laid by scientists of the last third of the 19th - beginning of the 20th centuries W. Jevons, K. Menger, F. Wieser, A. Marshall and J.-B. Clark, and marginal analysis as a methodological basis of both theories and now remains an urgent tool for economic research. Despite the generality of the methodology (marginal analysis), the standard (mainstream) theory of the behavior of an economic agent remains essentially dichotomous. The dichotomy is that an economic agent, on the one hand, is a consumer, and on the other, a producer. The dichotomy of the object of study generates a dichotomy of theoretical instruments. The theory of marginal productivity is used to build and develop the theory of producer behavior, and the marginal utility theory is the theoretical tool in the theory of consumer behavior. Both theoretical tools have a common methodological basis - marginal analysis. The main motive of neoclassical consumer behavior is the desire to maximize utility, and the manufacturer - to maximize profits. The consumer is interested in economic goods that can satisfy his needs (hedonistic consumption) (Roubal 2019) and is indifferent to industrial goods. The manufacturer is interested in the productivity of economic resources, which allows him to maximize profits, and he is ready to abandon current consumption in order to invest in business development (Morozova et al. 2019). The interaction between producer and consumer is carried out through a market mechanism that balances supply and demand, thereby ensuring economic communication between them. The dichotomy of the economic agent’s theory of behavior is a methodological problem, since it contradicts the principle of methodological atomism, according to which the economic agent should be a single and indivisible basic “particle” of the economic system.

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2 Research Problem and Methodology The task is to study the heuristic potential of the theory of productive consumption and the theory of economic communications to solve the problem of the producer-consumer dichotomy and formulate working hypotheses for further research in order to build a general theory of economic behavior. To solve this problem, the authors study the contribution of leading representatives of neoclassicism, Keynesianism, monetarism, the Russian, including the Soviet, economic and mathematical school to the solution of the “producer-consumer” dichotomy, and also reveal the heuristic possibilities of relevant modern theories - productive consumption and economic communications - to solve the problem. The research methodology of the producer-consumer dichotomy was as follows. Methods of historical and economic research, including: the method of rational reconstruction of science, the method of comparative analysis, the historical method, the method of scientific abstraction, the method of analysis and synthesis, made it possible to determine how the problem of the producer-consumer dichotomy was solved within the framework of neoclassical Keynesian economic theory economic theory, the Russian economic and mathematical school. The theory of productive consumption and the theory of economic communications were used as theoretical tools to solve the problem of producer-consumer dichotomy.

3 Results The first attempt was to build a “bridge” between the consumer and the producer F. Wieser, proposing a “theory of imputation”, which implicitly agreed on the economic interests of the consumer and the manufacturer. He proved that consumer goods “impute” value to economic resources/factors of production, which acquire value only if they have in the eyes of the consumer the value (value) of the goods of final consumption produced using these factors of production. Accordingly, the demand for the benefits of production is generated from the demand for the benefits of final consumption. The “theory of imputation” proposed by Wieser was not only of theoretical but also of practical importance, since its consequence was the priority of obsolescence of equipment over physical, which inevitably changed the depreciation policy of firms and formed economic prerequisites for accelerating scientific and technological progress, thanks to the mechanism of accelerated depreciation. The next step in understanding the relationship between consumer and producer interests was made by E. Böhm-Bawerk, who drew attention to the fact that the manufacturer refuses to maximize its current utility for the sake of investing, which will result in an increase in the productivity of production factors in the future, and hence an increase in his personal well-being. The idea that the rejection of current consumption should be rewarded with a percentage for the loan was developed by the scholastics, but only Böhm-Bawerk proved that the economic agent (creditor) consciously refuses to maximize current consumption (utility) in favor of maximizing consumption in the future.

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L. Valras proposed his interpretation of the relationship between consumer and producer, who, in the model of general economic equilibrium he created, proved the existence of a balance between supply and demand, that is, between consumption and production. Market demand and supply in the Walras model is formed as the sum of individual functions, and the role of the coordinator is performed by the abstract “auctioneer”, who has all the information about the prices of all goods and the volume of their production. The Walras general economic equilibrium model has opened up wide possibilities for using mathematical methods in economic research. At the turn of the XIX–XX centuries, a number of original studies appeared in Russia, which became the theoretical basis of the Russian, and then the Soviet, economic and mathematical school, whose representatives successfully modeled economic processes based on the use of the mathematical apparatus and the balance method. Of great importance for world and Russian economic science were the “Economic Essays” by V.K. Dmitriev, in which he already in 1904 formulated the idea of an intersectoral balance and the “input-output” system. It was Dmitriev who proved that in the conditions of “unlimited competition” the prerequisites are inevitably formed for the formation of stocks of finished products, and therefore for crises of overproduction. Subsequently, Dmitriev’s ideas were developed in the works of J. Keynes, who created the concept of “effective demand”. Dmitriev’s developments were developed in the works of Russian and foreign economists: in 1926, in the Soviet Union, a group of scientists under the guidance of P. Popov developed and published the world’s first “Balance of the National Economy of the USSR for 1923–24.”; At the same time, the future Nobel laureate V. Leontyev (who developed the model of intersectoral balance during the Second World War) was engaged in the problem of inter-industry balance. The interbranch balance models reflected the interconnections between the sectors of the country’s economy, between the spheres of production and consumption. In the second half of the 20th century, the development of economic and mathematical methods in economic research led to the creation of a system of national accounts as a system of economic indicators that reflect the results of the functioning of a market economy. Thus, from the end of the XIX centuries. In world economic science, two approaches to solving the problem of the “consumer-producer” dichotomy are actively developing. The theoretical foundations of both approaches were laid in the works of V. Dmitriev and other scientists of the Russian economic and mathematical school, but already from the 1920s. Research and practical development of Soviet scientists was carried out on the basis of a synthesis of the Marxist methodology, the balance method and the method of “input – output”; and the research and practical development of foreign scientists was based on neoclassical, and then Keynesian, methodology. In the 1990s the transformation of the Russian economy “from plan to market” also led to the methodological turn of domestic research from Marxist theory to Keynesianneoclassical synthesis, which is currently the main focus of economic theory. If the neoclassical approach to the analysis of the behavior of an economic agent was based on methodological atomism, the theory of complete rationality, marginal analysis, and economic and mathematical methods, the Keynesian approach recognizes the importance of “psychological factors”, such as expectations, orientation to “neighbors” when making decisions about consumption and others, as well as non-economic factors,

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such as contracts, causing the rigidity of market prices. Thus, consumer theory and producer theory developed and became more complex as the economic theory as a whole developed, but the consumer-producer dichotomy still persists. In our opinion, a partial solution to the problem is proposed by the theory of productive consumption, the main ideas of which were formulated by M. Friedman in his work “The Theory of the Function of Consumption” (1957). He proved that consumption is productive in the sense that people (households) behave in accordance with a long-term strategy, which can be described in general terms as maximizing the present value of their future income from the acquisition and exploitation of assets consisting of both human and from non-human capital (Friedman 1957). Productive consumption is consumption that increases utility and income at the same time. There are three forms of productive consumption: nutrition, health, education. All three forms serve current needs and therefore can be labeled as consumption expenditures; although sometimes it can be evaluated differently in the case of education. At the same time, labor efficiency increases or, depending on the interpretation, the supply of human capital. From this point of view, the main consumption expenditures can be classified as productive. Productive consumption ensures the satisfaction of current needs and at the same time increases the production potential of labor. The theory of productive consumption offers a new look at how consumers maximize their utility. To meet current needs, the consumer “relies on reality” (Valenčík and Wawrosz 2016), using certain means, performing certain actions and getting into certain situations. Seeking to maximize utility in the present, the consumer achieves a certain pleasure or experience (that is, this satisfaction is associated with a certain emotion). Thanks to experience, the consumer appreciates the receipt or acquisition of funds that he uses to carry out actions, perform the activity itself, situations in which he falls or which he avoids. Initial experience directly related to meeting initial needs leads to new needs and new experiences (Valenčík 2019; Roubal 2019). New experience arises from the synthesis of the transferred experience that arises as a result of satisfying existing requirements, when the same means of activity, the same activity, and the same situation simultaneously determine the satisfaction of many requirements. Thanks to the experience of satisfying certain needs, various types of experience are synthesized and new needs appear. The mechanism for the transfer, generalization and consolidation of experience over the means, actions and situations that determine the achievement of future experience (including the possession of certain goods or the performance of certain types of activities) plays a dual role: – on the one hand, it significantly increases the motivation to acquire economic resources and intermediate goods or to perform certain actions. Since these intermediary goods or activities often provide more productive achievement of the initial goals than the situation when the original goal was achieved without their existence, and therefore it also increases the effectiveness of decision-making in terms of achieving the original goals; – on the other hand, it removes the current human activities from their original goals (the intermediary goods themselves become the goals of human activities).

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Thus, the growth of human capital is an important aspect of the consequence of productive consumption; Another important aspect is a new understanding of the activity of an economic agent in the continuum “present - future”. Consumption becomes productive if, in deciding on consumption, the economic agent seeks to maximize the future beneficial effect and, ultimately, increase the discounted cost of human capital. Understanding that the behavioral model inherent in productive consumption can be extended to other products also changes the behavior of the manufacturer. Orientation of the consumer to the future to a greater extent than to the present, his desire to increase human capital, stimulates the manufacturer to look for opportunities to meet the future needs of the consumer. It can be assumed (hypothesis 1) that it is the image of the future that becomes the main condition for coordinating the interests and actions of the producer and consumer, which both seek to maximize their well-being and their human capital in the future. The vulnerability of the hypothesis formulated is the degree of rationality of economic agents. If economic agents are completely rational, then they have all the information about the present, their cognitive abilities are perfect and then equilibrium is reached automatically. But since economic agents are not completely rational (or even irrational), that is, they do not have all the information, and their cognitive abilities are limited, they need experience and emotions in order to form their idea of the future and make decisions in the present. Let us make an assumption (hypothesis 2) that economic communications are the link between economic agents (consumers and producers) in the present and future. Economic communications is not only a process of transmitting information, but also a component of the mechanism of economic coordination, coordinating the actions of economic entities in time and space. Despite the abundance of technical means of communication in the modern economy, a person still remains a carrier of meanings, values, norms, behavioral patterns, without which economic communication is impossible. At the same time, the person himself is the subject of socio-economic systems of various levels (micro-, meso-, macrolevels) and types (design, environmental, process, object). Speaking as the subject of communication, a person transmits and receives not only information, but also meanings, knowledge, values, behavioral patterns, rules (institutions) (Yerznkyan et al. 2017; Kleiner et al. 2018). Communications created by man in interaction with other people form the internal environment of systems and subsystems of various types and levels, affect the coordination mechanisms within systems and between systems, contributing to their development, destruction or planned termination of activity (Kleiner 2011, 2018). The role of economic communications is growing in direct proportion to the growing role of human and social capital in the economy. Economic communications play an extremely important role in international economic cooperation, in the preparation and implementation of comprehensive reforms aimed at the development, preservation and use of human potential in the economic system, as well as in obtaining public support for these reforms. Therefore, the study of economic communications and their role in the mechanism of economic coordination is relevant - both from a theoretical and practical point of view.

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Economic communications have long been studied by philosophers, economists, sociologists, historians and psychologists. The ancient philosophers Xenophon and Aristotle considered the exchange of economic goods as communication; mercantilists paid attention to trade and financial communications; communications in the sphere of social economic relations interested representatives of classical political economy and Marxists (Sazanova and Ryazanova 2019); Management communications were the subject of research at the first academic management schools. Currently, communications in general and economic communications, in particular, are actively studied by foreign and Russian philosophers, economists, psychologists and sociologists (Sazanova 2018; Sazanova et al. 2019) which reflects the demand for an interdisciplinary approach in economic studies in general and economic communications in particular. At the same time, a comprehensive analysis of economic communications, including an analysis of their fundamental foundations, essence and content, formation mechanisms, roles in the mechanism of economic coordination in socio-economic systems and subsystems in modern economic science, in our opinion, requires deepening and development. The synthesis of the theory of economic communications and the theory of productive consumption will make it possible to take a step towards the creation of a comprehensive theory of economic behavior, relevant from the point of view of the modern stage of development of economic theory.

4 Conclusion A study of the methodological and theoretical foundations of the modern theory of the behavior of economic agents based on the methodology of historical and economic research, the theory of productive consumption and the theory of economic communications made it possible to identify the problem of the producer-consumer dichotomy. It has been established that this problem has long been one of the key problems of economic theory, from the 19th century to the present. Differences in approaches to solving this problem of representatives of leading scientific schools of the XIX–XXI centuries: neoclassical economic theory, Keynesian economic theory, the Russian economic and mathematical school are revealed. The conclusion is made about the limited heuristic value of each of the analyzed approaches. It is proved that the theory of productive consumption and the theory of economic communications have heuristic potential for solving the problem of the producerconsumer dichotomy. Two hypotheses are formulated: 1) the image of the future becomes the main condition for coordinating the interests and actions of both the producer and the consumer, since they both strive to maximize their well-being and their human capital in the future; 2) economic communications are the link between economic agents (consumers and producers) in the present and future. These hypotheses are supposed to be used in the future to construct a general theory of economic behavior.

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References Friedman, M.: A Theory of the Consumption Function, p. 259. Princeton University Press, Princeton (1957) Kleiner, G.B.: A new theory of economic systems and its applications. Her. Russ. Acad. Sci. 81 (5), 516–532 (2011) Kleiner, G.B., Rybachuk, M.A., Ushakov, D.V.: Psychological factors of economic behavior: a systemic view. Terra Econ. 16(1), 20–36 (2018) Kleiner, G.B.: Three questions to political economy (An attempt of system introspection). Voprosy Ekonomiki 8, 118–127 (2018) Morozova, I.A., Popkova, E.G., Litvinova, T.N.: Sustainable development of global entrepreneurship: infrastructure and perspectives. Int. Entrep. Manage. J. 15(2), 589–597 (2019) Roubal, O.: The duality of hedonism in the ambivalent world of polarities. Eur. J. Sci. Theol. Tech. Univ. Iasi 15(1), 203–213 (2019) Sazanova, S.L., Ryazanova, G.N.: Problems and opportunities of development of the agricultural industry of Russia from the point of view of marxist theory. marx and modernity: a political and economic analysis of social systems management. In: Alpidovskaya, M.L., Popkova, E. G. (eds.) A Collective Monograph. A Volume in Advances in Research on Russian Business. Information Age Publishing Inc. (2019). 651p. – pp. 599–608. – ISBN: 978-1-64113-749-2 (Paperback), 978-1-64113-750-8 (Hardcover), 978-1-64113-751-5 (ebook) 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. In: Alpidovskaya, M.L., Popkova, E.G. (eds.) A Collective Monograph. A Volume in Advances in Research on Russian Business. Information Age Publishing Inc. (2019). 651p - pp. 279– 288. – ISBN: 978-1-64113-749-2 (Paperback), 978-1-64113-750-8 (Hardcover), 978-164113-751-5 (ebook) Sazonova S.L.: Structural modeling of the institution of Russian entrepreneurship in the spirit of “Old” institutionalism. In: Popkova, E. (ed.) The Future of the Global Financial System: Downfall or Harmony. ISC 2018. Lecture Notes in Networks and Systems, vol. 57, pp. 451– 460. Springer, Cham (2018). https://doi.org/10.1007/978-3-030-00102-5_48 Valenčík, R., Wawrosz, P.: Limits of neoclassical utility theory and some possible ways how to overcome them. J. Int. Sci. Publ. 10, 23–31 (2016). ISSN 1314-7242 Valenčík, R. (ed.): Ekonomie produktivní spotřeby: Teoretický základ analýzy role odvětví produktivních služeb bylo přiděleno. Vydání první. – Praha (2019). ISBN 978-80-7408-184-2 Yerznkyan, B., Gassner, L., Kara, A.: Culture, institutions, and economic performance. Monten. J. Econ. 13(2), 71–80 (2017)

Managing Company Competitiveness in the Digital Economy Irina Yu. Sizova1(&), Elena M. Semenova1, Aleksandr V. Zakharov1, Elena A. Sotnikova2, and Yuliia A. Zviagintceva2 1

Orel State University, Orel, Russia [email protected], [email protected], [email protected] 2 Orel State University of Economics and Trade, Orel, Russia [email protected], [email protected]

Abstract. The 21st Century Management Concept modifies management processes and mechanisms. Obsolescence of technologies and the formation of the new digital environment leads to a decrease in the level of competitiveness of companies. The application of new approaches to managing the competitiveness of companies in the digital economy is the main tool. The theoretical study of the issue is missing today. New tasks to manage the company’s competitiveness need to be formed. When writing a scientific article, the following tasks were solved: to the triangle of company competitiveness management was considered; to the company’s competitiveness management processes are identified; to the company’s competitiveness management system has been formed; to the model of the company’s competitiveness management in a digital economy is modeled. The solution of the tasks carried out on the basis of the application of methodological tools. The research methods were: the method of staging installations, the method of theorizing the conceptual apparatus, the method of comparative characteristics, the method of abstracted application, the method of formalization, the method of implication settings, the method of descriptive data, the method of structuring the phenomenon under study. Keywords: Competitiveness
Innovation
The digital economy Characteristics
The system
Stages
Management




1 Introduction Effective enterprise management is an important characteristic in the conditions of transformation of external processes. The constant variability of environmental factors leads to the absence of effective tools for managing the company’s competitiveness. This circumstance causes some negative characteristics. Firstly, the construction of long-term plans is replaced by current management. The negative consequences of environmental variability lead to a deterioration in the development of the company’s current activities. Current activities include maintaining operational processes in the company. The strategic characteristics of enterprise management are ignored. Subjects don’t work through management decisions. The competitiveness of the company is not satisfactory. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 365–375, 2020. https://doi.org/10.1007/978-3-030-47945-9_41

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Secondly, the use of marketing activities prevails over the application of integrated company management approaches. Marketing is a utopian phenomenon. Marketing specificity is typical for the company. Pricing policies and advertising don’t allow us to talk about the reflection of the whole aspect of management tools. Limitedness provokes a narrowly focused implementation of concepts and strategies for company management. The competitiveness of the company isn’t satisfactory. Thirdly, the new tools are not adapted to the outdated processes of the company. Effective competencies of subjects are absent in management. The introduction of new tools will create internal conditions for mobilizing company resources. If the company’s management system doesn’t work, then modern tools will not lead to an improvement in the company. The competitiveness of the company isn’t satisfactory. The grounds indicate the need to study the topic of managing the company’s competitiveness. Technologization of society transforms this issue under the conditions of digitalization of the external environment. The article considers the issue of managing a company’s competitiveness in the digital economy. The selected basis determines the purpose of scientific research. Negative features of the company’s competitiveness management indicate sufficient significance of the issue under study. To achieve this goal, you must complete the following tasks: – – – –

to to to to

consider the triangle of company competitiveness management; determine the processes of managing the company’s competitiveness; form a system for managing the company’s competitiveness; model the model of competitiveness management in a digital economy.

The objectives of the study are the main prerequisites for the management of enterprise competitiveness. Multitasking research allows you to consider the features of competitiveness in the digital economy.

2 Methods The characteristics of a company’s competitiveness management in the digital economy are based on methods. The main methods are divided into two groups. The first group includes theoretical methods. Theoretical methods express the semantic load of the investigated phenomenon. The second group includes modeling methods. Modeling methods focus on change management. Theoretical methods have a standard form. These methods include: – the method of staging installations is the consideration of the phenomenon through periods; – the method of theorizing the conceptual apparatus is the determination of the meaning of the definitions of the phenomenon in question; – the method of comparative characteristics is the process of comparing characteristics in the framework of the phenomenon under consideration;

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– the method of abstracted application is the distraction from unnecessary characteristics of phenomena with the allocation of the most significant characteristics; – the method of formalization is the concentration of a phenomenon on the essence of processes. A group of modeling methods forms new prerequisites for the creation of research systems. Modeling methods include: – the method of implication attitudes is the formation of a model based on subjective thinking in the research process; – the method of descriptive data is a synthesis of research results in the context of a single model; – the method of structuring the investigated phenomenon is the reduction into a single form of the components of the studied phenomenon. The methods reveal the objectives of the study within the framework of the subject of competitiveness management in the digital economy.

3 Main Part The company’s competitiveness management is formed on the basis of differentiation of concepts. An important definition is «competitiveness». Competitiveness is the principle of actions aimed at developing the subject of commercial relations (Wu 2015). Competitiveness is the property of a key player in the market (Adler et al. 2001). Competitiveness is the ability to realize ideas on the basis of existing advantages (Shestoperstov 2012). Competitiveness is the action aimed at the formation of qualities (Firsov 2012). Competitiveness is the feature manifested in the formulation of tasks and their implementation (Ryzhkova 2010). The concepts of «competitiveness» are generalized based on the selection of some characteristics. Firstly, the benefits are the initial characteristic of this concept. Competitive entities have advantages over other industry entities. The lack of advantages doesn’t allow us to state the fact of the presence of competitiveness of the subject. Secondly, competitiveness is a relative characteristic. Relativity lies in a comparative basis (Shikhkerimova 2010). Thirdly, the process of customer satisfaction is the end result of competitiveness (Pilcher 1999). The result of competitiveness is formalized on the basis of the consumer’s willingness to re-purchase a given product or service. Competitiveness is a way of influencing the end consumer due to the existing advantages. The competitiveness management process is aimed at implementing actions to transform changes. The selected components are summarized in the triangle of company competitiveness management (Fig. 1). The company’s competitiveness management triangle is based on three components: management through change, management through regulation, management through action. Management through changes reflects the system of the subject’s

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influence on the object. The subject is a person formalizing the activities of the company. The process of influencing the object forms competitiveness. The goal of management through change is to achieve the stated result. The subject of control achieves the result.

Influence on the subject Management through change

Management through regulation

Influence through goals

THE COMPANY

Management through action Influence through the processes

Fig. 1. The company’s competitiveness management triangle

Management through action produces an impact on competitiveness processes. Processes simulate advantageous characteristics. Processes form the competitive potential of the company. Competitive potential is focused on the sustainable development of the subject of competitiveness. The control component through regulation is formed differently. Management through regulation includes an objective function. The company sets promising goals. Then the company gets the result. A positive result indicates the company’s competitiveness. Competitiveness is manifested through the retention of competitive advantages. An important condition is the presence of an adequate external environment. Managing a company’s competitiveness through change is effective. Management of the company’s competitiveness through goals is aimed at maintaining competitive advantages. Management of the company’s competitiveness through processes regulates the competitive potential of the company. The process direction of competitiveness management of the company has a fairly broad focus. This direction is manifested through mechanisms. We formulate these mechanisms (Fig. 2). The company’s competitiveness management mechanism is positioning in the external environment. The positioning of the company in the external environment is mediated by the search for points. Positioning improves the image of the subject of management. Concepts are tested differently. The concepts are aimed at recognizing and uniqueness of a company’s product or service. Concepts increase consumer confidence in this company. The mechanisms are aimed at monitoring the market. Mechanisms include the implementation of a plan to improve the image of the company with the constant diversification of the product. The main objective of the mechanism is to maintain the company’s targets.

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COMPETITIVENESS OF THE COMPANY

Positioning Orientation Reaction Scaling

COMPANY COMPETITIVENESS MANAGEMENT PROCESSES

Comparison

Planning

Fig. 2. Company competitiveness management processes

The next process of managing the company’s competitiveness is orientation. The orientation process is built on the concepts of company competitiveness management. Orientation concepts include: – the integrated concept aimed at meeting customer needs and creating incentives for employees; – the production concept is based on the release of a fairly cheap and labor–intensive product through the use of conveyor technologies; – the concept of socially-oriented production regulates the features of mass production for customers with a low budget. The reaction processes of the company’s competitiveness management are manifested in the transformation of the external environment. Environmental variability leads to the need for action. Measures act as events. The company’s competitiveness management process is based on the development of ongoing reactions. The current reaction is to actively stimulate the operational work of the company. The company’s competitiveness management process is based on strategic responses. Strategic reactions are analysis and deep study of risks and consequences of environmental variability. The company’s competitiveness management process is based on the development of active reactions. An active reaction is predicting the consequences of ongoing changes.

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Scaling a company involves competitiveness in terms of formalizing the market component. Scaling a company includes stocks, employees, overall efficiency. Lack of stocks triggers analogue competitors. The lack of employees provokes errors in work. The overall effectiveness of business processes accelerates commodity circulation. The positive dynamics of indicators allows us to scale the company’s business processes in the market. The process of comparing companies with similar entities necessitates the use of benchmarking tools. Benchmarking aims to implement the most successful practices by identifying effective methods. Dedicated toolkit compares benchmarks. Variation of indicators helps to understand the advantages and disadvantages of the company. The planning process helps set competitive goals. Aspects are being worked out towards forecasting activities for the short and long term. The competitiveness planning process of a company is determined by a matrix assessment of indicator components. Evaluation includes variation of performance indicators, measurement of parameters, stimulation and coordination of processes. In general, the company’s competitiveness management processes have a single structural basis. Processes act as tools for managing the company’s competitiveness. Processes govern the set of tools to achieve results. The result is a systematic management of the company’s competitiveness (Fig. 3).

Management through innovation MANAGEMENT THROUGH TOOLS Management through needs

Management through strategies Function Management THE COMPANY

Fig. 3. Company competitiveness management system

The system reflects the company’s competitiveness management through stages. The system includes the steps: – – – –

of of of of

management management management management

by function; through strategies; through needs; through innovation.

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Management through functions is aimed at the implementation of actions. Actions increase the company’s competitiveness. Production functions are responsible for the elaboration of the company’s technological processes. Accounting functions simulate the company’s settlement system between counterparties. Administrative functions form and ensure the activity of the company’s competitive system. Financial functions group and rationalize the resource components of a company. The functions of a safe environment are aimed at ensuring the safety of available resources. Control through functions is a multitasking algorithm. The algorithm is focused on clear actions transforming the direction of the company. Management through functions is associated with the concept of transformation of directions, taking into account the variability of the external environment. The strategic management approach is comprehensive. The strategic approach is based on the study of tasks according to target guidelines. The company’s orientation is aimed at positioning the company, taking into account emerging challenges and threats. The strategic approach determines the competitive potential and advantages of the company. Variation of advantages and threats allows us to form substitution points for disadvantages. Management through strategies defines target segments. Target segments set the level of customer satisfaction. Level setting forms indicators – preferences. Management through needs requires orientation to the individual. Management through needs is related to resources, the market and the number of competitive companies. Limited consumer resources cause a decrease in the market segment. Limited resources of the company can cause the opposite situation. The main components are resources, the market, competitors. Resources form the company’s competitiveness management system through needs. The management system has a right to exist. Management through needs is formed on the basis of an integrated company competitiveness management system. Decisions are developed into management through needs. Management through innovation involves a large number of transformational components. Management of productive areas of innovation allows us to increase the competitiveness of the company through the implementation of work to create innovative ideas. Management includes analysis of the internal and external environment of the innovation market. The analysis formulates quality requirements for the company’s products. The analysis determines the circle of consumers of innovative goods. Internal analysis makes recommendations to improve the competitiveness of the company. The process of managing the company’s competitiveness is built through the functional characteristics of the company. The process includes a strategy for market modification and innovation opportunities. The digitalization of society is adjusting the existing system. Firstly, digital trends are transforming the company’s operations. The company’s activities are based on management through functions. Functionality determines the current actions for the formation of a company’s competitiveness. The lack of a trend component doesn’t allow taking into account the tools of the digital economy.

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Secondly, management models allow the elements of competitiveness to circulate in accordance with the life cycle of the company. Digitalization accelerates the life cycle of a company. The process of “withering away” of the company is changing to modification. The competitiveness of the company is transformed into a model. Thirdly, the digital economy is modifying the characteristics of a company’s competitiveness management. The developed characteristics are modeled in accordance with changes in the external environment. The formulated conditions led to the need to model the system in Fig. 3. The layout of the company’s competitiveness management in the digital economy is fixed in Fig. 4.

THE TREND

THE MODEL

Smart things Resource automation Virtualization Process audit Blockchain Innovative activity

Technology platforms

COMPANY COMPETITIVENESS MANAGEMENT Quality Planning Knowledge

THE CHARACTERISTIC

Fig. 4. Managing company competitiveness in the digital economy

The company’s competitiveness management in the digital economy is considered through: – trends are components – introductions into the competitiveness management of the company; – models are components – substitutions in the process of managing a company’s competitiveness;

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– characteristics are components - components of the company’s competitiveness management. Management through trends is aimed at taking into account the technological aspects of the company. The trend component intersects with the management phase through innovation. Firstly, trends suggest new technologies, but not innovations. Secondly, trends indicate the presence of technology in the company’s activities. Management through trends includes: – the introduction of the concept of «smart things» is the replacement of obsolete processes with technologies of the Internet of things computing network; – virtualization is the movement of company functions into virtual space; – blockchain is the formation of databases in order to simplify and automate the activities of the company; – technological platforms are the formation of communication platforms. Digitalization has altered the company’s competitiveness. Management through trends denies the need for rent, enlarged research structures, and visual seller-consumer contact. The trend component produces the need for technology assessment in the longterm development of the company. Management through models replaces the problematic side of the company’s competitiveness. The first management model is related to resource automation. The digital component regulates the full automation of the company. The transparency of the process determines the level of automation of the resource. A resource cannot be automated without transparent company management. The second model is process audit. The processes of the managing entity are subject to audit. Audit of processes allows to identify errors during the period of formation of the result. The latest model is innovation. In innovation, the company analyzes the level of its manufacturability. The low level of manufacturability denies the competitiveness of the company. Digitalization of society implies a fundamental change in the management of the company’s competitiveness. Competitiveness features include quality, planning and knowledge. The quality of the company’s competitiveness management presupposes the creation of an effective organization for the transition to the principles of technological development. Postulates include the speed of decision making, control over decisions made, interaction within the framework of information flows and response to current changes. Postulates are subject to the planning process. Planning is determined by the minimum and maximum speed of decision making. Knowledge produces the processes of the digital economy (Stroeva et al. 2019). In general, the postulates of the company’s competitiveness management in the digital economy are modifying the approach to this phenomenon. The main component are management methods. The digital economy seeks to transform processes. The change in the level of competitiveness by the transformation of the process characterizes only relative characteristics to the presented approach.

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4 Conclusion The study allowed us to formulate the following conclusions. 1. The study of the definition of «competitiveness» made it possible to generalize the existing concepts. Competitiveness is a way of influencing the end consumer due to the existing advantages different from market entities. The competitiveness management triangle of the company modeled the components: actions on the means of concentration through management processes, regulation on the means of concentration through the goals of management, changes in the means of concentration on the subject of management. 2. The company’s competitiveness management processes were positioning, orientation, reaction, scaling, comparison, planning. The processes are structured. Orientation allows you to build the system with company competitiveness management tools. 3. The company’s competitiveness management system is a phased algorithm of actions including: management through functions, management through strategies, management through needs, management through innovation. Management through functions allows you to work out the level of competitiveness of the company. Management through strategies is focused on identifying threats to the external environment. Management through needs requires orientation to the desire of the individual. Management through innovation involves the formation of an innovative model to increase the competitiveness of a company. The stages of the system are complex. 4. The layout of the company’s competitiveness management in the digital economy allows you to modify management methods. Ways to manage a company’s competitiveness in a digital economy are based on trends, models, and characteristics. Trends are introducing new processes into management. Models replace old processes. Characteristics form the basis of a company’s competitiveness.

References Firtsov, Y.V.: Change management is the most important resource of the company’s competitiveness. Financ. Bus. 6(161), 43–47 (2012) Adler, N.J., Brody, L.W., Osland, J.S.: Going beyond twentieth century leadership: a CEO develops his company’s global competitiveness. Cross Cult. Manag.: Int. J. 8(3–4), 11–34 (2001) Pilcher, T.: Compony benchmarking as a tool to aid competitiveness. TQM Mag. 11(1), 49–53 (1999) Ryzhkova, T.V.: Entropy evaluation of the company’s competitiveness. World Sci. Discov. 6–1 (12), 94–95 (2010)

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Stroeva, O.A., Lyapina, I.R., Gryadunova, A.V., Tishaev, V.V., Shalaev, I.A.: Priorities of using the new information and communication technologies in modern economy. In: Advances in Intelligent Systems and Computing, vol. 726, pp. 449–455 (2019) Shepoperstov, R.V.: Development of a strategic approach to increasing the competitiveness of the company. Econ. Law 1, 19–24 (2012). (Twenty-first century) Shikherimov, I.A.: Key indicators of competitiveness. Russ. Entrep. 1–2, 62–68 (2010) Wu, S.: Marketing assessment of compony competitiveness. Compon. Sci. Technol. Prog. 2(24), 33–35 (2015)

Directions for Increasing the Budget Expenditures Efficiency Under the Digital Economy Conditions S. N. Meliksetyan(&), G. V. Popova, A. L. Malyuga, and E. V. Kravchenko Rostov State University of Economics, Rostov-on-Don, Russia [email protected], [email protected], [email protected]

Abstract. Subject. One of the priorities of the national financial policy of the Russian Federation is to improve the efficiency and impact of the state financial resources use. These issues are particularly relevant in the conditions of the economy digitalization. The article presents the features of the innovative method implementation of the state financial control-budget monitoring, the effective budget monitoring algorithm and the algorithm of public control in Russia. Purpose. The purpose of the work is to reveal key directions of increasing the efficiency of budget expenditures in the digital economy. The paper sets the following tasks: to determine the interim results of the programs implementation to improve the budget expenditures efficiency within the budget reform, as well as to identify the main results of budget monitoring; to develop algorithms for the budget monitoring and public control. Design/Methodology/Approach. Methods of the comparative analysis, systematization, classification, analogy, comparison were used in the study. Results. The paper presents an overview of prospective directions to improve the efficiency of the budget fund use. The results of budget monitoring by the Federal Treasury of the Russian Federation as an innovative method of the state financial control are presented in the article; the main results of the programs implementation to improve the budget funds efficiency in 2012 and 2018 are revealed; the algorithm of effective budget monitoring and the algorithm of public control in Russia are proposed. Practical Implications: Results of the study can be implemented in management practice in order to improve the efficiency of budget expenditures, especially in the context of the digital economy formation. Originality/Value. The real increase in the efficiency and impact of the budget funds use can be achieved only if there is the effective interdepartmental interaction of the state financial control authorities and law enforcement agencies, providing the financial security of the state. Achieving the social and economic efficiency of budget expenditures, the welfare of the country and improving the life standard of the population is possible only with the rational and effective distribution of public financial resources. Keywords: Efficiency
Budget expenditures
State financial control
Budget monitoring
Public control © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 376–386, 2020. https://doi.org/10.1007/978-3-030-47945-9_42

Directions for Increasing the Budget Expenditures Efficiency JEL Classification Codes: G 28

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H50

1 Introduction The effective functioning of the state administration system is one of the state priority goals. In turn, the efficiency of any state is largely determined by its ability to manage limited financial resources with the maximum possible positive result. In the context of the ongoing implementation of the budget reform final stage, the issues of increasing the efficiency of the budget funds use are even more urgent. Effective budget expenditures contribute to the strengthening of the country’s economy and its growth, improve the life standard and welfare of the country’s citizens, they are a barrier to corruption. It seems that the idea of the budget expenditures efficiency should be present not only at the stages of the allocation and use of financial resources, but also at the stage of planning their formation in the context of the potential efficiency. The concept “efficiency” includes both economic and legal aspects. The economic aspect is expressed in the relationship of the costs incurred with the achievement of the best result with limited resources. The legal aspect is the legislative consolidation of the concept “efficiency”, its criteria and evaluation indicators in the normative legal acts for the state financial control (audit) bodies in order to determine the efficient/inefficient budget expenditures in the implementation of control measures. It follows that when there is no the efficiency criteria in the legislation, it is impossible for the state financial control bodies, subjects of public control represented by citizens to consider ineffective certain management decisions or performance of expenditure obligations. The retrospective analysis of various editions of the Budget code of the Russian Federation shows that since 1998 it revealed the essence of the principle of efficiency of the budget funds use. At the same time, the need to achieve the best result using limited budgetary resources remained unchanged. The Ministry of Finance of the Russian Federation developed and applied in practice the method for assessing the budget expenditures efficiency of the Russian Federation’s subjects. This method is mainly analytical and stimulating, because according to rating results the Russian Federation’s subjects with the highest scores receive additional financial resources for the implementation of programs to improve the budget expenditures efficiency. Among such indicators of the results’ assessment achieved by the Russian Federation’s subjects in the field of improving the budget expenditures efficiency are: – the balance and sustainability of regional and local budgets; – the implementation of program-target principles for organising the activity of public authorities; – the budget allocation efficiency; – the realization of the efficiency of the state and municipal management functions at their optimization; – the availability of the developed information system of the state (municipal) finances management; – the budget expenditures efficiency at the local level.

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2 The Program-Target Method in Increasing the Budget Expenditures Efficiency As the study shows, the efficiency principle of the budget funds use is revealed in the modern legislation, but the definition of the efficiency itself still is not fixed (Shevelko 2016). In addition, the program-target method of budget planning of the budget system of the Russian Federation determines the need to develop and use indicators for assessing the efficiency of the state programs implementation. At the same time, the annual expertise of the state programs and the audit of their implementation conducted by the Accounts chamber of the Russian Federation (Balinin 2018) revealed systematically recurring shortcomings: – the number of target indicators of some state programs was insufficient to assess the achievement of the stated purposes and objectives; – purposes and objectives of some state programs do not correlate with the provisions of the strategic planning documents and “May” decrees of the President of the Russian Federation; – the discrepancy of indicators with the state program measures; – the planned dynamics of the state programs indicators a priori did not allow to achieve their purposes and objectives. The above-described shortcomings of currently implemented state programs in Russia are certainly one of the factors determining not only the decrease in the efficiency and impact of budget expenditures, but also hindering the digital economy development in the Russian Federation. As it is known, the digital economy is the economic activity in which the key factor of the production is data presented in a digital form, processing the large amounts of information is carried out, that as a result, in comparison with traditional forms of management, makes it possible to significantly increase the efficiency of various types of production, techniques, equipment, services, including state and municipal ones. Digital techniques is supposed to be a leading factor in measuring and improving the efficiency and impact of budget expenditures. It should be noted that in order to improve the budget expenditures efficiency in Russia since 2010, various programs and conceptions have been implementing. Thus, in 2010, the government of the Russian Federation approved the Program to improve the budget expenditures efficiency for the period up to 2012 (hereinafter - The program-2012), the core of which was the implementation of budgetary and legal measures to differentiate powers of the budget system levels of the Russian Federation, the activation of financial control measures, the implementation and evaluation of the program budget efficiency (Fig. 1).

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The analysis of the main provisions, objectives of the Program-2012, as well as methods to achieve them allows us to make a conclusion that they were fuzzy and nonspecific. This fact, from our point of view, can be explained by the lack at that time of the sufficient methodological experience of such program documents developers (2010). The President of the Russian Federation outlined the global goal to improve the budget expenditures efficiency and the document formally reflected the key directions to achieve them. However, there was no well-developed and scientifically-based tools: there were no effective methods to assess the activity of public authorities and local bodies, including assessing the efficiency of the financial resources use. A similar situation was observed in the context of improving the budget expenditures efficiency in public policy (spheres of activity, sectors of the economy and social sphere) (Alieva and Shirinov 2018). Authors make a conclusion that as a result of the Program-2012 implementation, objectives were achieved significantly: – budgetary powers of the budget process participants were streamlined; – the system of the state financial control was improved; – from 2012 till the beginning of 2013 the Government of the Russian Federation approved 39 state programs of the Russian Federation;

The Program – 2012 purposes and objectives PURPOSES

Increasing the state bodies efficiency to perform state (municipal) functions, realize long-term priorities and the purposes of the social and economic development

OBJECTIVES to define spheres and mechanisms of ensuring the responsibility of public legal entities and state and local self-government bodies within public legal entity

to ensure a closer link between strategic and budget planning, to determine the planned results of budget expenditures and to monitor their fulfilment from the point of view of budget expenditure target setting the optimization of the volume and order of public services, as well as the performance of public functions the stimulation of participants in the budget process to improve the efficiency of budget expenditures and structural reforms strengthening the transparency and accountability of the activities of state and local bodies, including through the promulgation of their activity indicators.

Fig. 1. The purposes and objectives of the Program – 2012 (Compiled by the authors)

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– in 2010–2012, the fundamental reform of the public and municipal services system was carried out; – the comprehensive contract system was formed. Continuing successfully launched activity, in 2013 the Program for improving the efficiency of public finance management for the period up to 2018 was approved, which noted a number of shortcomings and unsolved problems, including in the context of the budget expenditures efficiency: – in 2013, when forming the Federal budget draft, the problem of the state programs implementation efficiency was not fundamental; – there was no correlation between different software and target tools; – methodological incompleteness of the formation of the state (municipal) programs as the main tool for the state (municipal) policy purposes achievement; – the system of the state financial control was insufficiently focused on assessing the budget expenditures efficiency (Chulkov 2019); – limited application of the efficiency assessment of the budget funds use in the public administration sector. In this regard, the Program-2018 identified new purposes and objectives (Fig. 2), but with an emphasis on the need to develop criteria for assessing the budget expenditures efficiency.

Purpose and objectives of the Program-2018

PURPOSE

improving the efficiency, transparency and accountability of the budgetary funds use by completing the formation of the modern regulatory and methodic base for the budgetary legal relations regulation. OBJECTIVES

to ensure the achievement of the state (municipal) programs purposes and to increase their efficiency in the planning of budget allocations, it is important to pay attention to their correlation with the indicators of state (municipal) programs. the implementation of measures to improve the budget expenditures efficiency improving the state and municipal financial control in order to assess the budgetary expenses efficiency improving the quality of financial management in the state administration sector Fig. 2. Purpose and objectives of the Program-2018 (Compiled by the authors)

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In other words, in 2013 the public finance management process was largely focused on the formal procedures compliance, without creating sustainable incentives and tools to improve the efficiency, transparency and accountability of the budget funds use. Eight years after the implementation of the Program-2012 and Program-2018, it can be concluded that they created the conditions for increasing the budget expenditures efficiency through the systematic control of the state bodies of the Russian Federation, including the widespread use of digital technologies. In order to improve the successfully implemented activity under the Programs2012, 2018, the Government of the Russian Federation approved the Order on 31.01.2019 N 117-p “On the approval of the Conception of increasing the budgetary expenditures efficiency in 2019–2024”, which still provides for actions to implement the project management principles; to improve the efficiency and quality of public services in the social sphere; to improve the procurement system for goods, works, services for state and municipal needs and other measures in the digitalization of all these processes. However, this document contains innovations that summarize the best international practice to achieve the budget expenditures efficiency, but at the same time has significant features. Thus, in particular, one of the innovative tools that contribute to improving the budget expenditures efficiency in accordance with the objectives of socio-economic policy, it is planned to introduce budget expenditures reviews in the state finance management system. These reviews should be understood as “a systematic analysis of the basic (permanent) budget expenditures aimed at identifying and comparing different ways for budget savings, the choice and practical implementation of the most acceptable of them”.

3 The Role of Digital Technologies in Increasing the Budget Expenditures Efficiency According to the study, the current system of assessing the budget expenditures efficiency is fragmented, there is no common approaches to assess the budget expenditures efficiency at all the levels of the budget system of the Russian Federation. One of the ways of leveling this disadvantage is to introduce new methods of the state financial control with the digital technologies use. It should be noted that in the sphere of the state financial control, as an integral part of the system of the state administration, during last ten years there have been transformational changes focused on the digitalization of the procedures of the preliminary and current state financial control. A special role in the digitalization of these processes belongs to the Federal Treasury of the Russian Federation. This Agency is, on the one hand, the object of ongoing reforms (in the case of transfer of powers and functions of the Federal service of financial and budgetary supervision in connection with its abolition), and, on the other hand, the subject initiating the introduction of digital technologies in the field of the state financial control. Carrying out a full cycle of the budget control: from preliminary budget control, during transactions, to the subsequent one, according to the budget execution results, the Federal Treasury of the Russian Federation develops more perfect approaches and ways to implement the control and audit activity with the application of digital technologies. Thus, within the interdepartmental cooperation with Rosfinmonitoring and the Federal tax service of the Russian Federation, since 2017, the

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Treasury of Russia has been applying the new method of the state financial control. It is the budget monitoring (Kovtyn 2018). As a result, the Russian Treasury now provides support for funds from the Federal budget in the form of inter-budget transfers, subsidies, budget investments in the authorized capital of legal entities that do not increase them. The essence of the budget monitoring as a method of the state financial control is following when a certain list of transactions is performed by a controlled subject (Client), the Treasury of Russia in accordance with the developed methods, there the identification of the Client in order to assess the risk level of the transaction (“critical”, “high”, “low”). On the basis of the specified information “Business of the Client” - a set of documents which contains information about the client of Federal Treasury on 42 indicators - is formed: since TIN, the check point, the name, types of activity and finishing with data on business reputation, claims (from Rosfinmonitoring, law enforcement, tax authorities). Depending on the assigned risk level, about beach Client is developed response measures to identify violations, or even attempted violations. It should be noted that the “Client Case” is constantly updated at each stage of the budget monitoring, including through the interdepartmental interaction. It makes it possible to make a conclusion that the budget monitoring introduction in the activities of the state financial control bodies is a confident step towards the economy digitalization. In general, we can conclude that the procedure of budget monitoring carried out by the Federal Treasury is almost identical to the procedure of the primary financial monitoring in the commercial sector, when a certain list of legal entities (pawnshops, notaries, etc.) must have a personal account in the Rosfinmonitoring system and reflect all the financial transactions in it. Rosfinmonitoring, in turn, reserves the right of the uninterrupted monitoring and analysis of financial transactions in order to determine doubtfulness or legality and transfer this information to law enforcement agencies. Thus, the budget monitoring helps to prevent violations that contribute to the inefficient spending of budget funds: unreasonably planned budget expenditures; withdrawal of budget funds through the accounts of fictitious companies; involvement of procurement participants in criminal activities, etc. In 2018, the volume of budget allocations for the implementation of budget monitoring projects of the Russian Treasury amounted to 8, 26 billion rubles, including Federal budget funds – 7, 33 billion rubles. The results of the assessment of the budget monitoring implementation by the Federal Treasury of the Russian Federation in 2018 are as follows: – 445 client cases were formed, 274 participants (62%) of which were assigned a high level of risk; – 170 signs of violations that can lead to negative consequences in the implementation of budget monitoring projects were identified. During the budget monitoring implementation in order to prevent violations of the legislation of the Russian Federation, 108 response measures were applied, as a result of which budget funds in the amount of 603.04 thousand rubles were saved, budget funds in the amount of 67.38 million rubles were returned. In addition, during the budget monitoring of the provided funds, the Federal Treasury of the Russian Federation identified and systematized in the List of events (facts, signs) typical financial violations of participants of budget monitoring projects, and also developed a risk classifier of financial violations of budget monitoring projects.

Directions for Increasing the Budget Expenditures Efficiency

The iIdentification of budget risks in the objects of the budget monitoring (BM)

yes

no

Illegal financial transactions or questionable transactions

yes

The iInteragency cooperation of Parties in the activities of BM

yes

Informing the Treasury of Russia about the consideration of information on suspicious transactions and illegal financial transactions

The participation of Parties in joint BM events with the Treasury of Russia

The application of response measures (refusal to open (suspension of opening) the treasury account; the prohibition of operations on the treasury account; refusal to conduct operations on the treasury account, etc.) in respect of participants of the treasury support

yes the elimination of revealed violations

No

1) The increase of the use of budgetary funds; the efficiency; 2) The achievement of purposes of the social and economic development of the state Fig. 3. Budget monitoring algorithm in Russia (Compiled by the authors)

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For the purpose of the perspective development of the budget monitoring by the Treasury of Russia, authors propose the algorithm of budget monitoring, which will organically fit into the list of priority measures for the digitalization of the economy and will undoubtedly contribute to improving the budget expenditures efficiency (Fig. 3).

Yes

Expressng the initiative by the OK group

No

The decision appeal in court by members of the initiative group

Informing the controlled entity about the QA

Determining society's attitude to the problem

The formation of the final document containing recommendations on elimination of the revealed deviations and the reasons served as the basis for carrying out OK

Decisionmaking on the results of OK

Bringing the decision to the public authority, in respect of which the control measures were carried out

Yes

The controlled subject implements recommendations formed as a result of OK activities

No

The development of the PLAN for the ELIMINATION of the revealed violations

Fig. 4. Algorithm of effective implementation of public control measures in Russia

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According to the author’s proposed algorithm to improve the budget expenditures efficiency as Parties in the process are: the Federal Treasury of the Russian Federation in cooperation with the General Prosecutor of the Russian Federation, the Ministry of Internal Affairs of the Russian Federation, Investigative Committee of the Russian Federation, Federal Security Service of the Russian Federation, the Federal Service for Financial Monitoring, Federal Tax Service, Federal Antimonopoly Service and its territorial bodies, The Accounts Chamber of the Russian Federation at the implementation by the Treasury of Russia (territorial bodies of the Federal Treasury) of the budgetary monitoring and Treasury support of means provided from the Federal budget. The study of foreign practice in functioning of the state financial control bodies, in general, and Treasury bodies in particular, shows that in the countries with the socially oriented market economy (USA, France, UK, etc.) the powers of national Treasury departments mainly consist in performing cash and banking functions. At the same time, the making of any procedures similar to those described above procedures of the budget monitoring of the Federal Treasury of the Russian Federation, is the exclusive prerogative of law enforcement agencies - the Agency for combating corruption in France, the National Crime Agency (NCA) in the UK. So, the French anti-corruption Agency is responsible for: – the development of a typological risk map of commercial organizations - budget recipients involved in the implementation of large-scale government projects; – the implementation of tools for the comprehensive verification of major suppliers and intermediaries in the process of concluding and executing government contracts; – the assistance in the preparation and submission of reliable budget accounting reports; – training of key employees of organizations-officials whose activity is most exposed to corruption risks. The presented examples of the functions of the French anti-corruption Agency allow authors to conclude that their qualitative and effective performance is possible only with high-level digital technologies and their constant improvement. A very important trend of the state control development in Russia, which can simultaneously act as a catalyst for improving the budget expenditures efficiency, is the public control. The public control allows to monitor the activities of public authorities and local bodies, state and municipal organizations for the purpose of the public inspection, analysis and evaluation of their decisions, including financial ones, for their expediency, efficiency and impact. Basing on the study of the mechanism of the public control implementation in Russia authors propose an algorithm for the effective implementation of public control measures (CA) (Fig. 4).

4 Conclusion Summarizing the above mentioned, it should be concluded that the main directions of improving the budget expenditures efficiency in Russia are as follows:

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1) ensuring the effective interdepartmental interaction between all the participants involved in the implementation of budget monitoring measures. For this purpose it is necessary to approve the classifier of signs of the financial violations of participants of Treasury support in coordination with the Federal service for financial monitoring; 2) the activation of the role of citizens in carrying out the public control, increasing the regulatory role of the public control, which should be provided by the regulatory obligation of the controlled object on the basis of public control measures, making a decision containing specific actions to eliminate the identified violations. These directions of increasing the efficiency of the budget funds use are supposed to organically integrate the budget monitoring and public control in the system of the state financial control, activate its role in the implementation of public authorities, and not to distort its meaning as an element of the state administration system. Only under the condition of the rational and effective distribution of financial resources, the achievement of social and economic budget expenditures efficiency, it is possible to ensure a decent of life standard of the population and to improve socioeconomic indicators of the state’s development.

References Andreeva, O.V., Samoilova, K.N., Takmazyan, A.S.: Current trends in financial support of the socio-cultural complex of the Russian Federation. Compet. Glob. World: Econ. Sci. Technol. 7(3), 7–10 (2017) Balynin, I.V.: A set of proposals to improve the transparency of public finance in the Russian Federation. Audit Financ. Anal. J. 4, 80–84 (2018) Belostotsky, A.A.: Foreign experience of initiative budgeting in the management of public finances. Econ. Sci. J. 12, 89–93 (2018) Ivanova, O.B., Bogoslavtseva, L.V., Karepina, O.I., Kostoglodova, E.D.: Providing the budget transparency and state projects efficiency monitoring in Russia. Eur. Res. Stud. J. 1(20), 97– 104 (2017) Kovtun, L.R.: Budget monitoring is a promising method of state treasury control. Finance 5, 28– 33 (2018) Masterov, A.I.: Program-targeted budgeting as a tool to stimulate economic growth in Russia. Finance Credit J. 5, 1211–1228 (2018) Romanov, D.G., Otrishko, M.O., Romanova, T.F., Samoylova, K.N., Andreeva, O.V.: Role of clusters in creation of financial innovations in the sphere of social insurance. Espacios 39(1), 6 (2018) Romanova, T.F., Andreeva, O.V., Meliksetyan, S.N., Otrishko, M.O.: Increasing of cost efficiency as a trend of public law entities’ activity intensification in a public administration sector. Eur. Res. Stud. J. 1(20), 155–161 (2017) Sannikova, I.N., Prikhodko, E.A.: Ensuring the financial security of the region as an effective instrument of fiscal policy. Econ. Prof. Bus. 1, 48–55 (2019) Usenko, L.N., Bogataya, I.N., Bukhov, N.V., Kuvaldina, T.B., Pavlyuk, A.V.: Formation of an integrated accounting and analytical management system for value analysis purposes. Eur. Res. Stud. J. 21(S1), 63–71 (2018)

The “Green” Scenario of Development of the Digital Economy: Strategic Priorities and Subjects of Management Raisa T. Adarina1(&), Ayapbek A. Kuttubaev1, and Kseniya A. Melekhova2 1

Gorno-Altaisk State University, Gorno-Altaisk, Russia [email protected], [email protected] 2 Altai State University, Barnaul, Russia [email protected]

Abstract. Purpose: The purpose of this work is to substantiate the necessity and to develop a new scientific and methodological approach to implementing the “green” scenario of the digital economy’s development, which would allow for equal distribution of responsibility for its implementation and assigning the management functions to all economic subjects. Design/methodology/approach: For verifying the offered hypothesis and determining the differences in the level of implementation of sustainable development goals the authors perform comparative analysis of the values of the IMD green economy index and the digital competitiveness index of Dual Citizen (2019) for the best five countries and the worst five countries and determine the scale of differences between these indices. Formation of a systemic idea of the changes that are necessary for observing the given target landmarks requires a SWOT analysis of social environment of the market economy for realization of the “green” scenario of development of the global digital economy. Findings: It is determined that the “green” scenario of development of the digital economy is not currently implemented due to imperfection of the monosubjective approach to its management – which is proved by vivid disproportions in development of the “green” economy and the digital economy. Originality/value: For solving the given problem, the authors develop a polysubjective approach to managing the implementation of the studied scenario, which envisages distribution of responsibility between venture investors, suppliers of resources, information society, e-government, and digital business. Its systemic results and terms of implementation are presented. Keywords: “Green” scenario
Development of the digital economy
Strategic priorities
Subjects of management
Monosubjective approach
Polysubjective approach JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
O47


O31
O32
O33


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1 Introduction Implementation of sustainable development goals and development of the potential of technological progress have equal strategic importance for humanity, but, due to differences in their social nature, they have different support in the social and business environment, which is based on the philosophy of consumer society and free competition, which proclaims the top-priority tactical profit in the mid-term and moves longterm consequences to the background. The green economy, which envisages long-term national investments into favorable environment in the future by means of refusal from a part of profit at present, contradicts the existing values and is an obvious “gap” of the modern market economy. The digital economy supports the values of the formed culture of the market economy, as it envisages acceleration of economic growth and increase of accessibility of goods and services. Due to higher support for economic subjects, the digital technological mode forms the basis of the future development of the global economic system, and the green economy is one of its scenarios. However, acknowledging the preference of this scenario, the state performs active direct and indirect interference with economic processes in the digital economy. The existing practice formed a monosubjective approach to strategic management of the green scenario of development of the digital economy. In this approach, the only subject of management is the state, and its strategic priority is increase of ecological effectiveness of the digital economy. Economic subject implement the studied scenario, using the state and market (created and strengthened by the state) stimuli. Such approach envisages focusing all responsibility for the implementation of the “green” scenario of the digital economy’s development on the state and causes large burden on the state budget, which, in the conditions of deficit of the budget, puts into doubt the successfulness of implementation of the studied scenario. The working hypothesis of this research is that currently there is a strong shift in favor of digitization and significant underrun of the results in implementation of sustainable development goals. Therefore, there’s a necessity for a new scientific and methodological approach to implementing the “green” scenario of the digital economy’s development, which would allow for equal distribution of responsibility for its implementation and would allow assigning management functions to all economic subjects.

2 Materials and Method The issues of state regulation of the “green” scenario of the digital economy’s development are studied in detail in the works Frolov et al. (2017), Inshakov et al. (2019), Morozova et al. (2019), Popkova et al. (2014, 2016, 2017), Pozdnyakova et al. (2017); digital technological mode is studied in the works Belik et al. (2020), Popkova (2019), Popkova and Gulzat (2020a, b), Popkova and Zmiyak (2019), Ragulina (2019), Ragulina et al. (2019), Sergi (2003, 2019), Sergi et al. (2019a, b), Shulus et al. (2020), and Stolyarov et al. (2020).

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However, the perspectives of involving a wide circle of economic subjects into the process of managing the “green” scenario of development of the digital economy and the logic of distribution of strategic priorities between them are not studied sufficiently. Here we strive to fill this gap. For verifying the offered hypothesis and determining the differences in the level of implementation of sustainable development goals the authors perform comparative analysis of the values of the IMD green economy index and the digital competitiveness index of Dual Citizen (2019) for the best five countries and the worst five countries and determine the scale of differences between these indices (Fig. 1). Digital competitiveness index, points 1-100 100.099.4 96.1 95.2

94.6

56.0 55.3 54.0

49.8

Venezuela

Mongolia

Peru

Ukraine

Argentina

Denmark

Switzerland

Sweden

27.8

USA

Sweden Switzerland Iceland Norway Finland Guinea-Bissau Bosnia and… Benin Haiti Bahrain

100.0 1.00 90.0 0.90 80.0 0.80 0.760.760.710.700.70 70.0 0.70 60.0 50.0 0.60 40.0 0.50 30.0 0.35 0.340.34 0.34 0.33 20.0 0.40 10.0 0.30 0.0 0.20 0.10 0.00

Singapore

Green economy index, shares of 1

Fig. 1. The graph of values of the IMD green economy index and the digital competitiveness index of Dual Citizen (2019) for the best five countries and the worst five countries. Source: compiled by the authors based on Dual Citizen (2020), IMD (2020).

As shown in Fig. 1, the average value of the green economy index in the best five countries constituted 73.72% of the maximum value in 2019 (1), and the value of the digital competitiveness index – 97.06% of the maximum value (100 points). Also, a rather large gap is observed with the worst five countries, which average value of the green economy index constituted 34.16%, and the digital competitiveness index – 48.59%. This shows that the monosubjective approach does not ensure the full-scale practical implementation of the “green” scenario of the digital economy’s development and requires a more efficient alternative. For creating this alternative, we determine the target landmarks of the “green” scenario of the digital economy’s development: – inflow of investments; – resource efficiency and energy efficiency; – consumer awareness;

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– effective state regulation; – innovative activity of business. Formation of a systemic idea of the changes that are necessary for observing the given target landmarks requires a SWOT analysis of social environment of the market economy for realization of the “green” scenario of development of the global digital economy (Table 1). Table 1. SWOT analysis of the social environment of the market economy for implementing the “green” scenario of development of the global digital economy. Strengths (S) – active inflow of investments into the digital economy – expanded opportunities for state and public monitoring of business’s responsibility – high innovative activity of business Opportunities (O) – all economic subjects have to accept the priorities of “green” development of the digital economy, for ensuring its systemic modernization, which will lead to its quick growth Source: compiled by the authors.

Weaknesses (W) – growth of needs for resources and energy – domination of private interests over public interests (underdevelopment of the “green” consumer awareness) – state regulation is to accelerate economic growth, regardless of the ecological costs Threats (T) – non-proportional observation of the priorities of the “green” digital economy, which aggravates of the positions of those observing these priorities – which will lead to a crisis

As shown in Table 1, the strengths (S) of the social environment of the market economy for implementation include the active inflow of investments into the digital economy, expanded opportunities for state and public monitoring of business’s responsibility, and high innovative activity of business. The weaknesses (W) include growth of the needs for resources and energy, domination of private interests over public interests (underdevelopment of the “green” consumer awareness), and the fact that state regulation is to accelerate the economic growth, regardless of ecological costs. The opportunities (O) of overcoming the weaknesses include the fact that all economic subjects have to accept the priorities of “green” development of the digital economy for ensuring its systemic modernization, which will result in its accelerated growth. The threat (T) to implementation of the opportunities is non-proportional observation of the priorities of the “green” digital economy, which aggravates the positions of those who observe these priorities, which will result in a crisis.

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3 Results We developed a polysubjective approach to managing the “green” scenario of development of the digital economy. In Table 2, for each target landmark we offer a subject of management and its strategic priorities. Table 2. The polysubjective approach to managing the “green” scenario of development of the digital economy. Target landmarks Inflow of investments

Subjects of management Venture investors

Resource efficiency and energy efficiency

Suppliers of resources, including secondary resources

Consumer awareness

Information society

Effective state regulation

E-government

Innovative activity of business

Digital business

Strategic priorities – adoption of ecological requirements to the usage of investments into digital projects – considering “green” criteria during selection among the alternative variants of investing into digital projects – development of the recycling’s potential – preferring renewable resources and energy to non-renewable ones – stimulating the consumption of secondary resources – considering ecological criteria during selection among the alternative digital technologies and products, which should dominate over the financial criteria – stimulating responsible production and consumption in the national digital economy – adoption of strict “green” requirements to importers and foreign companies that strive to start production in the country – mandatory analysis of the ecological consequences during development of digital innovations – considering ecological criteria during selection among the alternative innovative projects – using the opportunities of digital technologies for protection of the environment

Source: developed and compiled by the authors.

As shown in Table 2, for ensuring the inflow of investments into “green” projects of the digital economy venture investors have to following such strategic priorities as establishment of ecological requirements to using investments into digital projects and considering “green” criteria during selection among the alternative variants of investing into the digital projects.

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For reaching high resource efficiency and energy efficiency of the digital economy, suppliers of the resources, including secondary resources, have to following such strategic priorities as development of the recycling’s potential, preference for renewable resources and energy to non-renewable ones, and stimulating the consumption of renewable resources. For formation of ecologically responsible consumer awareness the information society has to follow such strategic priorities as consideration of ecological criteria during selection among the alternative digital technologies and products, which should dominate over the financial criteria. For achieving eco-efficient state regulation of the digital economy, e-government has to follow such strategic priorities as stimulating responsible production and consumption in the national digital economy and introducing strict “green” requirements to importers and foreign companies that strive to start production in the country. For achieving eco-efficient innovative activity of business, digital business should follow such strategic priorities as mandatory analysis of the ecological consequences during development of digital innovations, consideration of ecological criteria during selection among the alternative innovative projects, and usage of the opportunities of digital technologies for environment protection. The systemic results of following the polysubjective approach to managing the implementation of the “green” scenario of the digital economy’s development are shown in Fig. 2.

waste secondary resources

− рециклинг

− responsible production

renewable energy

waste

Suppliers of resources “green” digital products

Information society − responsible consumption

waste

Stimuli for ecological responsibility

− responsible investing

Digital busines

venture investors

“green” investments

ecologically safe utilization

High living standards and quality of life

Foreign economic subjects

“Green” digital economy at the national scale increased control over eco-efficiency e-government high ecological standards

− responsible economy

Fig. 2. Systemic results of following the polysubjective approach to managing the implementation of the “green” scenario of the digital economy’s development. Source: developed and compiled by the authors.

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As shown in Fig. 2, the intermediary results of following the polysubjective approach to managing the implementation of the “green” scenario of the digital economy’s development include responsible investing, development of recycling, responsible production and consumption, and responsible economic activities in the country by foreign economic subjects (refusal from placement of hazardous productions). The final results include provision of wide accessibility of “green” digital products – goods and services that are manufactures, sold, and used with the minimum damage to the environment, as well as achievement of high living standards and quality of life – i.e., leveling the disproportions in development of the “green” economy and the digital economy.

4 Conclusion Thus, the “green” scenario of development of the digital economy is not being implemented due to imperfection of the monosubjective approach to its management – which is shown by vivid disproportions in development of the “green” economy and the digital economy. This problem could be solved by the developed polysubjective approach to managing the implementation of the studied scenarios, which envisage equal distribution of responsibility between venture investors, suppliers of resources, information society, e-government, and digital business. It should be concluded that the change of approach to managing the implementation of the “green” scenario of the digital economy’s development requires a serious transformation of the social and business environment – i.e., the change of the cultural context. Thus, there’s a necessity for transition to the new model of the market economy – the social one – which will allow increasing the interest of all economic subjects in implementation of the studied scenario. It is recommended to study this approach and to develop recommendations for its acceleration and crisis management in the future studies.

References 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) Dual Citizen: The Global Green Economy Index (2020). https://dualcitizeninc.com/global-greeneconomy-index/index.php#interior_section_link. Accessed 15 Jan 2020 Frolov, D.P., Popkova, E.G., Strekalova, A.S., Marushchak, I.V.: Strategic planning of regional ecological development: adaptation of Elinor Ostrom’s principles in Russia. In: Contributions to Economics, pp. 39–45 (2017). (9783319552569) IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 15 Jan 2020

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Inshakov, O.V., Bogachkova, L.Y., Popkova, E.G.: The transformation of the global energy markets and the problem of ensuring the sustainability of their development. In: Lecture Notes in Networks and Systems, vol. 44, pp. 135–148 (2019) Morozova, I.A., Popkova, E.G., Litvinova, T.N.: Sustainable development of global entrepreneurship: infrastructure and perspectives. Int. Entrep. Manag. J. 15(2), 589–597 (2019) 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., Dubova, Y.I., Yakovleva, E.A., Azarova, N.A., Titova, E.V.: Role of ecological marketing in formation and development of ecological cluster. Asian Soc. Sci. 10(23), 1–8 (2014) 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., Poluyufta, L., Beshanova, Y., Popova, L.V., Kolesnikova, E.: Innovations as a basis for marketing strategies of Russian oil companies in the conditions of oil prices reduction. In: Contributions to Economics, pp. 449–455 (2017). (9783319606958) Popkova, E.G., Shakhovskaya, L.S., Abramov, S.A., Natsubidze, A.S.: Ecological clusters as a tool of improving the environmental safety in developing countries. Environ. Dev. Sustain. 18(4), 1049–1057 (2016) 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) Pozdnyakova, U.A., Popkova, E.G., Kuzlaeva, I.M., Lisova, O.M., Saveleva, N.A.: Strategic management of clustering policy during provision of sustainable development. In: Contributions to Economics, pp. 413–421 (2017). (9783319454610) 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.: Economic Dynamics in Transitional Economies: The Four-P Governments, the EU Enlargement, and the Bruxelles Consensus. Routledge, New York (2003) 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 (2019a) Sergi, B.S., Popkova, E.G., Sozinova, A.A., Fetisova, O.V.: Modeling Russian Industrial, Tech, and Financial Cooperation with the Asia-Pacific Region. In: Sergi, B.S. (ed.) Tech, Smart Cities, and Regional Development in Contemporary Russia, pp. 195–223. Emerald Publishing Limited, Bingley (2019b) 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) Stolyarov, N.O., Petrenko, E.S., Serova, O.A., Umuralieva, A.S.: The digital reality of the modern economy: new actors and new decision-making logic. In: Lecture Notes in Networks and Systems, vol. 87, pp. 882–888 (2020)

Digital Humanities: The Possibility of Using Intelligent Learning Systems in Teaching Foreign Languages Ludmila V. Guseva(&), Elena V. Koroleva, Galina A. Kruchinina, Julia A. Marinina, and Anastasia A. Oladyshkina Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The purpose of the article is to justify the need to update the methods and technologies of teaching foreign languages according to the processes of development and digitalization of society and the educational and cultural environment. The relevance of the research is connected with the updating of methods by attracting the methods of digital humanities that can quickly respond to changes in society and the educational space. The scientific novelty of the article is in the analysis of existing intelligent learning systems (ILS) presented on the Internet and applications operating on Android and ios mobile platforms. ILS allows you to cluster the words which must be learnt under the topics, complexity or stylistic changes by means of tags. The article describes the types of training exercises, proposed options for working with applications for the formation of lexical skills, and also describes the results of an experiment on the use of an intelligent learning system. Research methods: in the framework of this article, the principles and methods of teaching a foreign language, and its vocabulary in particular, are considered in the context of communicative, active and cognitive approaches. The results of the study prove the high teaching potential of ILS: the high didactic possibilities of ICT-based teaching aids and their compliance with the basic psychological needs of the individual, which increase the level of internal motivation of students and the effectiveness of mastering the productive and receptive vocabulary, are substantiated. In conclusion, the usage of ILS in the educational environment is revealed. Keywords: Digital humanities
Lexical skills
Lexically directed exercises Cognitive word image
ICT in education
Gamification




JEL Code: I 200

1 Introduction The choice of the research topic, the results of which are presented in this article, is determined by the processes of digitalization and virtualization of educational processes occurring in the conditions of the modern information society and the © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 395–401, 2020. https://doi.org/10.1007/978-3-030-47945-9_44

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growing opportunities for using interactive applications at all levels and stages of learning foreign languages. Digital humanities allow combining “methods and practices of the humanities, social and computing sciences in order to explore the possibilities of applying and interpreting new digital and ICT in the humanities and education” (Digital Humanities 2016). The discrepancy between the high requirements for the formation of foreign language lexical competence, given by Federal educational standard, and insufficient attention to the special lexically directed exercises that contribute to the effective memorization and retention in memory of lexical material; between the high level of development of information technologies and the low level of their implementation in the educational process; between the increasing number of different interactive educational services with high motivational and didactic potential, and a small number of methodological developments in the field of their use, - makes it especially relevant the search of new ways to optimize the learning process of foreign language vocabulary by increasing the motivation of students and educators and introducing intelligent learning systems (ILS) into the educational process that help to create a capacious cognitive word image at the presentation and semantization stages, more effectively memorizing vocabulary and developing strong lexical skills of the language.

2 Methodology The article presents a theoretical substantiation of the method of forming and improving lexical skills through the formation of a cognitive word image using a set of supports and exercises implemented on the basis of multimedia computer technologies, and acquaintance the reader with the results of testing the effectiveness of using intelligent learning systems (ILS), incorporating the impact of gamification of the process of learning foreign languages on the level of student motivation and containing lexically directed exercises using the method of interval repetitions. Teaching the vocabulary of the foreign language is based on the following principles: the principle of reliance on cognitive and communicative motivation, taking into account psychophysiological features, the system-forming role of vocabulary, lexical anticipation in language education, the adequacy of sign-symbolic means for mastering foreign language, phased formation of lexical actions, etc. (Kruchinina 2014).

3 Results Under the intellectual learning environment in the study refers to “a complex of organizational and methodological, information, technology and software that implements the didactic capabilities of information and communication technology (ICT)” (Robert 2008). ILSs respond to the needs that determine internal or true motivation (“intrinsic motivation” (Ryan 2000); “natural motivation” (Passov 1988); “objectified need” (Leontiev 1981), i.e. they make the process of learning meaningful and interesting,

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without external motivators, though we don’t deny the role of other methods of increasing motivation in classroom language learning (Sokolova and Plisov 2009). It becomes possible by the creation of a special gamified environment in ILS (gamification is the use of game elements and game design techniques in a non-game context (Werbach 2012), appealing to the individual’s basic needs: • to the need for autonomy (the possibility of independent search and selection of information, exercises, methods of control, planning of the entire work, etc.); • to the need for awareness of their own competence (due to the visualization of progress statistics and such game design elements as status, bonuses, badges, etc.); • to the need for involvement in socially significant processes and institutions (due to the possibility of instant demonstration of progress in social networks, mutual assistance and group work) (Kruchinina and Plotkina 2017). One can “gamify” the course using the existing developments in this area: creating an account for a class on any of the existing educational platforms (KhanAcademy or Uchi.ru). Students do homework on the platform, go through the “missions” set by the teacher, get points, badges, awards, show each other the scale of progress and have fun while learning in a game form. The teacher, in turn, receives automatically generated tables and performance charts, detailed statistics for each student, the results of passing tests, exercises and games, analysis of the pace and accuracy of assignments, recommendations for further work. Training is becoming not only more vibrant, motivating, but also more individualized, which is recognized as a priority task in all existing approaches to teaching foreign languages. The opportunities for the individualization of education in the context of learning the vocabulary of a foreign language are especially important. High requirements of federal educational standard for productive and receptive lexical minima for schoolchildren and students, ineffective and often frankly boring methods of working on the lexical aspect of the language (memorizing lists, vocabulary dictations), as well as the individual characteristics of students (age, ability to memorize) cause significant differences between mastering rates specific volumes of lexical units (LU) among students of the same group. The use of content personalization algorithms for the needs of each individual student (different LU lists and ways of their semantization, changing the frequency and duration of training exercises) makes it possible to effectively overcome these difficulties. One of the stages of work is the methodological structuring of foreign language material. At this stage there is a methodical organization of selected LUs, the establishment of combinations and interrelations, the assignment of a sequence, the correlation with the educational function. By the definition of I. L. Bim, it is precisely the statement of the methodological task that makes it possible to assign a specific linguistic unit of realization action necessary for the realization of various communicative intentions. And this statement is fixing with exercise. The exercise is a structural unit of the methodical organization of the material of the secondary order, providing objective actions with this material and the formation of mental actions on their basis, and is the basic unit of training (Bim 1977). Lexical exercise is a tool that connects foreign language vocabulary and concrete actions with it, defining these actions according to methodological tasks and managing

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the vocabulary learning process. In other words, when the task of using it in training activities is assigned to a specific lexical material (word list or text), when methods are described and samples of this use are given and there is a way to control this process, the selected material becomes an exercise. The main stages of work on the vocabulary include: presenting, putting words into work, developing speech skills. Accordingly, among the lexically oriented exercises, there are complexes of exercises aimed at: introduction (LU semantization), training (differentiation and initial fixing), repetition (substitution, constructive and transformational exercises) and vocabulary activation in speech. In a certain way, exercises are a complex of controlling and evaluating assignments, tests, quizzes, projects, tasks for creative works such as essays, compositions (Shamov and Guseva 2018). The language games stand out by themselves, which many researchers do not include in the classification of exercise types. The stage of the presentation of a new word implies work on its form and meaning. The cognitive image of the word is created by analyzing and summarizing the information contained in its internal and external structure, based on sign-symbolic means: visibility (subject, graphic), sound “visibility” (rhymes, songs), graphic image of words (morphemic composition). The use of various types of signs and symbols contributes to the development of theoretical thinking of students (Kruchinina et al. 2018). In the format of IES, this stage can be implemented using multimedia technology, images, schemes, different fonts, colors and other graphic and iconic means of expressiveness; with the use of hypertext links to online dictionaries, the image of associating nets, etc. The more meaningful memorization is the more effective it will be, therefore various kinds of associative and word-formation schemes are extremely appropriate at this stage. Semantization can be carried out using equivalent, definition in the native language or without translation: using visual means, actions, gestures, objects, through interpretation in a foreign language, using synonyms and antonyms, through context or based on the morpheme analysis. The choice of the method of semantization should depend on the designated concept, level of learning, on which type of vocabulary active or passive - the word will potentially belong to and on the psycho-physiological characteristics of students (belonging to the number of visuals, audials or kinesthetics). In other words, to ensure the safety of words in memory, you must correctly build a training phase. Different groups of researchers offer different methods of memorizing words: mnemonic, associative, method of activating the visual image, the method of interval repetitions, etc. At this stage, especially strict requirements are imposed on the exercise, because no matter how effectively a new word was presented, the absence of a well-built consolidation would negate the efforts of the teacher and the student. IESs satisfy these requirements through multimedia and interactive technologies, gamification and personalization of the training process. It is generally recognized that the simultaneous impact on human hearing and vision increases the volume and degree of assimilation of information transmitted per unit time, and an appeal to both hemispheres increases memorization (the left hemisphere encodes verbal information, the right – visual information) (Luria 1979). In addition, due to the possibility of instant check and “sending” to the presentation stage in case of an incorrect answer, IOS-based

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exercises organize the correct distribution of training over time, taking into account the Ebbinghaus forgetting curve (Ebbinghaus 1964). Some IES containing lexical exercises allow you to automatically create exercises for substitution of missing words or the completion of a phrase from educational texts, thus meeting the requirements set forth for the exercises of this stage N.I. Gez: “New lexical units must be presented in a symbolic lexical environment and already assimilated grammatical forms” (Gez 1982). As an experiment, a comparative analysis of the learning outcomes obtained using traditional means and through IES was carried out. For this, the experience in foreign language teaching with a group of supplementary education consisting of six primary school students aged 7–9 years was analyzed. An Anki – based Android simulator software – was used for training. The group is trained with Fly High 3 training kit (Pearson Education Limited 2011). The teaching materials include Pupil’s book, Activity book and Teacher’s Guide book, Pupil’s CD-ROM, Active Teach CD-ROM, Vocabulary flashcards and books on grammar Fun Grammar for student and teacher. The choice of these teaching materials for the study was chosen due to the fact that its structure clearly highlighted the words to be memorized for each lesson, and this list is made in the form of “flashcards” present on each page of the textbook, Picture dictionary at the end of the textbook and Active Teach the disc in the form of a word training game. Each lesson contains not more than seven cards. The selection of words corresponds to the statistical principle, the principle of compatibility, derivational value, stylistic unboundedness and practical value: most of the words are included in the basic 2500 words, are found on the same page as part of sentences and phrases, they have an absolute practical value for a preschooler, as they are necessary for communication on the most simple life topics. However, the format of flashcards and interactive games is inferior to the possibilities of an interactive application that complements a graphic image of a word with colored font (depending on the ownership of one or another part of speech), transcription, textbook suggestion with an example of usage, Russian equivalent on the reverse side and an audio file. After testing and improving, the cards were distributed to students (their parents along with written instructions), and installed on their PCs, smartphones or tablets. The functionality of the Anki application allowed offline to train words using the method of interval repetitions, i.e. through mathematically verified (in accordance with the Ebbinghaus curve) time intervals. To compare the effectiveness of the training, the words from the first and second units of the textbook were taken. Exercises from a textbook, workbook, and various card games were used to train words. IES Anki was used as part of students work at home and only for words from the second unit of the textbook. After that, in order to assess the strength of the skill, similar tests were carried out twice (four types of tasks: to translate a word from English into Russian, to sign an image in English, to write down the word combination and to fill in a word in the sentence). The first test was carried out after the end of work with the unit, the second – in a month. The test results are given in the table (in percent):

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1 2 3 4 5 6

Unit 1. Test 1 75 80 90 92.5 85 75

Unit 1. Test 2 55 70 77.5 65 67.5 62.5

Unit 2. Test 1 90 95 92.5 85 95 87.5

Unit 2. Test 2 82.5 85 77.5 72.5 75 87.5

As can be seen from these results, for the second group of words, the percentage of the performed tests turned out to be higher on average by 8% and 16% (for control tests conducted in a month – Test 2), which confirms the hypothesis that the use of simulators increases the memorizing of words and the percentage of words that have fallen into long-term memory.

4 Conclusion/Recommendations Thus, based on the analysis of scientific research and own experience on the use of IES containing lexical exercises, it can be concluded that the unique didactic possibilities of ICT-based teaching aids and their compliance with the basic psychological needs of the individual increase the level of inner motivation of students and efficiency of mastering productive and receptive vocabulary. A simulator training program containing lexically directed exercises based on interval repetitions is only a special case, one of dozens of possible and already existing ways to train lexical skills using IES.

References Bim, I.L.: Methods of Teaching Foreign Languages as a Science and Problems of a School Textbook. Russian Language, Moscow (1977). 288 p. Digital Humanities: Digital Humanities: The Humanities in the Digital Age. Ed. G.V. Mozhaeva. Publishing House Tom. University, Tomsk (2016). 120 p. Ebbinghaus, H.: Memory: A Contribution to Experimental Psychology. Dover, New York (1964) Gez, N.I., et al.: Methods of Teaching Foreign Languages in Secondary School. High School, Moscow (1982). 373 p. Kruchinina, G.A.: Methods of forming foreign language lexical skills by sign-symbolic means in elementary school. N. Novgorod (2014). 148 p. Kruchinina, G.A., Koroleva, E.V., Oladyshkina, A.A.: Signs and symbols in teaching English vocabulary to primary-school children. In: Advances in Intelligent Systems and Computing, vol. 677, pp. 169–174 (2018). https://doi.org/10.1007/978-3-319-67843-6_21 Kruchinina, G.A., Plotkina, A.Z.: Features of use of the intellectual training systems in the course of formation of lexical skills. In: Problems of Modern Pedagogical Education. Collection of Scientific Papers, Yalta, RIOGPA, vol. 55, pp. 135–142 (2017) Leontiev, A.N.: Problems of the Development of the Psyche. Moscow State University Publishing House, Moscow (1981). 584 p. Luria, A.R.: Language and Consciousness. State University, Moscow (1979). 320 p.

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Passov, E.I.: The Lesson of a Foreign Language in Secondary School. Prosveshcheniye, Moscow (1988). 223 p. Robert, I.V., et al.: Information and Communication Technologies in Education. Drofa, Moscow (2008). 312 p. Ryan, R.: Intrinsic and extrinsic motivations: classic definitions and new directions. Contemp. Educ. Psychol. 25, 54–67 (2000) Shamov, A.N., Guseva, L.V.: The role of evaluation tools kit in recording of foreign language learning results. In: Advances in Intelligent Systems and Computing, vol. 677, pp. 203–209 (2018). https://doi.org/10.1007/978-3-319-67843-6_25 Sokolova, M., Plisov, E.: Cross-linguistic transfer classroom L3 acquisition in university setting. Vestnik Minin Univ. 7(1), 6 (2009). https://doi.org/10.26795/2307-1281-2019-7-1-6. https:// vestnik.mininuniver.ru/jour/article/view/927/710 Werbach, K.: For the Win: How Game Thinking Can Revolutionize Your Business. Wharton Digital Press (2012). 144 p.

Responsible Information Society as a Social Environment for Creation of the “Green” Digital Economy: Formation and Monitoring Tamara G. Stroiteleva1(&), Elena A. Petrova2, and Sergey V. Yungblyudt3 1

3

Altai State University, Barnaul, Russia [email protected] 2 Gorno-Altaisk State University, Gorno-Altaisk, Russia [email protected] Kemerovo Regional Advanced Training Institute, Kemerovo, Russia [email protected]

Abstract. Purpose: The purpose of the work is to overcome the scientific and methodological gap between developed and developing countries, to determine the global regularities, and to develop a universal conceptual approach to formation and monitoring of a responsible information society as the social environment for creation of the “green” digital economy. Design/methodology/approach: The authors use the method of correlation analysis for determining the connection between the green economy index, calculated by Dual Citizen, and the indicators that are calculated by the World Economic Forum during compilation of the global competitiveness index in top 10 counties of the Dual Citizen ranking of the green economy in 2019. Findings: The results of the analysis show that correlation with the green economy index is rather high for the indicators of market regulation and the indicators of state regulation of the responsible information society. The highest correlation is observed with the index of the green economy with social capital (83,42%) and with effectiveness of the legislative base (79.29%). Thus, it is concluded that it is necessary to use both the market and the regulatory mechanisms - i.e., mixed regulation. Originality/value: The authors develop a program-oriented approach to formation of the responsible information society as the social environment for creation of the “green” digital economy. The offered approach is a mixed one – i.e., it envisage usage of both the market and the regulatory mechanism of managing the responsible information society, due to which this mechanism is universal – it fits developed and developing countries and allows achieving high effectiveness as compared to narrow approaches. Also, the authors develop a methodology of multi-criterial evaluation for monitoring of the responsible information society according to the mixed approach to its formation. Approbation of the methodology by the example of Russia in 2020 allowed determining that the Russian information society is in the process of formation and has wide perspectives of development. Keywords: Responsible information society
Social environment digital economy
Formation
Monitoring
Russia


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© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 402–409, 2020. https://doi.org/10.1007/978-3-030-47945-9_45

Responsible Information Society as a Social Environment for Creation JEL Code: D91
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1 Introduction Social environment is a flexible, dynamic, changing, and differentiated component of economic systems – which complicates the development of universal recommendations for bringing this environment into a certain state in which it will be most susceptible to the “green” digital economy and will provide the largest support for it – the state of the responsible information society. However, in order to achieve the global “green” digital future – for global coverage is envisaged by the sustainable development goals and the Fourth industrial revolution, at the joint of which the studied scenario of future development of the global economic system is placed – it is necessary to consider the universal concept of formation and monitoring of the social environment, based on which national strategies and international rankings will be built. Due to the variable character of the social environment of modern economic systems, two approaches to formation of the responsible information exist in the international economic practice. The first approach was appeared in countries with developed economy where the market mechanism shows high effectiveness. It envisages deregulation – i.e., liberalization of population’s ecological practices, for manifesting the responsibility of which there are vivid market stimuli. Striving for reduction of expenditures, households reduce the consumption of resources and energy. High value of the environment, supported by culture, creates the natural motives of the population for ecologically disposal of household waste. The second approach is used in countries with developing economy, where the usage of the market mechanism is limited. This mechanism envisages active state interference with the market process by adoption of ecological standards and introduction of ecological taxes. An example of this could be national programs of energy saving and taxed for future disposal that are imposed during the purchase of new cars. The fact that all countries achieved insignificant results in creation of the “green” digital economy shows imperfection of the both approaches. Also, usage of different approaches by countries of the world does not allow for international comparisons and for global monitoring of the responsible information society. Thus, the main indicator of development of this society in developed countries is effectiveness of market stimuli, and in developing countries – effectiveness of state regulation. The purpose of the work is to overcome the scientific and methodological gap between developed and developing countries, to determine the global regularities, and to develop a universal conceptual approach to formation and monitoring of a responsible information society as the social environment for creation of the “green” digital economy.

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2 Materials and Method Only the issues of formation and monitoring of responsible society in the “green” economy are reflected in the modern literature – e.g., in the works Frolov et al. (2017), Inshakov et al. (2019), Morozova et al. (2019), Popkova et al. (2014), Popkova et al. (2017), Popkova et al. (2016), and Pozdnyakova et al. (2017); information society in the digital economy is studied in the works Belokurova et al. (2020), Petrenko and Shevyakova (2019), Popkova (2019), Popkova and Gulzat (2020a), Popkova and Gulzat (2020b), Popkova and Zmiyak (2019), Popkova and Sergi (2019), Ragulina (2019), Ragulina et al. (2019), Sergi et al. (2019a), Sergi et al. (2019b), Sergi et al. (2019c), and Shulus et al. (2020). However, social environment for creation of the “green” digital economy remains poorly studied from the scientific and methodological point of view, and the issues of its formation and monitoring are the gaps in the existing research literature. Here we try to fill this gap. The method of correlation analysis is used for determining the connection between the green economy index, calculated by Dual Citizen, and the indicators calculated by the World Economic Forum during compilation of the global competitiveness index: – Social capital (1.05. Social capital), which reflects the level of education and culture of population (based on the market mechanism); – Population’s digital skills (6.05. Digital skills among active population), which reflect population’s ability for applying digital technologies (based on the market mechanism); – Stimulation of ecological responsibility (1.26. Environment-related treaties in force), which reflects market stimuli for implementing sustainable practices by the population (based on the market mechanism); – Effectiveness of the legal base (1.08. Efficiency of legal framework in challenging regulations), which shows reliability of ecological law (based on the mechanism of state regulation); – Adaptability of state regulation to the digital economy (1.22. Legal framework’s adaptability to digital business models), which shows consideration of the digital context in the practice of state management (based on the mechanism of state regulation); – Strategic orientation of state regulation (1.23. Government long-term vision), which shows the contribution of regulation into formation of responsible culture in society (based on the mechanism of state regulation). The values of the selected indicators in top 10 countries of the Dual Citizen rating of the green economy in 2019 are shown in Table 1.

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Table 1. Statistics of the green economy and market and state regulation of the responsible information society in 2019. Country

Index of the green economy, shares of 1

Social capital, points 1–100

Digital skills of population, points 1–100

Stimulation of ecological responsibility, points 1–100

Effectiveness of the legal base, points 1–100

Adaptability of state regulation to the digital economy, points 1–100

Strategic orientation of state regulation, points 1–100

Sweden Switzerland Iceland Norway Finland Germany Denmark Austria France Russia

0.7608 0.7594 0.7129 0.7031 0.6997 0.6890 0.6800 0.6479 0.6405 0.4115

59.5 62.4 66.0 66.4 62.2 61.6 65.8 61.6 56.1 45.3

77.8 74.4 77.9 71.6 80.5 67.8 73.6 63.0 58.2 65.8

100.0 90.0 72.0 100.0 100.0 100.0 100.0 83.0 97.0 66.0

56.6 71.0 65.0 56.9 78.1 63.6 59.0 53.4 56.1 34.6

67.9 60.5 62.3 60.3 67.7 67.3 60.2 55.3 50.8 48.1

55.6 70.1 53.9 62.6 67.9 59.0 62.8 55.8 58.8 51.0

Source: compiled by the authors based on Dual Citizen (2020), World Economic Forum (2020).

The results of the correlation analysis of the data from Table 1 are shown in Fig. 1.

Strategic orientation of state regulation

55.45

Adaptability of state regulation to the digital economy

76.05

Effectiveness of legal base Stimulation of ecological responsibility Digital skills of population Social capital

79.29 62.62 52.52 83.42

0.00 10.0020.0030.0040.0050.0060.0070.0080.0090.00

Fig. 1. Correlation of indicators of market and state regulation of the responsible information society with the green economy index in 2019, %. Source: calculated and compiled by the authors.

As shown in Fig. 1, correlation with the green economy index is rather high with the indicators of market regulation and the indicators of state regulation of the responsible information society. The highest correlation is correlation of the green economy index with social capital (83.42%) and effectiveness of the legal base (79.29%). This shows the necessity for simultaneous usage of the market mechanism and the regulatory mechanism – i.e., mixed regulation.

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3 Results We developed a program-oriented approach to formation of the responsible information society, which reflects the goals and tasks of regulation and the used mechanisms (Table 2). Table 2. The program-oriented approach to formation of the responsible information society. Purpose of regulation

Development of “green” digital education

Tasks of regulation

Introduction of professional standards, including “green” digital competencies Start of the programs of subsidized learning of “green” digital competencies Creation of open educational resources for independent development of “green” digital competencies with the population Publication of official reports on Provision of advertising of responsibility of government workers ecological responsibility of population Publication of reports on responsibility of residents by housing and utility organizations Creation of city forums with discussions, repots, and rankings of responsibility for city districts Stimulation of population’s Introduction of mandatory requirements to ecological responsibility responsibility for government workers Introduction of mandatory requirements to responsibility for workers of the budget sphere (e.g., teachers and doctors) Establishment of material bonuses for informing the executive authorities about the facts of irresponsible behavior Source: developed and compiled by the authors.

Mechanism of regulation Regulatory Market Market

Regulatory Market

Market

Regulatory Regulatory

Market

As shown in Table 2, we distinguished three goals. 1st goal: development of “green” digital education. It is achieved by implementing the following tasks: introduction of professional standards, which include “green” digital competencies, starting the programs of subsidized mastering of “green” digital competencies, and creation of open educational resources for independent development of “green” digital competencies with the population. 2nd goal: provision of advertising of population’s ecological responsibility. Its achievement envisages the following tasks: publication of the official reports on responsibility of government workers, publication of reports on responsibility of

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residents by housing and utility organizations, and creation of city forums with discussion, reports, and ratings of responsibility for city districts. 3rd goal: stimulation of population’s ecological responsibility. The tasks for its achievement include introduction of mandatory requirements to responsibility for government workers, introduction of mandatory requirements to responsibility for the budget sphere workers (e.g., teachers and doctors), and establishment of material bonuses for informing the executive authorities about the facts of irresponsible behavior. For the purpose of monitoring it is recommended to conduct sociological survey and/or expert evaluation of the level of development of the responsible information society as to the following criteria: 1. Level of accessibility (as to the number of suppliers and price) of learning that is aimed at mastering and development of “green” digital competencies; 2. Level of quality (efficiency) of learning that is aimed at mastering and development of “green” digital competencies; 3. Level of knowledge of ecological responsibility of government workers; 4. Level of ecological responsibility of wide groups of population; 5. Level of requirements to ecological responsibility of government workers and the budget sphere workers; 6. Size and value of the bonus for informing the executive authorities about the facts of irresponsible behavior. It is recommended to perform evaluation in points – the higher the better. The essence of evaluation consists in determining the justification of the practices of ecological responsibility in society: from 1 (it is preferable to refuse from them) to 10 (it is preferable to implement the practices). As a result of the evaluation, it is offered to calculate direct average with the help of the following logic: – Evaluation result is below 3 points: information society is in the process of formation; – Evaluation result is in interval [3-5) points: information society shows the low level of development; – Evaluation result is in interval [5-7) points: information society shows moderate level of development; – Evaluation result [7-9) points: information society shows the high level of development; – Evaluation result [9, 10] points: information society shows the very high level of development. As a result of approbation of the offered methodological approach, a multicriterial evaluation (monitoring) of the level of development of the information society (as of early 2020) of Russia has been performed with the method of expert evaluation; as a result, accessibility (as to the number of suppliers and price) of learning that is aimed at mastering and development of “green” digital competencies is assigned 6 points, and its quality is assigned 5 points. Knowledge of ecological responsibility of government workers and wide groups of the population is assigned 1 point.

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The requirements to ecological responsibility of government workers and the budget sphere workers, as well as the size and value of bonus for informing the executive authorities about the facts of irresponsible behavior, are assigned 1 point. The evaluation result equals: (6 + 5 + 1 + 1 + 1 + 1)/6 = 2.5 points. Therefore, the information society in Russia is in the process of formation and has wide perspectives of development.

4 Conclusion Thus, a program-oriented approach to formation of the responsible information society as the social environment for creation of the “green” digital economy has been developed. The offered approach is mixed – i.e., it envisages usage of the market mechanism and the regulatory mechanism of managing responsible information society, due to which the mechanism is universal – fitting developed and developing countries, allowing for increased effectiveness as compared to narrow approaches. Also, a methodology of multi-criterial evaluation for monitoring of the responsible information society according to the mixed approach to its formation has been developed. Approbation of the methodology by the example of Russia in 2020 allowed determining that the Russian information society is in the process of formation and has wide perspectives of development.

References Belokurova, E.V., Pizikov, S.V., Petrenko, E.S., Koshebayeva, G.K.: The institutional model of building the digital economy in modern Russia. Lecture Notes in Networks and Systems, vol. 87, pp. 64–70 (2020) Dual Citizen: The Global Green Economy Index (2020). https://dualcitizeninc.com/global-greeneconomy-index/index.php#interior_section_link. Accessed 07 Jan 2020 Frolov, D.P., Popkova, E.G., Strekalova, A.S., Marushchak, I.V.: Strategic planning of regional ecological development: adaptation of Elinor Ostrom’s principles in Russia. Contributions to Economics, pp. 39–45 (2017). (9783319552569) IMD: World Digital Competitiveness Ranking 2019 (2020). https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-digital-competitiveness-rankings-2019/. Accessed 06 Jan 2020 Inshakov, O.V., Bogachkova, L.Y., Popkova, E.G.: The transformation of the global energy markets and the problem of ensuring the sustainability of their development. Lecture Notes in Networks and Systems, vol. 44, pp. 135–148 (2019) Morozova, I.A., Popkova, E.G., Litvinova, T.N.: Sustainable development of global entrepreneurship: infrastructure and perspectives. Int. Entrep. Manag. J. 15(2), 589–597 (2019) Petrenko, E.S., Shevyakova, A.L.: Features and perspectives of digitization in Kazakhstan. Studies in Computational Intelligence, vol. 826, pp. 889–899 (2019) 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)

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Popkova, E.G., Dubova, Y.I., Yakovleva, E.A., Azarova, N.A., Titova, E.V.: Role of ecological marketing in formation and development of ecological cluster. Asian Soc. Sci. 10(23), 1–8 (2014) 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., Poluyufta, L., Beshanova, Y., Popova, L.V., Kolesnikova, E.: Innovations as a basis for marketing strategies of Russian oil companies in the conditions of oil prices reduction. Contributions to Economics, pp. 449–455 (2017). (9783319606958) Popkova, E.G., Shakhovskaya, L.S., Abramov, S.A., Natsubidze, A.S.: Ecological clusters as a tool of improving the environmental safety in developing countries. Environ. Dev. Sustain. 18(4), 1049–1057 (2016) 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. (eds.): Digital Economy: Complexity and Variety vs. Rationality. Springer International Publishing, Cham (2019) Pozdnyakova, U.A., Popkova, E.G., Kuzlaeva, I.M., Lisova, O.M., Saveleva, N.A.: Strategic management of clustering policy during provision of sustainable development. Contributions to Economics, pp. 413–421 (2017). (9783319454610) 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., Semenova, E.I., Avkopashvili, P.T., Dmitrieva, E.A., Cherepukhin, T.Y.: Toppriority directions of implementing new internet technologies on the territories of rapid economic development. Advances in Intelligent Systems and Computing, vol. 726, pp. 182– 188 (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 (2019a) Sergi, B.S., Popkova, E.G., Sozinova, A.A., Fetisova, O.V.: Modeling Russian industrial, tech, and financial cooperation with the Asia-Pacific region. In: Sergi, B.S. (ed.) Tech, Smart Cities, and Regional Development in Contemporary Russia, pp. 195–223. Emerald Publishing Limited, Bingley (2019b) Sergi, B.S., Popkova, E.G., Borzenko, K.V., Przhedetskaya, N.V.: Public-private partnerships as a mechanism of financing sustainable development. In Ziolo, M., Sergi, B.S. (eds.) Financing Sustainable Development: Key Challenges and Prospects, pp. 313–339. Palgrave Macmillan (2019c) 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)

Ontogenesis of Green Development Model of Digital Economy: Essence, Stages, and Prospects Tamara G. Stroiteleva1(&), Elena V. Kletskova1, and Svetlana I. Balaeva2

2

1 Altai State University, Barnaul, Russia [email protected], [email protected] Kabardino-Balkariyan State Agrarian University named after V. M. Kokov, Nalchik, Russia [email protected]

Abstract. Purpose: The authors are pursuing the goal of revealing the essence of the green development model of digital economy and exploring its ontogenesis, stages of evolvement and prospects. Design/methodology/approach: In the research, the authors rely on the evolutionary approach in economic science within which they use the method of economic genetics. The latter helped to reveal the essence of green economics as well as its prospects. In addition to the above qualitative method, the authors employed quantitative methods such as correlation analysis for mathematical reasoning of the pattern under study and showing its trend to get the most reliable data. To show the global side of the problem the authors included top-10 countries by the development of the green economics in 2019 and Russia in the sampling. Findings: It has been justified that the green and digital economies are not separate, but closely interrelated and jointly accomplished goals of modern economic activity. Although these areas were separated initially but in 2011– 2019 they were integrated. This trend will strengthen. And that’s the idea of a green development model of the digital economy. The stages of this process have been also determined. Uniqueness/value: It is presented that prospects for the development of the green model at the fourth stage are related to the transition of the digital economy initiatives on observation of state environmental regulations and standards in 4.0 industry to the green economics, development of culture and institutionalization of corporate environmental responsibility in digital entrepreneurship. A promising green model for the development of the future digital economy under the control of artificial intelligence has been developed. Keywords: Green economics
Digital economy
4.0 industry
Ontogenesis
Evolutionary economics
Economic genetics
Sustainable development
Circular economics
Corporate environmental responsibility JEL Code: D91
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1 Introduction Two areas are intensively developing in the economic science of the 21st century. One of them is connected to the establishment of green economics. In this area, a noospheric approach to economic management considering the unity of the economic, social and environmental system is applied. Economic growth is opposed to the goals of environmental protection. The measures to restrain economic growth to cut environmental costs of economic management are suggested. This area is reflected in the global goals of sustainable development designed to solve the climate change problems and provide favorable living and economic conditions for people. The living standard in this event acts as a derivative of the environment state. Another area is the digital modernization of the economy and the transition to the 4.0 industry. Attention is focused on a system of factors of production prevailed by intellectual resources predominate such as human resources as a source of new knowledge (innovations), technology as a systemically important factor in automated production, and artificial intelligence as a managing entity of this production. The technological structure of the economic system determines its effectiveness and competitiveness, the rate and quality of economic growth. The living standard is presented here as a derivative of the technological structure, i.e. the pace of scientific and technological progress and the level of technological capabilities of economic agents. The current scientific paradigm commonly distinguishes these areas and reckons them separate. In this paper, the authors put forward a hypothesis on their strong interrelation. They aim at revealing the essence of green development model of the digital economy and studying its ontogenesis (stages of evolvement and prospects).

2 Materials and Method The issues of establishing and developing green economics are investigated in the writings of scientists and researchers such as Ajibola et al. (2019) Bagheri et al. (2019), Delitheou et al. (2019), Inshakov et al. (2019), Khan et al. (2019), Popkova et al. (2016), Tumpa et al. (2019). The fundamental and applied issues of the digital economy evolvement and the transition to 4.0 industry are enunciated in the works of experts such as Alekseev et al. (2019), Belik et al. (2020), Belokurova et al. (2020), Popkova (2019), Popkova and Gulzat (2020), Popkova and Sergi (2018), Popkova and Sergi (2019), Ragulina (2019), Ragulina et al. (2019), Sergi (2003), Sergi (2019), Sergi et al. (2019), Stroiteleva et al. (2019). In the research, the authors rely on the evolutionary approach in economic science within which they use the method of economic genetics. The method was devised by the Russian economist Inshakov (2006), who stated in detail the basics of its application. The method helped to reveal the essence and evolution of the green development model of the digital economy, as well as its prospects. In addition to the above qualitative method, the authors employed quantitative methods such as correlation analysis for mathematical reasoning of the pattern under study and showing its trend to get the most reliable data. To show the global side of the problem the authors included the top-10 countries by the development of the green economics in 2019 and Russia in the sampling (Fig. 1).

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0.8000 0.7608 0.7594 0.7129 0.7031 0.6997 0.6890 0.6669 0.6479 0.6405 0.7000 0.6000 0.5000 0.4115 0.4000 0.3000 0.2000 0.1000 0.0000

Fig. 1. The green economics index in the sample countries in 2019, shares from 1 Source: developed by the authors based on materials from Dual Citizen LLC (2019).

As presented in Fig. 1, the level of the green economics development is very high in the sample countries in general. The highest index was in Switzerland in 2019 (0.7608) and the lowest (among the leading countries) – in Russia (0.4115) (quite high too). The statistical base of this research is shown in Table 1. Table 1. The development indicators of the green and digital economy in sample countries in 2013–2019. Country

Share of renewable energy in energy consumption pattern of 2013, percent

Digital Competitiveness Index of 2013, 1–63 places

Climate Change Index of 2016, 1–200 points

Digital Competitiveness Index of 2016, 1–63 places

Production Waste Index of 2019, 1–200 points

Digital Competitiveness Index of 2019, 1–63 places

Sweden Switzerland Iceland Norway Finland Germany Denmark Austria France Russia

48.83 22.99 76.22 57.73 38.48 12.09 27.34 34.68 13.48 3.70

2 6 26 8 4 16 7 25 19 46

55.18 63.37 n/a 52.28 34.80 52.01 66.05 62.13 82.34 9.20

3 7 26 9 6 15 8 19 22 40

17.45 21.31 15.65 20.29 11.57 28.42 20.79 21.78 42.91 63.49

3 5 27 9 7 17 4 20 24 38

Source: developed by the authors based on the materials of IMD business school (2019), Numbeo (2019), World Bank (2019).

Table 1 provides data since 2013 because it’s the first period for which digital economy statistics are available. Statistical accounting of the green economics has emerged much earlier and has been available since the second half of the 20th century, but these data are not used in the context of this research as far as they are unlikely to be applied in practice without data on the digital economy.

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3 Findings Having employed economic genetics in this paper, the authors revealed the essence and determined stages of the green development model of the digital economy (Fig. 2).

Preventing the negative impact of the digital economy on the environment

Using the opportunities of the digital economy for environmental protection

Circular development of the digital economy

Prospects

2024Stage 3. Wide-scale 2035 employment of digital technologies to reduce 2019 Stage 2. Stage 4. Full production and Comprehensive integration of digital-technology 2016 consumption for the Stage 1. Particular green and benefit of circular projects to tackle green innovations digital economic development based on digital 2013climate change issues economies technologies 2011 Observation of environmental regulations and standards when establishing digital economy and shifting to 4.0 industry

Manifestation of corporate environmental responsibility in 4.0 industry

Fig. 2. Essence and stages of the green development model of digital economy Source: developed and drawn up by the authors.

The trend of the correlation between indicators of the green and digital economy in the sample countries in 2013–2019 in the context of the selected stages that quantitatively describes the ontogenesis of the green model is shown in Fig. 3.

3rd stage (2019) Correlation of production waste and digital competitiveness (direct: 0.74)

0.74

2nd stage (2011) Correlation of climate change and digital competitiveness (reverse: -0.46) 1st stage (2013) Correlation of renewable energy and digital competitiveness

0.46

0.30 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80

Fig. 3. The trend of the correlation between indicators of the green and digital economy in the sample countries during 2013–2019 in the context of the selected stages Source: calculated and designed by the authors.

As presented in Fig. 1, 2, the first stage of the green development model of digital economy is aimed at preventing the negative impact of the digital economy on the environment. We should note that the first digital technologies, as well as the ideas of a

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green economics, appeared at the end of the 20th century. But their consequences were taken into consideration much later. Therefore, the green development model of the digital economy originates in 2011, when the share of renewable energy use in the global economy sharply increased according to the World Bank. Digital technologies have significantly augmented the energy intensity of economic growth. Renewable energy sources have started to be introduced everywhere to prevent the energy crisis. Particular green innovations based on digital technologies have been applied. In the second stage since 2013 (improving climate change indicators), the digital economy opportunities have been used for environmental protection. Comprehensive digital technology-based projects were launched to tackle climate change issues. The model of green development of the digital economy at this stage did not suggest putting obstacles to the growth of the digital economy, but devising new, green growth vectors. In the third stage since 2016 (reaching higher indicators of production waste reduction), there has been a wide-scale use of digital technologies to lower production and consumption waste for the benefit of circular economic development. Today, the development of the digital economy is taking a circular shape. The prospects of the green model at the fourth stage (since 2019) are associated with the full integration of green and digital economy. The results will be obvious in 2024–2035. This is demonstrated in Fig. 2, where the correlation between the green and digital economy indicators increased from 0.3 in 2013 to 0.46 in 2016 and 0.74 in 2019. Further, it shall increase to 0.9 or higher. The promising green development model of the future digital economy is presented in Fig. 4.

Interested parties (regulating bodies (government and non-government), investors, counterparties, competitors, consumers) Automated accounting for corporate environmental responsibility Искусственный интеллект Green competition Green competition

Enhancing ecoefficiency

Selecting by ecoefficiency criterion

Technology 1 …

Технологии

Technology n

Новая технология

Resources Recycled resources

Производство сортировка

Recycling enterprise

Recycling

роботы

отходы Environmentally friendly recycling

Fig. 4. A promising green development model of the future digital economy Source: developed and drawn up by the authors.

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According to Fig. 4, prospects of the green model are related to the AI-based management of the green development of 4.0 industry enterprises. All incoming technologies and resources of the enterprise operate within stiff green competition. Artificial intelligence selects them by the criterion of eco-efficiency and puts in action its capabilities to increase the eco-efficiency of current technologies at the enterprise. Artificial intelligence also sorts out production waste. Waste that cannot be recycled is transferred to specialized robots for environmentally friendly treatment. Another waste is delivered to a recycling plant. Recycled resources are sent to the resource market and reused in business activity.

4 Conclusion Finally, we reasoned that the green and digital economies are not separate, but closely interrelated and jointly accomplished goals of modern economic activity. Although these areas were separated initially but in 2011–2019 they were integrated. This trend will strengthen. And that’s the idea of the green development model of the digital economy. The stages of this process have been also determined. The first stage of this model is aimed at preventing the negative impact of the digital economy on the environment. Digital technologies have significantly increased the energy intensity of economic growth. In the second stage, the opportunities of the digital economy have been used for environmental protection. Comprehensive digital technology-based projects have been launched to tackle climate change issues. In the third stage, there has been a wide-scale use of digital technologies to lower production and consumption waste for the benefits of circular economic development. Today the development of the digital economy is taking a circular shape. The prospects for the development of the green model at the fourth stage are related to the transition of the digital economy initiatives on observation of state environmental regulations and standards in the 4.0 industry to green economics, development of culture and institutionalization of corporate environmental responsibility in digital entrepreneurship. The essential condition has already been established today. The acuteness of environmental issues has been acknowledged, sustainable development goals have been adopted and the possible ways to achieve them with the help of capabilities of the digital economy and 4.0 industry at government, public and business levels have been recognized. But this is not enough. One more condition is required, i.e. the transparency of corporate environmental responsibility. Digital technologies can make their contribution and promising green model developed under the control of artificial intelligence has already proved that.

References Ajibola, M.O., Oluwunmi, A.O., Kabiamaowei, A.I., Owolabi, D.R., Akinwale, O.M.: Green economics: the role of estate surveyors and valuer. J. Phys: Conf. Ser. 1299(1), 012016 (2019)

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Alekseev, A.N., Buraeva, E.V., Kletskova, E.V., Rykhtikova, N.A.: Stages of formation of industry 4.0 and the key indicators of its development. Studies in Systems, Decision and Control, vol. 169, pp. 93–100 (2019) Bagheri, M., Alivand, M.S., Alikarami, M., Kennedy, C.A., Doluweera, G., Guevara, Z.: Developing a multiple-criteria decision analysis for green economics transition: a Canadian case study. Econ. Syst. Res. 31(4), 617–641 (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) Belokurova, E.V., Pizikov, S.V., Petrenko, E.S., Koshebayeva, G.K.: The institutional model of building the digital economy in modern Russia. Lecture Notes in Networks and Systems, vol. 87, pp. 64–70 (2020) Delitheou, V., Meleti, V., Athanassopoulos, C.G.E.: Green economics and smart city. J. Reliable Intell. Environ. 5(4), 235–240 (2019) Dual Citizen LLC: The Global Green Economics Index 2019. https://dualcitizeninc.com/globalgreen-economy-index/. Accessed 20 Dec 2019 IMD Business School: World Competitiveness Ranking 2019. https://www.imd.org/wcc/worldcompetitiveness-center-rankings/world-competitiveness-ranking-2019/. Accessed 19 Dec 2019 Inshakov, O.V., Bogachkova, L.Y., Popkova, E.G.: The transformation of the global energy markets and the problem of ensuring the sustainability of their development. Lecture Notes in Networks and Systems, vol. 44, pp. 135–148 (2019) Khan, S.A.R., Sharif, A., Golpîra, H., Kumar, A.: A green ideology in Asian emerging economies: from environmental policy and sustainable development. Sustain. Dev. 27(6), 1063–1075 (2019) Numbeo: Quality of Life Index for Country 2019 Mid-Year. https://www.numbeo.com/qualityof-life/rankings_by_country.jsp. Accessed 19 Dec 2019 Popkova, E.G.: Preconditions of formation and development of industry 4.0 in the context of the knowledge economy. Studies in Systems, Decision and Control, vol. 169, no. 1, pp. 65–72 (2019) 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 (2020) Popkova, E.G., Shakhovskaya, L.S., Abramov, S.A., Natsubidze, A.S.: Environmental clusters as a tool for improving environmental safety in developing countries. Environ. Dev. Sustain. 18(4), 1049–1057 (2016) 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) Ragulina, Y.V.: Priorities of 4.0 industry development in modern economic systems with different progress in the 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.: The methodology of criterial evaluation of the 21st-century industrial revolution implications. Studies in Systems, Decision and Control, vol. 169, pp. 235–244 (2019) Sergi, B.S.: Economic Dynamics in Transitional Economies: The Four-P Governments, The EU Enlargement, and The Bruxelles Consensus. Routledge, New York (2003)

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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., Sozinova, A.A., Fetisova, O.V.: Modeling Russian industrial, tech, and financial cooperation with the Asia-Pacific region. In: Sergi, B.S. (ed.) Tech, Smart Cities, and Regional Development in Contemporary Russia, pp. 195–223. Emerald Publishing Limited, Bingley (2019) Stroiteleva, T.G., Kalinicheva, E.Y., Vukovich, G.G., Osipov, V.S.: Peculiarities and problems of forming 4.0 industry in modern Russia. Studies in Systems, Decision and Control, vol. 169, pp. 145–153 (2019) Tumpa, T.J., Ali, S.M., Rahman, M.H., Paul, S.K., Chowdhury, P., Rehman Khan, S.A.: Barriers to green supply chain management: An emerging economy context. J. Clean. Prod. 236, 117617 (2019) World Bank (2019). Indicators: Economy & Growth and Energy & Mining. https://data. worldbank.org/indicator. Accessed 19 Dec 2019 Inshakov, O.V.: Economic genetics as the basis of evolutionary economics. Bull. Volgograd State Univ. Ser. 3: Econ. Ecol. 10, 6–16 (2006)

The Possibility of Forming Systemic and Critical Thinking Skills of Students in the Digital Economy Alexandra Kriulina1(&)

and Tatiana Gudkova2

1

2

Kursk State University, Kursk, Russia [email protected] Lomonosov Moscow State University, Moscow, Russia [email protected]

Abstract. Professional skills (hard-skills) obtained by graduate students quickly become obsolete in the digital economy. In order to remain competitive in today’s dynamically changing labour market, students need to develop “soft” or “flexible” skills at the appropriate level, which are cross-sectional and also enable them to participate successfully in a workflow process in various subject areas. The article deals with classical and modern cognitive technologies that help to form systematic and critical thinking skills as a universal competence of professionals, which come to the forefront with the advent of the digital economy. Keywords: Digital economy
Universal competences approach
Cognitive technologies JEL Code: A12


Interdisciplinary


A22

1 Introduction The expression ‘rapidly changing world’ is not a metaphor, but a reality that should be invariably taken into consideration in the professional activity of higher education teachers. Thus, from 1 September 2019 first-year students all around Russia will begin to study in accordance with the new Federal State Educational Standards (FSES++), which are fundamentally different from the previous standards by the fact that there are universal competencies as well. They are also called cross-sectional (Lippman et al. 2015), as the success of the realization of any bachelor’s and master’s degree student’s potential depends on the development of such skills, regardless of the particular area of professional activity to specialize in. The universal competencies are also called ‘softskills’. According to experts, they differ fundamentally from hard-skills: their formation is based on personal experience and high emotional intelligence; subsequently, they require adaptation to the specific social environment and circumstances; and they are also difficult to measure and display. These features of universal competences bring to the forefront the search for adequate means of their formation as one of the priority tasks of education. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 418–426, 2020. https://doi.org/10.1007/978-3-030-47945-9_47

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This article will pay special attention to the universal competence that is the first to be enumerated in the FSES 3++ – systematic and critical thinking. Here are examples of two of its transcripts: 1. in the list of eight universal competencies for the undergraduate level: “to be able to search, critically analyze and synthesize information, and apply a systematic approach to achieve stated goals”; 2. in the list of six universal competencies for the master’s level: “to be able to carry out a critical analysis of problem situations on the basis of a systematic approach, to develop a strategy of action” (Kazakova 2018). It becomes reasonably logical, that this competence is ranked first in both lists, since it is the most important in the first as well as in the second list. We will support it with the following arguments. The theoretical argument means that analytical work with information and problem situations, problem solving and development of action strategies, based on a systematic approach, are implicitly included in the content of all other universal competencies. The practical argument is Russia’s transition to the digital economy, which is more demanding on the cognitive sphere of professionals. The peculiarities of this transition should be discussed in more detail below. At the end of the last century J. F. Moore formulated the concept of business ecosystems, which include companies, suppliers, consumers and even competitors, interaction with which helps to achieve greater results (Moore 1997). While describing the technological component of business ecosystems, various researchers try to make an analogy with the natural and technical processes, applying the laws of ecology for the information world. In such a system interacting partners and competitors create a single team that consolidates knowledge and resources to work together on projects in the mode of mutual completeness of information, while continuing to compete in other processes. Thus, for the most modern companies seeking to strengthen their market positions, the most important task will be digital transformation, that will change all the traditional business processes (production, management, interaction with partners and clients, etc.), otherwise they will face the withdrawal from the market or moving to its deepest edge (Gudkova 2019). It should be taken into account that the set of qualities and skills that modern professionals should possess is updated periodically. Thus, the ILO Director-General Guy Ryder made a prediction about the future at the World Economic Forum (WEF) 2018: interpersonal, communication, as well as emotional skills and the ability to assess and risk, manage stress and changes, will become more important for education systems, because they give people a comparative advantage over machines (The Future of Jobs Report 2018). The development of such skills should be considered as a continuous process of transformation throughout a person’s life. According to the survey of 1,155 CEOs of global manufacturing companies in 26 countries conducted by PricewaterhouseCoopers (PwC) consulting company at the end of 2017, two-thirds of the survey participants noted that their employees do not have the necessary qualifications to cope with the challenges of the digital future (Digital Champions 2018). The shortage of digital personnel is an urgent problem in Russia, where, as elsewhere in the world, the development of the digital economy is one of the

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main guidelines. It becomes obvious, that the new digital reality will require specialists with a brand new set of universal competencies.

2 Methodology The main trend of the modern professional education will be the development of softskills that will be in demand in the labour market in the near future. The value of creative and critical thinking skills; the ability to find innovative solutions; the possession of knowledge that is interdisciplinary; the ability to continuously learn, and a number of other key skills necessary in the digital age will increase. In order to improve the quality of professional education, it will be necessary to develop and implement new approaches in the educational process of higher education, allowing to expand scientific knowledge in general and form systematic and critical thinking skills. One of these approaches is interdisciplinary, carried out in the inter-faculty training courses of Lomonosov Moscow State University since the spring semester of 2012/2013 academic year. In order to improve the quality of implementation of the main educational programs and deepen the inter-faculty integration there is reading of the inter-faculty training courses (ITC) MSU, available to all students of Moscow State University (interfaculty training courses 2013). The inter-faculty training course of MSU is a semester course of lectures given by the leading professors and teachers of MSU who are experts in their fields and are able to show brightly and fascinatingly connections between various fields of knowledge: science, art, politics, culture, economy and sociology. Mastering the ITC is an integral part of teaching students at Moscow State University. For full-time 3rd and 4th year students enrolled in the specialist’s programs, 3rd year students from bachelor’s and 1st year master’s programs (full-time), attending ITC is mandatory. Students from all other courses and other forms of education are also invited to master the ITC. It should be noted that the most popular courses in 2013 by the number of enrolled students were the courses of the faculty of Economics of MSU (see Fig. 1). During the next 10 semesters, a total of 63 courses were actually read at the faculty of Economics. Almost all of the courses presented recruited the necessary number of participants to be available. 30 Of the 63 read courses (47% of the total) can be categorized as theoretical, 19 courses (30%) - the category of application, and 14 courses (22%) - the business-oriented category. In 2017, as part of an analytical study of the administration of the faculty of Economics of Moscow state University, an anonymous survey of ITC students was conducted. It is worth noting, that more than half (56.39%) of the total number of respondents (532 students) for the question “What attracts you to the ITC courses?” chose the answer “The opportunity to broaden my horizons”, and almost third of them (28.76%) answered “Obtaining knowledge that prepares me for future work”, and only a tenth of the students (12.59%) chose the answer “I have to listen to the ITC course as mandatory”. It is also worth mentioning, that the majority of respondents (more than 65%) does not belong to the category of students for whom attending the ITC is mandatory.

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Fig. 1. The most popular interfaculty courses of MSU by the number of enrolled students (spring semester 2012/2013 academic year)

Among students of the ITC faculty of Economics of MSU are representatives of different faculties, mainly students of the Mechanical-mathematical faculty (169), Faculty of Law (128), FSUE (98), Physical faculty (90), The Faculty of Computational Mathematics and Cybernetics (85) (see Fig. 2).

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Fig. 2. Students of interfaculty courses of MSU, read at the faculty of Economics (fall semester 2016/2017 academic year)

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Answering the question “What influenced your choice of economic ITC?” the majority of respondents (47.68%) said “I’m interested in the economy as a field of knowledge” and a significant part (38.42%) answered “The opportunity to expand the qualification profile”, only 5% said that “It was a random choice”. Also, it is interesting that to the question “What is the best way to teach ITC economic courses?” the vast majority (73.90%) replied: “Invite more practitioners.” The answers indicate that this approach to the educational process allows students to acquire new knowledge voluntarily and consciously, which they will be able to successfully put into practice, that will increase their competitiveness in the labor market as well as the possibility of employment in their chosen profession. With the transition to training according to new standards, universities are faced with a timely, but not an easy task in terms of content and methods of solution. In the near future, due to the transition of higher education to new standards, it is necessary to stop teaching at the subject-content level, that has lasted for decades, in favor of teaching on the basis of a systematic approach. Although the competence-modular approach is declared in all official documents. In order to develop systematic and critical thinking skills of bachelors and masters, a high school teacher herself must have such thinking. Perhaps, it was necessary to formulate and solve this problem at first. Let’s leave the answer to this question in parentheses and move on to the next problem. Let’s say that the teacher has a systematic and critical thinking. What number of cognitive practices (tools, technologies) does he or she have? This is not a simple question to be answered. In the last century, the transition to active learning methods (ALO) and increased enthusiasm for them were accompanied with the creation of the ALO Bank at the state level. Many refresher courses on mastering the basic ALO were conducted everywhere, such as the analysis of specific situations (now known and actively used in professional training as a method of cases), role-playing and business games, various types of training (speech, intellectual, socio-psychological, etc.). So what is the situation like now? We fully share the point of view of the author of the ontogenetic approach to understanding the mechanisms of the educational process: “all the centuries-long pedagogical experience shows… that it is impossible to teach, you can only create conditions and supervise the process of knowledge” (Karyakin 2010). Obviously, educational technologies, including cognitive practices, are among the necessary components of conditions. In order to apply them on the basis of a systematic approach to the development of systemic and critical thinking, it is necessary to have a systematic understanding of the diversity of cognitive practices. Fortunately, this fundamental methodological work on the generalization of many cognitive practices has been successfully carried out in 2014. The author is N.I. Minicki who analyzed studies of different authors, synthesized the accumulated in the study area scientific presentation and presented the results of the synthesis in the form of a multidimensional visual configuration, which incorporates the paradigms, theories, models, techniques, and results of the application of cognitive practices in the human sciences and education. In the same work, the author formulated the definition of cognitive practices, understanding them as an interdisciplinary conceptual framework for the construction of the content of education and cognitive activity in high and

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secondary school. Such a framework will allow researchers, teachers and students to develop cognitive mobility to create original intellectual product (Minicki 2014). According to the well-known expression, everything new is well-forgotten old. The issue of the need to develop systematic thinking of students as a result of the use of training programs with a systematic representation of the subject was raised and successfully solved by the Professor of the faculty of Psychology of Moscow state University Z. A. Reshetova in 1985. She succeeded, basing her research on the theory of stage-by-stage formation of mental actions and concepts of P.J. Galperin, to develop and experimentally test several training programs: General education programs – in physics, chemistry, mathematics and General technical programs– in theoretical mechanics, electronics, automation and automation of production processes (Reshetova 1985). The effectiveness of the developed training programs was tested with the help of specially created training tools called training cards. In their description these maps contained the objects of professional activity to be assimilated (purpose, subject, means, composition), as well as a detailed list of specific actions required for their development. In our opinion, the learning process carried out with the help of educational maps represents a cognitive practice developed in time, which is unique both in form and content. In an experimental research carried out in the system of professional training in accordance with all the accepted standards, Z. A. Reshetova convincingly proved the high efficiency of her approach in comparison with the traditional ones: students made fewer mistakes when performing tasks; the number of defective products (in groups of machine operators) decreased as well as the probability of industrial injuries. Some students reached the level of performance of production tasks comparable to the work of experienced craftsmen who have achieved high results through years of professional experience. It is a pity that in modern conditions of acute shortage of skill workers this approach is not used in the system of secondary professional education. In the methodical literature, the names referred to as the training cards are: “task cards”, “instruction card”, “production card”. However, it is explained that the maps correspond to the content and logic, the principles of construction of evaluation tools (Blinov 2018). Educational maps in the experiments of Z. A. Reshetova corresponded to the content and logic of the educational subject and served as an indicative basis for mastering professional activity. There is one more indisputable proof of the advantage of educational cards. At the same time with the formation of professional skills on training maps with a generalized scheme of indicative activities, the development of cognitive activity of students was carried out and monitored. This was due to the requirement on the part of the teacher to study the curriculum not spontaneously, superficially or randomly, but systematically and according to certain rules. As a result, the discipline of thinking was formed, which was checked during the test. A credit could be obtained only with a clear, complete, accurate and free verbal report on the work done. If at the first stage of training students used ready-made training cards made by the teacher, at the second stage they had to develop a training card on their own. The variation of tasks for drawing up new educational maps contributed to a greater interest in the mastered professional activity, selective attitude to the content of educational

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literature, improvement of academic performance. A new way of thinking organization became a means of intellectual development for students (Reshetova 1985). In our opinion, an appropriate term that incorporates the full responsibility of the professional for the quality of his or her own thinking, for the level of ownership of intellectual operations, for the processes in which the intellect is expressed, for the means of intellectual development is introduced into scientific use by E. Erikson by the concept of “intellectual self-determination”. He considered it as a necessary component of human life self-determination along with others: physical, social, moral and professional self-determination. E. Erickson believed all these types of self-determination to be distinguishing features of the normal line of human mental development in his or her youth (Erickson 1996). The authors conducted a pilot study of methods of formation of system and critical thinking of undergraduate and graduate students at the faculties of two classical universities.

3 Results In 2013 the author’s course “Modern firm: behavior, strategies and culture” was developed and tested at the faculty of Economics of Moscow state University. Course participants study the behavior of a company from the standpoint of an interdisciplinary approach, based on the knowledge of economics, psychology, sociology, cultural studies and other sciences. At the same time, active teaching methods (role-playing games, case studies, etc.) are widely used, which allow students to develop competence in the practical application of the knowledge in their main specialization (biology, chemistry, physics, etc.). Since 2018, the classes have been attended by the invited speakers-practitioners who shared their experience with students through interactive presentations on the related issues of the course. Training cards of Z. A. Reshetova found application in the educational process of Kursk State University at the industrial and pedagogical faculty. The form of the educational cards developed by Z. A., which components are studied in detail by future teachers of professional training along with the teacher of psychology, is accepted as a basis. Then they are filled in by students taking into account their future professional activity in the system of secondary professional education. The contents of components of educational cards correspond to a particular purpose of the training. It is substantially different for students specializing in teaching of design and garment modeling from the content of training cards, filled in by bachelors, future teachers of information technology. Private training maps are also used. One of the examples to be provided is the systematic representation of material and functional means of labor, proposed by Klimov (1996). Many other author’s private maps are described in the monograph on intellectual self-determination of students, young scientists and students of the business school (Kriulina 2018).

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4 Conclusions/Recommendations It is necessary to emphasize once again the importance of the transition to the digital economy and the increasing role of the systematic and critical thinking of professionals involved in the new work environment. Modern organizations are turning into mixed communities in which people and digital agents interact: according to the forecasts of the World Economic Forum (WEF), by 2022, more than 40% of problems will have been solved by computer algorithms and robots (The Future of Jobs Report 2018). Thus, modern organizations can be considered as “living companies” or “learning companies”, which become digital business ecosystems in the conditions of widespread use of digital technologies. The management of such a system should be focused not on individual participants, but on the overall characteristics of the entire system. Management tasks will become more complex and will require professionals with systemic and critical thinking to solve them. The analysis of the experience of the use of classical and modern technologies of professional training, gained by the authors of the article, allows us to propose the following hypothesis: given educational technologies should be considered as effective means of formation of systematic and critical thinking of bachelors as well as masters. In order to confirm the hypothesis, it is planned to develop a further research program, which will include verifying and forming stages.

References Digital Champions: Global survey of digital operations in 2018 by PwC strategy & division (2018). https://www.pwc.ru/ru/publications/digital-champions.html Erikson, E.: Identity: Youth and Crisis. Publishing House “Progress”, Moscow (1996) Gudkova, T.V.: The Digitalization of the Company, A Key Element of the American Economy. USA & Canada: ekonomika, politika, kultura (1), pp. 63–75 (2019). https://doi.org/10.31857/ S032120680003606-0 Interfaculty Training Courses of Moscow State University named after M. V. Lomonosov (2013). http://mfk.msu.ru Kazakova, E.M.: Assessment of universal competences of students in the development of educational programs. Yaroslavl Pedag. Bull. 5, 127–135 (2018) Karyakin, Yu.V.: Activation of cognitive activity in higher professional education. Alma Mater: Bull. Higher School 5, 29–32 (2010) Klimov E.A.: Psychology of the professional. Voronezh, Moscow. Publishing House “Institute of Practical Psychology”; Publishing House of NGO “MODEK” (1996) Kriulina, A.A.: Intellectual self-determination of constituent entities of the academic, scientific and professional activities. “Planeta”, Kursk (2018) Blinov, V.I. (ed.) Methods of professional education: study guide for the act. Yurait Publishing House, Moscow (2018) Minisci, N.I.: The dialogue of cognitive practices in humanitarian cognition and education. In: Kognitivnye Studies: Contemporary Psychology in the Context of Transdisciplinary Research: Proceedings of the V International. Interdisciplinary. Conference Issue. 5, pp. 134–142. BSPU, Minsk (2014)

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Reshetova, Z.A.: Psychological Bases of Vocational Training. Moscow State University Publishing House, Moscow (1985) Lippman, L.H., Ryberg, R., Carney, R., Kristin, A.: Workforce connections: key “soft skills” that foster youth workforce success: toward a consensus across fields. Child Trends Publication (2015) Moore, J.F.: The Death of Competition: Leadership and Strategy in the Age of Business Ecosistems. Harper Business, New York (1997) The Future of Jobs Report 2018: Centre for the New Economy and Society. World Economic Forum (2018). https://www.weforum.org/reports/the-future-of-jobs-report-2018

Digitalization of the Russian Economy: Institutional Strategies, Factors and Problems Marina Alpidovskaya(&)

and Ekaterina Stompeleva

Financial University under the Government of the Russian Federation, Moscow, Russia [email protected], [email protected]

Abstract. The relevance of the research is determined by the importance of the competitiveness of the national economy in the new conditions of emerging and developing the digital economy. The purpose of the research is to assess the obstacles to the effective implementation of the digitalization strategy of the national economy and constraining factors, which, in our opinion, are left without due attention. The article considers the impact of institutional features of the modern Russian economy on the economic behavior of a business. An unfavorable institutional environment stands out as the main reason slowing down the digitalization of the Russian economy and the development of digital technologies by the business. An analysis of the current institutional environment in Russia, especially its factors such as insecurity of property rights and low institutional trust in the authorities, allows concluding that they lead to new economic and behavioral rules to emerge and enshrine, which become alternative mechanisms for actors to make a choice when fulfilling their economic interests. The article substantiates a modern phenomenon of the Russian economy such as the institutional alienation by the business of its reproductive functions in social production. In this connection, measures on digitalization of the economy should be developed at the government level when they are integrated with a plan of actions on the improvement of the institutional environment, which hinders the effective socio-economic development of the national economy. Keywords: Economic competitiveness
Digital economy
Economic interests
Socio-economic development
Reproduction
Institutional alienation JEL Code: F63


E02

1 Introduction Most researchers share the opinion that the modern economy is a digital economy representing a qualitatively new stage of development of the economic system, i.e. transition to the 6th technological paradigm (Schwab 2017). According to the World Bank, the digital economy is defined as a system of social, economic and cultural relations, which is based on the use of digital information and communication technologies (ICT). The most valuable resource of this economy is information, and the © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 427–434, 2020. https://doi.org/10.1007/978-3-030-47945-9_48

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prevailing part of the national product is provided in areas related to the production, processing, storage, and dissemination of information. In modern conditions, the level of economic digitalization has become a determining factor of its competitiveness, and the main driver for the growth of business competitiveness is the introduction of digital technologies. At the same time, the development of the digital economy around the world both opens up new opportunities and poses threats to the competitiveness of national economies to be ensured. On the one hand, the digital economy gives new impetus to world economic development by shaping a global information space, leveling out the geographical and time frames of interaction between economic agents, suppliers, and consumers, and significantly extending world economic ties between them. On the other hand, the spread of digital technologies lays material and technical conditions for the development of production where competition becomes more intense and wide-scale and maintenance of the national economy competitiveness – more complicated. The urgent need for the large-scale introduction of digital technologies to forge innovative material and technical conditions for the development of production and the implementation of the competitiveness strategy of the Russian economy is widely recognized. Besides, it has been discussed in political, business and scientific circles for several years (Alpidovskaya 2018). However, the current pace and level of development of innovative technologies in Russia do not meet the expectations of the digital economy. This highlights the need to assess the obstacles to the effective implementation of the digitalization strategy of the national economy and constraining factors, which, in our opinion, are left without due attention. The current level of using the developments of the digital economy in Russia allows talking about intensive utilization of innovative digital technologies foremost in exchange and consumption. Therewith, the competitiveness of domestic goods, and, consequently, the economy as a whole, is their ability to meet the requirements of a competitive market in terms of technical, consumer and price properties, which are included in the goods not at the stage of exchange, but before launch at the market, i.e. in the course of production. Therefore, we think that the basis for economic competitiveness to be ensured is the introduction of innovative digital technologies in the manufacturing sector. Consequently, ensuring the competitiveness of the national economy and obstacles is suggested to assess, first of all, within the manufacturing process.

2 The Government and Business as Actors of the Digital Economy Innovative production activity implies the relations between the government, business, scientific community and the population that ensure their effective coordination in the production process. Each of these socio-economic groups has own goals and economic interests. The main goal of the government is to establish the necessary and sufficient institutional and infrastructural conditions for the use and development of digital technologies in production to increase labor productivity. Moreover, the crucial point is

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that these conditions should be established concerning the interests of the participants and contribute to their maximum fulfillment on mutual terms. A special economic role in a market economy is traditionally attributed to business as a direct industrial and economic entity. From the standpoint of the economy as a reproductive system, it is the business that is imposed with the social function of continuous resumption of social production. However, in the Russian economy, the business does not perform its inherent reproductive functions, in particular, do not introduce innovative digital technologies into production. Today, the distorted economic behavior of the Russian business elite in its economic activities is commonly recognized in the academic literature. Conscious skepticism of Russian business to its enterprises is also observed at the government level. The head of the Russian Union of Industrialists and Entrepreneurs Aleksandr Shokhin noted in the speech uttered at the St. Petersburg Economic Forum in 2019 the everdecreasing role of private business in the national economy, while the role of the state and state-owned companies is growing (Fadeeva et al. 2019). Private investors have no real incentives to invest in national projects, but there is great uncertainty regarding the institutional and regulatory environment of the national economy (Fadeeva et al. 2019). This is confirmed by the data of economic practice evidencing that the domestic business deliberately deprives their enterprises of both investment and circulating assets required to fulfill their current financial and economic obligations (Krichevskii 2009). For example, most of the largest enterprises of the country in crisis times announced the payment of dividends to their shareholders according to the results of six- or nine-month period of 2008 (Krichevsky 2009). The socio-economic nature of the current institutional economic system is commonly considered the main reason for such economic behavior. And it is the unfavorable institutional environment that stands out as the main reason hindering the digitalization of the Russian economy and the development of digital technologies by the business. The following key factors of the modern institutional environment that generate the non-proprietary economic behavior of Russian business are highlighted in the academic literature: – – – –

the vulnerability of property rights (Kapelyushnikov 2012); low institutional trust in the authorities (Nureyev 2010); the uncertainty and unpredictability of the institutional environment; the social rejection of privatization results (Kapelyushnikov 2012).

Modern statistical data indicate that insecurity of property rights remains is at the top of the rating on the influence of the institutional environment factors on the economic behavior of a business (Dergachyov 2017). So, applications on the manifestation of illegal takeover and other illegal acts against the property of business agents ranked 1st in the statistics of official applications of business agents to the Prosecutor General (Table 1). The National Anti-Corruption Committee estimates the volume of illegal takeover in Russia up to 700 thousand a year, and only 10% of criminal cases are initiated against these acts (Voronina 2015). The unpredictability of the institutional environment is the second factor of business’ concern (Fadeeva et al. 2019). The law on investment activity in Russia which is

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aimed at establishing a well-defined mechanism to attract private investment in national projects and creating incentives for participation in them and not yet adopted is considered a specific problem that generates uncertainty for business and hinders the development of the digital economy (Fadeeva et al. 2019). Table 1. Applications of Russian business to the Prosecutor General from 17.06.2016 to 01.02.2017 Serial No. 1.

Subject-matter of the application

Number of applications Units Percent 202 36%

The manifestation of illegal takeover and other illegal acts against the property of economic agents 2. Unjustified criminal prosecution, detention and other 143 64% preventive measures 3. Violation of the procedure for providing public services and 123 placing orders for public needs 4. Violation of the procedure for making inspections 60 5. Unjustified adoption of administrative enforcement measures 29 6. Total number of applications for the period 557 100% Source: Made up by the author based on the data of the Prosecutor General of the Russian Federation (Dergachyov 2017)

But if the applications specified in paragraphs 2–5 of Table 1 related to violation by the authorities of the rights and interests of business established by operating institutions are combined into one general group “low institutional trust in the authorities”, then the value of this factor will be 64%. Thus, this factor will be the first in the total volume of business applications and even exceed the number of applications on the illegal takeover. The above factors of the modern institutional environment presenting a combination of political, legal and social institutions of economy management do not just reduce the investment activity of domestic business and narrow the time frame of decision-making. They lead to a situation when the economic interests and economic needs of owners are fulfilled predominantly without regard to the production efficiency itself and in conflict with national reproduction processes, thereby escalating the reproduction contradictions of the socio-economic system in general (Stompeleva 2017). In our opinion, this fact is confirmed by statistics on an unprecedented outflow of private capital from the country, as well as a mass-scale withdrawal by entrepreneurs of assets from their own business and their subsequent conversion into personal assets, which is even more intensifying in crisis periods (Fig. 1). So, in 2008 and 2014 there has been a sharp increase in the volume of capital exported from the country by the private sector amid falling volumes of GDP and incomes of business agents.

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Thus, the specific features of the current Russian institutional environment lead to the emergence and consolidation of new economic and behavioral rules, which become alternative mechanisms for actors to make a choice when fulfilling their economic interests. From methodological point of view, one should distinguish between the institutionalization of economic interests as an objective mechanism for their fulfillment that is set by the socio-economic nature of current economic system and the institutionalization of economic interests as designing a structure of different levels, statuses, rules and roles and bringing them into a system aimed at the effective socio-economic development (Karaseva 2018). This allows investigating the key problems of the modern Russian economy the perspective of the discrepancy between the domestic institutional environment and the objective system of economic interests.

Fig. 1. Net import (+)/export (−) of capital by the private sector in 2005–2016. Source: Drawn up by the author based on the data of Submission of the Accounts Chamber of the Russian Federation (Report of the Accounts Chamber 2017)

The current institutional environment in the Russian economy does not contribute to the institutionalization of the economic interests of business towards national socioeconomic development. The owners of the domestic business are deprived of their inherent economic functions, and the economic behavior and real interests of these actors do not correspond to their institutional position and objective economic functions (Stompeleva 2017). The result of the institutionalizing economic interests of Russian business as a subject of the digital economy in the form of new economic and behavioral rules that meet the features of the institutional system is the distortion of the objective content of their economic interests, the alienation of their objective reproduction functions and inconsistent economic behavior when economic interests and economic needs are fulfilled predominantly without regard to social production. The concept of alienation is used here in a general philosophical context, as a performance of form of man’s relationship with the surrounding world during his life under which the products of activity and the activity itself is opposed to a person as something foreign to him.

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Moreover, this alienation from the business of its objective reproductive functions in the socio-economic system can be called a special type of alienation, i.e. institutional one. Institutional alienation is characterized by the opposition of institutions to a person in his economic activity, which is traditionally regarded as a process of turning “impersonal social structures into an active principle and becoming the subject of social activity thereby sinking a particular man to tool or means of maintaining the existence of these social structures” (Kirilenko and Shevtsov 2010). Thus, the institutional alienation by subjects of their objective economic interests and reproduction functions is a method of reproduction (existence) of economic agents in the current institutional environment and a reflection of their subjective awareness of economic interests with regard to operating institutions that set out acceptable social conditions for these interests to be fulfilled (Table 2). Under the current conditions, the implementation of the digitalization strategy of the Russian economy aimed at increasing its competitiveness is unfeasible without appropriate measures on the institutionalization of the Russian system of economic interests committed to the effective socio-economic development of the national economy. Table 2. Peculiar features of the economic and economic interests of the business as a subject of the digital economy Subject

Objective level Economic Form of interest implementation Growth of Business Long-term capital, benefit (Owner) reproduction interest Source: Drawn up by the author.

Subjective economic level Business interest Form of implementation Conversion of Short-term, bit not corporate assets associated with the into personal ones reproduction

At the end of 2018, the state program “Digital Economy of the Russian Federation” was adopted as a national project to implement a digital strategy. The program is intended to last until 2024 with a budget of 1.79 billion rubles. The largest part of the budget of this national project (about 43% of the total funding) is allocated to the construction and development of the digital economy infrastructure under the federal project “Information Infrastructure”, and 25% – for the design of digital technologies. The indicators, such as internal costs for the development of the digital economy out of all sources by share in the country’s GDP, the share of economic agents with Internet access, the cost share of the purchased and (or) rented domestic software by state authorities and state corporations are specified as the main indicators of performance of this national project. As we can see, these indicators mainly characterize the volume of government expenditures and private investments in the development of the digital economy. Along with that, the program does not reveal specific social and economic indicators of the effectiveness of these costs and does not justify their relation to the growth of labor productivity and the satisfaction of population’s needs. Such a goal as increased

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quantitative indicators of costs may not bring the expected socio-economic effect, and may even cause damage to the production itself, population, and environment. Along with quantitative indicators, the qualitative characteristics are also among the crucial criteria for socio-economic development (Alpidovskaya 2017). But they are missing in the national program “Digital Economy of the Russian Federation”. Besides, government measures and expenditures will not assist national reproduction processes without the appropriate motivation of business to invest in digital technology, without the institutional environment to be improved and institutional trust into authorities to be enhanced. Consequently, the issue of the developing measures on digitalization of the economy by the government that are intertwined with a system of measures on the improvement of the institutional environment of economic management aimed at socio-economic development and boosting the competitiveness of the Russian economy, remains pending and topical in the conditions of the institutional alienation by the business of its reproduction functions.

References Alpidovskaya, M.L., Tsikin, A.M.: Competitiveness of the National Economy: Development Strategies: Monograph. Financial University under the Government of the Russian Federation. Tver State University, Tver (2018). 192 p. Alpidovskaya, M.L.: Socio-economic development of modern Russia, inevitability of eliminating anti-system manifestations. Philos. Econ. 2(110), 107–124 (2017) Voronin, Yu.: Impinging upon one’s Property. Raiding Threatens Small and Medium-sized Business in Russia. Russian Business Newspaper, No. 26 (1005). https://rg.ru/2015/07/07/ reyderstvo.html. Accessed 01 Aug 2019 Dergachyov, V.: Raiding Became the Most Frequent Cause of Business Complaints Filed to the Prosecutor General. https://www.rbc.ru/politics/07/02/2017/5898adac9a7947096696dc48. Accessed 01 Aug 2019 Submission of the Accounts Chamber of the Russian Federation on the Report on the Federal Budget Performance for 2016, Moscow, p. 26 (2017) Kapelyushnikov, R.I.: The insecurity of property rights and its economic consequences: Russian experience. J. New Econ. Assoc. 1(13), 150–153 (2012) Karaseva, L.A., Zinatulin, M., Topalyan, M.R.: The institutionalization of economic interests in the socio-economic design of territorial development. Probl. Territ. Dev. 1, 42–56 (2018) Kirilenko, G.G., Shevtsov, E.V.:. Brief philosophical dictionary. In: Slovo, pp. 264–266. AST, Moscow (2010) Krichevsky, N., Postpikalevskaya, N.: Russia: A New Political and Economic Reality, Moscow (2009). http://www.krichevsky.ru/publikatsii/11-articles/333. Accessed 01 Aug 2019 Pavlov, N.: Related Business. Russian Newspaper (Federal Issue), March 21, 2006. No. 4022. https://rg.ru/2006/03/21/raykov.html. Accessed 01 Aug 2019 Stompeleva, E.S.: Peculiar features of developing the system of economic interests in the reproductive aspect of the Russian economy. Theor. Econ.: Electron. Sci. J. 6 (42), 117–125 (2017). http://www.ystu.ru/download/TheorEconom/1-2011.pdf. Accessed 01 Aug 2019 Fadeeva, A., Demchenko, N.: Shokhin Has Seen The Possibility to Repeat Perestroika in Russia. https://www.rbc.ru/business/07/06/2019/5cf9fc7a9a79479b5c9f2615?utm_source= yxnews&utm_medium=desktop. Accessed 01 Aug 2019

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Schwab, K.: The Fourth Industrial Revolution: Translated from English. “E”, Moscow (2017). 208 p. The Economic Actors of Post-Soviet Russia (Institutional Analysis): Ten Years Later. Part I. Russian Households. In: Nureyev, R.M. (ed.) Series: Scientific Papers: Independent Economic Analysis, No. 212, Part I. Moscow Public Scientific Foundation, Moscow (2010). 196 p.

The Role of Digital Technology in the Formation of Agri-Food Clusters Olga Kusakina(&) and Natalia Dovgotko Stavropol State Agrarian University, Stavropol, Russian Federation [email protected], [email protected]

Abstract. The Russian economy is in the process of achieving compliance with current trends in the development of the global economic system. This necessitates the strengthening of competitive positions in the domestic and global markets through the use of digital technologies in its various sectors, including agri-food. The purpose of the study is to identify the role, prospects and problems of the use of digital technologies in the development of agri-food clusters for the processing of agricultural products. The article shows that the concept of managing the agro-industrial clusters development as self-organizing systems which can integrate the activities of small and medium enterprises in the value chain should be developed and implemented on the basis of modern digital technologies such as big data, artificial intelligence, machine learning, cyber-physical systems, blockchain, neural networks, robotics, 3D-modeling, virtual reality, cloud computing and other directions. The authors identified specific industry features that complicate and slow down the development of the agricultural digital platform, substantiate promising areas for the use of digital technologies in agriculture. Due to the obtained data, the authors developed an algorithm for creating an agri-food cluster and proposed the author’s model of a regional digital cluster for deep processing of eggs based on the integration of agricultural producers of the Stavropol territory. The application of the method of statistical analysis, a systematic approach, and the method of self-reflection of researchers allowed us to identify and specify the problems and relevant areas of digitalization for the emerging Russian agri-food clusters. Keywords: Digital economy
Digitalization
Digital technologies
Agri-food cluster
Agro-industrial complex
Agrarian digital platform
Digital cluster
Deep egg processing JEL Classification Codes: O33


Q16
Q1

1 Introduction World experience shows that digital technologies are rapidly and widely distributed in various sectors and in the economy sectors. For example, the DigitalMcKinsey expert group notes that “already in 2017, the digital revolution entered a decisive phase – every second inhabitant of the Earth connected to the Internet” (Digital Russia: new reality 2017). Moreover, the prospects for digitalization of the economy have reached the forefront of scientific and methodological search and public consciousness. In this © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 435–448, 2020. https://doi.org/10.1007/978-3-030-47945-9_49

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regard, domestic researchers note that by 2020 the industrial phase of global economic growth will end and its further development will be carried out under the increasing influence of cognitive factors and industries based on the principles of leanproduction, additive processes, nano- and biotechnologies (Panshin 2016). Turning to the essence and content of the concept of “digitalization”, it is appropriate to recall that one of the first concepts of the digital economy was proposed by the American computer scientist N. Negroponte, who defines the main institutions of the digital economy (Negroponte 1995), and in the early 2000s by the researcher Ch Carlsson proposed refined versions of the sectoral structure of the digital economy (Carlsson 2004). In turn, the British economist M. Skilton in 2010 for the first time proposed the concept of the digital economy as a component of a qualitatively new high-tech development and economic growth (Skilton 2015). In the scientific literature, it is noted that the digitalization process indicates a new stage in improving the management of the production of goods and services and the production itself based on the “end-to-end” application of modern information technologies, from the Internet of Things to electronic government technologies. high-tech development and economic growth (Skilton 2015). But, despite a rather extensive scientific discussion, today a uniform approach to determining the content of the concept of “digital economy” has not yet been formed. In solidarity with the opinion of the domestic researcher N.V. Vasilenko, we believe that the digital economy should be defined as “a type of economy characterized by the active introduction and use of digital technologies for storing, processing and transmitting information in all spheres of human activity” (Vasilenko 2017). In the world scientific and practical community, a hypothesis that the digital economy contributes to sustainable development has now been put forward, however, not all countries in the world are equally moving in this direction. So, in Russia, at the St. Petersburg International Economic Forum (May, 2018), as part of the discussion “New Economic Policy (NEP): What, How, Who?” it was announced that the share of the digital economy in Russia’s GDP is only 2.1% while in most OECD countries, the digital economy accounts for about 4–7% of GDP. Currently, the leading countries in the development of digital technologies are the UK – 11.9%, Korea – 9.6% and Japan – 8.1% (German 2018). In this regard, by stimulating the creation of an ecosystem of the digital economy, the Russian government has developed an appropriate program in which the digital economy is defined as “improving the efficiency of the modern economy mainly due to the automation of all processes and processing technologies” (Digital Economy of the Russian Federation 2011). We believe that the tasks of such programs should be systemically important, since the speed of technological development of states and their transition to the digital economy is becoming a determining factor in leadership in the international market both in the field of information technology and in the classical sectors of the economy (including agriculture). Of course, digitalization is proceeding at a very different pace in various sectors of the Russian economy. About 180 companies work in this area, and first of all, startups associated with the Skolkovo Fund. Some of them have already yielded significant results, and not only for Russia. Thus, the Agrosignal company’s effective farming system is being implemented in 150 farms with crops of 2 million hectares, more than

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4 thousand farms in 10 countries and others use the cloud-based crop management service of Proagrortech (Digital Russia: new reality 2017). In addition, with the help of the Internet of things and the analysis of large amounts of data, the Russian economy, as well as the entire world community, will be able to answer the main challenges in the field of sustainable development, including threats related to food safety. This circumstance actualizes and determines the need for the development of the country’s agro-industrial complex based on digital technologies. In general, the discussed scenarios of scientific and technological development of the country’s agro-industrial complex are primarily associated with the transition to a new production paradigm associated with the accelerated use of ICT, which will make it possible to eliminate a significant part of intermediaries and radically reduce the barriers of interaction between consumers and manufacturers. Of course, the added value in the agri-food sector can be concentrated in high-tech segments related, for example, to engineering. However, traditional market niches will evolve towards customization and personalization of agro-industrial complex products and services. It seems to us that ultimately the transformation of already existing business models will occur and the role of system integrator companies working on the basis of advanced information technologies will increase. Such “integrators” of digital development can be agri-food clusters, which should be considered as the interaction of individual business entities, manifested in the following aspects: 1. the formation of the competitive advantages of the enterprises included in the association due to adaptation to the market environment; 2. expansion and deepening of production and technological ties in the industry; 3. the transition of economic entities to an innovative path of development while maintaining internal characteristics and independence. In the scientific literature, it is noted that clusters in the agri-food sector are one of the priority areas of integration processes in the current conditions of the development of agribusiness, and their investment potential can be directed to the innovative development and sustainable functioning of the agrarian economy as a whole (Markov et al. 2015). So, in scientific studies it is convincingly reflected that clusters, as socioeconomic systems with their specific properties and characteristics, are able to integrate small and medium-sized enterprises into the value chain and create conditions for its effective operation (Glinskiy et al. 2016). In addition, foreign and domestic experience shows that large agricultural enterprises and integrated entities are more competitive in both territorial and foreign markets. In this regard, it is appropriate to note that clusters are widespread abroad – in the United States, France, China, Turkey, Romania, Thailand, Tunisia and other countries. In the agricultural sector of developing countries, such as China and Argentina, clusters are the main way to achieve high quality products and access to world markets (Stam and Michalopoulos 2018). Currently, the Ministry of Economic Development of the Russian Federation has registered more than 220 cluster projects, 19% of which have begun to form in the agricultural sector of our country. We share the opinion of researcher K.K. Kurbanov, who notes that agri-food clusters are objectively one of the most effective forms of integration, capable of ensuring the integrated development of rural territories by achieving a synergistic effect

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(Kurbanov 2017). But, on the other hand, a number of domestic economists state that agri-food clusters did not receive proper development in Russia and did not change the situation in the agro-industrial sector: “despite the successes of agriculture in recent years, there is a gap between agricultural production and its processing, quality of life people in rural areas and cities, labor productivity and development tasks of the agroindustrial sector” (Zavyalov et al. 2018). The authors of the article are convinced that the agro-food clusters formed in the Russian economy can be radically changed for the better in the country’s agricultural sector based on modern digital technologies, which predetermined the purpose of this study.

2 Methodology During the study of the role and prospects of digital technologies in the development of agri-food clusters, as well as during the development of a regional digital cluster model for deep livestock production based on the integration of agricultural producers, the authors of the article used methods of analysis, synthesis, functional modeling and selfreflection. The information base of the study was the scientific work of Russian and foreign scientists, materials from the Federal and regional state statistics services, the regulatory framework of the Russian Federation, statistics from the Ministry of Agriculture of the Russian Federation and the Ministry of Agriculture of the Stavropol Territory. In the course of the study, the authors studied the basics and results of creating a single Internet information space – the agricultural sector, which forms the platform of the digital economy. In general, the author’s approach to the idea of the widespread use of digital technologies in the process of forming agri-food clusters is based on the following messages and scientific ideas. 1. The formation of agri-food clusters is one of the determining directions of the innovative development of agriculture, designed to ensure Russia’s breakthrough into world markets with competitive technical, technological or food products. 2. The priority area of agri-food strategy and policy in developed economies is the accelerated introduction of IT systems that ensure the expansion of precision agricultural production and rationalization of material and financial flows. 3. The task of successfully forming and implementing agri-food clusters is to create conditions for re-equipping the industry and attracting profitable investment based on sound and technologically feasible integrated progressive digital technologies. 4. The fundamental basis of the agri-food cluster as an integrated form of interaction between food production enterprises is the creation of digital platforms and their implementation in practice, which will ensure the sustainable development of enterprises participating in the cluster not only in the regional market, but also outside it. Considering this approach, at the first stage of the study, the authors developed an algorithm for creating agri-food clusters for the deep processing of agricultural products (Fig. 1).

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I stage. Preparatory phase for the crea on of an agri-food cluster 1.1. Choice of type of ac vity and specializa on of the cluster 1.2. Determining the financial condi on of cluster members 1.3. Determining the mo ves of the associa on 1.4. Marke ng research, determining the markets for raw materials and finished products 1.5. Determining the effec veness of the project taking into account risk factors 1.6. Calcula on of cost recovery and produc on efficiency 1.7. Forma on of common property II stage. Development of organiza onal and management structure of the cluster

2.1. Defini on of goals and principles of cluster func oning 2.2. Development of regula ons and rules for the func oning of the cluster 2.3. Development of organiza onal and managerial structure of the cluster 2.4. Calcula on of the need for workers and specialists. 2.5. Obtaining the consent of the an monopoly authority

III stage. Implementa on of the project, regula on of rela ons within the forma ons and principles of building rela onships with external market en es 3.1. Prepara on of necessary cons tuent documenta on 3.2. Examina on and registra on of an integra ve structure 3.3. Implementa on of the integra ve structure project

Рисунок 1 – Предлагаемый алгоритм создания агропродовольственных IV stage. Assessment of socio-economic efficiency and development strategies of integra on structures кластеров по глубокой переработке сельскохозяйственной продукции 4.1. Assessment of the socio-economic effec veness of forma ons 4.2. Relevance of goals and achieved results

Как видно из рисунка 1, алгоритм создания агропродовольственных

Fig. 1. Algorithm for creating an agri-food cluster

So, according to the authors, the algorithm for creating an agri-food cluster consists of several stages that require careful preparation and development of the organizational and managerial structure of the cluster. In addition, during the implementation of the project, it is necessary to regulate relations within the formations and take into account the principles of building relations with external market entities. At the final stage, an assessment of socio-economic efficiency and the development strategy of integration structures is carried out, as well as an assessment of the conformity of goals and achieved results.

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At the second stage of the study, the state and the process of development of agrifood clusters in Russia are analyzed. Using statistics and research in this area (Kurennaya et al. 2018; Belikova et al. 2018), the authors of the article revealed the problems of development of the agricultural sector of the economy as a whole and specific features that determine the insufficient development of agri-food clusters. At the third stage of the work, an attempt was made to create a digital cluster for the deep processing of animal husbandry using the example of the Stavropol Territory. In this case, the digital cluster was considered by the authors as an element of the digital economy, including algorithms and methods for optimizing information, material and other resources.

3 Results Using numerous statistical data, the authors of the article revealed that the specific features that determine the insufficient development of agri-food clusters include: 1. Lack of a development strategy for the agro-industrial sector, low involvement of small and medium-sized enterprises in the value chain. So, despite the fact that modernization of the agro-industrial complex carried out in recent years as part of state support has led to an increase in labor productivity, small and medium-sized agricultural enterprises are limited in the use of new innovative and knowledgeintensive technologies, since they are de facto excluded from the processes of development and improvement business. However, according to experts, the digitalization of agriculture will potentially increase labor productivity in the industry by 3–5 times, reduce fuel consumption by 30–40%, and increase the gross profit of “digitalized” farms by 25–50% without compromising product quality (Digital Russia: a new reality 2017).

– Economicwide

– Agriculture, hunting and forestry Fig. 2. Labor productivity index, % by 2005

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In fairness, it should be noted that in agriculture the labor productivity index over the past decade exceeded the same indicator for the economy as a whole – 153% and 129% respectively), as shown in Fig. 2 (Shagayda and Uzun 2018). But, if we evaluate labor productivity in terms of euros per hour, then in Russia it is 1.8 euros, while the EU average is 9.5 euros (a difference of 5.3 times). As a result, these circumstances do not at all stimulate the integration process and the development of agri-food clusters. 2. The ongoing digitalization process necessitates the adaptation of not only workers and employers, but also the entire community to new socio-economic conditions (Kusakina et al. 2019). At the same time, digitalization contributes to the release of economically active rural population; currently, for the Russian agricultural sector, the problem of unemployment is still relevant. In our opinion, it is possible to change this situation through mechanisms of active interaction of participants in agri-food clusters using information technology and the development of the digital economy, especially since the IT market in agriculture is growing and is currently estimated at 360 billion rubles, and by 2026 may increase at least 5 times. 3. During the formation of agri-food clusters, the problem of lack of investment has not been resolved. Currently, not only rural infrastructure, but also most agricultural and processing enterprises, require modernization and refurbishment in order to introduce energy-efficient and environmentally friendly technologies. So, the volume of investments in fixed assets of agriculture in 2010–2016 doubled in real terms, reaching 611.2 billion rubles (Fig. 3).

700 611.2

600 500 400 300

242.8

200 100 16.4

0

Fig. 3. The volume of investments in fixed assets of agriculture in 2010–2016, billion rubles.

However, the bulk of small and medium-sized enterprises – potential participants in the agri-food cluster – are limited in the use of new innovative digital technologies,

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since it is difficult for them to modernize production and introduce new technologies that meet modern world standards. 4. In the agri-food economic sector, the use of digital technologies complicates and slows down the following industry features: a long production cycle; high dependence on weather and climate conditions; the impossibility of automating biological processes; insufficient coordination and gap in the economic strength of links in value chains; the multistructure of the agrarian economy and its interweaving with the socio-spatial organization of rural communities (Andreeva et al. 2018). Today, in the regions of Russia, investments in IT technologies make up only 0.5% of investments in fixed assets of agriculture, and the share of IT specialists in the number of people employed in agriculture was below 2.5% (approximately one specialist per thousand employees). To solve these problems, the world scientific community proposes to use the experience of stimulating agricultural digitalization by ensuring synergies between agriculture and developments to increase the productivity and sustainability of agriculture (including a system of digital innovation hubs) (Hogan 2016). 5. Among the innovative projects of the digital agro-industrial cluster, one of the priority places should be the introduction of technologies for the deep processing of livestock products and the creation on this basis of various digital agro-food clusters. Indeed, at present, the main factors determining the development of the world food market are population growth and an increase in demand for healthy food products, for example, for eggs and egg products. Thus, it is predicted that poultry egg production will become the fastest growing sector of the global economy by 2035, and the consumption of eggs and egg products in the world will grow by 50%.

42000

41859

43000

41286

44000

42570

45000

43559

46000

44790

Among the key characteristics of the domestic market, one can single out a stable growth in egg consumption and a steady increase in domestic production. Let us analyze the capacity of the egg market in Russia (Fig. 4).

41000 40000 39000 2013

2014

2015

2016

Fig. 4. Market capacity of eggs in Russia, mln. Pieces

2017

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So, as shown in Fig. 4, by the end of 2017, the capacity of the egg market in the country reached 44790 million pieces, which is 1231 million pieces, or 2.8%, more than was obtained in 2016. The main factors in the growth of demand in the egg market are the increase in the purchasing power of the population, the development of the modern trade sector in the country and the increase in prices for meat products. The main growth was provided by poultry enterprises of the Leningrad, Yaroslavl, Tyumen, Belgorod regions and a number of other regions. But at present, the Stavropol Territory is the only one in the North Caucasus and Southern Federal Districts of the Russian Federation where state support is provided for poultry farming in the egg sector (over the past six years it has amounted to more than 122 million rubles). To build the egg basket of the region, several investment projects are planned. In particular, Pticekompleks Alyans LLC has implemented a program for the maintenance of 90 thousand laying hens, the company already this year plans to increase egg production to 60 million pieces, and by 2020 to 100 million. In the Budennovsky district of the Stavropol Territory, the reconstruction of the poultry complex is ongoing Preobrazhenskoye CJSC on reaching annual production of 280 million units. Production indicators of egg poultry in the Stavropol Territory are presented in Table 1. Table 1. Production indicators of egg poultry in the Stavropol Territory Animal species

Farms of all categories Bird stock, thousand Egg production, million pieces Agricultural enterprises Bird stock, thousand Egg production, million pieces The average annual egg production of laying hens, pcs. Households Bird stock, thousand Egg production, million pieces Farmer households Bird stock, thousand Egg production, million pieces

2013

2014

2015

2016

2017

2017 в%к 2013

15122,7 796,4

16606,2 707,9

19221,9 677

23042,6 654,7

20266,9 626,5

134,0 78,7

10877,3 365,1

12312,2 278,9

14909,9 258,5

18671,5 248,3

16022,1 240,1

147,3 65,8

250

273

252

245

232

92,8

4046,9 403,8

3852,1 400,6

3872,3 394,8

3890,8 366,6

3951,2 350,2

97,6 86,7

198,3 27,5

441,9 28,3

439,7 23,7

480,3 39,8

293,6 36,2

148,1 131,6

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Given the current circumstances, we believe that deep processing of eggs and expanding the range of products can become factors in supporting the egg market, both in Russia as a whole and in the Stavropol Territory. While in our country 10% of eggs are sent for processing, in Europe this figure reaches 25%, in the USA – 35%, and in Japan – more than 40%. In the segment of egg products, the Netherlands is also leading ($ 287 million). In our opinion, taking into account global trends in Russia and its regions, it is necessary to form an effective system of interaction and cooperation between agricultural companies, the food industry and the scientific and educational sector to increase the competitiveness of the egg industry, its further socio-economic and innovative development through the creation and functioning of a digital cluster for deep processing of eggs. We believe that the tasks of creating a digital cluster for deep egg processing in the Stavropol Territory are as follows. 1. Development and resolution of issues related to the implementation of joint projects of enterprises participating in the cluster in the field of cost reduction, marketing, logistics, staffing, staff development. 2. The solution of the problem of innovative development, the introduction of modern innovative biotechnology at all stages of the egg processing process. 3. The increase in the production of products of deep processing of eggs and food products from them. 4. The growth of tax revenues to budgets of various levels. 5. Creation and development of engineering, logistics, scientific, educational and infocommunication infrastructure of the egg industry. It should be noted that the already existing agri-food cluster of the Stavropol Territory is supported by the cluster development center within the framework of the program of the Ministry of Economic Development of Russia to support small and medium enterprises and includes 115 organizations, including the North-Caucasian Federal University Federal State Autonomous Educational Institution of Higher Professional Education, the Stavropol State Agrarian University, FGB NU “Stavropol Research Institute of Agriculture” and other scientific organizations of the region. Currently, cluster interaction is carried out at the level of such subclusters as “Production of fertilizers and feeds and bioadditives”; “Food production using biotechnology” and others. The author’s model of a regional digital cluster for deep egg processing based on the integration of agricultural producers using the example of the Stavropol Territory is shown in Fig. 5. So, the key objectives of the digital agri-food cluster for deep processing of eggs include the automation of production and economic processes, stimulating the development of a market for personalized production and consumption, mobilizing knowledge through the exchange and creation of high-tech jobs. The obvious economic and managerial basis for creating such a digital cluster is the program-targeted method, which provides for the deepening of integration and cooperation of the main, related and isolated participants in this process, as well as the establishment of long-term productive production and business ties.

Р е с у р с ы

Peasant farm enterprise

Deep Proce ssing Techn ologie s

Mini workshops processing eggs

Food industry enterprises

Agricultural Consumer Cooperatives

Agricultural organizations

Poultry organizations

Egg converters

Individua l Enterpris es

Agricultural producers

Primary raw materials (egg)

Agricultu re organizati on

ССИКЦ

Egg deep processin g products

Personal smallholdings S a l e s m a r k e t s ( c o n s u m e r s )

World markets

Livestock enterprises

Trading networks: wholesale and retail trade

Plant Industry

Marketing intermediaries

Pharmaceutical companies

Population, households in the region

Wholesale Distribution Centers

Food industry enterprises

Fig. 5. The author’s model of a regional cluster for deep processing of eggs based on digital technologies.

Transport companies

Organizations for the production of feed, feed products

Research, educational centers

Finance and credit, insurance, consulting companies

Industry associations of the Stavropol Agricultural Information and Suppliers of equipment, goods, containers

Committee of the food and processing industry of the region

Ministry of Agriculture, regional agricultural

Center for Regional Digital Cluster Development

У п р а в л е н и е

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In general, the digital cluster for deep processing of eggs can be a group of enterprises-producers of egg products, procurers, processors, trade enterprises, suppliers of raw materials, equipment, educational, scientific and research organizations, united by technological chains and/or common interests. For example, the vertical integration of the production scheme of such a cluster provides for the implementation of the concept “from the producer to the counter” by creating a closed production cycle and egg processing products. Within the framework of our proposed digital cluster in the egg and related industries in the Stavropol territory, it is possible to reduce costs and ensure competitiveness in the regional and global markets through effective digital channels of market communications. On the other hand, the widespread adoption of “precision” and “smart” agriculture technologies will allow controlling the full cycle using devices that transmit and process the current parameters of each object and its environment (equipment and sensors measuring soil, plant, microclimate, animal characteristics and etc.), as well as reliable communications between them and external partners. However, the implementation of the proposed by the authors of the project of the regional cluster for the deep processing of eggs based on digital technologies will require the removal of numerous economic and technological barriers of digitalization in the agri-food sector of the economy.

4 Conclusions/Recommendations The main conclusions and results of our study. 1. It is shown that at present it is necessary to speak only about certain guidelines that could become an important element of the national discussion about the future digitalization of the agri-food sector of the economy. The digital economy in the agri-food sector can be interpreted as a system of economic relations of high efficiency, ensured by the automation of all processes and data processing technologies. 2. To ensure the agri-food “digital breakthrough”, it is necessary to solve the “digital” problems, which include, first of all, the development, assimilation and wide dissemination of digital technologies and platforms, as well as personnel training and regulatory regulation of this process. 3. Paying attention to the fact that currently the main factors determining the development of the world food market are population growth and increasing demand for healthy food, the authors propose a wide creation and application of digital agrifood clusters. All known tools of the digital economy, such as the Internet of things, big data, artificial intelligence, machine learning, cyber-physical systems, monitoring systems, blockchain, neural networks, robotics, 3D modeling, virtual reality, cloud computing, can be used in the formation of agri-food clusters. 4. The author’s approach to the creation of a digital cluster for deep processing of eggs on the example of the Stavropol territory was proposed. Through the formation of an effective system of interaction and cooperation between companies of the agroindustrial complex, food industry and educational sector in the region may

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increase the competitiveness of the egg industry, its further socio-economic development and innovation based on advanced information and communication technologies. 5. The authors of the article are convinced that the promising areas of this study are the development and improvement of a specific digital eco-platform in the agri-food sector of Russia, which can serve as a scientific basis for constructing the concept of digital development of the national economy as a whole.

References Andreeva, G.N., Badalyanc, S.V., Bogatyreva, T.G., Borodaj, V.A., et al.: Razvitie cifrovoj ekonomiki v Rossii kak klyuchevoj faktor ekonomicheskogorosta i povysheniya kachestva zhizni naseleniya: monograph. Professional Science Publishing House, Nizhny Novgorod, 131 p. (2018) Vasilenko, N.V.: Cifrovaya ekonomika: koncepcii i realnost. In: Innovative Clusters in the Digital Economy: Theory and Practice: Proceedings of a Scientific and Practical Conference with International Participation, 17–22 May 2017, ed. Dr. econ. sciences, prof. A.V. Babkin. SPb. Publishing House Polytechnic University, pp. 147–151 (2017) German, G.: Kakoj Rossiya podoshla k 2018 godu? (2018). http://www.vestifinance.ru/videos/ 40497 Zavyalov, D.V., Saginova, O.V., Zavyalova, N.B.: Upravlenie razvitiem agropromyshlennyh klasterov. MIR (Modernizaciya. Innovacii. Razvitie) 9(1), 123–136 (2018) Kurbanov, K.K.: Innovacionnoe razvitie regional’nogo APK: klasternyj podhod. Regional’nye problemy preobrazovaniya ekonomiki (4), 43–50 (2017) Markov, L.S., Petuhova, M.V., Ivanova, K.Yu.: Organizacionnye struktury klasternoj politiki. Zhurnal Novoj ekonomicheskoj associacii (3), 140–156 (2015) Panshin, B.N.: Cifrovaya ekonomika: osobennosti i tendencii razvitiya. Nauka i innovacii 3(157), 17–20 (2016) Shagajda, N.I., Uzun, V.Ya.: Tendencii razvitiya i osnovnye vyzovy agrarnogo sektora Rossii. Analytical report, Center for Agri-Food Policy of the Russian Academy of National Economy and Public Administration (2018). https://www.csr.ru/wpcontent/uploads Programma «Cifrovaya ekonomika Rossijskoj Federacii»: Utverzhdena rasporyazheniem Pravitel’stva RF ot 8 dekabrya 2011g, No. 2227-r (2011). https://www.garant.ru/products/ ipo/prime/doc/70006124/ Cifrovaya Rossiya: novaya realnost (2017). https://www.mckinsey.com/russia/our-insights/ru-ru Bannikova, N.V., Astrakhantseva, E.Y., Morozova, I.A., Litvinova, T.N.: Mastering of the information and communication technologies by labor resources of rural territories as a new vector of their development in modern Russia. Adv. Intell. Syst. Comput. 726, 701–708 (2019) Belikova, I.P., Zaporozhets, D.V., Tenischev, A.V., Zvyagintseva, O.S., Isaenko, A.P.: Innovative development of the agricultural sector: problems and prospects. Res. J. Pharm. Biol. Chem. Sci. 9(6), 1860–1865 (2018) Carlsson, B.: The digital economy: what is new and what is not? Struct. Change Econ. Dyn. 15(3), 245–264 (2004) Gebhardt, C., Donnan, D., Subei, B., Tuot, C.: Agriculture is fertile ground for digitization. Paper, A. T. Kearney (2016). http://www.atkearney.com/documents/20152/434105/

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Glinskiy, V., Serga, L., Chemezova, E., Zaykov, K.: Clusterization economy as a way to build sustainable development of the region. Procedia CIRP 40, 324–328 (2016). (in Eng.) Hogan, Ph.: Speech at EU Workshop - Europe’s Opportunity in Digital Agriculture, Brussels (2016). http://ec.europa.eu/agriculture/sites/agriculture/files/docs/speeches/hogan_en.pdf Kurennaya, V.V., Kusakina, O.N., Aydinova, A.T., Kosinova, E.A., Shevchenko, E.A.: State and development trends of the agri-food market in the region. Res. J. Pharm. Biol. Chem. Sci. 9(6), 1537 (2018) Kusakina, O.N., Tokareva, G.V., Ermakova, A.N., Dykan, Y.A.: Application of information and communication technologies as a tool of development of rural territories’ labor resources: possibilities and perspectives. Adv. Intell. Syst. Comput. 726, 695–700 (2019) Negroponte, N.: Being Digital. Knopf, New York (1995). 243 p. Skilton, M.: Building the Digital Enterprise: A Guide to Constructing Monetization Models Using Digital Technologies. Springer, Heidelberg (2015). 230 p. Stam, C., Michalopoulos, S.: EU agri-food operators sign milestone data sharing deal (2018). https://www.euractiv.com/section/agriculture-food/news/eu-agri-food-operators-signmilestone-datasharing-deal Brynjolfsson, E., Kahin, B. (eds.): Understanding the Digital Economy: Data, Tools, and Research. The MIT Press, Cambridge (2000). 408 p.

Legal Liberalism and the Digital Economy: Boundaries of Freedom in a New Era Vladimir E. Berezko(&) Moscow State Institute of International Relations MGIMO, Moscow, Russia [email protected]

Abstract. Introduction: The ideology of legal liberalism presumes the restriction of liberty by law. In the context of building a competitive country, this task gets a special urgency. The key question is the preservation of justice in society as a foundation of law and a constitutional state. Restriction of freedom is viewed not in a negative sense, as its infringement, but in a positive sense, as protection of freedom of each individual. Establishing the boundaries between the rights of individuals by the means of law is the main purpose of restricting freedom. Therefore, the most consistent solution of this problem is possible only from the side of public authorities, the state authorities. In this respect, the aim of the study was to identify the essential aspects of restricting freedom in a constitutional state in the conditions of development of the digital economy. Methodology and research methods: In the course of the study, methods of the systematic method, the method of comparative law, exegetics, hermeneutics and logical analysis were used. Findings: The analysis justifies the importance of legal liberalism for the normal functioning of the constitutional state. Restricting freedom in legal forms in the development of the digital economy does not lose its relevance, but allows overcoming a number of new challenges posed by the digitalization of society. In particular, this includes countering the placement of illegal content on the Internet and social networks. Originality/value: The study also established that the ideas of legal liberalism contribute to the functioning of a modern, competitive state and lead to its prosperity. Restricting freedom by the law in the digital economy not only remains relevant, but also helps to overcome a number of new challenges posed by the digitalization of society. On the contrary, the need for such restrictions in the context of the digital economy will increase. But this is not a sign of abandoning freedom as such, but of protecting it with the help of law and public authority. Keywords: Legal liberalism
Restriction of freedom
Digital economy State
Law
Freedom
State power
Public law regulation JEL Code: K100

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 449–458, 2020. https://doi.org/10.1007/978-3-030-47945-9_50




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1 Introduction The ideology of legal liberalism implies more than just a restriction of freedom. This restriction is performed only within the legal framework for the sake of the existence of freedom itself. The well-known French lawyer Maurice Orioux, studying this issue, was deeply convinced that the state was created not for the suppression of freedom, but for the triumph of the latter (Hauriou 1929). And in the process of development of the digital economy, the legal restriction of freedom does not lose its relevance, but also acquires a completely new meaning for building a competitive state facing new and complex challenges.

2 Materials and Method In this study, the systematic method, the methods of comparative law and logical analysis, as well as the methods of exegetics and hermeneutics were used.

3 Results The state organization serves as a solid foundation, the basis for the personal freedom. Achieving the harmony necessary for the stable and progressive development of society is possible only through a reasonable combination of freedom and power. The protection of the personal rights and liberties is the most important task and main goal of state policy. Expansion of the spiritual and material well-being of the society is inconceivable without freedom and strong power, ensuring it. Legal liberalism assumes that the development of freedom does not imply the “underdevelopment” of the state. This is an objective, fundamental law of being in power. In a number of works there is a fairly common opinion about some “historical” roots of “unfreedom” in Russia. The era of John the Terrible is often used to demonstrate the “unfree” Russia. Actually, as many contemporary researchers rightly point out, the reality – compared, for example, with England of that time – was quite different (Kozhinov 2014). It should be emphasized that the opposition between freedom and law leads to certain practical conclusions of a radical-liberal nature. Or rather, radical judgments. This simply clouds the real nature of the modern state. Moreover, it makes it possible to blame ordinary citizens for all the troubles resulting from illiterate governance. Alan Morton Dershowitz, a well-known American lawyer, emphasized that the life of modern states faces such challenges when the law may come into conflict with the order maintenance. It would seem to be a paradox, but modern life and examples of recent violent crimes committed by migrants in Western Europe fully confirm this thesis. Here is what the famous American lawyer wrote about it: “Law” and “order” may not always be perfectly compatible. Complying with the law may make it more difficult to maintain order, especially against terrorists who do not care about law and whose goal is disorder (Dershowitz 2002).

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By the way, it should be noted that long before Dershowitz, Napoleon came to the same conclusion. The campaign against gang violence in France was uncompromising and, one might say, extremely cruel – not only the gangsters themselves but also their numerous accomplices were executed (Tarle 2008). Many scholars, both the greatest minds of the past and contemporary lawyers, have been debating how to find an acceptable measure of freedom, a reasonable combination of freedom and power (Atamanchuk 2010). Radical liberals often make hasty judgments in their efforts to make the concept of freedom absolute. For example, it is proposed to minimize the authority of the state executive branch. These radicals see the weakening of power as the way to freedom. But this is a logical misconception. Tocqueville even remarked that a government with no power is absolutely meaningless (Tocqueville 1994). In times of crisis, management of the state requires special measures. This inevitably leads to the restriction of existing freedoms. In this regard, Maurice Hauriou noted that restrictions on rights in such a situation could become simply inevitable, since the issue of the survival of the nation and state. I would like to emphasize that it is not about the power itself, but the state, understood as a trinity of territory, population and power (Hauriou 1929). In fact, the degree of power concentration does not depend on the form of government. The power can be oppressive under the republic, and rather soft under the monarchy. Compare the degree of concentration of power that Stalin had with, for example, Alexander the Second’s, who was the target of the terrorists. This was partially confirmed by the famous poet Maximilian Voloshin in his speech “Crucified Russia”: “Under the monarchy, Russia enjoyed a freedom of private life that none of the European countries knew of” (Voloshin 1992). In fact, the liberal idea did not cause any fundamental contradictions in the life of Russian society at all. Boris Nikolaevich Chicherin once wrote about it (Chicherin 2010). According to Viktor Leontovich, the author of a very interesting work on the history of liberalism in Russia, the fundamental problem of finding a reasonable combination of power and freedom among intellectuals began to resemble a radical doctrine, gained almost sacred status and became no longer a scientific problem, but a faith. Leontovich saw the reason for this in the purely abstract approach to the practical constitutional problems (Leontovich 1995). And if the people of action professed conservative liberalism, then, as Leontovich writes, at aristocratic banquets more often the radical views prevailed, which have nothing to do with real liberalism (Leontovich 1995). Except, perhaps, for the use of the magical word “freedom”. Leontovich ironically wrote about this perception of the liberal idea, emphasizing the most common “inability to distinguish between the conservative liberalism of the Zemstvo and the political radicalism of the ‘banqueting’ organizers”. Discussing the introduction of constitutional monarchy in Russia at the beginning of the XX century, Leontovich very accurately noted the essence of the radical perception of the liberal idea, which in the name of freedom denies all the other elements necessary for the harmonious development of society, namely, power, law and order. Unfortunately, under the reign of Nicholas II in imperial Russia, the authorities did not fully understand this (Leontovich 1995).

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But the development of only one social element leads to the fact that the most important element of the state – the power – disappears from the general palette, which leads to public cataclysms. The main idea of law in a constitutional state, according to Maurice Hauriou, is, without a doubt, the establishment of justice in human communication (Hauriou 1929). In turn, the law requires obedience. If the law is not respected, the enforcement mechanism is activated. By the way, this is the ratio of legal responsibility. Hegel noted in this regard that legal responsibility is fair, because it is already established in the offense itself (Hegel 1990). In this regard the great Russian philosopher Ivan Alexandrovich Ilyin pointed out that law enforcement is conditioned by the need to confront evil and protect the Good (Il’yn 1993). The protection of law as a “minimum of the good” is of particular relevance in contemporary information society. The state and law here face new challenges and they are in the need for timely modernization. Valery Dmitrievich Zorkin, the President of the Constitutional Court, stressed in his article dedicated to the new legal challenges in the digital age, that “just as traffic rules designed to regulate horseback riding have been replaced by traffic rules, the rules of air travel and space flights continue to give rise to a new right – the “right of the second modern”, which regulates economic, political and social relations in the context of the world of numbers, big data, robots and artificial intelligence” (Zorkin 2018). But this process does not eliminate the fundamentals of the state and law at all. It is not only premature, but also scientifically incorrect to talk about their disappearance and “erasure”. First, because the need for legal regulation of new social relations is not only not disappearing, but also increasing significantly. And the question of the balance of freedom and power, the law does not lose its relevance in the digital economy. Modern scientists are actively studying the specifics of the digitalization impact on law and public administration (Inshakova 2018; Kamolov 2017; Ponkin 2019). The authors have rightly noted certain confusion in terminology (Ponkin 2019). Some scientists also talk about the new industrialization era of the Russian economy (Inshakova 2019). The digital era has brought to life new digital rights (Zorkin 2018). Professor Zorkin defines them as “people’s rights to access, use, create and publish digital works, to access and use computers and other electronic devices, as well as communication networks, in particular the Internet” (Zorkin 2018). In this regard, the main task of the modern state is to ensure the constitutional and legal security of the individual (Zorkin 2018). Professor Zorkin is convinced that the most important step in this direction can be the adoption of the Information Code, which systematizes information legislation and eliminates existing contradictions (Zorkin 2018). By the way, the problem of the lack of proper legal regulation in this area is global (Ponkin 2018). And even in the digital age, freedom restrictions for the sake of protecting freedom itself cannot be avoided. The Chairman of the Constitutional Court stressed that “an urgent problem in the relationship between a n individual and the authorities in the

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digital society is the definition of possible limitations of digital rights by federal law, including the permissible limits of control over the information environment by law enforcement services in order to ensure effective protection of society from cybercrimes” (Zorkin 2018). The starting point for legal regulation of the digital economy is, of course, the Constitution of the Russian Federation and constitutional norms. Perhaps the term “digital economy” should be included in the Constitution. The Chairman of the Constitutional Court of the Russian Federation Valery Dmitrievich Zorkin emphasized that “the degree of development of the digital reality, it should ultimately fall under the scope of the Constitution as a normative act having the highest legal force in the Russian legal system” (Zorkin 2018). At the same time, it is necessary to find a reasonable balance between freedom and law (Zorkin 2018). Other researchers also call the issue of ensuring human rights and freedoms in the information society “the most pressing” (Morkhat 2018). In fact, the human right to the protection of privacy and private information occupies a special place among these. The digital economy must also allow for strong digital control. More specifically, companies producing food, pharmaceuticals and other goods and services that have a direct impact on human life and health should be under the special state control. From my point of view, serious digital control is also needed over private medical clinics. The President of the Constitutional Court noted that “a united cyber-control system should be in place in the country, where every company that can affect people should be constantly monitored at the federal and regional levels” (Zorkin 2018). In fact, it is all the same use of coercion to protect freedom, to secure the prisoner for the sake of higher good, which is the most important duty of the state authorities. As Vladimir Soloviev noted precisely and succinctly, this right is the minimum good, that everyone is obliged to adhere to by law (Solovyev 1999). But the relationship between power and freedom requires an exact definition of the boundaries between personal and state rights. The definition of this balance should not lead to the false assumption that these elements are in opposition. From the scientific point of view, it is incorrect, and from the point of view of practical management of the state, it leads to the destruction of the whole state building, under the ruins of which the freedom, put on a pedestal by different radicals, also inevitably dies. The opposition between power and freedom, as Professor Korkunov rightly noted, is one of the greatest misconceptions of legal science: “Not in all cases the restriction of state intervention is beneficial to personal freedom, and the expansion of the scope of action of states does not necessarily act as a new restriction of individual autonomy” (Korkunov 1909). And today’s legal scholars rightly point out that one should not oppose power and society in the style of classical, “old” liberalism (Atamanchuk 2012). Lack of understanding of the essential role of the government in the organization of “general affairs”, disregard for other public elements, and often complete ignorance of them leads Russian liberals to a gap between reality and perception, to radicalism, in the depths of which freedom itself disappears. This ignorance of the obvious by the Russian scholars and the replacement of the fundamental content with a vibrant form were very clearly expressed by Boris Nikolaevich Chicherin (Chicherin 2002).

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There’s an interesting remark from Maurice Hauriou about civil liberties. He believed that they could exist in the “kingdom of the good tyrant” (Hauriou 1929). On the other hand, if we continue Maurice Hauriou’s thought, it would actually make sense. In the epilogue of the epic “War and Peace” Leo Tolstoy describes how one of the heroes brilliantly managed his own estate and men from neighboring estates came to him and asked to buy them. They were primarily concerned with economic well-being rather than civil rights. This once again emphasizes the axiom of statebuilding and state policy, which calls for the unity of political declarations and their economic support with certain resources. In other words, freedom and poverty are incompatible. The declaration of a right does not yet mean its actual implementation and realization. This requires adequate economic resources. Alan Morton Derschowitz, a famous American lawyer, once wrote that positive legislation should be changed in order to solve the problems that are relevant for the survival of society - this also applies to the problem of international terrorism and the problem of preserving the family as the basis for the existence of any society. Derschowitz cites in his brilliant book “Why Terrorism Works” the words of another lawyer, which undoubtedly remain relevant at all times: “The Constitution is not a suicide pact,” Justice Robert Jackson once observed (Derschowitz 2002). In other words, if the Constitution grants all people numerous rights, it does not mean that the constitutional state should not protect the basic natural right of all people – the right to life – by all available means (and even invaluable within the framework of the Constitution). In this regard, the topic of combating illegal content on the Internet is very relevant. Professor Zorkin noted in this regard “without violating the constitutional rights of citizens, it is necessary to strengthen control over cyberspace and immediately respond to the emergence of various types of “death groups”, other similar communities that call for violence and spread the ideology of the criminal world. A so-called “Darknet” which now actively sells drugs and weapons, as well as provides recruits for terrorist organizations, must be under special control of law enforcement agencies” (Zorkin 2018). A reasonable combination of freedom and power, freedom and law in a constitutional state inevitably dictates a scientific understanding of the limits of state interference in the economy. Including the digital one. Above all, it is necessary to note the following - it is important to abandon, once and for all, the absolutely inappropriate opposition to the market economy and socialist teachings. The fact that socialists criticize capitalism for striving for the realization of a purely private interest does not overshadow the useful functions of a market economy for society. The essential task is to bring them into a balanced combination. Let me remind myself of the rough but well-known dilemma – what is better for the people – having freedom or having meat on the supermarket shelves? In my opinion, there can be no real freedom without having meat in the fridge and on the shop shelves. If there is no food, any thoughts of the Bolshoi Theatre are replaced by the image of it. And there can be no range of food products on the shelves of shops without proper freedom, in the economic area particularly.

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The leading contemporary state scholars rightly argue that the “pure” market, whose ideas stem from the “old”, classical liberalism with its actual denial of the state and its role in the life of society, is simply unable to perform its tasks in the modern world. And not because it is bad. It is simply because a reasonable combination of private and public interest in the economic field is a pressing need of the entire society. It does not matter where this society is located geographically – in Africa or Western Europe. Moreover, in the modern world the migration flows are already changing the face of old Europe in the national and civilizational sense (Engibaryan 2017). The reason for this is that the market always strives to satisfy the private interest. But the society also assumes that the public interest is also present, which should be protected by the state authorities. The next issue is the digital economy, like any other economy, will not be able to develop if there is no stable development of the state and society. And that is why the state power is obliged to resist the spirit of revolution, the spirit of denial of the state and law. And in this regard, it is worth adding that the state and law are the greatest achievements of human civilization. Attempts to “cancel” them are naive and scientifically incorrect. These attempts are built on the crumbling foundation of rosy dreams of “powerless” governance, which are quickly gone with the harsh winds of political storms. In fact, it should be noted that revolutionary governments are detached from the real world. And then, the people, not the delusional dreamers, pay a great price for it. Including in a special currency – its own blood. Maurice Orioux believed that there is only one way to avoid extremes – to cultivate a proper understanding of freedom (Hauriou 1929). By the way, Pyotr Bernhardovich Struve has made a clear and resounding statement about the great danger of scientifically incorrect understanding of the state, which arises for the whole society. It first saw the light in the famous collection of “Vekhi” (Milestones), published in 1909 after the first Russian revolution. But, I believe, the words of Struve are still relevant today – in the XXI century. Thus, he wrote: “The ideal form of the Russian intelligentsia is its detachment, its alienation from the state and hostility to it” (Struve 2007). The main task of the state and the right sanctioned by the state authorities is to establish a fair, legal order in which everyone is guaranteed to have “to each his own”. This balance, wrote Hauriou, is the most powerful foundation of public law (Hauriou 1929). The law and the state are realized by the government institutions. Institutionalization and organization implies protection of the right in special legal form. It is the presence of a procedure and the regulation of procedural norms that will make it possible to exercise good stae administration (Kazantsev 2001). If there are no legal forms of realization of the law, the law itself disappears. Only due to legal procedures the law is objectified in real life (Kazantsev 2001). Discussing the reasonable balance between power and freedom in the digital economy, it should be emphasized that the boundary between power and freedom may vary depending on the circumstances in which the state finds itself. This issue is particularly acute in times of crisis. It should be noted that this issue was developed in

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detail by the well-known pre-revolutionary lawyer Boris Nikolaevich Chicherin. In his work “On People’s Representation,” he wrote: “The power must be stronger, and freedom must be less, the more disparate and opposite the social elements are” (Chicherin 1899). Otherwise, there’s no way to deal with the turmoil… The organization is also a fundamental condition for the existence of freedom itself. Without organization, democracy and freedom degenerate into revolutionary and destructive elements. In other words, democracy degenerates into ochlocracy. And the power of the crowd makes it impossible for the freedom to manifest itself in reality. In this case, it remains a good wish, an “abstract good”, “we tried our best”, but not as a tangible benefit for the citizens of the state as a trinity of territory, population and power (Hauriou 1929). Maurice Hauriou noted that the absence of organization means a return to the herd state (Hauriou 1929). According to Maurice Hauriou, any form of organization is always preferable to its absence. Even in the most egregious case, he has described: “Even if the organization was limited to the organization of a gang armed for war, robbery and prey, the internal social order of this gang would still be higher than the internal order of the human herd…” (Hauriou 1929). At the same time, the social organization always opposes the revolutionary spirit. The reason is simple. Revolution always destroys the organization. But then a new organization is created, a new state is built. And often the builders of this state are called reactionaries for some reason. Although, of course, they cannot be revolutionaries by definition. At least because they obey the fundamental, objective laws of power and the needs of any society in solving public affairs. But it is obvious that in reality there is a restoration of public power, the establishment of legal order, which was destroyed during the revolutionary storm. The implementation of the digital economy program in Russia definitely requires thoughtful and meticulous work. It may sound a little trivial, but I remember Professor Kazantsev’s ironic remark about the desire of certain historical characters to change the country at once. It does not matter if it is about building a communist society, or about establishing market relations. All these impulses in recent Russian history are united by a completely drastic approach – to do everything promptly and at once. But the result is a… “carnival” (Kazantsev 2001). At the same time, the population, which by the will of not so much fate as these historical personalities gets to such a carnival, cannot have fun on it. As a rule, the situation is exactly the opposite. Carnival turns into a “feast” of sadness and often grief…. It is obvious that negative conceptions of the state are not able to ensure stable development, achievement of the common good, and, consequently, the real legal state, the state of justice. In particular, it is impossible to build an effective digital economy with a negative state concept. And in order to avoid such repetitions, it is necessary to consider the concepts of “state” and “law” as valuable phenomena, independent of ideology. In my opinion, Professor Kazantsev was very precise in this regard. Thus, he wrote on this occasion: “In the most general sense, the positive theory of public law is the theory of a positive legal vision and interpretation of state law. This is precisely the positive view that

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approves, proclaims and researches the state as a positive value and the highest legal achievement of civil society development in its activity” (Kazantsev 2001).

4 Conclusion It should be emphasized that an individual’s full implementation of his or her rights is possible only within a legal and civil framework, when the public authorities guarantee these rights by force of coercion. The state and the right are the greatest achievements of a human civilization as the humanity transfers from a wild state to a legal one. The opposition between freedom and law is a consequence of their radical, one-sided perception. For the normal functioning of the state, it is necessary to have appropriate institutions and organization. Only a positive state theory is able to indicate the path of consistent, stable development of the country. The lack of attention to the theoretical problems of the state and law leads to various failures in the field of public administration. The fight against the Darknet should become the most important task of law enforcement agencies. The digital economy also implies the introduction of cyber-control over the production of goods and services that are most important for people. And most of all – food products, medicine and medical services.

References Atamanchuk, G.V., Stepashin, S.V., Shakhray, S.M.: Gosudarstvo, gosudarstvennoe upravlenie, gosudarstvennyy audit v Rossiyskoy Federatsii (sushchnost yavleniy i mexanizmy ikh realizatsii) [State, Public Administration, State Audit in Russia (The Essence of Phenomena and Implementation Mechanism)] (2012). (in Russian) Atamanchuk, G.V.: Teoriya gosudarstvennogo upravleniya: uchebnik [Theory of Public Administration] (2010). (in Russian) Voloshin, M.A.: Rossiya raspiataya: sbornik statej i stihov [Russia Crucified: a collection of articles and poems]. Composed by V.I. Tsvetkov, Introduction and comments by E.S. Mendelevich. Agentstvo Pan (1992). (in Russian) Hegel, G.V.F.: Philosophy of Law (1990). (in Russian) Engibaryan, R.: Mnogolikaya demokratiya: vremya pereocenki cennostei [Multifaceted Democracy – It’s Time to Re-Evaluate Values]. Mezhdunarodnaya zhizn [International Affairs] (2017). (in Russian) Zor’kin, V.D.: Pravo v cifrovom mire. Razmyshlenie na poljah Peterburgskogo mezhdunarodnogo juridicheskogo foruma. Rossijskaja gazeta – Stolichnyj vypusk, 30 May 2018, # 7578 (115), S. 1, 4. https://rg.ru/2018/05/29/zorkin-zadacha-gosudarstva-priznavat-i-zashchishchatcifrovye-prava-grazhdan.html. (in Russian) Il’in, I.A. O soprotivlenii zlu siloyu [On the resistance to evil by force], in Il’in, I.A. Put’ kochevidnosti [The way to the obviousness], Moscow: Izdatel’stvo Respublika, 1993, pp. 5– 132. (in Russian)

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Inshakova, A.O.: The response of law to the challenges of high technologies in innovative Russia. Legal Concept 17(4), 6–15 (2018). https://doi.org/10.15688/lc.jvolsu.2018.4.1. (in Russian) Kazantsev, N.M.: Publichno-pravovoe regulirovanie gosudarstvennoi sluzhby: institutsionnofunktsional’nyi analiz [Public legal regulation of public service: institutional and functional analysis.]. Izdatel’stvo RAGS, Moscow, 493 p. (2001). (in Russian) Kozhinov, V.V.: Korennyye razlichiya Rossii i Zapada. Ideya protiv Zakona. Algoritm, 304 p. (2014). (in Russian) Korkunov, N.M.: Russkoe gosudarstvennoe pravo. T. 1. SPb (1909). (in Russian) Leontovich, V.V.: Istoriya liberalisma v Rossii, 1762–1914 [The history of liberalism in Russia] (1995). (in Russian) Morkhat, P.M.: Pravo i iskusstvennyy intellekt [Law and artificial intelligence]. Edited by I.V. Ponkin. Unity Dana Publ., Moscow, 536 p. (2018). (in Russian) Hauriou, M.: La théorie de l’institution et de la fondation (essai de vitalisme social). M. Hauriou, Cahiers de la nouvelle journée, IV, pp. 89–128 (1929). (in Russian) Ponkin, I.V., Redkin, A.I.: Digital ontologies of law and digital legal space. Perm Legal Almanac. Annu. Sci. J. 24–37 (2019). (in Russian) Ponkin, A.V., Redkina, A.I.: Artificial intelligence from the point of view of law [Iskusstvennyy intellekt s tochki zreniya prava]. Vestnik RUDN. Ser. Legal Sci. 22(1), 91–109 (2018). (in Russian) Soloviev, V.S.: Law and morality. Russian philosophy of law. Ed. by V.P. Salnikova, St. Petersburg (1999). (in Russian) Struve, P.B.: Intelligentsia and Revoljucija [Intelligentsia and Revolution]. Collection of articles about Russian intelligentsia, Vekhi (2007). (in Russian) Tarle, E.: Napoleon [Napoleon] (2008). (in Russian) de Tocqueville, A.: Democracy in America (1994). (in Russian) Chicherin, B.N.: Moskva sorokovykh godov [Moscow of the forties]. Chicherin B. N. Vospomina-niia: v 2 t. [Reminiscences; in 2 vols]. Moscow Publishing house named after Sabashnikovs, vol. 1, pp. 132–362 (2010). (in Russian) Chicherin, B.N.: Mera and granicy [Measure and Boundaries] Neskol’ko sovremennykh voprosov. M., 1862. 264 s. Pereizdanie, M., 265 p. (2002). (in Russian) Chicherin, B.N.: O narodnom predstavitel’stve. [On national representation]. M., Tipografija Tovarishhestva I. D. Sytina Publ, 838 p. M. (1899). (in Russian) Dershowitz, A.M.: Why Terrorism Works. New Haven and London (2002) Inshakova, E.I., Ryzhenkov, A.Y., Inshakova, A.O.: Neo-industrialization of the Russian economy: technological and digital development. 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. 239–250. Springer Science+Business Media, Cham (2019) Kamolov, S.G.: Digital public governance: trends and risks = Governo pubblico digitale: tendenze e rischi. J. Const. Hist. Giornale di Storia Costituzionale 33(1), 185–194 (2017)

Clustering and Development of Information and Telecommunication Technologies as Factors for Overcoming the Digital Divide of Regions Anna N. Zhilkina1(&), Marina V. Gracheva2 , Marina B. Trachenko1, Ol’ga D. Gaisha1, and Vladimir A. Dzhioev1 1

State University of Management, Moscow, Russian Federation [email protected], [email protected], [email protected], [email protected] 2 Moscow State University, Moscow, Russian Federation [email protected]

Abstract. The rapid development of digital and telecommunication technologies provides tremendous opportunities for the economy and the state. At the same time, the level of digital development is one of the factors of social imbalances. Currently, the level of digital inequality is a problem not only of individuals, but also of regions and countries. Informatization provides ample opportunities for the society organization, in particular, the spread of integration processes. One of these integration forms is clusters, the level and effect of which in developed countries demonstrates the growth of competitiveness, the development of entrepreneurship and innovation. Clustering contributes to the cooperation of participants, their information interaction and mutually beneficial cooperation. The goal of this study is to assess the dependence of clustering and the level of digital development of world economies. As a result of the analysis of the development indicators of the field of information and telecommunication technologies and the level of cluster development, there is a moderate relationship between the studied factors, while the connection is strengthened when the focus groups are narrowed to the countries of Europe and the Middle East. In the framework of the research, methods of bibliographic, logical and correlation analysis were used. Keywords: Information and communication technologies Digital economy
Cluster
Cluster policy


Digital divide


JEL: O33

1 Introduction On the one hand, the development of the sphere of information and telecommunication technologies (hereinafter ICT) helps to expand the life opportunities of people, facilitate work and increase productivity through the automation of labor-intensive processes. On the other hand, it sets restrictions for those categories of the population that © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 459–466, 2020. https://doi.org/10.1007/978-3-030-47945-9_51

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are not capable, for various reasons, of being part of information processes. In general, this process is fraught with risks, the most important of which are the following: social (job cuts, obsolescence of professions and skills); risks of the emergence of new and “broad” competencies; the risks of mass online education; risks associated with the level of digital competencies of the population. At the level of the main forms of social inequality, which consists of political inequality (including civil inequality and inequality before the law), productive inequality (in terms of wealth, poverty), inequality of life chances (opportunities), inequality in access to public goods (Mount 2008) we can define the digital inequality, the form of inequality caused by the rapid development of science and technology. ICT development can be described as a “global information revolution”, which has a direct impact on such areas of public life as politics, economics, finance, science, culture, etc. (Shinyaeva and Slepova 2019). Scientific researchers have various points of view regarding the forms of manifestation of the digital divide (Mal’sagova 2016; Shcerbakova 2013; Kudrejko and Belyackaya 2014; Srinuan and Bohlin 2011; van Dijk 2002), based on the gap in access to information and lack of basic digital experience.

2 Literature Review In the context of rapidly changing realities, access to digital information and relevant life opportunities becomes another factor of the society stratification, which contributed to the emergence of foreign and domestic studies of this process. Currently, there is no single interpretation of the concept of “digital inequality.” In general, digital inequality refers to the dynamics of the introduction of digital technologies in various spheres of public life (Shinyaeva and Slepova 2019). There are various understandings regarding the place of digital inequality in the general system of social imbalances. While some say that digital inequality is a form of social inequality (Dobrinskaya and Martynenko 2019), A. Fomin emphasizes that “digital inequality leads to an increase in economic and social inequality” (Fomin 2019). K. Mal’sagova characterizes “digital inequality” as a situation of differences in society between those social groups that have access to modern digital technologies and communications (primarily to the Internet), and those that do not have such an opportunity (Mal’sagova 2016). Malsagova proposes to single out: the difference in the levels of ICT development between different countries, regions, age and social groups, as well as the gap in access to information between different social groups. It is also noted that it was the development of ICT that contributed to the transformation of various social institutions and a change in the nature of work and people’s lifestyle. L. Shcherbakova identifyes 2 forms of digital inequality: reproductive and dynamic. Reproduction form is a projection onto an existing inequality, and dynamic form is a consequence of the information gap (Shcerbakova 2013). In identifying the factors that provoked the digital divide among groups of people, M. Kudrejko and T. Belyackaya identify two main factors: the level of real disposable income and the level of education in the field of ICT (Kudrejko and Belyackaya 2014).

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O. Shinyaeva and O. Slepova determine the following risk factors that contribute to the strengthening of the digital divide: – insufficiently developed infrastructure; – the high cost of Internet services; – a rather low motivation of people and the readiness of different population groups to use ICT. At the same time, anti-risk factors were determined (i.e., factors contributing to the reduction of the digital divide): – the willingness of individuals to master computer literacy; – development of federal and regional programs for the formation of competencies of the population in the field of information technology (Shinyaeva and Slepova 2019). It is possible to overcome the digital divide by educating, educating and stimulating social groups, increasing the personal motivational readiness of individuals for selfeducation and the development of ICT. In the new conditions, social institutions that traditionally perform educational functions (institutions of basic and additional education, public libraries, etc.) should take on the tasks of creating a new information culture, eliminating computer illiteracy and passivity. Along with the growing processes of population polarization due to the development of the ICT sphere, some transformations contribute to a qualitative change in the population life, the development of innovation and the knowledge economy. Such processes pave the way for the development of integration processes in public life. Representatives of business, science and government show interest in integrated forms of unification of economic entities, which is due to the development of scientific and technological progress, competition and the increased importance of intangible assets. One of these forms of integration is clusters, which are a group of interconnected companies and related organizations concentrated in a certain territory in the relevant industry (Porter 1998). Territorial nearness is one of the key characteristics of clusters. Along with this, the development of the cluster involves the interaction of business, government, science and education. Cluster structures are also characterized by such features as information exchange and the accumulation of experience by participants, the functioning of many representatives of small and medium-sized businesses, and high flexibility to introduce new technologies. Structurally a cluster can be represented in the form of a core (usually represented in the form of large enterprises of several industries connected by a single technological chain), around which a group of organizations is formed, represented in the form of research institutes, innovative and financial organizations, infrastructure enterprises, etc. When organizing clusters, special emphasis is placed on small and medium-sized enterprises, which in practice account for more than half the number of participants and are characterized by flexibility and adaptability to the introduction of innovations. The number of participants in the cluster belonging to the cluster specialization industry, in practice, is at least 30–50 participants.

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In addition to the universal development factors that are characteristic of all types of clusters, such as capital, raw materials, labor, and technology, it is advisable to single out local development factors characteristic of clusters of a certain type. Thus, the following factors of their development are distinguished for high-tech clusters: knowledge overflows (Grabher 1993), institutional environmental conditions of the cluster (Saxenian 1994), government preferential policies (Wen 2003), and a favorable atmosphere for attracting scientists (Zhao 2004), the level of ICT development (Babenko et al. 2019). Clustering affects not only the development of individual components of the cluster (increasing competitiveness at the regional and international levels), the cluster itself due to the synergy effect during the interaction of its participants, but also the development of the regional economy by accelerating the innovation process, improving the living standards of the population, increasing productivity etc. (Trachenko and Gaisha 2018). In the framework of the goal of the study, which is to assess the dependence of the levels of digital and cluster development of the economies of the world, a correlation analysis was carried out, the methodology and results of which are presented in paragraphs 3–4.

3 Methodology Correlation analysis was carried out on the generated data array for 129 countries. The level of digital technology development is characterized by the ICT Development Index (IDI), and the level of clustering is characterized by the State of cluster development sub-index of the Global Competitiveness Index (GCI). In order to assess the tightness of the relationship between the studied parameters, the Spearman correlation coefficient was used, which is due to the lack of a normal distribution and the index character of the indicators. When using Spearman’s rank correlation coefficient, the assessment of the tightness of the relationship between the attributes is as follows: the values of the coefficient of 0.3 or less are characterized by indicators of weak correlation; values between 0.4 and 0.7 are indicators of moderate correlation, and values of 0.7 and more are indicators of high correlation. A fragment of the studied actual indicators of the studied parameters, as well as the results of the study are presented in the next paragraph.

4 Results A correlation analysis of the relationship between the levels of digital and cluster development was carried out on statistical data for the countries of the world: ICT Development Index for 2017 and the State of cluster development subindex for 2017 and 2018. Table 1 shows a fragment of the generated data array. During the analysis of the relationship between the indicators, the Spearman’s rank correlation coefficient was 0.515, which is defined as moderate correlation of the

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Table 1. The values of the ICT development index for 2017 and the cluster development indicator of the global competitiveness index for 2017–2018. (Compiled by the authors based on open data (The Global Competitiveness Report 2017; The Global Competitiveness Report 2018; Measuring the Information Society Report 2017).) №

Economics

IDI value (2017)

1 2 3 4 5

Iceland South Korea Switzerland Denmark United Kingdom Hong Kong Netherlands Norway Luxembourg Japan Sweden Germany New Zealand Australia France … Czech Portugal Russia Slovakia Italy … Chad

6 7 8 9 10 11 12 13 14 15 … 37 38 39 40 41 … 129

8,98 8,85 8,74 8,71 8,65

State of cluster development value (2017) 4,1 4,6 5,1 4,7 5,4

State of cluster development value (2018) 4,2 4,6 5,5 4,8 5,2

8,61 8,49 8,47 8,47 8,43 8,41 8,39 8,33

5,3 5,4 5,0 5,0 5,1 5,0 5,4 4,1

5,4 5,4 5,0 4,9 5,3 5,1 5,5 4,3

8,24 8,24 … 7,16 7,13 7,07 7,06 7,04 … 1,27

4,0 4,7 … 3,9 4,2 3,5 3,8 5,3 … 2,7

4,8 4,2 … 4,0 3,2 4,3 3,5 3,8 … 2,8

studied parameters. Taking into account the time lag, the coefficient increased to the level of 0.565 (i.e., the IDI indicators for 2017 and the State of cluster development for 2018 were studied). Moreover, moderate correlation allowed us to make an assumption about the presence of territories where relationship is strengthened and, conversely, weakened. So, the closeness of the relationship between the studied parameters was determined by the generated data sample (Table 1), disaggregated by all countries by territorial attribute, and taking into account the time lag, the results of which are presented in Table 2.

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Table 2. The results of the analysis of the assessment of countries correlation in 2017–2018. (Compiled by the authors based on open data (The Global Competitiveness Report 2017; The Global Competitiveness Report 2018; Measuring the Information Society Report 2017).) Evaluation parameters

Asia and Oceania

Africa

Middle East

Europe

Number of countries in the study sample Spearman’s correlation coefficient The value of the Spearman correlation coefficient taking into account the time lag (1 year) Established correlation

24

32

14

36

North and South America and the Caribbean 22

0,373

0,301

0,748

0,724

0,510

0,390

0,421

0,779

0,738

0,471

Moderate (close to weak)

Moderate (close to weak)

High

High

Moderate

Based on the data obtained, it was found that the greatest closeness of communication is present in the countries of Europe and the Middle East, while the connection is practically absent in Africa and Asia. In Europe, examples of successful practices include The Software-Cluster, a German cluster for developing organizational management software, the Cosmetic Valley French cluster, the Mirandole biomedical cluster, and the Sassuolo ceramic cluster in Italy (Labory and Prodi 2014). Also, according to the Table 2, there is a positive dynamics of the correlation coefficient taking into account the time lag. Such dynamics can be explained by the cyclical nature of development: the development of the digital economy paves the way for more successful development of cluster formations. In turn, clusters facilitate the exchange of information, knowledge and technologies between participants, access to international levels and overcome inequalities in the development of regions - innovative, economic, social and digital.

5 Conclusions Зaфикcиpoвaнныe peзyльтaты нacтoящeгo иccлeдoвaния пoдтвepждaют выдвинyтoe пpeдпoлoжeниe o нaличии зaвиcимocти мeждy ypoвнeм paзвития ИКT и клacтepным paзвитиeм. Cтpeмитeльнoe paзвитиe ИКT cпocoбcтвyeт coздaнию блaгoпpиятныx ycлoвий фyнкциoниpoвaния клacтepныx oбpaзoвaний. Cyщecтвyeт и oбpaтнaя cвязь: клacтepизaция ycкopяeт paзвитиe yчacтникoв интeгpиpoвaнныx фopм

Clustering and Development of Information and Telecommunication Technologies

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oбъeдинeния, гeнepиpyeт пoтpeбнocть в нoвыx цифpoвыx peшeнияx, cтимyлиpyeт paзpaбoткy нoвыx инфopмaциoннo-тeлeкoммyникaциoнныx тexнoлoгий, cпocoбcтвyeт peшeнию пpoблeмы цифpoвoгo нepaвeнcтвa peгиoнoв. The recorded results of this study confirm the hypothesis that there is a relationship between the level of ICT development and cluster development. The rapid development of ICT contributes to the creation of favorable conditions for the functioning of cluster entities. There is also a converse correlation: clustering accelerates the development of participants in integrated forms of association, generates a need for new digital solutions, stimulates the development of new information and telecommunication technologies, and contributes to solving the problem of regional digital inequality. The analysis did not take into account other equally important factors affecting the development of clusters and, conversely, affecting the development of digital and telecommunication technologies, which may be the direction for further research.

References Babenko, V., Perevozova, I., Mandych, O., Kvyatko, T., Maliy, O., Mykolenko, I.: World informatization in conditions of international globalization: factors of influence. Glob. J. Environ. Sci. Manage. 5(SI), 172–179 (2019) Dobrinskaya, D.E., Martynenko, T.S.: Perspectives of the Russian information society: digital divide levels. RUDN J. Sociol 1, 108–120 (2019) Fomin, A.A.: Formation of the information space in modern russia: problems and prospects. Polit. Sci. 19(2), 192–195 (2019). Working paper Izvestiya of Saratov university. New series. Series of Sociology Grabher, G.: The Embedded Firm: On the Socioeconomics of Industrial Networks. Routledge, London (1993) Korableva, A.A., Karpov, V.V., Kapoguzov, E.A.: Interconnection of territorial innovation clusters and sustainable development of the region. Actual Probl. Econ. Law 4(48), 800–815 (2018) Kudrejko, M., Belyackaya, T.: ICT clusters - the driving force of intellectualization and electronization of the economy. Sci. Innov. 134, 51–54 (2014) Labory, S., Prodi, G.: Structural transformations in clusters: the cases of biomedical and ceramics. Ind. Econ. Overview 14, 95–120 (2014) Mal’sagova, K.B.: Digital inequality in the modern Russian society. Sci. Notes Young Res. 4–5, 74–79 (2016) Measuring the Information Society Report, vol. 1 (2017). https://www.itu.int/net4/ITU-D/idi/ 2017/. Accessed 23 Sept 2019 Mount, F.: Five Types of Inequality (2008). https://www.jrf.org.uk/report/five-types-inequality . Accessed 23 Sept 2019 Porter, M.E.: Clusters and the new economics of competition. Harv. Bus. Rev. 76(6), 77–90 (1998) Saxenian, A.L.: Regional Advantages: Culture and Competition in Silicon Valley and Route 128. Harvard University Press, Cambridge (1994) Shcerbakova, L.N.: Social inequality as an obstacle in a way of information society. Bulletin The Reporter of Volzhsky University after V.N. Tatischev, no. 2(28), p. 178 (2013)

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Shinyaeva, O.V., Slepova, O.M.: Information digital inequality of population: risk and anti-risk factors. Polit. Sci. 19(1), 53–61 (2019). Izvestiya of Saratov university. New series. Series of Sociology Srinuan, C., Bohlin, E.: Understanding the digital divide: a literature survey and ways forward (2011). https://www.econstor.eu/bitstream/10419/52191/1/672623358.pdf. Accessed 23 Sept 2019 The Global Competitiveness Report (2017). https://www.weforum.org/reports/the-globalcompetitiveness-report-2017-2018. Accessed 23 Sept 2019 The Global Competitiveness Report (2018). http://reports.weforum.org/global-competitivenessreport-2018/. Accessed 23 Sept 2019 Trachenko, M.B., Gaisha, O.D.: Control over funding for innovation territorial clusters in Russia. Financ. Credit 24(8), 1938–1952 (2018) van Dijk, J.: A framework for digital divide research. Electron. J. Commun./Rev. Commun. Electron. 12(1) (2002). http://www.cios.org/EJCPUBLIC/012/1/01211.html. Accessed 23 Sept 2019 Voronov, A.S., Leont’eva, L.S.: On the issue of types of regional innovation. Stat. Econ. 3, 8–12 (2016) Wen, L.: Analysis of locational factors of high-tech enterprises. Enterp. Manage. 1, 103–109 (2003) Zhao, Y.: Economics of High-Tech Industry. Economic Publishing House, Beijing (2004)

Digital Innovation Technologies in Public Governance: Budget Geolocation System Sergei G. Kamolov(&) and Aleksandra A. Smagina Moscow State Institute of International Relations MGIMO, Moscow, Russia [email protected], [email protected]

Abstract. This article deals with the use of modern IT solutions in the field of public and municipal governance. The aim of the article is to develop a specific model that allows to deploy integrated management systems that are able in real time to interconnect the processes shaping in social networks (reflecting the mood and opinions of citizens) with legal, budgetary and administrative processes aimed at meeting the needs of citizens at the regional and municipal levels. As a result, the elaborated solution is designed to contribute to the implementation of the federal project “Digital Public Governance” of the national program “Digital Economy of the Russian Federation” and offers a methodological framework of digital technologies in the field of public governance, involving the creation of an ecosystem in which digital data provides effective interaction of business, government and citizens. The outcome of the application is the increase in the responsiveness of the authorities to the emerging needs of citizens. As recommendations, the authors emphasize the need to accompany the implementation of the solution with extensive training of public and municipal employees. The choice of methods is determined by the specifics of working with software that allows to analyze social networks, and represents the method of content analysis and logical-linguistic analysis with subsequent modeling and formalization of the data. Keywords: Budget geolocation
Innovations
Public governance Networks
Social media
Digitalization
Digital economy JEL Classification: H110





K300

1 Methodology While preparing the study, methods of observation, measurement and forecasting were used. The core of research is the elaboration of the algorithm of the use of social media date and its automated integration in the decision-making system. When working with primary data, the method of content analysis and logical-linguistic analysis were used, followed by modeling and formalization of the obtained data.

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 467–475, 2020. https://doi.org/10.1007/978-3-030-47945-9_52

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2 Introduction Nowadays social networks, the Internet, media, blogs, forums and other social media are both a place of storage of significant information arrays, and an arena of information wars, manipulation of consciousness and a powerful tool for shaping public opinion. We estimate that up to 95% of the information in the networks does not have new content, consisting primarily of “reposts”, “retweets”, “shares”. Nevertheless, social networks still can be regarded as a valuable source of information related to the citizens’ dissatisfaction, expectations, moods and intentions. To a certain extent, social media serve as a mirror of reality in which we exist. In order to obtain reliable and reality-reflecting information for it subsequent use to make public management decisions, it is necessary to develop and implement a special methodology for its collection and interpretation. Currently, the use of special technologies and tools by a number of Russian companies allows public and municipal authorities to analyze and interpret big data, as well as to obtain accurate results in the “space-time” dimension. Existing Russian technologies make it possible to analyze and detect information attacks, as well as sources of dissemination of socially dangerous information in the early stages (Eom et al. 2018). To properly study, compare and apply the data retrieved from social networks, we need to develop a special methodology. In our study we are formalizing the technical capacities that exist on the Russian IT market, especially those of Kribrum company, one of the leaders in the Russian market of smart systems of social networks monitoring, and converse technical elements into administrative algorithms, thus modeling creation and integration of the “Comprehensive monitoring system of citizens’ satisfaction with the implementation of priority projects and development programs” (hereinafter - CMS). Kribrum markets its technologies since 2010 and is considered a reliable supplier for public and corporate sectors. The system analyzes open public segments of social networks (Facebook.com, Vk.com, Instagram.com, Odnoklassniki.ru), blogs, forums, chats, video hosting (Youtube.com), Telegram channels, online media, news agencies and thematic portals. Today the public network space comprises over 310 million accounts in social networks and more than 22 thousand of online media. The open information flow in Russian language channels 140 million text messages and 40 million images daily. Kribrum system is able to analyze up to 85% of the public information flow in the range from 15 s to 40 min and generate a social profile of news sources, graphs of real connections of user accounts, determine the intensity of the network discussion and its emotional character. Therefore we assume that proposed CMS can be true smart information system for public and municipal authorities enforcing their strategic and operational management based on extensive and geographically linked data. CMS reflects three main principles: – Citizens’ network messages are geo-tagged; – Messages are processed in real time mode; – Decisions are made basing on geo-tagged budget expenditures and data on previously adopted decisions at a specific geolocation point.

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The set of principal characteristics of the system allows the governing bodies not only to immediately respond, but also to predict potential points of tensions and dissatisfaction of the citizens. The current study examines the possibilities of applying digital technologies of the CMS-type in public administration, using the case of one of the Russian priority project “Safe and high-quality roads”. Certain aspects addressed in this article were studied in the works of different scholars: N. Negroponte (Negroponte 1996), A. Toffler (Toffler et al. 1984) and J.J. Kudela (Kudela 2010). The constructive potential of using social networks as a management tool was repeatedly presented by the reputable Russian technological entrepreneurs I. Ashmanov (Ashmanov 2008) and N. Kasperskaya (Kasperskaya 2018). Some issues, in particular, the need for tighter coordination of managerial decisions and the information technology system in public governance were addressed in studies of S. Kamolov (Kamolov 2017) and P. Artemova (Kamolov and Artemova 2017).

3 Results A practical solution to the problem of increasing the efficiency of budget execution on the basis of CMS is proposed. The implementation is designed to reflect the principle of transparency of the Budget System of the Russian Federation and interlinking management decisions with data on financing, messages in social networks and geotagging. As a result of the integration of social media and budget information within the CMS a universal tool for decision-making at the federal, regional and municipal levels of government is shaped. Thus, clustering messages on a thematic and geographical basis allows focusing on relevant and important issues tied to their geographical location. The system allows decision-makers to determine the responsible authority and the reasons for the citizens dissatisfaction in real time. Analytical breakdown of the reviews into positive and negative allows us to identify a correlation between them and assess the quality of the implementation of decisions taken. The thematic distribution of messages allows geo-localization of the problems revealed by Internet users and immediate actions to protect the legitimate interests of citizens.

4 Discussion CMS Concept. Social media monitoring is an opportunity for the management systems at various levels to pick up signals from citizens and their perception of the current activities of government bodies, priority projects and initiatives being implemented (at the stage of planning, implementation, as well as projects accomplishment).

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Conventional social media monitoring systems used for public and municipal governance have a number of fundamental vulnerabilities. Firstly, their design to serve the needs of political-campaigns. It focuses the attention of authorities on the sources of discontent or provocative information sources, and, to a lesser extent, on the matters of socio-economic processes that are discussed on social networks. Secondly, social networks analytics is a tool for reaction to events, and not for proactive roles. Thirdly, the analysis of social networks is carried out in isolation and without interconnection with the analysis of managerial and, most importantly, budget decisions that preceded signals of approval or dissatisfaction of citizens who stay active in social networks. It is this methodological gap that does not allow such promising initiatives as “Dobrodel” or “Active Citizen” to be fully realized. It is important to take into account that the bureaucratic systems are very adaptable to various innovations and theoretically can give out the activity of citizens as the result of their work (for example, citizens often take photos of irregularities on the sidewalks, the responsible department closes them up, but no one deals with the cause of these irregularities, the motivation for proactive departmental control is lost). At the same time, it is obvious that behind each pit on the sidewalk, the electronic queue for kindergarten or crowded classes there is a management decision, which in the system of public and municipal governance has evident budgetary dimensions and specific responsible executives. Thus, the digitalization of management decision-making (the implementation of intelligent information systems in the public and municipal management) based on data from social networks requires such programs to be able to determine: • availability of the public program, budget financing and target indicators classified by region/area of network activity (financial allocation); • presence of a public authority or agency responsible for bringing and developing budget financing (departmental breakdown) by region and field of activity; • geographical location of financing, i.e. map funding to a specific object in geographical coordinates (financial geo-location/geo-tagging) (Eermak 2018). In this configuration, CMS is able to solve two key tasks: • proactive early response to signals of deterioration in the management of priority projects based on information from social networks; • creation of an objective picture of the current state of priority projects for making subsequent solid management decisions. Required CMS functionality includes: • measurement of the citizens attitude towards the effectiveness of the implementation of public priority projects and programs; • classification of regions and agglomerations by level of satisfaction with the quality of public management; • geo-tagging of problems within the implementation of priority projects in the regions; • automatic determination of responsible departments and the history of budget allocations related to specific geo-tag.

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CMS Design Methodology. CMS relies on feedback of Internet users. Thematic and financial tagging of messages allows them to be classified according to the level of importance and risks, and also to provide geolocation of the intensity of the thematic information flow of social networks - that is, to determine where and at what time there is an increase in messages, reviews or dissatisfaction of network users, caused, for example, by utilities or road conditions inconvenience (Wang et al. 2014). The citizens dissatisfaction emphasized in the network is a reaction that carries specific “space-time” dimensions. Space tags relate to one of three levels of government: federal, regional, or municipal. Each level of governance is provided with the appropriate budget, which, in turn, consists of a set of public or municipal programs. Therefore, each event of citizens dissatisfaction can and should be correlated with a specific responsible authority. Thus, the implementation of CMS should result in a geotagged budget expenditures through matching the geography of project financing and mapping feedback from social media, which should be taken into account by the governing bodies for operational and strategic management. Stages of CMS Design. Suppose there is a high citizens activity in regional social network caused by and related to poor quality of the roads (Wang et al. 2018). In this case, the algorithm for practical use of the system will be as follows. Stage 1. Classification of roads in the region. All roads in an agglomeration or region are legally classified on the basis of their affiliation, importance and the agency responsible for the quality and safety of the road. In accordance with current legislation, all roads in the Russian Federation can be divided into three groups of federal, regional and local significance. Stage 2. Information profile creation for every road in the region. For each road, which is fully or partially located in the region, a digital passport is compiled containing information about the responsible authority, length, budget expenses, warranty period (for roads after repair). As a result, the automobile map of the region will be divided into zones of responsibility of departments, owners, filled with geometries of financing for construction and repair work. Stage 3. Collection of the social media posts about roads in the region. Messages are collected using the Kribrum-type CMS for each populated area from regional specialized social media and communities, especially those dedicated to assessing the situation on the roads. The message array is divided by geography, messages containing a tag of a specific region are detected (Katz-Bassett et al. 2006). It is possible that after clustering messages by region, an array of references without geotags will remain. This untagged array is subject to offline analytical processing.

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Stage 4. Thematic classification of messages for each road. All messages that are assigned a tag of a certain road are further classified into three main groups: safety of drivers, passengers and pedestrians; emergency situations; regulatory condition of the road (Cao et al. 2014). Stage 5. Determination of the emotional intensity of messages within each thematic group. Messages within the thematic group are moderated based on the emotional intensity and are divided into three groups of emotional intensity: positive reviews, complaints, and neutral posts. Stage 6. Definition of “specific weight” of posts. Each group of messages is assigned to its own score, which is subsequently affixed to the reviews. The assigned score is the basis for assessing the “specific weight” of the message. As a result of mathematical calculations, adjusted for the median of visibility of the author’s messages (likes, reprints, comments), the final “weight” of the message is calculated. As a result of determining the “specific weight” of messages, it is possible to objectify data on reviews and satisfaction/dissatisfaction of Internet users. In addition, the points system allows you to identify significant and important problems, as well as identify key “victories” of the authorities, which have become noticeable to the audience of social media. All points received are summarized for each key within each topic (Emergency situations, Normative condition of the road, Road safety). Stage 7. Formation of a perception matrix of the region. All data obtained are grouped in the form of a matrix of the region as a whole (Table 1). Table 1. The matrix of perception of the region. Federal roads

Regional roads

Local roads

“Specific “Specific “Specific “Specific “Specific “Specific weight” of weight” of weight” of weight” of weight” of weight” of positive” negative positive” negative positive negative Life safety

Emergency situations Regulatory condition of the road

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Each of the elements of the matrix can be decomposed for more detailed analysis. Stage 8. Formation of the integrated matrix of each road. As a result of the data obtained at stages 1–7, an integrated matrix for each road is compiled, which looks as follows (Table 2). Table 2. Integrated road matrix. Life safety

Emergency situations

“Specific “Specific weight” of weight” positive” of negative

“Specific weight” of positive”

Regulatory condition of the road

“Specific “Specific “Specific weight” of weight” of weight” of negative positive” negative

Name of the road: Type of the road: federal / regional / local Responsible. Authority: Length: Budget expenses: Warranty period repaired roads):

(for

Sources of Information for CMS. Sources of information for the system represent four groups of network resources: • Organizational and legal (establishing the authority and responsibility of the event (object) at a particular point in geolocation) (Inshakova 2018); • Budgetary and financial (allowing to determine the availability, volume and form of budgetary allocations delivery to the place of geo-tagging of network activity, including information on public procurement tenders; • Social (resources containing the statements of citizens living in the geo-tagged area of the event); • Professional forums (for example, for truck-drivers) containing substantive comments on the subject of monitoring. CMS Application Algorithm. Suppose that the monitoring of social networks indicated dissatisfaction with traffic jams on a particular section of the road. The management algorithm will be as follows in this case: • to localize the place of congestion geographically; • to identify the responsible authority; • to track the availability of financing for repair and other works in this geolocation;

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• to detect this geographical relativeness of a program or financial (budget) documents which informs the governor or the head of the municipality about the history of financing; • the controlling authority will be able to verify the actions of the supervised authority and prevent unjustified performance of work on the same site two or more times. An extended version of the CMS algorithm and methodology is presented in Fig. 1.

1. Roads classification

8. Formation of a perception matrix of the region

9. Formation of the matrix of each road

2. Formation of an information card about each road

7. Definition of "specific weight" of messages

10. Responsible authorities determination

3. Collecting social media posts about roads

6. Messages geotagging

11. Financing tracking

4. Thematic classification of messages for each road

5. Determination of the emotional intensity of messages

12. Managerial decision making

Fig. 1. Algorithm of CMS Application

5 Conclusion The digital transformation and implementation of information technologies in the public governance system should serve the main goal – the increase of the responsiveness of the authorities to the emerging needs of citizens (Tarakanov et al. 2019). Immediate response to network signals, anticipation or prediction should be comprehensive: it is necessary to deal not only with the consequences, but also with the causes of dissatisfaction of citizens. In addition, the use of such tools should be consistent with the operational and strategic goals of the national level. In the context of the Russian Federation, it is about the implementation of the presidential decree “On national goals and strategic objectives of the development of the Russian Federation for the period until 2024.” Such a correspondence, however, should not be a simple formality, but should be a mechanism organically integrated into the system that optimizes the interaction in the “citizens-authorities” format.

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The introduction of CMS must necessarily be accompanied by a large-scale training of public and municipal employees, both in order to develop software and hardware systems and technology for monitoring network space, and to understand and master the goals and objectives of implementing such solutions. In this regard, the issue of the personnel training with the necessary competencies and potential for professional and personal development remains open.

References Ashmanov, I.S.: ZHizn’ vnutri puzyrya: Kak menedzheru vyzhit’ v investiruemom proekte. Mann, Ivanov i Ferber, M. (2008). 208 c Cao, J., Zeng, K., Wang, H., Cheng, J., Qiao, F., Wen, D., Gao, Y.: Web-based traffic sentiment analysis: methods and applications. IEEE Trans. Intell. Transp. Syst. 15(2), 844–853 (2014). Art. no. 6684285 Eermak, J.: Social media Big Data based transport infrastructure design. J. Eng. Appl. Sci. 13(2), 529–532 (2018) Eom, S.-J., Hwang, H., Kim, J.H.: Can social media increase government responsiveness? A case study of Seoul. Korea. Gov. Inf. Q. 35(1), 109–122 (2018) Inshakova, A.O.: Effective mechanisms of law enforcement as a basis of modern democratic statehood of the Russian Federation. Legal Concept = Pravovaya paradigma 17(3), 6–10 (2018) Kudela, J.J.: Elektronnoe pravitel’stvo i uslugi: pol’zovatel’-grazhdanin ili pol’zovatel’-klient? VSHGA MGU, 16 February 2010. Seminar “Podderzhka elektronnogo pravitel’stva ot Evrosoyuza”. http://www.anspa.ru/files/sem2011/kudela/kudela2.pdf. Accessed 20 Aug 2019 Kamolov, S.G., Artemova, P.V.: Informacionnye tekhnologii dlya gosudarstvennyh sluzhashchih. Moskva (2017) Kamolov, S.G.: Digital public governance: trends and risks = Governo pubblico digitale: tendenze e rischi. J. Const. Hist. Giornale di Storia Costituzionale 33(1), 185–194 (2017b) Katz-Bassett, E., John, J., Krishnamurthy, A., Wetherall, D., Anderson, T., Chawathe, Y.: Towards IP geolocation using delay and topology measurements. In: Proceedings of the 6th ACM SIGCOMM Conference on Internet Measurement, pp. 71–84 (2006) Negroponte, N.: Being Digital. Hodder and Stoughton (1996). 249 p. Obognat’, ne dogonyaya: Natal’ya Kasperskaya: Kak Rossii sohranit’ cifrovoj suverenitet. Rossijskaya gazeta - Stolichnyj vypusk №7510 (47) (2018). https://rg.ru/2018/03/04/nataliakasperskaia-nelzia-dopustit-oborota-v-rf-chuzhih-kriptovaliut.html. Accessed 20 Aug 2019 Toffler, A.: Future shock, vol. 553. Bantam (1984) Tarakanov, V.V., Inshakova, A.O., Dolinskaya, V.V.: Information society, digital economy and law. 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. 3–15. Springer Science + Business Media, Cham (2019) Wang, Z., Feng, J., Xing, C., Xu, G., Xu, B.: Research on the IP geolocation technology. J. Softw. 7, 1527–1540 (2014) Wang, S., Cao, D., Lin, D., Chao, F.: Traffic condition analysis based on users emotion tendency of microblog. Adv. Intell. Syst. Comput. 650, 299–311 (2018)

Towards Sustainable Development Through Bridging Digital Penetration Gaps Evgeniya K. Karpunina1(&) , Anna F. Beilina2, Larisa M. Butova2, Svetlana A. Trufanova3, and Alexander S. Astakhin4 1

3

Tambov State University named after G.R. Derzhavin, Tambov, Russia [email protected] 2 Voronezh State Pedagogical University, Voronezh, Russia [email protected], [email protected] Moscow University for Industry and Finance «Synergy», Moscow, Russia [email protected] 4 Belgorod State National Research University, Belgorod, Russia [email protected]

Abstract. The aim of the article is to study the impact of the digital environment on the economic conditions of economic entities, as well as to assess the gaps between economic development, changes in social relations and environmental well-being. It is proved that gaps in digital penetration can cause the deepening of existing inequalities and risks: digital inequality, social inequality, inequality in the appropriation of benefits, environmental risks. Approaches to assessing the impact of digital artifacts on the environment (in the context of the concept of “circular economy”) and sustainable development of the economic system are investigated. The authors have formed a conceptual matrix of sustainable development in the digital economy, which is differentiated by the subjects of economic activity (individuals, enterprises, the state) and in relation to a specific type of inequality in the digital economy and risks (risks of digital inequality, risks of social inequality, risks of inequality in the appropriation of benefits, environmental risks). The proposed author’s approach makes it possible to develop an optimal set of actions for each subject to level emerging risks and ensure sustainable development of the economic system in the digital environment. Keywords: Digital economy Circular economy


Sustainable development
Inequality
Risks


JEL Classification Codes:: O11


О21
O33
О44

1 Introduction The phenomenal “digital economy” has replaced the traditional industrial economy and transformed the entire familiar system of industrial relations in a short period of time. The use of new types of digital technologies, alternative ways of selection of resources and active introduction of innovations in the processes of development and production of products, the use of information tools of interaction between all economic entities, © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 476–485, 2020. https://doi.org/10.1007/978-3-030-47945-9_53

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formal and informal types of business cooperation and other innovations that erase the previous boundaries, has made new sources of economic growth achievable for a number of digital content industries. Today, digital Finance, digital communications, digital entertainment and media, automotive and robotics contribute to the development of the economy – and this, no less, more than one-fifth of global GDP (22%) (Knickrehm et al. 2016). However, reorientation to new economic conditions can lead to aggravation of existing contradictions of social and economic development. For example, there are problems with access to information systems, especially in the regional context, automation carries significant risks and risks of unemployment (OECD estimates that less than 10% of workers in the OECD region can lose their jobs due to automation, up to 70% of tasks in 25% of workplaces can be automated (OECD 2016), not every individual understands the need for continuous learning and self-development, building digital skills in order to adapt to the digital economy and remain successful. It is even more difficult to achieve sustainability in the context of digitalization. Sustainable development involves the interaction of socio-economic and natural systems, each of which is complex, nonlinear, dynamic and unpredictable. These qualities mean that sustainable development as an end point or a state of equilibrium can be a worthy and useful goal, but will never be achieved (Jaffe and Gertler 2008). However, the scientific community, public authorities and the public are continuously searching for sustainable development mechanisms that enable society to minimize its impact on the environment while maintaining or enhancing the capacity to maintain a desirable quality of life for all. An example of this is the adoption by most developed countries of the concept of “circular economy” and its implementation in practice within the framework of the formation of the Industry 4.0 (Iles 2018). The study of the fundamental vulnerabilities of the digital environment is important for sustainable global economic growth, as well as the balance of its economic, social and environmental components.

2 Methodology The scientific hypothesis of the study is the assumption that in the conditions of digital transformation, the existing gaps between the development of the economy, changes in social relations and environmental well-being are growing. The asymmetry of the global economic system requires a review of approaches to ensuring its sustainable development in the digital environment and a search of enabling tools based on risk minimization. To substantiate the hypothesis, the authors studied the works of scientists on the formation and development of the digital economy. First of all, Tapscott D., who pointed out that the driver of progress in the digital environment is the formalized knowledge and implicit knowledge of management and personnel (Tapscott 1995). Brynjolfsson E. and Kahin B. revealed epochal organizational changes in the system of management, access, market structure and competition in the conditions of digital transformations (Brynjolfsson and Kahin 2000).

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Schmidt E. and Cohen J. illustrate the development of the digital age through changes in the individual, society, politics and economy. They call the digital economy “a rapidly evolving interconnectedness besieged by constant technological innovation” (Schmidt and Cohen 2013). Prahalad C. and Ramaswamy V. in their research focus on changing the relationship between economic and social in the digital environment through the prism of the evolving role of the consumer in the value creation process. Scientists argue that in a world of limitless choice, instant gratification and unlimited opportunities for innovation, manufacturers cannot meet the needs of consumers and maintain the desired growth rate and level of productivity. This can bring the economic system out of balance (Prahalad and Ramaswamy 2010). Attempts of scientists to justify the possibility of sustainable development of the economic system in the context of “man-society-nature” have been made repeatedly. The approaches proposed by A. Pigou (Pigou 1920), Porter M. and van der Linde (Porter and van der Linde 1999; Dernbach 1998), are interesting. The international adoption of the Concept of sustainable development was the result of the search for a compromise between environmental sustainability and socio-economic development (United Nations General Assembly 1987). However, the advent of digital technologies to replace the mechanisms of the traditional economy changes the determinants of sustainable development, there are structural and technological changes in the economic system, and, therefore, there are new threats to the balance in the system “man-society-nature”. The opinions of scholars differ regarding the evaluation of the impact of digital technology on the stability of the economic system: some say that digitization contributes to sustainability, others argue that it creates additional sources of system vulnerability (Karpunina et al. 2019).

3 Results The essence of digital transformations of the economic system is revealed in the changes of the expanded value chain under the influence of external influences from information and communication technologies, breakthrough innovations, artificial intelligence systems and other benefits of digital civilization. Value chains in today’s world are more complex and dispersed, so external influences are becoming more and more significant. Thus, Prahalad C. and Ramaswamy V. note that consumers no longer get value just by buying goods or services (Prahalad and Ramaswamy 2010). Consumers interact with a network of firms and consumer communities to meet their unique preferences. As a result, they accumulate total personal experience and realize it in the form of value created. This situation radically changes the conditions of competition for producers: companies need fundamental changes in the infrastructure for creating value, increasing the openness and accessibility of information and operations for all employees, transforming the nature of relations with consumers towards the establishment of longterm dialogue (Prahalad and Ramaswamy 2010).

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Access to information (as a consequence - more informed decision-making by consumers), global reach (gathering information about firms, products, technologies, prices around the world), networking (the ability of consumers to communicate in an open space independent of manufacturers leads to a change in the model of marketing communications), experimental experience (the use of the digital environment for experiments in the development of new products by consumers), consumer activity (consumer involvement in the process of creating value at all stages, process management, stimulation of other participants in the process) create new conditions for the functioning of economic entities of the digital economy. Through the prism of the real market in this environment, digital penetration gaps are observed, they provoke digital, social inequality and inequality in the appropriation of goods (Sologubova 2017) (Fig. 1).

Digital penetration gaps

Digital inequality

inequality in technical means inequality of human potential unequal conditions for the use of the Internet

Social inequality

inequality in educational opportunities inequality in employment by profession inequalities in relation to social support the emergence of "useless" class

Inequality in the appropriation of goods

rising unemployment due to automation increasing differentiation of the population by income concentration of elite inequality in the interpretation of knowledge and in the realization of opportunities reducing the quality of life of the poor

Asymmetry of the global economic system

Fig. 1. Types of inequalities as a reflection of digital penetration gaps

At first glance, it seems that lower barriers to entry in a digitalized world are empowering and leading to a more equitable distribution of wealth. However, this myth dispels the emergence of “digital inequality” in relation to socio-economic inequality within the “online population” (Karpunina et al. 2019). In this context, the following determinants of digital inequality are distinguished: inequality in terms of technical means (unequal access to Internet content); inequality of human potential (due to different levels of digital literacy, education, skills);

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inequality of conditions for the use of the Internet (place of residence, access to webresources, quality of Internet connection). The results of the study, which was conducted by a group of European scientists, showed that in the member States of the European Union there are two main aspects of digital inequality - “skills” and “autonomy” of Internet users (Stiakakis et al. 2010). “Level of formal education” is a representative variable of skill measurement. “The level of population density in different geographical areas” is a representative variable of autonomy measurement. Eurostat data on daily computer use over the past three months and average Internet use at least once a week were used. Scientists have concluded that there is now a problem of digital inequality in the EU at an expanded rate. The validity of research results is also confirmed by analytical data from a world Bank report in the series “Global development” for 2016: about 15% of the world population can afford broadband access to the Internet; almost 2 billion people have mobile phones and about 60% of the world population does not have access to the Internet, the possibility to use it or funds to pay for it (IBRD and World Bank 2016). Note that the digital divide within countries can be as deep as the gap between different countries. The largest number of Internet users are registered in China, the United States, India, Japan and Brazil. The gaps between the poorest 40% and the wealthiest 60% of the population, as well as between rural and urban residents, are narrowing in the context of mobile phone use, but are deepening in terms of Internet use (IBRD and World Bank 2016). Social inequality arises because of differences in education, skill level, professional affiliation. There is a new generation of people instead of classes and estates. According to the researchers, soon there will be a “useless class” of people who will not be able to get an affordable job because of the psychological dependence on digital programs and technologies (Harari 2015). Thus, before the person the problem of lack of employment and emergence of feeling of dissatisfaction from own life is actualized. For example, data from an American study show that 22% of American men without a College degree have not worked a single day in the past 12 months. The U.S. Bureau of labor statistics States: over the past 15 years, the amount of free time low-skilled workers have increased by 4 h a week, and 3 h of this extra time they spend on video games (Sologubova 2017). Inequality in the appropriation of goods in the digital economy will manifest itself in the growth of unemployment, the concentration of the elite and in an even greater decline in the level and quality of life of the poor. Indeed, there are concerns about the ability of the digital economy to create enough high-quality jobs and ensure that the benefits of growth are widely shared across and within countries. ILO Estimates that there are about 200 million unemployed in 2017. The global unemployment rate is expected to remain stable. The labor force is expanding in line with increasing digital trends, demographic changes, and participation, so the global unemployment rate could rise even further (ILOSTAT 2017). Indeed, automation and robotics processes have an impact on employment. The growing trend of increasing robotics is already showing a decrease in production costs, productivity growth and the forced release of significant labor resources. Robotics and automation carry the risk of global restructuring of the labor landscape. So, McKinsey

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analysts studied more than 2,000 tasks performed by people of 800 different professions, and concluded that almost half of the work on which employers spent 15 trillion Us dollars can be automated using current technologies. At the same time, only about 5% of these professions can be automated completely with the help of existing technologies, and another 60% of professions can be automated by at least a third. And, according to analysts, the most affected processes that use monotonous physical labor, as well as data collection and processing. McKinsey estimated that 81% of the time that workers spend on physical labor can be transferred to robots; and automation of data processing will give workers 69% of free time, data collection-64% of the time (McKinsey Global Institute 2017). The existing gap in access to digital technologies is causing a global gap in knowledge and opportunities (Sologubova 2017). It is meant not only about the amount of knowledge mastered, but also their interpretation. The leadership in this case is held by the USA, Canada and some European countries (determined by the share of scientific publications among all scientific journals produced in the world). Access to information and digital technologies creates enhanced opportunities to harness the benefits of digital civilization for human and societal development. However, not everyone can implement these features. These are probabilistic limitations: unequal access to the e-government system of companies and individuals; the use of online services of public authorities by individuals to obtain information for personal use instead of professional. Studies have shown that individuals with the highest income and highest connectivity are 45 times more likely to use e-services than people with the lowest income and lowest connectivity (IBRD and World Bank 2016). These inequalities can provoke asymmetry in the development of the global economic system. Thus, in the works of the organization for Economic Cooperation and Development (OECD), the main goal of state regulation in developed countries is to minimize those inequalities that lead to social tensions and conflicts, interfere with the balanced and sustainable development of the economy and social sphere (Skufina 2013). To ensure sustainable development in the digital economy, it is necessary to assess the impact of digital technologies on the environment. First of all, it is necessary to assess environmental risks and ensure a balance in the system of relations “man-society-nature”, that is, by integrating and recognizing economic, environmental and social problems throughout the decision-making process (Emas 2015). Even Pigou A. in his writings pointed to the existence of “random, uncharged services, which are a barrier to achieving equilibrium in the market” (Pigou 1920). He proposed to impose a tax on those activities that cause them negative external effects (externalities), leading to a decrease in the stability of the economic system. Porter M. and van der Linde C. investigated the occurrence of environmental risks due to human economic activity. They suggested that environmental pollution is a sign of resource inefficiency and concluded that opportunities for the environment and economy can be captured through improvements that reduce pollution in production processes (Porter and van der Linde 1999). These authors were among the first to draw attention to the relationship between digital and innovation processes and the environmental situation: by stimulating

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innovation, strict environmental regulations can actually increase competitiveness. According to Porter, a properly designed environmental policy using market incentives can contribute to the introduction of new technologies and reduce waste, and thus achieve sustainability. What is the nature of the impact of digital artifacts on the environment? Historically, for every 1% increase in global GDP, CO2 emissions have increased by about 0.5% and resource intensity by 0.4%. Current production activity will contribute to a global gap of 8 billion tons between supply and demand for natural resources by 2030, resulting in a loss of economic growth of $ 4.5 trillion by 2030 (Lacy and Rutqvist 2015a). According to a study by the world economic forum, digital initiatives in industries could provide an estimated 26 billion tons of net CO2 emissions avoided from 2016 to 2025. This is almost equivalent to the CO2 emissions of the whole of Europe over this time period. Therefore, the main task is to overcome obstacles to the development of new, cyclical business models, customer acceptance and environmental impact of the digital technology itself (Weforum 2017). At the same time, scientists Lacy P. and Rutqvist J. prove that the possibilities of digital technologies will allow in the near future to talk about the creation of the socalled “circular economy”, the main task of which is to ensure maximum efficiency of each process in the life cycle of a product or service, and the reuse of waste becomes one of its priorities. The concept of a “circular economy” involves keeping resources in productive use within the economy for as long as possible, sharing economic growth and unsustainable consumption of natural resources. Digital technologies make it possible to transform “waste” into economic opportunities of modern times. According to the authors of the concept, such an economy can provide a potential volume of additional economic production in the amount of $ 4.5 trillion. US by 2030 (Lacy and Rutqvist 2015b). The proposed concept of “circular economy” was supported by the world community and became a new trend, it is the basis of the concept of “Industry 4.0”. The European Commission is in the process of preparing a package of laws to put into practice the concept of “circular economy”. The European Investment Bank, in turn, financed projects of the circular economy for 15 billion euros, mainly in Europe. Major companies McKinsey, Ellen MacArthur Foundation, Philips and Accenture support her ideas (Sausheva 2017). To assess the level of development of the circular economy, special indices reflecting the efficiency of the process of its formation are used: The Material Circularity Indicator (MCI); The Regional Circular Economy Index System; The Circular Economy Performance Index; A Circular Economy Index for the Consumer Goods Sector (Pahomova et al. 2017). Denmark, Scotland, Finland and China have adopted appropriate development programs and are leaders in the development of the circular economy. Thus, it is unreasonable not to take into account the importance of the environmental component of sustainable development in the context of digitalization. Environmental risks are a threat to the sustainable development of States in the digital environment, despite the attempts of the public and the state to build a new production system, taking into

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account their minimization. The analysis of the factors of digitalization and the inequalities and risks provoked by them allows us to form a conceptual matrix of sustainable development in the digital economy (Table 1).

Table 1. Conceptual matrix for sustainable development in the digital economy Risks

Subject Individuals

Enterprises

• developing a business environment conducive to the use of the Internet for competition and innovation • introduction of automated enterprise management systems • introduction of electronic document management • creation of enterprise information security systems • advanced development Risks of social • using the Internet to of human capital of the inequality empower citizens on a enterprise collective platform and • implementation of provide services client-oriented strategy • training of users of ICT of enterprise • continuous training and development professional • improving the development adaptability of staff to the environment • formation of intra-firm system of economic security • investing in a timely • continuous selfRisks of retraining of the development and inequality in workforce improvement of the • competent policy of professional literacy appropriation automation and competence (lifelong of goods displacement of human learning) • the development of soft- labor • development of business skills social responsibility system • building a system of continuous communication with customers and staff

Risks of digital • improving information inequality literacy of individuals • improvement of user skills in the field of digital technologies • leveling information security threats

State • инcтитyциoнaль institutional regulation aimed at creating an open and accessible information environment • implementation of the policy to stimulate digital activity of enterprises • maintaining a healthy competitive environment • ensuring information security of the state

• the implementation of the policy of human capital development • ensuring equal access to education for all segments of the population • ensuring equal access to egovernment services • development of social protection system

• creation of a system of continuous training and retraining • stimulating the development of science and innovation • creation of a system of social support for the unemployed due to automation

(continued)

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Risks Environmental risks

Subject Individuals

Enterprises

• coverage consumers, the • investment in the field of waste management waste management • creation of waste system; management facilities • involvement of on the basis of publicconsumers in the private partnership activities of the • creation of waste municipal solid waste disposal facilities that collection and disposal meet the statutory system requirements • formation of consumer ideology based on the principles of “circular economy”

State • formation of a system of recycling efficiency on the basis of regular monitoring, control and operational management of the development of the circular economy as a whole and its individual elements

4 Conclusions/Recommendations The study of the problems of digital, social inequality, inequality in the appropriation of benefits and risks of environmental security, allowed us to conclude that in the conditions of digital transformation, the existing gaps between the development of the economy, changes in social relations and environmental well-being are growing. The identified problem areas became a starting point in the process of creating a conceptual matrix for sustainable development in the digital economy. The proposed matrix is differentiated in the context of economic entities (individuals, enterprises, the state) and in relation to a specific type of inequality in the digital economy and risks (risks of digital inequality, risks of social inequality, risks of inequality in the appropriation of goods, environmental risks). According to the authors, this allows us to develop an optimal set of actions for each entity to level emerging risks and ensure sustainable development of the economic system in the digital environment.

References Brynjolfsson, E., Kahin, B.: Understanding the Digital Economy. The MIT Press, Cambridge (2000) Dernbach, J.: Sustainable development as a framework for national governance. Case West. Reserve Law Rev. 49(1), 1–103 (1998) Emas, R.: Brief for GSDR 2015 the Concept of Sustainable Development: Definition and Defining Principles (2015). https://docviewer.yandex.ru/view/316254058/. Accessed 16 Oct 2019 Harari, Y.: Homo Deus: A Brief History of Tomorrow. Harvill Secker (2015) Iles, J.: Which country is leading the circular economy shift? (2018). https://medium.com/ circulatenews/which-country-is-leading-the-circular-economy-shift-3670467db4bb. Accessed 15 Sept 2019

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ILOSTAT: ILO Labour force estimates and projections: 1990–2030 (2017). https://www.ilo.org/ ilostat-files/Documents/LFEP.pdf. Accessed 12 Aug 2019 International Bank for Reconstruction and Development (IBRD) and World Bank: Digital dividends. World development report 2016 (2016). https://openknowledge.worldbank.org. Accessed 11 Nov 2018 Jaffe, J., Gertler, M.: Sustainable development in the new economy: risk, vulnerability and ecosocial justice. Curr. New Scholarsh. Hum. Serv. 7(2), 1–20 (2008) Karpunina, E., Yurina, E., Kuznetsov, I., Dubovitski, A.: Growth potential and economic security threats in terms of digital economy ecosystem. In: Vision 2020: Education Excellence and Management of Innovations through Sustainable Economic Competitive Advantage Proceedings of the 33nd International Business Information Management Association (IBIMA) Conference, Granada, Spain, pp. 2669–2678 (2019) Knickrehm, M., Berthon, B., Daugherty, P.: Digital Disruption: The Growth Multiplier (2016). https://www.accenture.com/_acnmedia/PDF-4/Accenture-Strategy-DigitalDisruptionGrowth-Multiplier.pdf. Accessed 23 June 2019 Lacy, P., Rutqvist, J.: Waste to Wealth. The Circular Economy Advantage (2015a). https://www. palgrave.com/us/book/9781137530684. Accessed 28 Oct 2019 Lacy, P., Rutqvist, J.: The Circular Economy Advantage. Springer, Heidelberg (2015b) McKinsey Global Institute: A future that works: automation, employment and productivity (2017). https://docviewer.yandex.ru/view/316254058/. Accessed 13 Aug 2019 OECD: Skills for a Digital World (2016). https://www.oecd.org/els/emp/Skills-for-a-DigitalWorld.pdf. Accessed 23 July 2019 Pahomova, N.V., Rihter, K.K., Vetrova, M.A.: Perekhod k cirkulyarnoj ekonomike i zamknutym cepyam postavok kak faktor ustojchivogo razvitiya. Vestnik Sankt-Peterburgskogo universiteta. Ekonomika 33(2), 244–268 (2017) Pigou, A.: The Economics of Welfare. Macmillan and Company, London (1920) Porter, M., van der Linde, C.: Green and competitive: ending the stalemate. J. Bus. Adm. Polit. 215–230 (1999) Prahalad, K., Ramaswamy, V.: The Future of Competition. Creating Unique Value Together with Consumers. Publishing House “Williams”, Moscow (2010) Sausheva, O.: Monitoring effektivnosti reciklinga: zadachi i organizaciya. Nauchnyj zhurnal NIU ITMO. Seriya Ekonomika i ekologicheskij menedzhment, no. 4, pp. 102–109 (2017) Schmidt, E., Cohen, J.: The New Digital Age: Reshaping the Future of People, Nations, and Business. Alfred A. Knopf, New York (2013) Skufina, T.P.: The problem of asymmetry of economic development of space in modern research. Fundam. Res. 10(3), 650–652 (2013) Sologubova, G.: The phenomena of the digital economy (2017). https://www.econ.msu. ru/sys/raw.php?o=44108&p=attachmenthttps://www.econ.msu.ru/sys/raw.php? o=44108&p=attachment. Accessed 15 Aug 2019 Stiakakis, E., Kariotellis, P., Vlachopoulou, M.: From the digital divide to digital inequality: a secondary research in the european union: e-democracy. In: LNICST, vol. 26, pp. 43–54 (2010) Tapscott, D.: The Digital Economy: Promise and Peril in the Age of Networked Intelligence. McGraw-Hill, New York (1995) United Nations General Assembly: Report of the world commission on environment and development: our common future, Oslo, Norway (1987) Weforum: Understanding the impact of digitalization on society (2017). http://reports.weforum. org/digital-transformation/understanding-the-impact-of-digitalization-on-society/. Accessed 12 May 2019

Dialectics of Sustainable Development of Digital Economy Ecosystem Evgeniya K. Karpunina1(&) , Galina K. Lapushinskaya2, Asya E. Arutyunova3, Svetlana V. Lupacheva4 , and Alexander A. Dubovitski5 1

Tambov State University named after G.R. Derzhavin, Tambov, Russia [email protected] 2 Tver State University, Tver, Russia [email protected] 3 Kuban State Technological University, Krasnodar, Russia [email protected] 4 Northern (Arctic) Federal University named after M. Lomonosov, Arkhangelsk, Russia [email protected] 5 Michurinsk State Agrarian University, Michurinsk, Russia [email protected]

Abstract. The purpose of the scientific article is to study the dialectical relationship between the concepts of “sustainable development” and “ecosystem of the digital economy”, as well as the analysis of the factors that determine them. The article gives the author’s representation of the structure of the digital economy ecosystem and reveals the content of each subsystem. It is determined that due to the advantages of digital development, it is possible to underestimate the adverse effects of distribution and negative external effects of technological changes and Informatization. The authors found that environmental sustainability factors are maximally reflected in the calculation of Country Sustainability Ranking (CSR). The analysis of socio-economic and technological development of the leading countries of the world on the level of stability of the economic system, as well as the directions of state policy in the field of environmental safety. It is concluded that the development of the digital economy ecosystem can serve as a basis for the implementation of the strategy of sustainability, ensuring the achievement of the objectives of balanced economic, social and environmental development. The author’s version of the configuration of the digital economy ecosystem in order to ensure sustainable development with the inclusion of ecological safety ecosystem as a subsystem is proposed. Keywords: Digital economy ecosystem Ecological security
Competitiveness JEL Classification Codes: O11


Sustainable development



O33
O44
Q56

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 486–496, 2020. https://doi.org/10.1007/978-3-030-47945-9_54

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1 Introduction The realities of the modern world are such that the rapid development of scientific and technological progress and digital technologies does not always entail an increase in the quality and standard of human life. Emerging security threats in the information environment, rising unemployment due to automation of working processes, increasing socio-economic and digital divide among different groups of population, environmental degradation testify to the expansion problems of modern man. Human-centricity, that is, maximizing the benefits for a person, improving the conditions of his life, has always been put at the forefront and determined the direction of development of the economic, financial, social and educational spheres. The United Nations, which deals with people-centred sustainable development, points to the existence of this problem. In 2015, the UN decided on the new global sustainable development goals 2030 in its three dimensions-economic, social and environmental-eliminating inequalities within and between countries; building peaceful, just and inclusive societies; protecting human rights and ensuring the long-term protection of the planet and its natural resources (DSDG 2015). The UN sustainable development goals were also reflected at the meeting of the G-7 summit in Biarritz in 2019. The main topics of the forum were: combating inequality during the ecological transition, supporting international initiatives and research to save ecosystems, promoting initiatives aimed at addressing the negative effects of climate change, financing projects aimed at maintaining biodiversity (Kuhnin 2019). Sustainability empowers the economic system to cope with both expected and unexpected situations, to maintain a focus on human development goals and to acquire new opportunities. Achieving our goal requires deepening studies on impact assessment ecosystems of the digital economy on the existing inequalities of socio-economic nature, the process of balanced development of national economies and on the environment.

2 Methodology The research is carried out from the positions of two scientific directions-methodology of sustainable development and theory of information (digital) economy. The issues of sustainable development and its provision are covered in the works Porter M., van der Linde C. (Porter and van der Linde 1995), Cooper P., Vargas M. (Cooper and Vargas 2004), Dernbach, J. C. (Dernbach 1998), Kuznetsov O., Kuznetsov P., Bolshakov B. (Kuznetsov et al. 2000). The A. T. Kearney global business policy Council constantly reviews the development horizon of the global external strategic operating environment in key aspects of demography, economy, environment, geopolitics, governance, resources and technology. In assessing these aspects, the Council annually identifies new trends and their implications for the functioning of national economies, which have been taken into account in this study (DSDG 2015).

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To expand the theoretical approaches to the study of the digital economy, the works of E. Schmidt, J. Cohen (Schmidt and Cohen 2013), Hampton S., Strasser C., Tewksbury J., Gram W., Budden A., Batcheller A., Duke C., Porter J. (Hampton et al. 2013) were analyzed. Karpunina E., Yurina E., Kuznetsov I., Dubovitski A. (Karpunina et al. 2019b) have attempted to identify the digital economy ecosystem and structure its elements and relationships. Data from reports of the World Economic Forum, RobecoSAM (CSR), IMD, consulting companies Gartner, Statista, the Finnish forest Association, the global Footprint network, materials of the European Commission, the World Commission on Environment and Development, ICC Commission on the Digital Economy, Legatum Institute and others formed the information basis of the study.

3 Results The development of the digital economy is an important factor that determines the level of competitiveness of countries. Countries that are at the forefront of technology development and the application of digital economy tools tend to have high levels of competitiveness and sustainable development. However, a comparison of the world’s countries in terms of the global competitiveness rating (the World Economic Forum uses the Global Competitiveness Index 4.0 to assess the country’s productivity factors and drivers of long-term improvement in living standards (World Economic Forum 2019)), the global digital competitiveness rating (IMD index to assess the potential and readiness of countries to implement digital technologies in business, government and society (IMD World Competitiveness Center 2019)) and the global sustainability rating of countries (based on The RobecoSAM Sustainability Index (CSR), which takes into account environmental, social and managerial profiles of countries (Robecosam 2019)) suggests the use of different approaches to understanding and assessing competitiveness and sustainability in the context of digitalization (Table 1).

Table 1. Comparison of the world’s leading countries by Global Competitiveness ratings, Global Digital Competitiveness rating and Global Sustainability rating in 2019 (created by the authors) Position in the ranking

The Global Competitiveness Index 4.0

IMD World Digital Competitiveness Ranking

Country Sustainability Ranking

1 2 3 4 5

USA Singapore Germany Switzerland Japan

USA Singapore Sweden Denmark Switzerland

Sweden Switzerland Norway Denmark Finland

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Thus, the top five countries in terms of sustainability in 2019 (Sweden, Switzerland, Norway, Denmark, Finland) include not all countries with a high level of competitiveness, including in the digital aspect. Environmental sustainability factors are not always reflected in global competitiveness indices, the emphasis is shifted towards economic and technological factors. Thus, when calculating the IMD World Digital Competitiveness Ranking, three groups of factors are taken into account-knowledge, technology, future readiness, and the environmental factor is not taken into account. The magnitude of environmental sustainability is partly reflected in GCI 4.0. The index assesses the potential and actual extent of environmental damage in the form of pollution, climate change, lack of resources, destruction of ecosystems and loss of biodiversity, as it can pose a real threat to human security. For example, the global Footprint network estimates that humanity uses the equivalent of 1.7 percent of the earth to provide resources (Galli et al. 2015). If this momentum continues, the equivalent of two planets will be needed to sustain human life on Earth by 2030. Statistics confirm that more competitive countries have a much larger environmental footprint. In turn, when compiling the sustainability Ranking, long-term economic, geopolitical, societal, technological and environmental risks are taken into account. Environmental risks include: extreme natural events, failure to mitigate and adapt to climate change, natural disasters, human-induced natural disasters, loss of biodiversity and ecosystem collapse. It should be noted that in 2019, environmental risks came to the fore in terms of impact and significance (5 positions out of 10). Indeed, in the race for unconditional advantages, countries sometimes forget or underestimate the adverse effects of distribution and negative externalities due to technological change and digitalization. The key challenge for governments now is to manage the emerging ecosystem of the digital economy towards a higher standard of living for all, while ensuring environmental sustainability and the interests of future generations (World Economic Forum 2018). What is the ecosystem of the digital economy and does it have the resource to ensure sustainable development? Let’s try to answer these questions. We will reveal the concept of “digital economy ecosystem” on the basis of the definition presented by Gartner consulting company: “it is a global space for different communities to interact, using digital connections and technologies to achieve complex goals and realize common interests”. Scientists have made numerous attempts to structure the ecosystem of the digital economy, which allowed us to theoretically justify its main elements (Karpunina et al. 2019a) (Table 2). The result of the interaction of the selected subsystems is the intensive development of information and communication technologies (for example, at the beginning of 2019, there are 4.1 billion Internet users in the world (Statista 2019), the availability of fixed broadband for residents of European countries has reached 98% of Europeans (European Commission 2018), the growth of the value added of the ICT sector (in 2018 amounted to 632 billion euros), the rapid development of the e-Commerce sector and mobile services (e-commerce audience is more than 2.8 billion people, in 2018 1.78

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Subsystems of the digital economy ecosystem Business ecosystem Consumer ecosystem

Talent and innovation ecosystem

Digital platforms and communications ecosystem

Institutions of the digital economy ecosystem

Functional An economic community of interacting enterprises that produces goods and services of value to consumers A set of consumers who form a need and expand their functionality in the process of creating value (product design together with the manufacturer, organization of production processes, preparation of marketing messages and control of sales channels) A variety of institutional entities that generate new ideas and products for the entire ecosystem of the digital economy (education; science; venture investments; tangible and intangible infrastructure; innovative demand) An aggregated set of digital platforms and electronic communications tools that promotes an enabling environment and framework for electronic interactions between actors in the digital economy ecosystem; facilitates the creation and promotion of digital products; and promotes information and communication technology (ICT) skills A set of regulatory rules, technological standards, ethical norms, government mandates necessary to reduce the negative effects due to failures of regulation of the business environment in the conditions of digitalization, imperfections in the communication system and connections between subsystems of the digital economy ecosystem

trillion US dollars was spent for the purchase of consumer goods via the Internet). And this is only a small part of the achievements that the digital environment provides. How does the described ecosystem of the digital economy correlate with the concept of “sustainable development”? The concept of “sustainable development”, once introduced in the Brundtland report, is associated with “development that meets the needs of the present and does not compromise the ability of future generations to meet their own needs” (World Commission on Environment and Development 1987). The identification of three components of sustainable development that complement each other allows us to speak about the application of a systematic approach to the construction of this concept. Thus, the optimization of the economic component is due to the maximization of the flow of total income, which can be produced provided that the total capital with which this income is produced is preserved. The optimum social component is achieved with the stable development of social systems due to the equitable sharing of benefits and the preservation of social capital. Ensuring the integrity of the ecosystem and preserving biodiversity is supported by the state’s environmental policy aimed at reducing risks to the environment.

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Overall, based on the Country Sustainability Ranking, the Nordic countries strengthened their leading position as they best preserved their democratic institutions and quality of governance. As a significant number of advanced economies as well as emerging markets suffer from growing political polarization, populist movements and even more authoritarian rule, good governance is under pressure. This is problematic at a time when critical challenges such as climate change, rising inequality and underlying geopolitical tensions require a coherent, coordinated and decisive political response (Robecosam 2019). With an ESG score of 8.04 in 2019, Sweden successfully defended its position as the most stable country in the world, just ahead of Switzerland and its Northern neighbors Norway, Denmark and Finland. They all have a very robust and well balanced stability profile across all three ESG dimensions and demonstrate consistently high performance. The main features of the economies of the countries included in the group of leaders of sustainable development: a high degree of social guarantees of the state; ensuring high competitiveness; the development of an export-oriented economy; high incomes; high domestic demand; low inflation. For example, we can compare the GDP and inflation figures of these countries for 2018: in Denmark, GDP growth was 2%, and inflation-1.4%; in Sweden, GDP growth is indicated at 2.4%, inflation-1.9%; in Finland, GDP growth was 2.6%, inflation-1.9% (RAPI 2019). In addition, these States consistently occupy the top lines in the international economic rankings. For example, in terms of competitiveness, Sweden is on the 7th place, Denmark on the 12th, Finland on the 10th place. In terms of GDP per capita, the situation is as follows: Sweden-54,112 US dollars; Switzerland-82,839 Us dollars; Norway-81,807; Denmark-60,596 US dollars; Finland-49,960 US dollars. This allows these countries to provide a high standard of living. That is, all countries are in the top 15 countries in the world in terms of GDP per capita, and this picture remains virtually unchanged over the past 6 years (Nonews 2018). In 2018, these countries also had the lowest level of public debt in the European Union (in % of GDP): Sweden-41.9; Switzerland-44.12; Norway-27.94; Denmark47.73; Finland-66.25 (Fincan 2018). Let us pay closer attention to the characteristics of socio-economic development and the implemented policy of socio-economic, technological and environmental development of Sweden as a leader in sustainability. The economy has been growing steadily since 1950. This can be seen in the annually growing level of GDP in Sweden. As of 2019, Sweden’s gross domestic product was 551.03 billion US dollars, an increase of 2.4% over the previous year. The main share of Swedish GDP is made up of private companies-they account for about 80% of turnover, while the state only 20%. The share of agriculture in total gross domestic product of Sweden is decreasing each year. Now it is less than 2%. Almost 50% of Sweden’s GDP is accounted for by services, industry-about 18%, transport and trade-12%. Tax revenues account for about 5% of total GDP. Of these, most are taxes on production and imports (Visasam 2019). The government of Sweden sees its task in ensuring that the country maintains its global leadership in innovative and sustainable industrial production of goods and services. The objective is to create favorable conditions for the development of the

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company, industrialization and production of new products in Sweden. The mission is to make it easier for companies that have or are developing a product to be produced so that they can find players in Sweden who could consider the production process. Sweden’s reindustrialization strategy “Smart industry” is an important step in using the “window of opportunity” for the growth of industrial production. In June 2016, the government presented a package of 45 measures to strengthen the conditions of international competition and return production to Sweden for industrial enterprises. Digitalization and the transition to sustainable production are the basis of this process. In December 2017, the government introduced a further 37 new measures in the second action plan for “Smart industry” (Robecosam 2019). On behalf of The Government, the Swedish energy authority supports R&D in the field of electric transport. For this purpose, 23.5 million US dollars has been allocated during 2018–2023. These funds are directed to the development of new technologies, primarily for electrified vehicles, as well as ships, aircraft and equipment with electric motors. In Sweden, as of 2015, 48% of the forest area is owned by citizens, 24% is owned by private timber companies, 13% is owned by the state (managed by the state company Sveaskog), 5% is owned by other state and municipal structures, 11% by the Church and non-profit organizations (Skogsstyrelsen 2018). In 2018, a plan for the implementation of the provisions of the state forest program in the field of forest was prepared, aimed at creating sustainable forest farms and preparing the basis for a growing national economy focused on environmentally friendly production. The government decided to allocate 105 million US dollars in the period 2019–2020 as part of the joint policy for the development of Swedish rural regions. The package of measures provides for various opportunities to strengthen support for enterprises in the regions. Among the goals of the program-the development of entrepreneurship in rural areas, technical development of the economy, innovation, stimulation of investment activity. Funding will be allocated to the following areas: rural pilot projects (24 million US dollars), including the development of telemedicine, as well as pilot farms; digitalization (39 million US dollars for the period 2019–2020); technical modernization (26 million US dollars); skills and knowledge development (9 million US dollars); development of the tourism sector (2 million US dollars) (Rysslandshandel 2018). The government of Sweden plans to strengthen this work by adopting a five-year strategy for global cooperation in sustainable social development for the period 2018–2022. An appropriation of 165 million US dollars per year for a five year period is provided for in the strategy budget. The partnership covers four priority areas: green technologies in transport, clean energy and sustainable cities. As part of this goal, Sweden plans to reduce emissions from transport (other than aviation) by at least 70% by 2030 (compared to 2010). The Swedish government is implementing a number of programmes and projects that strengthen the social dimension of sustainable development. For example, it spent about $ 5.2 million to develop a patient-centered health plan. For this purpose, the work is carried out in three directions: 1) Digitalization and best use of the data obtained in the provision of social and health services; 2) Identification of chronic diseases with the help of modern diagnostic methods; 3) Bringing together health and science to conduct more clinical trials and introduce new treatments as soon as possible. Elderly patients

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have the right to adequate medical care. The government is providing 1.4 million US dollars in appropriations to improve the health and social support chain, including for seniors with dementia and multiple illnesses. Finland, which also has the highest living standards in the world and a strong socioeconomic and environmental policy, completes the top five countries in the world for sustainable development. Finland’s strengths are public administration, education and human capital development, and environmental quality. According to experts, Finland is a favorable country for the development of private property with minimal institutional barriers to business (for example, the level of corporate taxation is 20%) (The Legatum Institute 2018). At the same time, the current taxation system in Finland provides for high taxes on private income, however, they are compensated by the quality and volume of public services and equal access to them. The government of Finland has embarked on structural reforms that promote employment growth (in 2017, the unemployment rate is 8.8%), the development of entrepreneurship and the formation of a basis for economic growth. According to the level of human capital development and the level and quality of education of citizens, Finland leads in the global competitiveness ranking of the world economic forum. The country has an effective system of financing research and development (R&D) with the active participation of business (about 70% of R & d is financed by the private sector, including large multinational companies, as well as small and medium-sized businesses). According to the Bloomberg Innovation Index 2018 (which takes into account the concentration of high-tech companies and research and development spending), Finland is on the second position in the ranking among the Nordic countries, and on the seventh in the overall list of the most innovative economies in the world. Currently, R & d spending accounts for 8% of GDP. In 2018, Finland ranks third among European countries in terms of digitalization after Denmark and Sweden (according to the European Commission’s Digital Economy and Society Index). Indeed, today 87.7% of Finnish citizens are Internet users, 80% of whom use Internet services to resolve administrative issues. Finland’s stable position in the ranking is ensured, first of all, by the high level of digitalization of the public sector (the work of “e-Government”, the availability of online public services for business, the digital health system). Since 1998, the country has been implementing a state program aimed at ensuring the welfare of the population within the resource constraints of nature, that is, supports the implementation of the concept of sustainable development in practice. For example, by 2020 the share of renewable energy sources should exceed 50%, and by 2030 the share of renewable transport fuels should grow to 40% (data from “The government’s report on the implementation of the development concept until 2030”) (Gluhovskaya 2018). According to the world wildlife Fund, Finland is an example of successful implementation of the principles of sustainable development in the field of forestry. According to the Finnish forest Association, as of 2017 in Finland, 53% of the forest area is owned by citizens (family forests), 35% are state forests managed by the state enterprise Metsahallitus, 7% are forests of private companies, the remaining 5% are other types of property (Natural Resources Institute Finland and National Forest Inventory 2017).

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The analysis allows us to put forward a number of assumptions: 1) The Ecosystem of the digital economy can be the basis for the implementation of the strategy of sustainability, ensuring the achievement of the objectives of balanced economic, social and environmental development. This assumption is based on the analysis of costs and benefits associated with the development of human capital, R&d funding, the implementation of programs of scientific, technical, digital development, measures should be taken to ensure innovation and industrial growth, the implementation of strong social policies and programmes in the field of ecology, which carry out leading countries of sustainable development. The goals of digital and sustainable development are complementary, the implementation of the sustainable development policy allows using the potential of the digital economy to minimize environmental risks and develop societality. 2) It is necessary to transform ideas about the structure of the digital economy ecosystem in order to ensure sustainable development of the world’s countries in the digital environment. The business ecosystem, consumer ecosystem, the ecosystem of talent and innovation, ecosystem of digital platforms and communications, as well as connecting them with the institutions of digital development in the structure of the digital economy ecosystem should be complemented by ecological security ecosystem - a set of institutional formations providing a responsible attitude to environmental protection and the protection of mankind from the threat of environmental crisis, conservation and maintenance of vital environmental parameters (Table 3).

Table 3. A new configuration of the digital economy ecosystem for sustainable development (created by the authors) Subsystems of the digital economy ecosystem

Sustainable development

Digital development

Business ecosystem Ξ Consumer ecosystem Θ Ecosystem of talent and Θ innovation Digital platforms and Θ communications ecosystem Ecological safety Ξ ecosystem Institutions of the digital Θ economy ecosystem Symbols used in the table: Θ-state of expectation; maximum disclosure.

¥ Ξ ¥

Sustainable development of the digital economy ecosystem ¥ ¥ ¥

Ξ

¥

Θ

¥

Ξ

¥

Ξ-stable form of existence; ¥ -

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4 Conclusions/Recommendations The result of the study was to obtain the following conclusions, determining its theoretical and practical significance. 1) from the standpoint of theoretical science, the concepts of “sustainable development” and “ecosystem of the digital economy” are revealed, the points of their contact are established, the absence of their internal contradictions is indicated. 2) the analysis of indicators of socio-economic and environmental development of the countries-leaders in sustainability allowed to prove that the development of the digital economy ecosystem can be the basis for the implementation of the sustainable development strategy, ensuring the achievement of the objectives of balanced economic, social and environmental development. 3) the author’s version of the digital economy ecosystem configuration is proposed in order to ensure sustainable development with the inclusion of ecological safety ecosystem as a subsystem in it.

References Cooper, P., Vargas, M.: Implementing Sustainable Development: From Global Policy to Local Action. Rowman and Littlefield Publishers Inc., Lanham (2004) Dernbach, J.: Sustainable development as a framework for national governance. Case West. Res. Law Rev. 49(1), 1–103 (1998) Division for Sustainable Development Goals (DSDG): Transforming our world: the 2030 Agenda for Sustainable Development (2015). https://sustainabledevelopment.un.org/ post2015/transformingourworld. Accessed 11 Nov 2019 European Commission: Digital economy and society index for 2018 (2018). https://ec.europa.eu/ digital-single-market/en/news/digital-economy-and-society-index-2018-report. Accessed 12 Oct 2019 Fincan: Gosdolg stran mira 2018 (2018). http://fincan.ru/articles/15_gosdolg-stran-mira-2018/. Accessed 20 Oct 2019 Galli, A., Lin, D., Wackernagel, M., Gressot, M., Winkler, S.: Brief for GSDR 2015. Humanity’s growing ecological footprint: sustainable development (2015). https://visasam.ru/emigration/ economy/vvp-shvecii.html. Accessed 5 Nov 2019 Gartner Inc.: Top 10 Strategic Technology Trends for 2019 (2019). https://www.gartner.com/ smarterwithgartner/gartner-top-10-strategic-technology-trends-for-2019/. Accessed 10 Nov 2019 Gluhovskaya, Y.: Obshchestvo ustojchivogo razvitiya (2018). https://plus.rbc.ru/news/ 5c0ed36c7a8aa912d731251c. Accessed 13 Nov 2019 Hampton, S., Strasser, C., Tewksbury, J., Gram, W., Budden, A., Batcheller, A., Duke, C., Porter, J.: Big data and the future of ecology. Front. Ecol. Environ. 11(3), 156–162 (2013) IMD World Competitiveness Center: The IMD World Digital Competitiveness Ranking 2019 Results (2019). https://www.imd.org/wcc/world-competitiveness-center-rankings/worlddigital-competitiveness-rankings-2019/. Accessed 15 Nov 2019

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Karpunina, E., Shurchkova, J., Konovalova, M., Levchenko, L., Borshchevskaya, E.: Opportunities of advanced development of the digital economy ecosystem. In: Vision 2020: Education Excellence and Management of Innovations Through Sustainable Economic Competitive Advantage Proceedings of the 33rd International Business Information Management Association (IBIMA) Conference, Granada, Spain, pp. 7454–7461 (2019a) Karpunina, E., Yurina, E., Kuznetsov, I., Dubovitski, A.: Growth potential and economic security threats in terms of digital economy ecosystem. In: Vision 2020: Education Excellence and Management of Innovations Through Sustainable Economic Competitive Advantage Proceedings of the 33rd International Business Information Management Association (IBIMA) Conference, Granada, Spain, pp. 2669–2678 (2019b) Kuhnin, I.: Novostnoj obzor v oblasti ustojchivogo razvitiya (2019). https://www2.deloitte.com/ ru/ru/pages/risk/articles/2019/sustainable-development-news-issue-20.html. Accessed 2 Nov 2019 Kuznetsov, O.L., Kuznetsov, P.G., Bolshakov, B.E.: System Nature-Society-Man: Sustainable Development. Noosphere, Moscow (2000) Natural Resources Institute Finland and National Forest Inventory: Forest ownership in Finland (2017). https://smy.fi/wp-content/uploads/2017/10/ff_Graph_2017_019_Forest_Ownership_ in_Finland.pdf. Accessed 8 Nov 2019 Nonews: Rejting stran po urovnyu VVP na dushu naseleniya (2018). https://nonews.co/directory/ lists/countries/gdp-per-capita. Accessed 20 Nov 2019 Porter, M.E., Van der Linde, C.: Green and competitive: ending the stalemate. Harvard Bus. Rev. 73(5), 120–133 (1995) RAPI (2019): Prognoz social’no-ekonomicheskogo i politicheskogo razvitiya stran Severnoj Evropy na kratkosrochnuyu i srednesrochnuyu perspektivy (2019–2024 gg.). http:// baltstudies.ru/articles/smi/prognoz-sotsialno-ekonomicheskogo-i-politicheskogo-razvitiyastran-severnoy-evropy-na-kratkosrochnuyu/. Accessed 26 Oct 2019 Robecosam: Country Sustainability Ranking Update, June 2019. https://www.robecosam.com/ media/e/2/c/e2cc7b9dd60d3fa406d531c592f4e4c4_2019-06-country-sustainability-ranking_ tcm1011-21016.pdf. Accessed 6 Nov 2019 Rysslandshandel: Obzor publikacij v shvedskih SMI (2018). http://rysslandshandel.se/rus/ uploads/media/2018-07.pdf. Accessed 10 Oct 2019 Schmidt, E., Cohen, J.: The New Digital Age: Reshaping the Future of People, Nations, and Business. Alfred A. Knopf, New York (2013) Skogsstyrelsen: Rapport 2018/12. Strukturstatistik. Statistik om skogsägande 2017 (2018). https://www.skogsstyrelsen.se/globalassets/om-oss/publikationer/2018/rapport-2018-12strukturstatistik-statistik-om-skogsagande-2017.pdf. Accessed 13 Nov 2019 Statista: Digital Market Outlook (2019). https://www.statista.com/outlook/digital-markets. Accessed 2 Sept 2019 The Legatum Institute: The Legatum Prosperity Index 2018 (2018). http://www.prosperity.com/. Accessed 22 Nov 2019 Visasam: VVP Shvecii v 2018–2019 gg (2019) World Commission on Environment and Development: Our Common Future. Oxford University Press, Oxford (1987) World Economic Forum: The Inclusive Development Index 2018 (2018). https://www.weforum. org/reports/the-inclusive-development-index-2018. Accessed 12 Sept 2019 World Economic Forum: Global Competitiveness Report 2019: how to end a lost decade of productivity growth (2019). https://www.weforum.org/reports/how-to-end-a-decade-of-lostproductivity-growth. Accessed 27 Oct 2019

The Ecosystem of the Digital Economy: A New Approach to the Study of Structural Features and Content Evgeniya K. Karpunina1(&) , Elena A. Okunkova2, Ekaterina V. Sazanova3 , Natalia N. Gubernatorova4, and Evgeniya S. Tishchenko5 1

4

Tambov State University named after G.R. Derzhavin, Tambov, Russia [email protected] 2 Plekhanov Russian University of Economics, Moscow, Russia [email protected] 3 Northern (Arctic) Federal University named after M. Lomonosov, Arkhangelsk, Russia [email protected] Financial University Under the Government of the Russian Federation, Kaluga Branch, Kaluga, Russia [email protected] 5 Kuban State Technological University, Krasnodar, Russia [email protected]

Abstract. The object of the study of the authors in this article is the ecosystem of the digital economy as a space formed by the institutions of the digital environment, in which the subjects interact, performing various functions, which are structured into subsystems and have access to common scalable resources in order to create “value” and meet human needs. The authors propose a new original approach to the disclosure of the structure of the digital economy ecosystem. The authors identify four independent subsystems-the business ecosystem, the consumer ecosystem, the ecosystem of talent and innovation, and the ecosystem of digital platforms and communications (depending on the functions performed by their constituent entities), as well as the institutions of the digital economy ecosystem linking them into a single whole. The specificity of value creation in the digital economy is investigated, which allowed to justify the priority role of the consumer ecosystem in the overall structure of the digital economy ecosystem. The article presents the characteristics of each of the selected subsystems of the digital economy ecosystem and assesses their current state. The authors justified the need to change the priorities of institutional regulation of the digital economy ecosystem in order to achieve the goals of digital development. Keywords: Ecosystem


Digital economy
Institutions
Value creation

JEL Classification Codes: O11


O14
O32
O33

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 497–508, 2020. https://doi.org/10.1007/978-3-030-47945-9_55

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1 Introduction In the process of digital transformation, which is currently in full swing, the production landscape and the entire system of relationships between economic actors are changing. The needs of individuals, the value creation process, business organization approaches and institutional regulatory requirements are also changing. At the initial stage of digitalization, digital ecosystems were formed as a response of business to the new conditions of the digital environment. Over time, the scale of the phenomenon goes beyond the narrow scope of digitalization of business activities and extends to the entire system of economic relations in the international space. In this context, it is necessary to speak about a holistic ecosystem of the digital economy. In order to monitor the changes taking place and to level the emerging digital, economic and social gaps, a new approach to structuring the elements of the digital economy ecosystem and its institutional regulation is required, which will form the foundation for the study of the emerging reality.

2 Methodology A research area related to digital ecosystems has been initiated Go Digital (European Union 2001) and aimed at stimulating the adoption of ICT by small and medium-sized businesses in European countries. The creation of digital ecosystems was seen as a tool to stimulate technological progress and ensure productivity growth during the recession (Kok 2004). Nachira et al. adapted the concept of digital ecosystems to business modeling, as well as software and runtime development (2007). Using an evolutionary and open approach to knowledge, researchers have shown that the link between learning or knowledge transfer and economic development is not direct. Chang et al. have argued that digital ecosystems have emerged to enhance communication between small and medium-sized enterprises within the global business ecosystem. The authors understand the digital ecosystem as “an environment that is open, loosely connected, domain-clustered, demand-driven, self-organizing and agentbased, in which each species is active and responsible for its own benefit and profit» (2006a, b). This initiative is to create an enabling digital environment for sustainable business development. However, in the process of accelerating digital development, scientists have moved from the study of individual digital ecosystems to the study of the entire ecosystem of the digital economy as a global space in which different communities interact, using digital communications and technologies to achieve complex goals and realize common interests (Gartner 2019). Newman’s opinion about the ecosystem of the digital economy as a set of all those segments of the market where added value is created with the help of digital (information) technologies and connects the “ecosystem with the creation of value” does not contradict this research position. In this study, we will consider the ecosystem of the digital economy as a space formed by the institutions of the digital environment, in which various actors interact in

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functions and nature of activity. They are structured into subsystems and have access to shared scalable resources that are used to create “value” and meet human needs. The information base of the conducted research consists of statistical and analytical materials of international organizations, consulting agencies, including Gartner, World Bank Group, World Economic Forum, materials of scientific conferences, periodicals, scientific monographs. The use of methods of economic and statistical analysis allowed us to study the patterns of development of the digital economy ecosystem and its subsystems. Methods of analysis and synthesis, as well as a systematic approach were used in structuring the selected subsystems of the digital economy ecosystem and their institutional relationships.

3 Results So, based on the above definition, we present the author’s vision of the structure of the digital economy ecosystem (Fig. 1).

Shared scalable resources

Business ecosystem

Consumer ecosystem Institutions of the digital economy ecosystem Digital platforms and communications ecosystem

Ecosystem of talent and innovation

Value created

Fig. 1. Structure and content of the digital economy ecosystem (created by the authors)

In the structure of the ecosystem of the digital economy it is advisable to allocate 4 separate subsystems – the business ecosystem, the consumer ecosystem, the ecosystem

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of talent and innovation, the ecosystem of digital platforms and communications (depending on those functions of their constituent entities), as well as linking them into a coherent whole institutions of the ecosystem of the digital economy. A business ecosystem is an economic community of interacting enterprises-an “organism of the business world” that produces goods and services of value to consumers (Moore 1996). The formation of business ecosystems is associated with the need to minimize costs in the process of creating new products entering the market, and achieving the efficiency of economic activity of the enterprise. However, the most important in the digital environment are such factors as: orientation on customer needs (service or product formed at the request of the consumer, not at the suggestion of the manufacturer); focus on speed and mobility (the principles of “here and now”, any device, any channel of communication); the orientation of the data (new data is available, analysis, decision-making) (Anatkin et al. 2017). In these conditions, each enterprise becomes a subject of the business ecosystem and chooses the most suitable strategy for its development in the digital environment (Sologubova 2017). It can be a platform-based development strategy that involves the development of new products and services based on a combination of a large number of technologies and innovations. The growth in the number of services and services that are offered by the platform is aimed at making customers dependent on a particular platform. For example, users of the Apple platform, as a rule, are not interested in Android technology. This determines the effectiveness of the business model. Innovative development strategy is the most applicable in the digital economy. It is characterized by rapidly generating new products (usually based on complementary borrowing) by accelerating them to market, and reduced costs for research and the growing number of successful innovative products. An example of this model can serve as Amazon, Skype, Starbucks. Research by IBM and BCG shows that 14 of the 25 most innovative companies in the world are adopting innovative business models and that leaders are updating their own business model twice as often as lagging companies (Vc 2019). The digital environment is characterized by a growing number of different communities. Therefore, the community development strategy (through the promotion of its own products and services in the communities of users of various social networks and communication platforms) meets all the requirements of the environment and implements the necessary form of feedback between the consumer and the manufacturer. For example, specialized communication platforms such as Edmodo are actively used to promote educational services. To a lesser extent, the strategy of cooperation development is aimed at digital technology providers. It is also actively used by enterprises, as the network principle of organization is one of the features of the digital economy. In this case, the implementation of the strategy will be aimed at optimizing the relationship between all participants of the network. An example is the development of supply chains, provision of consulting, technical services, placement services, brokerage IT services. Enterprises can achieve development through real-time access to information about the use of products and services, that is, by implementing a strategy for the development of big data technologies and Analytics. This strategy, using communication

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devices, Internet resources, mobile technologies, Internet of Things (IoT), is the basis for the development of the industrial Internet, logistics supply chains. Enterprises implement a particular development strategy, they enter into business relationships, create a business ecosystem that provides subjects with immediate and potential future business benefits. In addition, enterprises as subjects of the business ecosystem can form their own ecosystems. Consider the volume of GDP in the world’s leading countries and the contribution of business structures to its creation in order to characterize the current state of the business ecosystem (Table 1). Table 1. Contribution of small and medium-sized businesses to GDP production in the leading countries of the world in 2018 (created by the authors) Rank

Country

GDP (in trillion $)

1 United States 20.41 2 China 14.09 3 Japan 5.17 4 Germany 4.21 5 United Kingdom 2.94 Sources: Thefinancialstreet 2018, Forbes 2018.

Share, %

23.30 16.10 5.90 4.81 3.36

Contribution of small and medium-sized businesses to GDP, % 50 60 60 57 47

According to the International monetary Fund (IMF), the United States has the largest economy in the world at $20.4 trillion, followed by China, with $14 trillion. Japan is in third place with an economy of $5.1 trillion (Weforum 2018b). In these countries, the contribution of small and medium-sized businesses to GDP production is more than 50%, they also ensure the production of goods for export at an average level of 40–50% of GDP. In these countries, 60 to 70% of the employed population works in the sphere of small and medium-sized businesses, in China – 80%. According to the IDG’s 2018 State of Digital Business Transformation report, 89% of businesses plan to adopt or have already adopted a digital business strategy with services (95%), financial services (93%) and healthcare (92%) leading across all industries (Forbes 2018). The use of big data/Analytics, mobile technology and the private cloud contributes the most to an organization’s revenue growth. According to IDG, 49% of businesses have excellence in managing business performance through data availability and visibility. In addition, 73% of production managers or it executives (ITDM) say that IoT affects their digital business strategy. 69% of enterprises use IoT to monitor equipment and machines today. Startups that rely on digital-first strategies can increase revenue by 34%, while all other businesses increase revenue by 23%. New products and services are a driver of

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revenue growth in all companies and a source of new opportunities within the company. In 22% of enterprises, improved ability to integrate and analyze company, customer, and external data contributes to increased revenue. Digital business strategies allow you to increase the speed of delivery of products and services. Other factors driving revenue growth are: the development of new partnerships, global or regional expansion, and mergers and acquisitions. Thus, it is obvious that the level of development of the business ecosystem is currently determined by the desire of enterprises to integrate into the new digital conditions of management, which have the properties of complementarity and openness, to introduce modern technologies and include their own adaptation resource. The next component of the digital economy ecosystem is the consumer ecosystem. We purposefully allocate it into a separate independent subsystem due to the transformation of the role of the consumer in the digital economy. The consumer subsystem assumes a dominant role in the digital economy, as it is the source of needs, participates in value creation and consumes the created product. Prahalad and Ramaswamy point out that the emerging reality leads to a reassessment of the traditional system of value creation, at the center of which was the enterprise. A new paradigm of value creation is emerging in the digital economy (2010). The concept of relationship marketing interprets the new paradigm of value creation as follows (Gordon 2014): – consumers along with producers are included in the process of creating a new good, the distribution of benefits from this activity also occurs among them (Kholod et al. 2019); – individuals act not only as final consumers, but also determine the format and properties of the desired good (the good is created together with the consumer, not for him); – in order to better satisfy the consumer’s desire, the manufacturer carries out additional coordination of its own business processes; – joint work in the system “consumer-producer” is continuous and is carried out in real time; – long-term mutually beneficial relations between consumers and producers are being built; – all relationships are established on a network basis (Gordon 2014). Thus, consumers expand their functionality in the process of creating value (they design the product together with the manufacturer, organize the production process, compose marketing messages and exercise control of sales channels). Thus, a new subsystem of the digital economy ecosystem – the consumer ecosystem is formed. In the consumer ecosystem, it is the unique experience of collaborative value creation that matters most, not the product. The whole system of industrial relations is built around the individual and the experience of joint value creation, and not under the influence of passive demand for the products of the enterprise. (Karpunina et al. 2019b). This model of value creation is used in the work of Intel, Microsoft, Sony, where the consumer determines the direction of development of new technologies, starting with network support devices and software for working in networks, and ending with cell phones.

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The process of developing the consumer ecosystem in the digital environment can go further in the direction of even greater importance of the consumer in the economythrough the creation of value directly by the consumer. Normann and Ramirez (2003), Grönroos and Voima (2013) indicate the possibility of occurrence of such a phenomenon. In implementing this model, enterprises will only provide resources to the process and mobilize the consumer to create value for themselves. The key role will be delegated to consumers’ individual and social experiences with respect to resources, processes and results. In this case, it is possible to devalue the business ecosystem. Current state of the consumer ecosystem in the digital economy can be described by using the indicators: “human capital (health, skills)” (calculated within the framework of The Global Competitiveness Index 4.0) (Weforum 2018a), it reflects the adequacy of education system and efficiency of the labour market, including the quality of the education system; the degree of staff training; availability of scientists and engineers; reliance on professional management; pay and productivity; hiring and firing; cooperation in the sphere of labor relations; flexibility of wage-setting; the ability of a country to retain talent; the potential of countries to attract talent. The Internet user skills and advanced skills and development indicators can also describe the development of the consumer ecosystem (in the DESI digital economy and society Index). The first uses the European Commission’s digital skills indicator, which is calculated on the basis of the number and complexity of activities involving digital devices and/or the Internet. The latter includes employment rates for ICT professionals and ICT graduates (Karpunina et al. 2019a). According to the digital skills indicator, a composite indicator based on the digital competency framework for citizens, 17% of the population of the European Union did not have digital skills in 2017 due to non-use of the Internet. The proportion of EU citizens without basic digital skills fell by 1 percentage point (to 43%). The state of the consumer ecosystem is directly determined by the level of penetration of information and communication technologies (in 2019 - 4.1 billion Internet users in the world, 3.5 billion users of social networks (Web-canape 2019)). At the same time, consumer activity in the digital environment can be described by indicators of the development of e-Commerce: in the current year, the sector generated 3.45 trillion dollars, and at the end of 2018, only 1.78 trillion dollars were spent on consumer goods (Statista 2019). The ecosystem of talent and innovation is a set of institutional entities that generate new ideas and products for the entire ecosystem of the digital economy. The ecosystem of talents and innovations is based on such elements as: education; science; venture investments; tangible and intangible infrastructure; innovative demand; legislative acts, legal conditions. Universities produce new cadres that are receptive to the culture of entrepreneurship in the digital environment and the risks associated with it. University graduates are carriers of the knowledge, skills and talents that are needed to create innovative products. Scientific basis create educational institutions collaboration with research organizations and institutes of development of the digital economy in the form of technology parks, business incubators, special centres where science and technology are implemented in practice. Venture entrepreneurship provides the ecosystem with the necessary financial resources. The infrastructure preserves the latest products, brings

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them to the market. Legislative acts allow to regulate relations between all subjects of economic activity in the digital environment (Viafuture 2018). The ecosystem of talent and innovation exists thanks to these components, which need constant development. In this context, we should talk about financing the development of human capital, research and development. The state of the talent and innovation ecosystem can be assessed by sub-indices calculated within the framework of the Global innovation index (according to the methodology of the UN world intellectual property organization): innovation resources (institutions, human capital and science, infrastructure, development of the domestic market and business) and innovation results (progress of technology and knowledge economy, development of creative activity). The coefficient of efficiency of innovations is defined as the ratio of two sub-indices, reflecting, thus, the aggregated efficiency of innovative activity at the given innovative potential (Cornell University et al. 2018). Thus, the Global Innovation Index evaluates human capital as a factor of production from the standpoint of correlation of costs and results. For example, such indicators as “education costs”, “public funding per high school student”, “ratio of General and higher education institutions”, “number of researchers” and others are calculated, reflecting the cost of the resource “human capital”. On the other hand, the effectiveness of human capital expenditures in the form of increase in employment in the field of knowledge-intensive services, revenues from intellectual property, the number of scientific and technical publications is reflected in the calculation of the indicators “creation, influence and dissemination of knowledge” Karpunina et al. (2019a). In 2019, Switzerland, Sweden and the United States lead in the largest data indicators. Other European countries such as the Netherlands and Germany, along with Singapore in Asia, remain consistent members of the GII top 10. Spending on R&D (public and commercial) also helps to assess the performance of the talent and innovation ecosystem. For example, the growth of R&D spending in China and the United States over the past 19 years explains the leading positions of these countries in the world rankings in terms of competitiveness, as well as their sustainability in the digital environment (Fig. 2).

Fig. 2. Dynamics of R&D spending in the US, China, Japan and the European Union (source: Organisation for Economic Co-operation and Development, Kearney Analysis (AT Kearney 2018))

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The ecosystem of digital platforms and communications can claim to be a separate element of the ecosystem of the digital economy. It has three priorities: to promote an enabling environment and framework for electronic interactions among actors in the digital economy ecosystem; to promote the creation and promotion of digital products; and to promote information and communication technology (ICT) skills. Internal digital platforms of enterprises (product and/or technology platforms) are assets integrated into a single structure (knowledge, design solutions, technologies, components, etc.), with which the enterprise can effectively develop and produce many derivative products (for example, a family of cars based on a product platform). The development of internal platforms is aimed at obtaining potential benefits in the form of fixed cost savings, the effects of the modular approach-the ability to produce a large number of derivative products at low costs and flexibly change product attributes depending on the changing needs and tastes of consumers. Hewlett-Packard, Boeing, Honda successfully apply their internal platforms and repeatedly use modular components for the production of various product lines. External digital platforms are products, technologies, technical modules, services that provide the basis for the development of complementary products, technologies and services by other enterprises. Examples of such platforms are Microsoft Windows and Linux operating systems; Intel microprocessors; Apple’s iPod, iPhone, and iPad; Facebook, LinkedIn, and Twitter social networks; video game consoles, and others (Kuznecova and Markova 2017). The open interface of digital platforms stimulates innovation among manufacturers of complementary products. The report “The state of digital business transformation 2018” examines five implemented digital communication technologies: big data/Analytics (58%), mobile technologies (59%), private cloud (53%), public cloud (45%) and APIs and Embedded technologies (40%). Currently, additional technologies are also used: application performance monitoring (APM) (18%), microservices and containers (15%), softwaredefined storage (SDS) (14%) and software-defined networks (SDN) (14%). Artificial intelligence (39%), machine learning (34%) and the Internet of things (31%) are the three leading technologies that businesses are implementing today (Forbes 2018). The use of digital platforms and communication systems allows to expand the range of enterprises to deliver a client solution. Businesses want to offer a solution for a wider set of needs. For example, a pharmaceutical company can offer not only medicines, but also a range of health solutions, including real-time monitoring and configuration for the patient, a number of preventive services. All of this is made possible by digital products, artificial intelligence technologies, and secure data that provide new ways to organize businesses, markets, supply chains, and hierarchies (World Economic Forum 2019). Gaver and Kuzumano give strategic recommendations for enterprises that market products developed on the basis of platform technologies. They note the need for continuous development of communication skills, a thorough analysis of the actions of platform leaders and the desire to be the first to receive information about new trends and opportunities for product development, rapid response to the demand of platform leaders, as well as cooperation with other members of the ecosystem of digital platforms and communications (Gawer and Cusumano 2014).

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All the described subsystems of the digital economy ecosystem are hardy and durable, but they are characterized by constant internal changes and are in a state of continuous interaction through a system of institutional and digital links (institutions of the digital economy ecosystem): regulatory rules, technological standards, ethical norms, government mandates, that is, “rules of the game”, allowing the subjects of the digital economy to realize their digital ambitions (Sologubova 2017). Institutions of the digital economy ecosystem are necessary to reduce negative effects due to failures of regulation of the business environment in the conditions of digitalization, imperfections in the communication system and connections between subsystems of the digital economy ecosystem (digital gaps, lack of demand for human resources due to automation and robotics, information risks of digital technologies, the development of cybercrime, etc.). The development of institutions of the digital economy ecosystem is determined by the state’s interest in full-fledged entry into the world digital space. It is in the face of regulators are able to ensure: forming of the legal base, which allows enterprises to use the opportunities of digital platforms and electronic communications for competition and innovation, promotion of business entities of the ecosystem to transition to digital model development and readiness training system to the formation of user skills in the field of digital technology among the population and specialists, full funding of scientific research, to create a protective system of state measures to mitigate the social spaces of digitalization, as well as information risks. A special role in the development of institutions of the digital economy ecosystem is assigned to its initiative actors from different subsystems, which determine new rules of the game in industries and ecosystems, thus creating better prospects for themselves and opening up new opportunities. For example, the transition of traditional enterprises to the digital format, there are a number of barriers to this transition: high duties on imports of digital goods and services, protective measures that support the income of traditional monopolies at a level prohibitive for new companies prone to innovation, the collapse of the chain of intermediaries. In this case, the initiative actors of the ecosystem, working ahead of the curve, are able to set the direction of the regulatory authorities to level these barriers (for example, in the situation of choosing between compliance with previously adopted industry rules, for example, the requirements of safety insurance, and the benefits of consumers from lower prices and increased comfort).

4 Conclusions/Recommendations The authors managed to present an original approach to the study of the ecosystem of the digital economy as a space formed by the institutions of the digital environment, in which different functions and nature of activities interact, structured into appropriate subsystems and having access to common scalable resources to create “value” and meet human needs. In the structure of the digital economy ecosystem, the business ecosystem, the consumer ecosystem, the ecosystem of talent and innovation, and the ecosystem of

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digital platforms and communications, as well as the institutions of the digital economy ecosystem linking them into a single whole, were identified. The characteristics of the current state of each of the selected subsystems of the digital economy ecosystem are given with the help of the indicators of digital environment assessment and digital development indices used in the world practice.

References Akatkin, Y.M., Karpov, O.E., Konyavskij, V.A., Yasinovskaya, E.D.: Cifrovaya ekonomika: konceptual’naya arhitektura ekosistemy cifrovoj otrasli. Biznes-informatika 4(42), 17–28 (2017) Kearney, A.T.: Competition, disruption and deception. Global trends 2018–2023 (2018). https:// www.atkearney.com/documents/3677458/3679874/Global+Trends+2018%E2%80%932023 +%E2%80%93+Competition%2C+Disruption%2C+and+Deception.pdf/154e6c69-d1a1-339 1-d92d-37534e53dbc9?t=1536762345379. Accessed 20 Nov 2019 Chang, E., West, M.: Digital ecosystem - a next generation of the collaborative environment. In: iiWAS2006, Yogyakarta (2006a) Chang, E., Quaddus, M., Ramaseshan, R.: The vision of DEBI Institute: digital ecosystems and business intelligence: Digital Ecosystem and Business Intelligence Institute, DEBII, Perth (2006b) Cornell University, INSEAD and WIPO. Global innovation index 2018. Energizing the world with innovation (2018). https://www.wipo.int/publications/ru/details.jsp?id=4330. Accessed 15 Nov 2019 European Union. Helping SMEs to “Go Digital” (2001). http://europa.eu/eur-lex/lex/LexUriServ/ LexuriServ.do?uri. Accessed 20 Oct 2019 Forbes. The State of Digital Business Transformation 2018 (2018). https://www.forbes.com/sites/ louiscolumbus/2018/04/22/the-state-of-digital-business-transformation-2018/#713c46225883 . Accessed 15 Sept 2019 Gartner Inc. Top 10 strategic technology trends for 2019 (2019). https://www.gartner.com/ smarterwithgartner/gartner-top-10-strategic-technology-trends-for-2019/. Accessed 10 Nov 2019 Gawer, A., Cusumano, M.: Industry platforms and ecosystem innovation. J. Prod. Innov. Manag. 31(3), 417–433 (2014) Gordon, I.: Partnership marketing, Peter, St. Petersburg (2014) Grönroos, C., Voima, P.: Critical service logic: making sense of value creation and co-creation. J. Acad. Mark. Sci. 41, 133–150 (2013) Vc. 12 proryvnyh biznes-modelej, kotorye izmenili rynok (2019). https://vc.ru/marketing/5529612-proryvnyh-biznes-modeley-kotorye-izmenili-rynok. Accessed 18 Oct 2019 Karpunina, E., Konovalova, M., Ermolaev, K., Okunkova, E., Yakovleva, E.: The social dimension of the digital economy. In: Vision 2025: Education Excellence and Management of Innovations Through Sustainable Economic Competitive Advantage proceedings of the 34 International Business Information Management Association (IBIMA) conference, Madrid, Spain 2019 (2019b) Karpunina, E., Shurchkova, J., Konovalova, M., Levchenko, L., Borshchevskaya, E.: Opportunities of advanced development of the digital economy ecosystem. In: Vision 2020: Education Excellence and Management of Innovations Through Sustainable Economic Competitive Advantage proceedings of the 33nd International Business Information Management Association (IBIMA) Conference, Granada, Spain 2019, pp. 7454–7461 (2019a)

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Kholod, M., Golubtsov, P., Varlamov, A., Filatov, S., Yada, K.: Modeling customers speed of movement from POS- and RFID-data. In: Smart Innovation, Systems and Technologies, vol. 143, pp. 101–112 (2019) Kok, W.: Facing the challenge: the Lisbon strategy for growth and employment. Report from the High Level Group, OPOCE, Luxembourg (2004) Kuznecova, S.A., Markova, V.D.: Cifrovaya ekonomika: novye aspekty issledovanij i obucheniya v sfere menedzhmenta. Innovacii 6(224), 27–32 (2017) Moore, J.: The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. Harper Business, New York (1996) Nachira, F., Dini, P., Nicolai, A.: A Network of Digital Business Ecosystems for Europe: Roots, Processes and Perspectives. European Commission DG Information Society and Media, Bruxelles (2007) Norman, R., Ramirez, R.: From value chain to value constellation, designing interactive strategy. Harv. Bus. Rev. 71, 65–77 (2003) Prahalad, K., Ramaswamy, V.: The Future of Competition. Creating Unique Value Together with Consumers. Publishing House “Williams”, Moscow (2010) Sologubova, G: The phenomena of the digital economy. (2017). https://www.econ.msu.ru/sys/ raw.php?o=44108&p=attachment. Accessed 15 Aug 2019 Statista. Digital Market Outlook (2019). https://www.statista.com/outlook/digital-markets. Accessed 2 Sept 2019 Thefinancialstreet. Top countries with the highest GDP – 2018 (2018). https://www.the financialstreet.com/countries-with-highest-economies-2018/. Accessed 20 Nov 2019 Viafuture. CHto takoe innovacionnaya ekosistema i v chem ee plyusy? (2018). https://viafuture. ru/sozdanie-startapa/ekosistema-innovatsij. Accessed 15 Nov 2019 Web-canape. Vsya statistika interneta na 2019 god – v mire i v Rossii (2019). https://www.webcanape.ru/business/vsya-statistika-interneta-na-2019-god-v-mire-i-v-rossii/. Accessed 20 Oct 2019 Weforum. The global competitiveness report 2018 (2018a). http://reports.weforum.org/globalcompetitiveness-report-2018/. Accessed 26 Oct 2019 Weforum. The world’s biggest economies in 2018 (2018b). https://www.weforum.org/agenda/ 2018/04/the-worlds-biggest-economies-in-2018/. Accessed 27 Oct 2019 World Economic Forum. Platforms and ecosystems: enabling the digital economy (2019). http:// www3.weforum.org/docs/WEF_Digital_Platforms_and_Ecosystems_2019.pdf. Accessed 20 Nov 2019

Improving the System of Regulation and Conduct of Banking Operations in the Era of Digitalization Alisa S. Kirizleyeva(&) Institute of Local and Regional Development, app. 1, h. 31, Belinsky str., Perm 614002, Russia [email protected]

Abstract. The aim of the research is to present directions for improving the system of regulation and conduct of banking operations in developing countries in order to achieve a level of compliance with the international requirements and development in the era of digitalization and integration. The article explores the trends, problems and opportunities for the development of banking in developing countries in the context of digitalization. The inadequacy of the traditional asset and liability management system has been proved. The introduction of the latest technologies and the use of new financial and non-financial instruments, which are taken into account on the balance and off-balance sheets, necessitate the improvement of the national legislation and the implementation of international standards. The article presents the analysis and assessment of the impact of off-balance sheet operations on banks’ financial results, which showed a high degree of dependence even at the initial current stage of development of new tools and technologies. The model for assessing the real value of shares for bank shareholders taking into account its performance has been proposed. This model will increase the corporate responsibility of bank owners in carrying out transactions that are taken into account on the balance and off-balance sheets, and, consequently, it will ensure compliance with quantitative, qualitative criteria for the reliability of banks in the future and the ability to fulfill their obligations to all shareholders. Keywords: International standards
Banking regulation and off-balance management
Banking institutions JEL Code: G210


Assets
Liabilities


G230

1 Introduction The development of society has always been influenced by the scientific and technological revolutions. Each stage is characterized by specific fundamental transformations, which cause cardinal changes in all spheres of society, structures and institutional support. First of all, this affects the financial system, the banking system in particular, as its most flexible and mobile basic component. Since banks accumulate all of the country’s cash flows, in order not to lose their share in the money and capital markets, © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 509–519, 2020. https://doi.org/10.1007/978-3-030-47945-9_56

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they must meet the requirements and needs of the society. That is why they are the first to respond in a timely manner and implement all the latest technologies and innovations that are the results of a scientific and technological revolution. The present stage of the society development and the digitalization of all areas of activity is accompanied by the discovery and implementation of the latest information, financial and other technologies, which is especially significant and relevant for developing countries. The development of the modern society is impossible without the global integration. The need for integration preconditions the banks of developing countries entrance to the global financial market, which is impossible without full compliance with the needs and requirements of the world community. Therefore, banks must ensure a complete qualitative restructuring of their activities in order to meet the international requirements of banking, reliability and financial stability under different scenarios of economic development.

2 Methodology Regulation of banking operations at the state level is impossible without approximation of the national approaches to the international standards of the Basel Committee on Banking Supervision, which will strengthen the stability and reliability of banks in stressful situations, increase their credit ratings, and allow Russian and Ukrainian banks to enter the global financial market, which is being formed under the influence of the latest technological developments. In this regard, in the context of digitalization and international economic integration, the consideration of the activities of a commercial bank solely as an enterprise engaged in certain banking operations does not fully reveal its specifics, possibilities and problems of functioning in the current conditions of the development of the national economy of any country in the world. Scientists are conducting research on the definition of a ‘bank’ and presenting various interpretations depending on the stage of its historical formation and on the features of conducting operations in different countries, under different conditions of economic, legal, cultural development of various systems (Davidenko 1997; Bouheni 2016; Ivashina 2015). A German scientist and economist B. Buchwald, engaged in research on the development of banking, noted that the banking changed dramatically under the influence of the needs and moral principles of the society. The scientist marks the initial need of the society to store the money, to issue loans, then the need to form banks to issue money, then to conduct settlement and payment transactions. O.P. Orlyuk presents different ideas about the bank, which are defined by the Central European and Anglo-Saxon systems of law (Orlyuk 2003). Countries with the continental system of law consider a bank through its functions, and countries with the Anglo-Saxon legal system have shifted the emphasis to the regulation of banking activities as a set of rules that are applied in practice. However, it should be noted that such a definition, on the contrary, reduces the banks’ functions to attracting temporarily free cash at customers’

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urgent accounts and investing them in lending operations, at the same time excluding the functions of cash, cashless payments and other banking operations. English scientists present the bank as a structure that stores money for its customers, provides loans and conducts commercial operations with money. P. Rose defined a bank as a providing several services financial institution, considering it in the context of the conduct of banking operations. Douglas North, in his work ‘Institutions Make a Difference’, provides quantitative indicators for measuring the value of institutions. The scientist concludes that institutions have adaptive effectiveness, they must resist crises that are unknown yet, prevent challenges unknown yet, then we can create a layer of institutions that do not allow to fall, then the growth will have a completely different result - the result of development. According to Douglas North, modern banks should have both mechanisms and tools for regulating and preventing the consequences of crisis phenomena in the economic and political life of the society with the aim of not only to keep these institutions in a reliable and stable condition, but also develop their operations. Thus, it is necessary to note the problem of narrow legislative interpretation of a bank in the present conditions of digitalization. First of all, it is necessary to include in the normative legal acts of the regulator the possibility of banks working with new financial and non-financial balance and off-balance instruments, which are the results of the introduction of the latest technologies. These are the technologies of the decentralized payment system P2P (peer-to-peer), transition to electronic monetary circulation and paperless technologies; changing the concept of managing information and cash flows of the bank: moving from ‘heavy’ solutions that require the use of complex, expensive hardware systems to ‘light’ tools that are based on SaaS principles in the cloud and others. Such technologies have led to the development of the use of off-balance sheet financial instruments in banks nowadays and in the future, which will have a significant impact on the financial position of the bank and its reliability. Therefore, representing a bank in the future exclusively as a credit organization, which is mainly engaged in deposit-credit operations and servicing customer accounts, creates obstacles to the development of not only banking operations, but also the entire financial system of the state. It is the latest financial technologies and integrated well-functioning information database of banks for all legal entities and individuals of all countries that determine the deep penetration of banks in all areas of the ‘financial and non-financial life’ of the society - the insurance system, consulting, financial and non-financial services, economic activity of all business entities (Vishnevskiy 2013; Parusimova 2017). The improvement of the legal regulation of banks should also include the requirements to provide in the financial statements the detailed information on offbalance sheet instruments and their types, which will enable banks’ shareholders to fully assess the risks of their activities. For banks to reach a new level of development today, which will determine their future, it is necessary to initially bring their activities fully in line with the international recommendations concerning the reliability and financial stability of these institutions.

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The requirements of the current legislation and laws and statutory instruments of the regulators of the Russian Federation and Ukraine on the regulation of banking activities are at different levels of adaptation to the recommendations of the Basel Committee, in contrast to developed countries (Koch 2016). Recent changes to Ukrainian laws and instructive acts have increased the quality of bank liability protection since the calculation of the regulatory capital adequacy standard began to take into account the risks of off-balance sheet obligations. There is still a disadvantage that off-balance sheet financial instruments must include not only offbalance sheet commitments, but also off-balance sheet requirements, and also take into account the different level of riskiness of these instruments depending on the level of the market development of the country in which it is circulating. At the same time, the Bank of Russia has not yet determined the requirements for conservation and countercyclical buffer. In order to increase the reliability and financial stability of banks in Russia, a number of regulatory legal acts have been adopted that partially approximate the national requirements on determining regulatory capital to its adequacy to the international ones. Capital ratios of the first and second levels are set according to the recommendations of the Basel Committee, but it should be noted that the standard of capital is higher than the recommended level: the recommended level is  4.5%, and 8% is established. The regulator has not introduced normative values and the calculation of buffer and countercyclical capital, system-significant buffer, also for additional capital it is recommended to establish a value of  1.5%. The capital adequacy standards in Russia, unlike Ukraine, also include the following buffers: buffer for maintaining capital adequacy from sources of basic capital, set as a percentage from the sum of risk-weighted assets, without including the amount of off-balance sheet instruments; the value of the countercyclical buffer - it includes the calculation of the assets and off-balance sheet liabilities with the exception of transactions with the state and municipal corporations and enterprises; systemic importance buffer that takes into account only assets distributed by risk categories without risky off-balance sheet instruments. According to Basel III, a bank’s stability in stressful situations is characterized by a leverage/leverage ratio calculated as the ratio of tier 1 capital to assets and off-balance sheet items weighted by risk. According to the international recommendations, the indicator of financial leverage (leverage ratio) is to be calculated as the ratio of fixed capital to assets and off-balance sheet instruments that are at risk. The normative value of this ratio, established by the regulator of Russia, is 3%, which complies with international recommendations. The requirements of the regulator in Ukraine are significantly different from the Russian ones, as well as from the international standards. The Instructions present the types of assets with their classification by risk degree, without the necessary similar

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presentation of off-balance sheet instruments by risk degree necessary for the calculation of the capital adequacy ratio for Ukrainian banks. The NBU normative legal acts do not establish the requirement to calculate the necessary by Basel III financial leverage indicator, which determines the mandatory compliance with the requirement for coverage by fixed assets, which consists of qualitatively stable elements, in the amount of 3% of risk-weighted assets and offbalance sheet requirements. Thus, a significant difference in the regulation by the central bank of these states to regulate the liquidity of modern banks in accordance with the international requirements is the introduction of a liquidity coverage ratio (LCR) in Ukraine, which allows daily monitoring of the adequacy of cash outflows in banks under a stress scenario. In Russia, contrary to Ukraine, the long-term liquidity ratio is calculated, which allows to limit the risk of the bank losing liquidity in the long-term scenario (over 365/366 calendar days). In Ukraine, on the contrary, there is no such monitoring, whereas the short-term liquidity ratio is controlled - providing the fulfillment of obligations by the bank only up to 365/366 calendar days without taking into account the possibility of obligations non-payment in the long term with risky investment of funds in long-term assets and other finances tools. According to the international recommendations of the Basel Committee, it is also necessary to introduce a ratio of net stable funding. To date, the legislation of the countries in question does not provide for the calculation and observance of the Net Stable Funding Ratio (NSFR), the introduction of which is mandatory to restrain the active aggressive policies of banks during the crisis in order to profit and gain a customer base. During the economic crises and banking system instability, based on the analysis, it has been established that the developing countries conduct a thoughtless policy of managing liabilities and assets: the banks of Russia and Ukraine significantly increased the volume of loans issued - an aggressive credit policy was carried out, which resulted in the quality deterioration of the loan portfolio due to non-repayment of borrowers’ debts and ultimately obtaining the financial result - the loss for many banks, which caused a loss of banks’ reliability (Fig. 1). US banks are increasing their investment in risky assets in proportion to the increase in their equity, while banks in Russia and Ukraine are pursuing a policy of significant outstripping growth rates in the loan and securities portfolios compared to the formation of their own resources. Indicative and distinctive from Ukraine (14%) and Russia (22%) are indicators of the coverage of 55% of risky assets by US banks, and 75% by banks of Canada. In Ukraine this figure is only 14%. This indicates a greater likelihood of covering banks’ losses from these active operations and a greater degree of reliability of banks in Canada and the United States, while observing not only quantitative indicators, but also the quality of banks’ equity in these countries, as well as the need for capitalization of domestic banks.

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Fig. 1. Dinamics of (а) assets and (b) profit of banks of Ukraine, Russia, the USA and Canada, bln rub.

According to the conducted analysis, it can be seen that the assets of Ukrainian banks grew 6.16 times from 2005 to 2017, in Russia - 7.58 times, in the USA - 1.61 times, and in Canada the growth was 0.14 times. Moreover, when considering the general indicator of the financial result for twelve years in Ukraine, a loss of 794,328 million rubles was received, which testifies the ineffective management of bank liabilities and assets. The best performance indicators of banks are those of the banks of Russia and Canada, which throughout the years of activity in the second-tier banking system as a whole made a profit, which totalled to 6,893,800 million rubles in Russia

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during twelve years and 5,294,697 million rub. for Canada during ten years. The total result of the US banks in 2005–2017 - profit - amounted to 443 645 584 million rubles. Another problem is the presence of non-diversified portfolios of liabilities, assets, off-balance sheet (Kirizleyeva 2016). The high volatility of the markets in developing countries, the difficulties of introducing the latest technologies contribute to the slow process of digitalization of all activities and operations of banks. But the analysis and assessment of the impact of off-balance sheet operations of banks on their financial results showed a high degree of dependence even at the present stage of new tools and technologies development. Studies on how close the relationship between factors that affect the level of net profit in the banking system is, based on the financial statements of 20 banks in Russia, allowed us to make a statistical analysis of each dependence reflecting this relationship, find a fairly close statistical relationship and build a hypothetical dynamic model of net profit. Net profit (y, thousand rubles) is closely related to the financial instruments ‘Net Assets’ (x1 , thousand rubles), ‘Deposits of individuals’ (x2 , thousand rubles), ‘Attracted interbank loans’ (x3 , thousand rubles), ‘Off-balance sheet liabilities’ (x4 , thousand rubles) of the banking system artificially organized from twenty components of the banking system of Russia (thousand rubles), which is confirmed by pair correlation coefficients, respectively: Ryx1  0;84, Ryx2  0;84, Ryx3  0;75, Ryx4  0;93 (Table 1). Table 1. Correlation matrix y t x1 x2 x3 x4

y 1 0,596438134 0,841956387 0,842017147 0,756103901 0,928298485

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1 0,733993887 0,746336719 0,607849706 0,565486089

1 0,992055972 1 0,911942311 0,856972701 1 0,798020715 0,79614581 0,742683216

The process presentation of each asset showed: the dynamics of realization is positive, as evidenced by the corresponding correlation in time: Rtx1  0;73, Rtx2  0;75, Rtx3  0;6, Rtx4  0;57 and corresponding trend graphs (Fig. 2).

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Deposits of individuals 1 0.8 0.6 0.4 0.2 0

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0.4

0.6

0.8

1

0

t

0

20

40

60

Fig. 2. Dynamics of financial instruments (Compiled by the author.)

Based on the analysis presented above, the functional dependence of net profit on the above financial instruments can be shown in the form of the following regression equation: y ¼ 25430578 þ 0; 046028783x1  0; 095546262x2  0; 065541005x3 þ 0; 057660824x4 þ e

ð1Þ

Then, the economic essence of the above defined factors in the form of indicative factor criteria is considered and the moving average method (MAM) is applied, the correlation matrix is determined, the hierarchy of the correlation dependence is studied. Studies have shown the dependence of net profit on the indicator of off-balance sheet liabilities. This dependence has the highest correlation dependence ryx4  0;92. This dependence is represented by the regression equation: yj ¼ 22690398 þ 0; 07x4; j þ ej ;

ð2Þ

where ej – a standard mistake, j 2 ½1; 81. The correlation coefficient R  0;92 shows a fairly high degree of closeness of dependence. The determination coefficient R2 ¼ 0;86 indicates that if the dynamics of off-balance sheet liabilities ðx5 Þ change by 1%, the dynamics of the bank’s net profit ðyÞ will change by 86%. It should be taken into account that the indicators of off-balance sheet liabilities are closely correlated with the net assets ðx1 Þ, deposits of individuals ðx1 Þ, attracted interbank loans ðx3 Þ.

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Thus, a high degree of influence of not only financial instruments, which are taken into account in the structure of assets and liabilities of banks, but also in articles of offbalance sheet liabilities, on the financial result of the bank is proved. In order to improve the management efficiency of all banks, it is necessary to include analysis and management of off-balance sheet liabilities and develop an asset and liability management system. In the context of digitalization, the traditional system should be improved and presented by the system for managing liabilities, assets, off-balance sheet requirements and liabilities. The final issue of the development of banks in the national and international markets in the context of the latest technologies introduction, the use of new tools should be the increase of the responsibility level of the owners for the performance of each particular bank. Since the bank’s shareholders invest their own and other people’s money at their own discretion, losses from investments in illiquid assets and financial instruments that are taken into account on an off-balance sheet should affect not the bank’s stakeholders, but the participatory interest (share, block of shares) of each bank’s shareholder. The Central Bank of the Russian Federation and the NBU need to develop a legal basis for the implementation of a financial instrument and the terms of contracts, statutory documents, according to which it will be possible to convert obligations, losses and negative earnings of the bank into the share capital. In a modern bank, in order to conduct effective management of liabilities, assets, off-balance sheet claims and liabilities, the management system must include the responsibility of shareholders for the results of the policy on working with financial instruments, which will affect the value of shares and, accordingly, the degree of influence on the possibility of further decisions. In theory and practice, different types of prices for financial instruments are used, which are classified by type of financial instrument, type of issuer, market segment, type of market operations, place and time of pricing, namely: nominal, issue, balance, accounting, exchange rate, stock exchange, discounted (Musina 2016). The book value is determined on the basis of the financial statements of the bank as the value of the joint-stock company’s equity divided by the number of outstanding shares: Vb ¼ Vequ/N;

ð3Þ

where Vb – book value per share; Vequ – equity value of the joint-stock company; N – number of outstanding shares. The model for evaluating the real value per share for the bank’s shareholders taking into account its performance without the payment of dividends and the current yield for this type of share on the market: Vbr ¼ Vb  Premium=Discount Vbr – real book value per share.

ð4Þ

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The real book value per share tends to exceed the Vb, if the bank operates profitably, by the amount of profit per 1 share based on the results of the bank’s activities and the discount on the book value if the bank suffers losses - by the amount of loss per 1 share. With loss-free results, a modern bank should calculate the book value according to Formula 1. Such a real book value per share in a modern bank should be determined taking into account the results (profitability/loss ratio) of the bank’s operation and should consist of a book value determined on the basis of the bank’s financial statements as the value of the joint stock company’s equity, divided by the number of outstanding shares and premiums or discounts depending on the results of the joint-stock company’s operation. Since the international banking regulatory authorities included in the international financial reporting standards the requirement to reflect complete and truthful information about the financial state of a modern bank, taking into account the probability of cash flows and outflows from financial instruments in the present and in the future, the bank’s shareholders are responsible for calculating the real book value of the balance sheet and off-balance sheet tools. The reflection of the real financial result of the bank’s activity is a reflection of the correctness of the decisions taken by the owners of the bank, which the equity and financial state of the majority of the bank’s shareholders depend on. A stimulating and restraining tool of managing a bank’s property is the simultaneous and complete management of all balance and off-balance portfolios of financial instruments. This is a peculiarity of banking institutions. Properly distributed and invested own, attracted and borrowed funds of the owners and customers of the bank determine its financial result, which affects the financial situation and, accordingly, the ability to fulfill its obligations to shareholders of a modern bank.

3 Results Thus, the article analyzed the theoretical and legislative interpretations of the bank, on the basis of which there has been found a noncorrespondence to the level of development of banking operations in the future in the context of digitalization. Incomplete implementation of the international requirements for banking activities by credit organizations of Russia and Ukraine is revealed. Based on the analysis of the activities of banks on the example of developing and developed countries, the main indicators of their performance are assessed, an aggressive policy for conducting risky activities, the presence of undiversified portfolios of liabilities and assets, the absence of detailed information on off-balance sheet instruments in the financial statements and other problems that may cause a loss of the bank reliability in times of crises. A high degree of influence of not only financial instruments that are recorded in the structure of assets and liabilities of banks, but also in the articles of off-balance sheet liabilities, on the financial result of the bank is proved. As a result, the traditional asset and liability management system is outdated and needs to be developed.

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4 Conclusion/Recommendations During the study, the article proposes the following areas for improving the banking operations: the national-level regulation of the banks’ ability to use new financial and nonfinancial instruments of balance and off-balance sheet in the context of digitalization; synergy of national and international banking standards in developing countries to meet their global criteria for reliable banks; establishing the dependence of the value of shares on the performance of a modern bank will encourage shareholders to make appropriate reasonable investment decisions in order to obtain stable returns in a certain future, levelling the current aggressive policy of maximizing profit in the present, at the same time using schemes for deriving these incomes and reflecting minimal financial results in financial statements for the regulator and fiscal authorities.

References Davidenko, N.: Finansovyi menedzhment: evoliutsiia vzgliadov i utochnenie predmeta [Financial management: the evolution of perspectives and indication of object]. Problemy teorii i praktiki upravleniia - Probl. Theory Pract. Manag. (1), 116–118 (1997) Bouheni, F.: Banking Governance, Performance and Risk-Taking. Conventional Banks vs Islamic Banks. Wiley, London (2016) Ivashina, V.: “Dollarovoe finansirovanie i kreditnoe povedenie globalnykh bankov” [Dollar Funding and the Lending Behavior of Global Banks]. Ezhekvartalnyi ekonomicheskii zhurnal - Q. J. Econ. 30(3), 1241–1281 (2015) Orlyuk, O.: Bankivska systema Ukrainy. Pravovi zasady organizatsii [Ukrainian banking system. Legal background of the Organization]. Yurinkom Inter., Kyiv (2003) Vishnevskii, A.: Sovremennoe bankovskoe pravo: bankovsko-kliyentskie otnosheniia: Sravnitelno-pravovie ocherki [Modern Banking Law: Bank-Client Relations: Comparative Essays]. Statut, Moscow (2013) Parusimova, N.: Formirovanie i razvitie deiatelnosti finansovykh posrednikov na rossiiskom rynke [Formation and development of financial intermediaries in the Russian market]: monografiia. OGU, Orenburg (2017) Koch, C.: Bank leverage and regulatory regimes: evidence from the great depression and great recession. Am. Econ. Rev. 106(5), 538–542 (2016) “Statistika v tsyfrakh” [Statistics in numbers]. https://www.fdic.gov/bank/statistical/stats/ Kirizleyeva, A.: “Znachenie deiatelnosti bankovskikh institutov dlia razvitiia ekonomiki strany” [The importance of banking institutions for the development of the country’s economy]. Teoriia ekonomiki i upravleniia narodnym khoziaistvom - Theory Econ. Natl. Econ. Manag. 39(3), 171–180 (2016) Musina, O.: Metody i mekhanizmy otsenki stoimosti kommercheskogo banka [Methods and mechanisms of the cost estimate of a commercial bank]. SamNts RAN, Samara (2016)

Potential for Development of Business Segments of the Green Economy in the Republic of Crimea Olga V. Kozhevina1(&) , Natalia V. Salienko2 , Evgeny A. Starozhuk2, Victoria A. Klueva2 , and Irina V. Pavlova3 1

Bauman Moscow State Technical University (National Research University), Chamber of Commerce and Industry of the Russian Federation, Moscow, Russia [email protected] 2 Bauman Moscow State Technical University (National Research University), Moscow, Russia [email protected], [email protected], [email protected] 3 Financial University under the Government of the Russian Federation, Bauman Moscow State Technical University (National Research University), Moscow, Russia [email protected]

Abstract. Purpose: The paper considers the task of creating green economy based on rational management of natural and subsurface resource. Design/methodology/approach: The study is based on a sufficient scientific and practical basis of international entrepreneurship, internationally defined goals of transition to the green economy and directions of its development, as well as the priorities of the Russian policy in this area. Findings: The scientific novelty of the study is as follows: classifying the principles of the green economy and identifying macroeconomic and rental ones; definition of such resource effects and evaluation parameters of the market potential of the green economy, that may be specified taking into account regional characteristics of the Republic of Crimea; systematic and strategic analysis-based identification of such sectors of the green economy, in which the development of entrepreneurship will ensure high growth rates of the Crimean economy; development of measures aimed at creating both an effective regional economic policy within green economy development and the segments of agroindustrial entrepreneurship aimed at ensuring environmental and food security of the Republic of Crimea. Originality/value: The article presents a comparative analysis of the implementation of environmental innovations in the federal districts and agroindustrial regions of the Russian Federation; potential opportunities, risk and growth factors of the green economy of the Republic of Crimea are identified. Keywords: Green economy
Sustainable development
Republic of Crimea
Entrepreneurship
Economic segments
Industrial complex
Green growth potential JEL Code: Q01


Q18
D47

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 520–529, 2020. https://doi.org/10.1007/978-3-030-47945-9_57

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1 Introduction The current stage of globalization sees the advent of a new area of economy – the green economy that increases human well-being and ensures social justice, at the same time significantly reducing the environmental risks. Strategically, sustainable use of natural resources in the context of the green economy will contribute to the environmental and food security of Russia. The structure of industry-specific financing in the creation of the innovation platform of the green economy should take into account the expansion of production capabilities and trade in the domestic and foreign markets, formation of new models of entrepreneurship, job creation. Issues of sustainable use of natural resources are relevant during the transition to “green” standards in the agro-industrial complex. Further “business as usual” approach to nature resource management (Alekseyeva and Klimanova 2011; strategy 2014) is associated with risks that can lead to social (increased mortality, reduced life expectancy, increased morbidity, etc.) and economic losses (reduced competitiveness of Russian companies in the face of stricter environmental standards in the world), which can significantly limit economic growth.

2 Materials and Method The world community has long recognized the importance of the transition to green growth (environmentally sensitive development) and green economy. The option of transition to the green economy at the global level was proposed in 2008 within the “Global Green New Deal” developed by the UN (Paptsov and Shelamova 2014; Shulze et al. 2015). Research in the field of economics of sustainability (Zakharova 2011; Кundius et al. 2004) looks into the origin of the concept of the green economy, its emerging characteristics and expectations in terms of strategic results. The green economy of Russia is in its fledging and development period, that is why the theoretical and regulatory framework for the necessary “green transformation” in the country is underdeveloped. In addition, the Russian scientific and business practice lack well-developed and reasonable organizational, managerial and institutional models for assessing the potential of entrepreneurship development in the sectors of the green economy (Кozhevina 2015; Dubina et al. 2017; Kozhevina et al. 2015). Troublesome development of the green economy results from a considerable delay in transition to the environment-friendly economy of the Russian Federation as compared with other countries. In our opinion, the expansion of business activities in agriculture and other priority sectors will significantly accelerate the transition to the green economy through the active use of nature- and resource-saving technologies, and implementation of human impact- and environmental pollution-reducing measures, as well as the creation of innovative and technological platforms of the green economy on their basis. The issue of integrated assessment of the market potential of the development of business segments of the green economy in the regions of the Russian Federation is new to Russian science. Nevertheless, there is a large number of works on the assessment of the market potential of the traditional brown economy enterprises, as well as a lot of methods and approaches to assessing the market potential of the regions,

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both integral and concerning certain aspects of the market potential: information and communications, marketing, price, capacity, etc. Currently, there is a lack of developed domestic tools for assessing the market potential for the development of business segments of the green economy in order to ensure economic security. Besides, the Russian scientific and business practice lack well-developed and reasonable rational organizational, managerial and institutional models of entrepreneurship (business models) that would consider the parameters of economic security provision and be related to the sectors of the green economy. Modern science, both domestic and foreign, covers the issues of assessing the market potential of economic entities in sufficient detail. The term market potential refers to the ability of an economic entity to exert decisive influence on the general conditions of circulation of goods in the relevant product market and (or) to impede access to the market to other economic entities, not directly related to the share of an economic entity in the product market (document 1996). Studying the essence of the “market potential” economic category, D. A. Grigoriev and Yu. Yu. Suslova found that the market potential can be considered in three aspects (Grigoryev and Suslova 2014): 1) as a capacity characteristic represented by the amount of goods and services sold in the maximum possible volume; 2) as a mathematical component, i.e. the limit that market demand tends to at 100% customer satisfaction with this product; 3) as a social and economic component determined by the total of productive forces and consumer preferences on the market. Using the category “market potential of the region” in the methodology and theory of regional economic planning makes it possible to develop the logic of the study more accurately, to reveal in a more non-biased manner the problems and formulate directions for improving the planning system in the regions of Russia, especially in agroindustry. For example, the following lines of improvement of strategic regional planning can now be considered relevant: prioritizing the strategy of innovative development of the economy within the regional economic planning; deepening the integration of the industry-specific and territorial planning for a more rational use of state and regional financial resources; the use of various components of the market potential of the region as objects of planned activities – it will contribute to a more precisely targeted solution of regional problems taking into account the impact of the market environment factors on the development of the region’s economy. Currently, the Market Up Consulting Group has developed a model for calculating the rating of the attractive effect of regional markets for various types of business. Based on this model the Market Capacity technique was patented as a technology for assessing the market potential of regions based on the calculation of a unified market indicator, UMI. According to the authors, the administration of the Market Capacity resulted in creating a regional business promotion strategy (Methods, 2012). Harris’ marketpotential index (MPI) is also known and actively used in the international practice. Issues of formation and functioning of the green economy are covered in detail in various international documents of such credible organizations as UNEP (UN Environment Program), OECD (Organization for Economic Cooperation and Development)

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and the World Bank. Some issues of sustainable development and green economy are studied by major international institutions such as IFPRI (International Food Policy Research Institute). Along with this, there is a large number of different Funds that contribute to the promotion and development of methods and principles of the green economy. The Institute of Sustainable Development of the Public Chamber of the Russian Federation functions in the Russian Federation. Here we propose the green economy principles that can be classified into macroeconomic and rental ones (Кozhevina 2007, 2015). The macroeconomic principles of the green economy include: 1) assessment and prioritizing of ecosystem services at the national and international levels; 2) employment through the creation of green jobs and the development of appropriate public policies; 3) the use of market mechanisms to achieve sustainable development of the society. Rental principles of the green economy: 1) efficient use of natural resources; 2) preservation and increase of the natural capital, sustainable nature resource management; 3) reduction of air pollution; 4) reduction of carbon emissions and the transition to international environmental standards; 5) reduction of human-induced impact. Unfortunately, the Russian Federation has not developed a comprehensive policy for the formation of a green economy, and the terms “green economy” and “green development” are not enshrined in the laws. The “Strategy of socio-economic development of agro-industrial complex of the Russian Federation for the period up to 2020” (Scientific basis) (strategy 2020), recommends to carry out fundamental research on assessing the risks of adaptation of the agro-industrial complex of Russia to observed and projected climate changes during the preparation of regional target programs for the development of the agro-industrial complex and its basic industry – agriculture, as one of the main areas of research. The risks associated with adverse weather and climatic conditions are usually not mentioned among the key risks for sustainable social and economic development. Identifying natural climatic risks that have a serious impact on crop yields and production volumes within the “State program for the development of agriculture and regulation of markets for agricultural products, raw materials and food for 2013–2020” in the group of risks of crop production is an evidence of the particular importance of climatic resources. The danger of such risks has increased in the last decade in the face of recurrent adverse weather conditions.

3 Results In modern conditions when the Russian economy is facing new challenges from the international community, the fact that the Republic of Crimea has joined the Russian Federation makes the issues of development of the new subject of the Federation especially relevant. Over the past twenty years, as a region of Ukraine, the Republic of Crimea has faced the dire consequences of consumer attitude to its territory and natural resources, the lack of public funding for infrastructure, industry, technology, environmentally friendly and energy saving technologies. The change of the legal framework governing the life and social and economic processes in the Republic of Crimea is the most appropriate time and a favourable condition for the restoration and development of its economy towards the green economy.

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This line of research is chosen because of the following: first, the Republic has unique mineral, recreational, and agro-climatic resources creating prerequisites for the rapid development of a number of sectors of the economy and strengthening of economic specialization of the region. Second, because of the lack of investment in the infrastructure of the Crimea for twenty years we have to modernize and develop the region on the basis of the green economy principles and approaches. Besides, the adoption in 2017 of the “Strategy of economic security of the Russian Federation for the period up to 2030” made it necessary to develop the process of implementation and monitoring of the strategy of economic security of the new subject in the system of national security of the Russian Federation, taking into account environmental parameters. The problem of assessing market potential usually arises in two cases: when the industry with its products or services is going to enter the markets of other subjects of the Russian Federation or the international market as well as when it is necessary to assess the state of the industry, its material and technical base and infrastructure of the regional markets. Both cases are relevant for the Republic of Crimea. In this regard, we should pay attention to a comprehensive assessment of the market potential of the Crimea from the point of view of the green economy sectors. This line of research is relevant because of the following: first, the Republic of Crimea has unique mineral, recreational and agro-climatic resources creating prerequisites for the rapid development of a number of sectors of the economy and strengthening of economic specialization of the region. Second, because of the lack of investment in the infrastructure of the Crimea for twenty years we have to modernize and develop the region on the basis of the principles and approaches of the green economy. According to the strategy of socio-economic development of the Republic of Crimea until 2030, this region is geared to the development of smart (innovative) and green (environmentally friendly, energy-efficient) economy characterized by advanced development of science with dynamic implementation of its achievements and minimal human impact on the unique natural ecosystem of the Crimean Peninsula. Assessing the potential for the development of the green economy and the transition of the Republic of Crimea to the model of green growth, we should state that the sectors of specialization of its economy are health resort and tourist complex, agriculture, food production, winemaking, and fishing. Main risk generating factors of sustainable development of the Republic of Crimea: limited access to the capital market, high cost of financial resources; low level of innovation activity of enterprises of the Republic of Crimea; shortage of highly qualified personnel for the future technological breakthrough; high level of depreciation of fixed assets in the social and economic spheres of the Republic of Crimea; vast shadow economy; breakage of the established cooperation ties, changing markets, reduced intensity of foreign economic relations; high resource intensity of the economy; investment and innovation infrastructure in the formation stage; seasonality of the functioning of service-oriented companies; location of the Republic of Crimea in the zone of increased seismic activity; high human impact on the environment; environmental threats – deterioration of environmental conditions and the emergence of serious environmental issues due to increased human impact: low quality of wastewater treatment, increased waste disposal in the environment, increased emissions of

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pollutants into the air by stationary and mobile sources; violation of environmental standards in agriculture. Growth factors of the Republic of Crimea: preferential regime of a free economic zone within the entire territory of the Republic of Crimea; favourable agro-climatic resources (heat supply, fertile soil); the presence of primary competencies in the agroindustrial complex; obtaining additional federal financial resources for the socioeconomic development through participation in the state programs of Russia; cooperation with federal development institutions – the Industrial Development Fund, Fund for the Development of Single-industry Towns, Fund for Support of Small and Medium Enterprises, the Innovation Assistance Fund, Vnesheconombank and others (strategy 2017). Strategic projects localized in the municipal units of the Republic of Crimea aimed at the development of the agro-industrial complex and agriculture for the period up to 2030. 1. The municipality of Alushta: expansion of processing of essential oil crops, increasing the area of vineyards, creation of an industrial/agro-industrial park. 2. The municipality of Armyansk: construction of bakery producing enterprises, vegetables and fruits processing enterprises, pasta producing enterprises, increasing the acreage for grains and oilseeds, construction of a wind power plant. 3. The municipality of Dzhankoy: construction of a canning plant, development of winemaking, expansion of milk processing, expansion of the assortment of dairy products, construction of an enterprise for the production of agricultural machinery and equipment. 4. The municipality of Yevpatoria: expansion of capacities for winemaking, creation of capacities for fish processing. 5. The municipality of Kerch: construction of a fish receiving point in Kerch, construction of a plant for the production of stocking material, development of fish processing and aquaculture, creation of capacities for meat and milk processing. 6. The municipality of Krasnoperekopsk: production of vegetables in the protected ground (construction of a complex for the production of the protected ground vegetables), creation of vegetables processing facilities, pork production, processing and sale. 7. The municipality of Saki: creation of capacities for fruits and vegetables processing and conservation, construction of meat processing facilities, cultivation of mariculture. 8. The municipality of Simferopol: reconstruction and development of the poultry farm for the production of poultry meat and chicken eggs. 9. The municipality of Sudak: increasing the area of vineyards, increasing the production of grape wines, establishing of walnut orchards, processing of walnuts on an industrial basis, increasing the area of fruit plantations, and processing of fruit crops. 10. The municipality of Feodosia: development of wine-making, construction of a plant for the production of stocking material, establishing of walnut orchards, processing of walnuts on an industrial basis, mariculture.

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11. The municipality of Yalta: development of viniculture in the area of the Opolznevoye village, increase in wine production at the federal state unitary enterprise MASSANDRA public company, creation of an industrial/agro-industrial park. It is expected that the following facilities will be constructed in municipal areas: conserved fruit and vegetables production facilities, processing and bottling of wine and brandy; warehouse infrastructure for storing fruit, vegetables, grain, and milk; wind turbines; beef-producing as well as beef and dairy farms, creating facilities for meat and milk processing; environmentally safe industrial complex with the infrastructure for recycling animal waste (biological waste) to obtain complete feeds for animals and poultry; cooling and logistic complex; solar power station; and desalination station. The main purpose of creating sustainable eco-environment in the Republic of Crimea is to create a favourable environmental situation. Priorities for sustainable development of the region: 1) ensuring environmentally friendly economic growth; 2) preservation of the natural environment and biodiversity of the Republic of Crimea; 3) improving the system of state environmental monitoring; 4) reclamation of disturbed lands; 5) solving the problem of water supply; 6) formation of ecological culture, development of environmental education and upbringing; 7) implementation of environmental innovations. Tables 1 and 2 present data on the share of the organizations that carried out environmental innovations in the federal districts and subjects (as of the beginning of the year).

Table 1. Share of organizations implementing environmental innovations in the total number of surveyed organizations by federal districts of the Russian Federation as of the beginning of the year Federal district of the Russian Federation (Percent) 2011 2012 Russian Federation 4.7 5.7 Central federal district 4.3 5.6 Northwestern federal district 3.4 5.5 Southern federal district 3.2 3.6 North Caucasian federal district 3.3 3.1 Volga federal district 6.9 7.5 Ural federal district 5.6 6.5 Siberian federal district 4.2 4.8 Far Eastern federal district 4.1 4.6 Crimean federal district … … Republic of Crimea … … * source: Federal State Statistics Service

2013 2.7 3.0 1.9 2.0 1.6 3.2 3.0 2.2 2.9 … …

2014 1.5 1.6 1.5 0.9 0.7 1.8 1.6 1.3 1.6 … …

2015 1.6 1.7 1.6 1.3 0.8 1.7 1.8 1.3 1.5 4.1 5.8

2016 1.6 1.7 1.6 1.2 0.8 1.8 1.8 1.2 1.3 1.6 1.8

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Table 2. Share of organizations that carried out environmental innovations in the total number of surveyed organizations by subjects of the Russian Federation as of the beginning of the year Subjects of the Russian Federation, agro-industrial regions

(Percent) 2011 2012

2013

2014

2015

2016

Russian Federation Belgorod Oblast Voronezh Oblast Kursk Oblast Orel Oblast Tambov Oblast Pskov Oblast Krasnodar Oblast Rostov Oblast Stavropol Krai Kurgan Oblast Altai Krai Republic of Crimea

4.7 8.2 4.5 3.1 6.8 4.0 2.2 2.2 2.3 4.3 6.8 4.8 …

2.7 3.9 3.4 3.0 1.5 1.5 0.3 3.0 0.8 0.9 2.1 4.8 …

1.5 2.5 0.9 1.2 1.5 1.2 – 1.0 0.7 0.4 0.3 1.7 …

1.6 2.6 1.5 1.7 2.2 1.3 0.4 1.1 1.2 0.9 0.3 2.1 5.8

1.6 2.0 2.2 1.5 2.4 0.9 0.4 1.0 1.4 0.7 0.6 2.0 1.8

*

5.7 8.7 5.1 5.4 7.8 5.7 3.3 4.4 3.1 3.5 6.2 7.5 …

source: Federal State Statistics Service

It is proposed to assess the potential of the green economy through a set of interrelated resource effects (parameters) (Fig. 1).

Fig. 1. Structure of resource effects assessment to determine the potential of the green growth of the regional economy (Кozhevina 2015).

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4 Conclusion This study shows that the Republic of Crimea has significant potential for the development of business segments of the green economy. This region should be considered from the standpoint of state support of widespread environmental innovations, financing of projects for the development of organic agriculture, construction of alternative energy facilities. Solving problems that limit the sustainable development of the region and levelling risk factors will allow in the period up to 2030 to form in the Republic of Crimea an innovative agriculture-based economy, and an effective agroindustrial complex in general which will increase the competitive status, investment attractiveness of the region, will contribute to the employment of the population of the Republic of Crimea and the formation of modern professional competencies to meet the regional needs.

References Alekseyeva, N.N., Klimanova, O.A.: Prospects for the scientific and technological development of the “Environmental Management” direction in Russia in the context of the global transition to a green economy. Research report. Moscow State University named after Lomonosov (2011) Grigoryev, D.A., Suslova, Yu.: Theoretical and methodological approaches to the study of market potential and its capacity. Prob. Mod. Econ. 2, 234–237 (2014) Zakharova, T.V.: «Green» economy as a new course of development: global and regional aspects. Bull. Tomsk State Univ. 4(16), 28–38 (2011) Кozhevina, O.V.: Strategic aspects of environmental management development of agricultural regions. Bull. Russ. Agri. Sci. 3, 16–17 (2007) Кozhevina, O.V.: Sustainable development and “green” growth of regions of agro-industrial specialization. Bus. Strat. 3, 14–20 (2015) Кundius, V.A., Кozhevina, O.V.: Regional development trends and their place in the economic system of the Russian agro-industrial complex. Bull. Russ. Agric. Sci. 6, 5–7 (2004) On the State Program for the Development of Agriculture and Regulation of Agricultural Products, Raw Materials and Food Markets for 2013–2020. RF Government Regulation No 717 dated 14.07.2012 (2012) On strategy of social and economic development of the Republic of Crimea for the period up to 2030. Law of the Republic of Crimea dated 09.01.2017 No 352-SRK/2017 (2017) Paptsov, A.G., Shelamova, N.A.: Green economy - a new direction of sustainable development. Agric. Econ. Russ. 11, 66–72 (2014) Ministry of Aircraft Production of the Russian Federation Order dated 20.12.1996 № 169 «On Approval of the Procedure for Analyzing and Evaluating the State of the Competitive Environment in Commodity Markets» (1996) Vniieskh, M.: The strategy of socio-economic development of the agro-industrial complex of the Russian Federation for the period up to 2020 (scientific basis). Russian Academy of Agricultural Sciences, 100 p. (2011) Technological platforms in Russia: strategy, foresight, practice. Technopolis 31, 28 (2014) Shulze, E., Pakhomova, N.V., Nesterenko, N.Yu., Krylova, Yu.V., Richter, К.К.: Traditional and organic agriculture: an analysis of comparative efficiency from the standpoint of the concept of sustainable development. Bull. St. Petersburg Univ. (4), 4–39 (2015) http://www.marketup.ru/netcat_files/File/Methods_rus.pdf

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Dubina, I.N., Campbell, D.F.J., Carayannis, E.G., Chub, A.A., Grigoroudis, E., Kozhevina, O. V.: The balanced development of the spatial innovation and entrepreneurial ecosystem based on principles of the systems compromise: a conceptual framework. J. Knowl. Econ. 8(2), 438–455 (2017). https://doi.org/10.1007/978-3-030-19868_25 Kozhevina, O.V., Yurchenko, E.V., Balunova, N.V.: Development of management quality assessment methodology in the public sector: problems and contradictions. Econ. Reg. 3, 39– 52 (2015)

Digital Transformation of the Industrial Sector: Challenges and Prospects Olga V. Kozhevina1(&), Natalia V. Salienko2 , Evgeny A. Starozhuk2, Victoria A. Klueva2 , and Irina V. Pavlova3 1 Bauman Moscow State Technical University (National Research University), Chamber of Commerce and Industry of the Russian Federation, Moscow, Russia [email protected] 2 Bauman Moscow State Technical University (National Research University), Moscow, Russia [email protected], [email protected], [email protected] 3 Financial University under the Government of the Russian Federation, Bauman Moscow State Technical University (National Research University), Moscow, Russia

Abstract. Purpose: Digital technologies create a fundamentally different model of today’s reality. It is a model that enables fairly effective fundamental developments, allowing us to reach a high level of knowledge management in the area of science and technological progress. Design/Methodology/Approach: Innovations are based on digital technologies and business models as well as effectively used information and communication technologies. Findings: In the Russian Federation, state programmes helped to form a strong reserve for providing incentives to business for the introduction of various innovations in the economy and social area, which is certainly one of the main factors in the development of any country. Originality/Value: This topic is of high relevance because the widespread introduction of information and communication technologies and the digital transformation of the industrial sector is one of the most important factors of sustainable economic growth, food and economic security. Keywords: Digitalization sector
Digital ecosystem


Digital transformation
Agriculture
Industrial

JEL Code: О180

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 530–539, 2020. https://doi.org/10.1007/978-3-030-47945-9_58

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1 Introduction Digitalization of all processes of social life is a reality of the modern stage of development of human civilization, mainly driven by: transition to a new technological order as well as modification of globalization trends (both political, economic and technological, etc.). Therefore, all countries of the world face the challenge of properly responding to these new phenomena (Tyukavkin 2018; Ageyev 2017; Gorlacheva et al. 2017, 2018; Nikolskaya 2018; Kozhevina et al. 2020).

2 Materials and Methods The review of domestic and foreign literature testifies to the considerable interest in this problem shown by many scientists and practitioners. The methodological base for studying macroeconomic growth and using institutional mechanisms for development was created by such scientists as Bell E., Keynes J., Clark K., Kondratiev N.D., North D., Nureyev R.M., Nekless A.I., Porter M., Rozmainsky I.V., Sen A., Solow R., Hayek F., Chesborough H.U., Schumpeter J., et al. Questions of economic dynamics and risk management of development of socio-economic systems have been studied by Butter M., Kachalova R.M., Sapira J., Peccei A., Pestelya E., Polterovich V.M., Prigogine I., Forrester J., Haken G., Hegger D., Shelekhov A., Yakovts Y. and others. Abalkin L.I., Buchwald E.M., Demyanenko A.N., Zubarevich N.V., Kantor O.G., Kleyner G.B., Sorokin D.E., and other scientists devoted their studies to the problems of ensuring the sustainability of socio-economic systems. The issues of industrial development are studied in the works of Akayev A.A., Bodrunov S.D., Glazyev S.Y., Karlik A.E., Korotaev A.V., Nizhegorodtsev R.M., Popoa G.X., Sadovnichev V.A. and others. This specificity of the theoretical and empirical basis allows us to formulate a scientific hypothesis. The scientific hypothesis of the presented research is the thesis concerning the need to use the system-economic approach to the problem, to formalize the conditions for the transition to sustainable industrial development in Russia and to develop effective instruments for ensuring economic and financial growth. The scope of the study is the dynamics and mechanisms of sustainable development of industrial production in Russia (Kozhevina et al. 2015; 2018; 2020). The transition to sustainable development is understood as a «switching» between socio-technical configurations, involving changes in markets, consumer habits, political and cultural discourse and management institutions as well as technological changes related to them (Kemp, Loorbach, 2003, Van der Laak, Raven, Verbong, 2007). It was found that the transition to stability has some specific features (Table 1).

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Table 1. Specific aspects of the transition to sustainable balanced development of industries depending on key results (Kozhevina et al. 2018) Criteria for the classification of the transition Contents and tools for managing the transition to sustainable development of the economy to sustainable economic development Public utility and development institutions The benefits of transition have the attributes of public goods, which can be characterized by «non-excludability» and “the lack of competition” in consumption. The ownership and control of the benefits derived from the transfer can be determined through collective ownership. Tools of rational state policy, effective institutions of civil society, development institutions, institutional environment of the entrepreneurial type are needed in order to change economic conditions, start to support green, environmental technologies, reduce negative externalities The «points of growth» and the basic It is needed to select key industries, where such spheres of the economy transitions are necessary and prepared to a greater extent, for example, for the Russian economy: transport, energy, food industry and agricultural production, chemical industry and consumer goods industry. For sustainable development, a reorientation from the rawmaterial model to the «non-raw» model of management of industries and industrial complexes is needed Effectiveness and value There is no proven interdependence between the implementation of «sustainable development solutions» and efficiency, since sustainability is a collective benefit, and the market advantage is often derived, to a large extent, from setting a low price rather than improving technology. It is controversial that environmental innovations can fully replace existing industrial, managerial, and marketing technologies without changes in economic conditions: taxes, subsidies, protectionism

The financial mechanism for promoting sustainable development of economic sectors, in our opinion, should be aimed at increasing the revenues of budgets of all levels, reduction of risks of innovative and technological development of industries, human development, solution of problems of employment and labor migration, creation and development of innovative growth points, increasing the share of sectoral exports, capitalization of industries and the formation of industrial areas of a new type, competitiveness and investment attractiveness of the regional economy and its economic entities, development of human resources (Kozhevina et al. 2015, 2018).

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According to the empirical study, at the time of January 1, 2017, the SocioEconomic Development Strategy until 2030 was developed in 51 subjects of the Russian Federation. Separately, the issues of industrial development as a strategic priority are highlighted in 36 constituent entities of the Russian Federation. The regional law «On Strategic Planning» was developed in 67 constituent entities of the Russian Federation and the regional law «On Industrial Policy» was developed in 81 subjects of the Russian Federation. Analysis of strategies for Socio-Economic Development of the constituent entities of the Russian Federation shows the inconsistency of the tasks of innovation and technological development, import substitution, modernization with the potential for their implementation within the framework of territorialsectoral planning, capabilities and real conditions of the territories. It should be noted that at the regional management level there is no precise understanding of the sustainable development of the territory, the sustainable development of economic spheres, the elements of the model of sustainable economic development at the mesolevel and the spatial mechanisms for its implementation. The key indicators of the strategic planning of socio-economic development of the constituent entities of the Russian Federation do not allow assessing the effectiveness of achieving the goals of industrial and industrial development to the full extent. It is necessary to develop a unified system of indicators in order to assess the effectiveness of implementation of measures of socio-economic development strategies of the constituent entities of the Russian Federation.

3 Results In our opinion, economic benefits of digitalization of the economy are as follows: • • • • • •

significant contribution to economic growth; more inclusive conditions and higher quality of life for the people; 5-fold increase in the number of jobs in the related sectors of the economy; productivity growth; increased growth rate of small and medium enterprises; better access to financial services.

In fact, digital ecosystem is a community that has emerged from a combination of day-to-day uses of a platform as well as its applications by customers, developers, goods and services suppliers and agents, having the skills and competencies acquired through this use. This allows the following conclusion: digital ecosystem and digital market are almost synonymous. The Digital Economy national programme implies using at all levels several innovative digital technologies (end-to-end technologies), which are extremely effective over the longer term. End-to-end technologies include: 1. Big data. This term has been used since about 2010 to refer to some specific technologies of distributed processing of large amounts of data that cannot be processed as a single set of information using conventional methods. For example, in agriculture, large amounts of data are constantly being involved, and this end-toend technology is widely used in the digital platform of the agro-industrial complex.

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2. Neurotechnologies and artificial intelligence. Neurotechnologies are, in the first place, various medical technologies used to study brain activity of living organisms. Artificial intelligence is an umbrella term for a wide range of technical and software technologies based on the simulation of some functions of brain activity. 3. Distributed ledger systems or the so-called blockchain technology which involves processing of incoming information in blocks and special procedures for encoding each block (hashing) so that already encoded and stored information can not be replaced or corrected. In agriculture, blockchain technology can be used to maintain distributed databases on transactions of sale and purchase or lease of land as well as to solve other problems. 4. Quantum technologies based on quantum entanglement of photons, electrons and other elementary particles. These areas are in their nascent stage, and their practical use in the field of agro-industrial complex in the coming decades is unlikely. 5. The Industrial Internet or the Internet of Things (or IoT) is a technology for communicating and transmitting information over the Internet directly between things (equipment, devices, and goods). It has already been used in the agroindustrial sector at the moment and the use of this technology is increasing over time. 6. Robotics and sensor components. Robotics, that is, the use of sensors and various robotic systems to perform some routine operations and replace people in a number of nonprofessional occupations, is already becoming reality in the agro-industrial complex. 7. Wireless communication technologies (ZigBee, BlueTooth, Wi-Fi) as well as virtual and augmented reality technologies (virtual reality, VR), etc. The Digital Economy programmeme implies “successful operation of at least 10 industrial digital platforms for the key subject areas of the economy (including digital health as well as digital education and smart city)”. According to the specialists’ research, the potential economic outcome of the digitalization of the Russian economy will imply our national GDP growth by about 4.1–8.9 trillion rubles by 2025, which will be 19 to 34% of the total expected GDP growth. These optimistic economic forecasts are associated both with the effect of automation of existing processes and the introduction of fundamentally new breakthrough business models and technologies, the most relevant of which are: digital platforms; digital ecosystems; advanced analytics of large data sets; Industry 4.0 technologies, including 3D printing, robotics, Internet of Things, etc. Agro-industrial complex is one of the most important “major subject domains of the economy”, for which a digital platform is a must. This is why we study this area (digital economy) in the agro-industrial complex (hereinafter “agro-industry”). In the modern agro-industrial complex, intelligent digital solutions help the agricultural sector to address such challenges as sustainable development and the need to increase productivity. New technologies are aimed at effective land inventory and land use. For quite a long period of time, agriculture in the Russian Federation didn’t enjoy popularity among investors because of long production cycles, exposure to natural risks and large crop losses during cultivation, harvesting and storage. Automation of biological processes was impossible, therefore there was no progress in increasing

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productivity and no innovations. The use of information technology in agriculture was limited to the use of computers and software for financial management and commercial transaction tracking. However, digitalization in agro-industry began as farmers started to use digital technologies during monitoring of crops, livestock and various elements of the agricultural process. Agro-industrial technologies entered a new scientific paradigm with a leap in the engagement of investors, i.e. technology companies, in this segment of economy. Creation of a single network of business processes in agroindustry, exchange and management of information via the Internet, productive capacity of computers, development of software and various cloud platforms made it possible to maximize the automation of agricultural processes by creating a virtual (digital) model of the entire production cycle. The advantages of digitalization in agroindustry: mathematical precision in the planning of work schedules, possibility to take emergency measures in time to prevent losses in the event of recorded threats, preliminary calculation of yields, production costs and final profits. Of course, using modern information and communication technologies is a prerequisite for the innovative development of the agricultural sector. These technologies can enable effective communication and interaction in the so-called online mode. Today, in a networked economy, technology platforms are a key element of digital ecosystems. As for agricultural digital systems shown in Table 2, they can help the agro-industrial complex of Russia in particular and the EAEU as a whole maintain its positions at the market and be competitive.

Table 2. Technological platforms of agricultural digital systems Basic 1. Technologies of food and processing industry of agriculture – healthy food 2. Eurasian agricultural technology platform 3. Organic production 4. “Digital” amelioration

Additional 1. Space and geo-information technologies – products of global marketability 2. Eurasian supercomputer technology platform 3. Photonics 4. Eurasian LED technology platform, etc.

From our point of view, digitalization of agro-industry involves coordinated actions of each participant of the digital ecosystem, minimization of financial and transaction costs, developed IT structure, providing expertise of digital transformation, as well as institutional and regulatory tools. Today, the Russian Federation has an information system of the State Programme planning and control, designed to provide automated collection, processing and storage of statistical and departmental information on the state of agriculture including the implementation of the State Programme in 2013–2020 (document 2010, 2018). A statistical study showed that the level of investment in information, computer and telecommunication (hereinafter – ICT) equipment of the agro-industrial complex is quite high. For example, in 2017, investments in the agro-industrial ICT amounted to 854.04 million rubles or 0.2% of the total investment in the fixed capital of the Russian

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Federation. The volume of the IT market in agro-industry in 2017 amounted to 0.4 trillion rub. or 38.5% of the total IT market in Russia. Figure 1 shows the structure of investments in the agro-industrial ICT based on the Report of the Ministry of Agriculture of the Russian Federation. Analytical centre of the Ministry of Agriculture of Russia, agricultural production in 2005–2017 (Vartanova and Drobot 2018): According to the Ministry of Agriculture of the Russian Federation, Russia ranks 15th in the world in terms of digitalization, at the same time in Russia only 10% of arable land is processed using digital technologies (Report 2018; Json 2017). The impact of innovative technologies on the efficiency of agricultural production in Russia is shown in Fig. 1.

Investments in agricultural ICT 7

2 1

51

39

Plant cultivation

Food production

Mixed farming

Auxiliary

Animal breeding

Fig. 1. Structure of investments in the agro-industrial ICT

Thus, digitalization of business processes in agro-industry helps the Russian economy to enter a fundamentally new development stage, gaining new competitive advantages. Innovative development of the agricultural and industrial complex of the Russian Federation is only possible with its digitalization. New information and communication technologies today are modern tools of progress. Digitalization is using digital technologies to change the business model and provide new opportunities for revenue and value creation; it is the process of transition to digital business (Agri 2018; FSSS 2018). The efficiency of grain crop production has doubled in 40 years. Digitization made it possible today to control 2/3 of the most important factors of influence on productivity (efficient collection of objective information) (Menn 2011). The introduction of digital economy technologies can provide positive economic effects and reduce production costs by about 23% when using an integrated approach. An unbalanced approach to the use of seeds, plant protection products as well as the capacities of the machine and tractor fleet and new technologies can cause the loss of

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up to ca. 40% of the crop. Digital transformation of agro-industry will contribute to savings in wages, chemicals and fertilizers, the use of planting material, the use of fuels and lubricants as well as oil products. The introduction of digitalization in the agro-industrial complex of Russia significantly saves production costs (1,513.3 rubles/t). To date, the digital ecosystem of the agricultural sector of the EAEU is as follows (Fig. 2):

Fig. 2. Digital ecosystem of the agricultural sector of the EAEU

In 2019 it is planned to launch the Digitalization of Agriculture programme in Russia. The Ministry of Agriculture of the Russian Federation is currently working at this programme. Within the framework of this project, it is planned to create a common system of accounting of agricultural land. It will make it possible to track which part of the land is actually used and which lies fallow.

4 Conclusion Digitalization will help to solve many problems faced by farmers such as shortage of staff, irregularities in the feed harvesting procedure, and waste of resources. Modern solutions are aimed at facilitating the work of agricultural workers, organizing processes and improving the quality of the final product. One of the problems of agroindustry digitalization in Perm Region today is the rising prices for foreign smart

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systems. Therefore, one of the frequent topics of round-table discussions is the need to produce equipment locally in Russia. There are following major risks of implementing digital technologies: lack of knowledge in the field of creation and use of ICT, scarcity of IT professionals in the industry (*113 thousand people are currently employed in agro-industrial IT and at least 90 thousand people more are needed), transformation of professions (about 40% of professions may disappear by 2030), lack of the required number of devices and sensors made in Russia (too high dependence on import). Given the need to overcome the technological gap to the developed countries, it is assumed that the market share of digital technology in agriculture will grow every year, by 2019–2021 the market of information and computer technologies in the industry is expected to have grown by 300%, and by 2026 – by least 500% (Menn 2011). The potential economic effect of digitalization of agro-industry is an increase in agricultural products consumption in Russia by half in monetary terms which corresponds to market growth by 4 trillion rub., and, according to the authors, three to five times productivity growth (Vartanova and Drobot 2018). As a result, it will be possible to reduce the cost per unit up to several times and to increase the marginality of the agricultural business. It is hoped that in the nearest future many Russian farmers will also be able to use the potential of digitalization to achieve their goals (Tyukavkin 2018). Digitalization of agro-industrial business processes will allow the Russian economy to move to a new stage of development and give it competitive advantages.

References RF government regulations dated 24.05.2010 N 365: On the coordination of activities on the information and communication technologies use in the activities of state bodies. http://www. consultant.ru/document/cons_doc_LAW_100871/ Order of the Ministry of Agriculture of Russia dated 01.03.2018 № 92: On approval of the informatization plan for the next fiscal year 2018 and the planned period 2019–2020. http:// ppt.ru/docs/prikaz/minselkhoz/n-92-196260 Vartanova, M.L., Drobot, Y.V.: Prospects for the digitalization of the RF agro-industrial complex as a priority direction for import substitution. Econ. Relat. 8(1), 1–18 (2018) Menn, T.: Digitalization of agro-industrial complex (2011). www.agroxxi.ru Tyukavkin, N.M.: Current issues of economic systems development. In: Tyukavkina, N.M. (ed.) Proceedings of the International Scientific and Practical Conference, Samara (2018) Report of the Ministry of Agriculture of the Russian Federation: Analytical Center of the Ministry of Agriculture of Russia, agricultural production in 2005–2017 Digitalization in agriculture: technological and economic barriers in Russia. J’son & Partners Consulting (2017). http://json.tv/ict_telecom_analytics_view/tsifrovizatsiya-v-selskomhozyay-stvetehnologicheskie-i-ekonomicheskie-barery-v-rossii-20170913024550 Digital technology is coming to agriculture, AgriNews (2018). https://agri-news.ru/novosti/ czifrovyie-texnologiiprixodyat-v-selskoe-xozyajstvo.html Preliminary results of the 2016 All-Russian Agricultural Census by regions of the Russian Federation: Federal State Statistics Service, 1110 p. (2017). http://www.gks.ru/free_doc/new_ site/business/sx/vsxp2016/VSHP2016_tom2.pdf Ageyev, A.I.: Digital society: architecture, principles, vision. Econ. Strat. 1, 114–125 (2017)

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Gorlacheva, E., Gudkov, A., Omelchenko, I., Koznov, D.: The knowledge management capability of high-technology enterprises. In: Proceedings of the 9th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management, IC3K 2017, vol. 9, pp. 131–138 (2017) Gorlacheva, E.N., Gudkov, A.G., Omelchenko, I.N., Drogovoz, P.A., Koznov, D.V.: Knowledge management capability impact on enterprises performance in Russian high-tech sector. In: 2018 IEEE International Conference on Engineering, Technology and Innovation, ICE/ITMC 2018, Proceedings, p. 8436316 (2018) Nikolskaya, Y.M., Selivanov, V.V., Omelchenko, I.N., Rakhlina, L.I.: Increase of the metods of program-target planning of the knowledge-intensive sectors. In: Proceedings of 2018 11th International Conference “Management of Large-Scale System Development”, MLSD, p. 8551855 (2018) Kozhevina, O., Salienko, N., Kluyeva, V., Eroshkin, S.: Digital readiness parameters for regional economies: empirical research and monitoring results (Russia Case Study). Advances in Intelligent Systems and Computing, vol. 983, pp. 247–256. Springer (2019). https://doi.org/ 10.1007/978-3-030-19868-8_25 Kozhevina, O.V., Trifonov, P.V., Ksenofontov, A.A., Perednikh, L.V.: The strategic management of sustainable industrial development in transition to Industry 4.0. In: Growth Poles of the Global Economy: Emergence. Changes and Future. Lectere Notes in Neyworks and Sistems, vol. 73, pp. 1295–1304. Springer (2020). https://doi.org/10.1007/978-3-030-151607_132 Kozhevina, O.V., Yurchenko, E.V., Balunova, N.V.: Development of management quality assessment methodology in the public sector: problems and contradictions. Econ. Reg. 3, 39– 52 (2015) Kozhevina, O.V. (ed.): The tools for assessing and ensuring Sustainable Development of sectors of the Russian Economy, 174 p. (2018). www.dx.doi.org/10.12737/monography_59b672t7d db609.66393241

Labour Market in the Era of Digital Economy Olga A. Nikolaichuk(&), Nina M. Lizunova, and Larisa Yu. Obukhova Financial University under the Government of the Russian Federation, Moscow, Russia [email protected], [email protected], [email protected]

Abstract. The purpose of the article is to analyze new challenges, underlying transformations and recent trends in the Russian labour market towards more training and employment in the era of digital economy. The novelty value of the current research lies in defining major determinants of the Russian job market development and in identifying the levers to combat unemployment and train competitive and initiative economists and financiers capable of generating innovative ideas, solving problems creatively, working in multicultural teams and using state-of-the-art technologies. On the basis of the application of the integrated approach to the evaluation of the Russian labour market and its latest trends, the sociological survey was carried out among future bachelors majoring in Economics and Finance at the Financial University under the Government of the Russian Federation. The conclusions were drawn on the necessity to make university training more adaptable to the labor market and changing economic conditions. Modern higher educational institutions can provide a set of stimulating resources that could help realize students’ full potential, give them the edge over other employees and help them succeed in achieving their professional goals. Keywords: Digital economy
Labour market
State-of-the-art technologies Russian job market
Recent trends
Innovative activity JEL Code: E24





J01
J18
A12
A22

1 Introduction Modern society is on the threshold of the new period of its development, the Fourth industrial revolution, which is characterized by mass introduction of cyber-physical systems into production, the applications of quantum systems, the implementation of secure teleportation channels and the Internet of Things. All spheres of our social life - i.e. economic, political systems, technological production, living environment and the labour market – are sure to undergo serious transformations in the nearest future. In the new system the labour market is going to play a special part, due to significant changes in its structure and composition. In view of global digitalization, some professions that have existed for several centuries will shortly disappear. Therefore, it may increase the risk of a higher unemployment. According to the McKinsey Global Institute forecast, up to 50% of jobs can be automated by 2036, and even up to 99% by 2066 (Alyabyev et al. 2018). © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 540–552, 2020. https://doi.org/10.1007/978-3-030-47945-9_59

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The article aims to pinpoint the underlying problems and transformations in the Russian labour market and identify employment prospects for graduates in the era of digital economy. The research has four main objectives: firstly, to analyze the conditions of the Russian labour market in 2018; secondly, to define recent trends in the Russian labour market in the era of digital economy; thirdly, to propose hopeful prospects of the Russian labour market development in the era of digital economy; and finally, to identify key skills and knowledge university graduates need to gain to become successful in a highly competitive job market. “The dynamic power of contemporary world development, the general vector of which is directed at the creation of integrated cultural, economic and educational space reflecting the real life with its global threats…. require that the detailed parameters for educational content should be set. This update is aimed at the human factor and the creation of prerequisites for sustainable development, which is the organizing principle for meeting human development goals” (Nikolaichuk et al. 2019).

2 Materials and Methods The application of the integrated approach to the evaluation of the Russian labor market provides the theoretical and methodological framework for the study of the job market in the era of digital economy. The key contribution to the suggested approach is the evaluation of the survey data collected, validated and displayed in the charts and tables and exploratory turn of mind that sees them as possible guides to be analyzed and proved. The article explores strategies that can be adopted to make practical recommendations. In order to meet the proposed objectives the research was conducted in three steps: 1) The analysis of major scientific publications and the development of the conceptual framework of the research theme: labour market, households, an inevitable transformation in the job market, global digitalization. 2) The study of the current situation in the labour market in Russia, its existing problems, new trends and prospects based on the data from the official websites of Rosstat, MosGorStat, Gorodrabot and Ministry of Labour (Russia) and the assessment of the findings. 3) The description of the key skills necessary for graduates’ employment and successful career based on the data of the opinion poll of students of Economics and Finance at the Financial University under the Government of the Russian Federation. The selected participants were both second- and first-year students. We hoped to gain insights from their reflections on their personal experience of the university curriculum and their expectations of the skills to be developed. Responses were entirely voluntary and anonymous. The theoretical/conceptual set of ideas and principles developed in the research is not meant to provide answers to all the questions. The article will serve as a framework for future study.

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3 Research Results The theme of the article is foreshadowed by a consideration of the crucial effect of a social environment and global digitalization on the labour market. In spite of the fact that the Russian labor market is characterized as relevantly stable, an inevitable transformation in the pattern of labour market is clearly becoming noticeable. Undoubtedly, the demand for IT professions is growing. 3.1

The State of the Russian Labour Market

The Russian labor market has not undergone enormous changes in its structure and composition over the past year. According to the data published by the Ministry of Labour and Social Protection of the Russian Federation, the working population aged between 15 and 72 amounted to 76,381 people in October 2018, at the end of the previous year its number was 76,314 people. The employed population of the working age made up 72,948 and 72,438 people respectively (https://rosmintrud.ru, 2019). Thus, the number of the unemployed can be calculated as the difference between the first and the second number. According to Rosstat data, the workforce aged 15 and over in the Russian Federation amounted to 75 million people in March, or 51% of the total population of the country. In January 2019 unemployment rose to 4,9% from 4,8% in December 2018. In March the unemployment rate fell to 4,7%. Today, Russian people are offered more than 1274638 vacancies for different positions. In October 2018 the largest number of job vacancies was available to management positions (Fig. 1).

Distribution of vacancies, % 3.5 5.1

manager

3.5 2.3

2.2 2

2

seller driver

1.7 1.5

operator engineer sales manager

76.3

consultant cashier sales-consultant

Fig. 1. Distribution of job vacancies, %. Source: compiled by the authors

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According to Gorodrabot website data, the average salary of Russian people within a period of twelve months (November 2017–October 2018) amounted to 34,590 roubles (Table 1) (https://gorodrabot.ru, 2018). Table 1. Average salary in Russia, RUR Month The average salary in Russia, rub. November 2017 32441 December 2017 31979 January 2018 32837 February 2018 33658 March 2018 33427 April 2018 35045 May 2018 34609 June 2018 34354 July 2018 33691 August 2018 33867 September 2018 35494 October 2018 35530 Source: (https://gorodrabot.ru, 2018).

If we consider the actual disposal income indicators of the population of Russia but not the average ones, we can state the following facts. Table 2. Disposal incomes (average per capita per month, rubles) Region/city 2013 Russian Federation 21197 Central Federal district Vladimir region 21848 Moscow region 19923 Ryazan region 12365 Moscow 39653 North-Western Federal district Pskov region 16306 St-Petersburg 28664 South Federal district Republic of Kalmykia 9410 Volgograd region 18273 North Caucasus Federal district Ingush Republic 3857 Ossetia - Alania 16676

2014 2015 22890 23085

2016 24210

2017 24927

19955 21577 14063 37563

23682 24181 15149 40163

24261 25679 17163 38763

24509 23674 15670 40814

18944 17911 18695 19386 33137 32505,8 36188,0 37641 11496 12197 21583 23167

13532 24305

14099 21041

5069 7275 16051 16703

7475 8881 16627 16042 (continued)

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O. A. Nikolaichuk et al. Table 2. (continued) Region/city Volga federal district Republic of Mordovia Rrepublic of Tatarstan Urals federal district Yamalo-Nenets auth. district Kurgan region Siberian Federal district Republic of Tuva Krasnoyarsk region Eastern Federal district Kamchatka territory Jewish auth. area Source: (Nikolaychuk 2019)

2013

2014

2015

2016

2017

10615 11308 13043 25419 27076 25797

14156 25343

15048 27184

43068 41105 34419 17223 19616 19701

32309 19427

31019 19735

12258 12759 13400 27007 24924 29123

12547 27781

12340 28243

35476 33557 48380 19090 20805 21426

40928 20784

43758 23879

The data spread of the uneven regional development is such that the average values do not reflect the current situation. Therefore, as shown in Table 2 the figures reveal the uneven economic development at the regional level in Russia. On August 23–30, 2018, the Levada Analytical Centre for a Representative AllRussian Sample conducted a sociological survey aimed to determine what prevents Russian people from being happy. The results of the study show that more than half of the respondents are not satisfied with their work and salary (Table 3). Table 3. The results of the sociological survey “How happy are Russian people?” Category % of total Uninteresting work, low earnings 54 Dissatisfaction with the authorities and the state of affairs in the country 17 Health 15 Family problems 11 Lack of joy and love in life 9 Fear for the future of the country 4 Poor housing 2 Other 4 Difficult to answer 7 Source: (http://www.levada.ru, 2019)

The salary level reflects the ratio - the larger the city, the higher the salary is. According to MosGorStat, the average monthly salary per employee amounts to 81,841 roubles in Moscow, but in Tambov it is 24,900 roubles, whereas the price of a consumer goods basket in Moscow fluctuates around 4887,04 roubles and its cost in Russia is 3969,88 roubles.

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Thus, the current situation in the labour market is not an ideal one, however, employers offer plenty of vacancies. Since 2018 the Russian State Statistics Service has conducted a selective study of the workforce state among citizens over the age of fifteen. The category “unemployed” is interpreted as a person who is not working at the moment, but is actively seeking employment and ready to carry out his or her professional duties. Our research revealed that there was a tendency to reduce unemployment rate from 5,5% to 4,9% from January to August. However, the data are approximate due to the hidden unemployment factors: production hold-ups, leave without pay, shadow economy. The report made in the State Duma with reference to the Russian Presidential Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) says that the real unemployment rate is about 30% (www.gks.ru/wps/wcm/connect/rosstat_main/rosstat, 2018). 3.2

Changes in the Labour Market in the Digital Economy Era

In 2016, at the world economic forum, a report on “Global information technologies” was presented. It contained information that Russia ranks 41st in terms of readiness for the introduction of digital technology (Sheenko and Stasevich 2017). In this regard, in July 2017, the “Digital economy” program was approved, which was aimed at a new economic structure characterized by the transition to the intensive pace of economic development, by using modern technologies in most areas of activity. Russia has started implementing the program in different areas – by creating conditions for the training of competent personnel through reforming the education system, which should produce specialists ready to work in the conditions of digitalization, and by improving the labour market in order to meet the requirements of the new economic structure (Dashchenko 2018). Within the framework of the “Digital economy” program 8 main directions have been provided for: • • • • • • • •

State regulation; Information infrastructure; Research and development; Personnel and education; Information security; Public administration; Smart city; Digital health.

While the “Personnel and Education” program has determined the number of tasks for the period until 2025: • Participation of scientific organizations, higher educational institutions and companies in international associations in the field of fundamental and applied research; • Creation of a highly responsive scientific environment in Russia, which involves the long-term operation of centers of digital equipment for mass use, as well as the creation of centers for technology development;

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• Creation of attractive working conditions for specialists in the field of ITtechnologies; • Addressing the issues of retraining, including civil servants, disabled people of groups I and II, pensioners in the digital economy (Odegov 2017). Moreover, it is planned to create competence centres that will coordinate research conducted in the country, and a mechanism to support the bilateral exchange of employees between research organizations and universities with companies in the field of digital economy. It is also planned to increase the number of graduates in the field of IT-technologies: by 2020 – to more than 150 000 people, and by 2025 – to more than 500 000 people (Bryndin 2018). In addition to the reform of the education system, changes in the labour market are expected. According to the program “Personnel and Education”, by 2020 it is planned to use a personal development trajectory instead of a work -book, and the competence profiles of specialists who want to change jobs will be transferred to new employers. By 2025, more than 80% of employees will have a digital record (Avdeeva 2017). Changes are also expected in the composition and structure of the labour market. Already today we can see the gradual decrease in the demand for such professions as: an accountant, lawyer and economist. On the other hand, the demand for IT-specialties increases. According to experts, more than 50% of professions will disappear by 2030– 2040. It should be noted that this may lead to higher unemployment rate in the country, social inequality and deeper income differentiation. Thus, as it follows from the report of the world economic forum “The Future of Jobs” by 2020, automation will destroy more than 5 million jobs. Active robotics can also have an impact on the labor market – the driver, the seller, the technologist can be replaced by a bot. But this process cannot be overwhelming. In 2013, at Oxford University an experiment was conducted, which revealed that robots cannot replace scientists, engineers, actors, managers and teachers. Robotics is mainly to replace people in the service sector. Prime Minister Dmitry Medvedev calls not to link the digital economy to the risk of mass unemployment. According to the politician, unemployment occurs only in a falling economy with a decrease in demand and production, but not due to new technologies (Kuksova 2017). 3.3

Labour Market Prospects in the Digital Economy Era

One of the problems of the modern labour market is the lack of a sufficient number of people with innovative activity, capable of extraordinary thinking. The introduced new technologies will increase labour productivity in industrial sectors by 30%, and work efficiency – by 25%. Thus, there will be a big technological shift, which is planned to be completed in 2025. More than 610,000 jobs will be cut in the labour market, but about 1,000,000 new jobs will be created (Yakovleva et al. 2017). Employers in the field of production will not need people, these functions will be assigned to robots. But creativity, programming, invention, teaching cannot be robotic. The bots themselves should be managed by people – the profession of an online operator will be in demand among women, pensioners, teenagers and disabled people. Consequently, the digital economy, automation of production and computerization of society do not mean the

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complete extinction of professionals. Meanwhile, the government regulate the implementation of socio-economic programs through investing in human capital (Sizova and Khusyainov 2017). 3.4

Bringing Key Skills into Focus

The new generation of university students, known as digital natives, the direct product of the network environment, is widely using modern methods of communication and information technologies. They admit that academic programs are not the only source of knowledge they have gained through learning. Apparently the curriculum does not reflect completely the wide picture of the global world. Students’ professional interests and educational needs are not restricted to university courses or extracurricular activities. Their sphere of communication covers a great number of Internet users and, moreover, they regard numerous websites as a media, a useful way of communicating information and news to people. Students are actively engaged globally. Information flows, joins courses, classes, campaigns and connects young people, businesses and countries. The requirements and pace of modern life and a highly competitive labour market in particular are certain to increase. Only a few years ago companies employed a large number of university graduates who had a higher education (gained knowledge and developed skills) that equipped them for later professional life. Nowadays companies and organizations are much more interested in employees capable of generating innovative ideas, setting new tasks, solving complex problems, working in multicultural teams and using state-ot-the-art technologies. Companies are in great need in expertise in different fields and have to employ people with vision and strong principles who have several different degrees. Moreover, they encourage their employees to develop new skills or a ‘long tail of skills’ constantly, perform many different functions and new tasks, do more strenuous work. The company management analyze, compare and assess employees’ potential, which should be fully realized. They watch carefully whether the staff can fulfill more complex functions in the workplace. There is a good deal of evidence that digitization has transformed the Russian labour market and it is undergoing major changes now. A program on digital economy development worked out in 2017 includes markets and sectors of the economy at which digital technology is being introduced, cross-cutting technologies (neurotechnologies, artificial intellect, quantum technologies, the industrial Internet, robotics and sensors, wireless data and virtual technologies) and regulatory control, digital infrastructure, research and development and personnel training. A lot of labour market platforms have emerged, for instance platforms helping students apply for a job (Monster, Linkedin, Careerbuilder, Skillful a Markle Initiative), Platforms for “OnDemand” work (Upwork, TaskRabbit, SameSource), Talent management tools for recruiting and training (OOD.CO, ReviewSnap, PyMetrics, PayScale) etc. Today’s students, thinking over their distant and foreseeable future and employment prospects, are trying to puzzle things out. They make their views known and raise reasonable questions: what knowledge and skills they need, how competitive they are, how they will gain competence in a wide range of skills, what their real potential is… etc. It is important to note that a competitive personality is characterized by the ability

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to work qualitatively and effectively, to be the leader in the conditions of competitiveness and rivalry (Andreev 2006). There is a strong possibility that universities will be able to help students to achieve this goal by providing conditions for their creative self-development and forming their competitive qualities. Graduates can try their hand in business or continue research work, but in any case, the question of the ability to resist competitors remains a priority. For those graduates who are seeking a job, a career in international companies is especially attractive. It is necessary to prepare young people for extraordinary life situations, when they will not be able to choose but have to be chosen. The implementation of professional and scientific plans of graduates depends on how well they are ready to stand up for themselves, to assert themselves, on how well they are able to present the knowledge obtained at the University and demonstrate the academic/technical/practical skills. From the point of view of managers of large enterprises and small businesses, besides having the high level of qualification, University graduates should develop and improve the so-called ‘employability skills’, i.e. competitive qualities in the labour market, meaning by this: – competence in matters of their specialty, i.e. high professionalism; – communication skills - that is, the ability to clearly express their thoughts, both orally and in writing; – ability to apply information technology ‘IT skills’; – ability to organize their activities - to be on time for classes, meet the deadlines, to work effectively in difficult conditions and under pressure, to be responsible, diligent and disciplined – these are ‘self-management and time - management skills’ (Fig. 2).

Fig. 2. The data of the opinion poll among 300 future bachelors at the Financial University, 2019, compiled by the authors.

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The conducted survey showed that there are still a lot of negative factors, such as: absenteeism, delays, failure to meet the deadlines, etc. Assessment of data on other skills has shown the following results: – language skills and knowledge of English (and other foreign languages) are important for 78% of respondents, they have noted the increasing role of this skill; – ability to structure, summarize, draw conclusions, think critically, generate ideas ‘analytical skills’; was appreciated by 31% of the respondents; – ability to work in a team for the overall final result – ‘teamworking skills’- are considered very important by 93%, while 7% prefer to work alone; – ability to predict and quickly assess the situation and make decisions, to calculate the consequences of decisions, the desire to dominate the team – 10% of the respondents have demonstrated potential to ‘leadership skills. Besides having these skills, the employers also value students’ willingness to learn new things, to contribute to the fulfillment of common task, their creativity, active life position, positive attitude to work and people as well as the initiative – ‘positive attitude and initiative skills’. From the point of view of employers, future bachelors should have very good IT skills, they need to know how to use sources of information and process it. They also should have good knowledge in the sphere of their profession. Nevertheless, recognizing the undoubted advantages of graduates, employers point to the following disadvantages: Young people often consider their first job as a temporary, as a springboard for their future career. Therefore, employers do not want to waste time, money and effort on those who may soon quit. – Young professionals do not have enough responsibility, neither formed habit of going to work every day or be on time and meet the deadlines (poor ‘selfmanagement’ and ‘time management skills’); – At present, some young professionals are not realistic enough in assessing their work results and have overstated claims to wages and the nature of the work they have to perform. In this regard, the preference for employment is given to highly qualified and most experienced professionals. Thus, employers believe that during the period of study at the University it is necessary to strengthen training in psychological, social and organizational terms, while the gaps in professional training will be filled when entering the professional environment (Polikarpova 2014). It’s necessary to emphasize, that the formation of the competitive qualities is encouraged through scientific students conferences, contests of presentations in a foreign language, as they are focused on the development of independent creative activity and higher competitiveness of students. In the process of preparation for the scientific presentation all student’s capabilities are involved: he or she writes a report in a foreign language, prepares slides in Power Point and works on their web design. In case of group presentation, the intensive teamwork takes place. It is especially important to perform all tasks by a certain date, which requires a high degree of selforganization. Students are initiative, creative and positive. It is very important that they

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should develop the qualities that are currently in demand in the market. Scientific conferences contribute to the formation of foreign language competences and analytical skills of students - the most important mechanism of scientific and socio-cultural integration (Lizunova and Obukhova 2016). Today, University teachers have the opportunity to form these important qualities with the help of domestic theoretical base and practical experience. Thus, in numerous studies in the field of professional communicative competence acmeological competence was identified and analyzed as a component of communication skills. The formation of this competence suggests knowledge of the criteria and factors of movement to the heights of professionalism through communication, it involves focus and emotional stability, reflexivity of thinking and empathy. Acmeological competence is implemented in the process of comprehension yourself and your partner in business communication, the establishment of emotional relations with him or her, as well as the ability to predict the behavior of the interlocutor (Kalugina and Chernyshova 2012), which is necessary for constructive competition, achievement of the best results in the professional and scientific field. Thus, in a market economy, universities are designed to form such qualities as: an active life position, desire to work hard, readiness for self-development, aptitude to communication skills and orientation to a healthy lifestyle (Polikarpova 2014). According to the “Atlas of new professions”, the employee of the future should have the following characteristics: readiness for training and retraining, a quick response to technical, social and economic challenges, the ability to work in a team. He or she should assess risks quickly and effectively, design models and absorb a large amount of information. In some industries, a steady increase in demand for new professions is expected (see Table 4). Table 4. The forecast of dynamics of demand for professions in the digital environment. Professions Rate of demand growth, % Web SITE developer 24 Analyst in the computing field 21 Analyst in the field of information security 18 Software development specialist 17 Data processing specialist 16 Source: compiled by the first author in accordance with (Morozov and Morozova 2018).

It can be noted that robots and bots can replace routine production work, but all creative and innovative activities will never be automated.

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4 Conclusion Digitalization of the economy gives a powerful impetus to the development of production, increasing the dynamics of GDP growth, living standards and other socioeconomic indicators. The massive introduction of robots and computers allows the labour market to reach a new level, and create conditions for domestic workers to meet international criteria and standards. Business is actively developing, and entrepreneurial ideas are implemented through the effective use of technology and innovation. Within the framework of the program “Digital economy” in the direction of “Personnel and Education”, a number of significant changes in the labour market are expected, which will solve the problem of irrational use of labour resources and bring the country’s economy to a new level.

References Avdeeva, I.L.: Analysis of prospects of the development of digital economy in Russia and abroad. In: Digital Economy and Industry 4.0: Problems and Prospects: Proceedings of the Scientific-Practical Conference with International Participation, pp. 19–25. Publishing House of Polytechnic University, St. Petersburg (2017) Alyabyev, S., Goloshchapov, D., Klintsov, V., Kuznetsova, E., Roth, E., Sergienko, Ya., Troshchenko, Yu., Chalabyan, A., Shuvaev, A.: Innovations in Russia – an inexhaustible source of growth. Center for innovation development McKinsey Innovation Practice, p. 58 (2018) Andreev, V.I.: Competitiveness: training course for creative self-development of competitiveness. Kazan, p. 26 (2006) Bryndin, E.G.: Technological, economic and social aspects of the digital industry development era 4.0. Creative Econ. Soc. Innov. 1(22), 15–34 (2018) Dashchenko, Yu.Yu.: Digital economy as the economy of the future. Trends Dev. Sci. Educ. 35(1), 18–19 (2018) Kalugina, O.A., Chernyshova, N.V.: Presentation in the formation of communicative competence. Financ. J. 3, 159–164 (2012) Kuksova, O.D.: Problems of the development of the Russian labor market in the transition to the digital economy. Society: Politics, Economics, Law, pp. 4–5 (2017) Lizunova, L.M., Obukhova, L.Yu.: Scientific conferences and competitions in a foreign language as a factor of formation of competitiveness of students. Philol. Sci. Theory pract. 7(Part 1), 189–192 (2016) Morozov, M.A., Morozova, N.S.: Development of digital service economy and its impact on the labor market. Service Plus 1(12), 100–107 (2018) Nikolaichuk, O.A., Lizunova, N.M., Obukhova, L.Yu., Moiseeva, T.V.: Integrated approach to train environmentally-responsible students of economics and finance. In: Ubiquitous Computing and the Internet of Things: Prerequisites for the Development of ICT, pp. 688– 698. Springer, Switzerland (2019) Odegov, Y.G., Pavlov, V.V.: Transformation of work: the 6th technological structure, the digital economy and the trends of employment. Inst. Soc. – Econ. Popul. Probl. RAS 4, 19–25 (2017) Polikarpova, A.I.: Competence and competitiveness of young professionals in the labor market. Bull. North Caucasus Fed. Univ. 6(45), 272–274 (2014)

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Sizova, I.L., Khusyainov, T.M.: Labor and employment in the digital economy: problems of the Russian labor market. Sociology 4, 380–382 (2017) Sheenko, E., Stasevich, O.: Digital economy and Russian companies: the level of use and readiness for the transition to digital technology. In the sat. Almanac “Digital economy”. Skolkovo, pp. 100–127 (2017) Yakovleva, E.L., Seliverstova, N.S., Grigorieva, O.V.: The concept of the electronic nomad: risks of the digital economy. Actual Prob. Econ. Law 4, 230–232 (2017) City of Jobs. https://gorodrabot.ru/. Accessed 30 Nov 2018 The survey, “Happiness”: Analytical center Levada – center: the official center (2019). http:// www.levada.ru/. Accessed 30 July 2019 Key indicators characterizing the situation in the labor market of the Russian Federation. Ministry of labor of Russia: official website (2019). https://rosmintrud.ru/ministry/ programms/inform/2. Accessed 30 July 2019 Efficiency of the Russian economy. Federal state statistics service: official website (2018). http:// www.gks.ru/wps/wcm/connect/rosstat_main/rosstat/ru/statistics/efficienc. Accessed 30 Nov 2018 Nikolaychuk, O.A.: Households in modern Russia: are there grounds for expanding financial strategies? Finan. Manag. 3 (2019). https://nbpublish.com/library_read_article.php?id=30233

The Contract of Power Supply During the Era of the Digital Law: Civil Bases Oxana B. Novruzova(&), Yuliya O. Pronina, Elena A. Shergunova, and Evgenij D. Gorevoy Southwest State University, Kursk, Russia [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose: The purpose of current research is the complex scientific analysis of the problems of signing the contract of the power supply by the legislation of the Russian Federation. Design/Methodology/Approach: problems of the current research are: research of legal regulation of the contract of the power supply; permission of the problematic issues arising at signing the contract of the power supply in a digital form. In the course of work on a research legalistic and comparative and legal methods were used. Findings: The possibility of expeditious obtaining the documents, transfers of indications of metering devices was realized for the consumers using the modern digital document management system in their work. And now there is a possibility of signing the contract of power supply, without leaving the office. Originality/Value: Problematic issues of signing the contract of power supply during the era of rapid development of the digital law are considered in the article. The relevance of this subject consists in that the conclusion of the transactions which are especially connected with considerable financial injections sometimes becomes just impossible in the modern world without professional knowledge in the area of the law as it is burdened with a set of formalities and abundance of difficult highly specialized terminology. Summing up the result of the conducted research, it is possible to claim with confidence that the conclusion of transactions in digital space is a fundamental element of digital commerce. Development of the studied institute allows many subjects of business to derive big profits at implementation of economic activity. Signing of contracts in this way promotes simple and fast receiving goods and services by the favorable prices, despite distance between contractors. Keywords: Power supply
Electronic transaction Purchase and sale
Contract


Digital signature


JEL Code: K-12 – Contract Law

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 553–560, 2020. https://doi.org/10.1007/978-3-030-47945-9_60

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1 Introduction The legal nature of an digital form of the transaction in legal literature is defined as a kind of a simple written form. The relevance of a subject of the research is caused, in those that a key condition of effective regulation of the relations between the company providing power supply, and a consumer is existence of correctly made contract of power supply. It is very important to understand for what purpose it is formed also that provides for both parties.

2 Materials and Method Emergence of modern means of communication significantly changed forms and methods of the conclusion of civil transactions. Speed and convenience are the key advantages of digital document flow. The efficiency plays a large role and affects result of the made transactions in the conditions of market economy. Introduction of new information technologies in practical activities leads everything to complication of legal support of contractual works. Transactions in an digital form gained distribution in the most various spheres of civil circulation. First of all, it is about transactions of purchase and sale. In the course of work on a subject of a research legalistic and comparative and legal methods were used which allowed formulating the following conclusions. The contract of energy saving is the contract which regulates relationship between two participants of the transaction – between the seller and the buyer. Responsibility under the contract of power supply is distributed between two parties: between the power supplying company and the consumer of its services. Which of them the buyer and who the seller – it is clear without additional explanations, but the pair of words and another should be told about obligations of that. So, the seller undertakes to deliver to the buyer the electric power, using the bringing network. At the same time at the buyer in this case it is possible to reveal slightly more obligations. He has to: • in time to bring payment for the consumed electric power; • to be guided by the energy consumption mode stated in the contract; • to ensure operational safety of the power accepting devices and electrical networks which are at its disposal; • to watch technical serviceability of consumers of the electric power. There are three key conditions which allow two parties to sign the contract of power supply: • existence in the order of the subscriber of the power accepting devices; • the power accepting devices have to be attached to the bringing networks; • the design of the power accepting equipment has to submit to the established technical regulations. Very important condition, from those which are consecrated by the contract of purchase and sale of energy the following is: the volume of the delivered electricity and

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parameters of its delivery have to be determined in advance. As for volume: it is measured by the counter of the consumed electric power and size of the attached power. If a consumer of service is the natural person, then the delivered electric power can be spent in the quantities, necessary for it. At the same time the amount of payment is defined, proceeding from indications of the electric meter. The quality delivered electricity under any circumstances has to correspond to state standard specifications. It is demanded by the contract of power supply. Participants of the contract are the following parties: • the organization which is engaged in power supply – the commercial enterprise; • the subscriber – the private consumer who is carrying out energy consumption for the household purposes or the legal entity which is carrying out energy consumption for requirements of production. The contract of power supply takes legal effect after technological connection of the subscriber to the bringing network is realized. That is, upon connection. As a rule, period of validity of the similar contract is unlimited. At the same time the consumer can terminate it, having independently informed of it the supplier. The only indispensable condition which is subject to performance for cancellation of obligations consists that payment for the consumed kilowatts has to be completely brought by the person which was the consumer of services of the power supplying organization. In cases when the supplying company needs to sign the contract of power supply with the subscriber representing manufacturing installation, such contract will surely get under category of urgent. At the same time in the document the quantity of the delivered electric power has to be stipulated. If neither the consumer, nor the buyer announces change of conditions of cooperation during all period of validity of the document, then the contract will be automatically prolonged for the same term and on the conditions approved earlier. Without resorting to coordination, but, having warned about it the subscriber, the power supplying company can temporarily stop or reduce supply of electricity. The decision on it is made by representatives of the supplier if the power accepting devices of the subscriber are in an unsatisfactory state (that is confirmed by the relevant acts of the state Energonadzor). All above-mentioned requirements are subject to obligatory observance if other is not provided by the relevant acts. The contract of power supply provides existence of certain duties of each of participants: energy supply of resources to the consumer by means of network – for the supplying organization); timely payment of the consumed energy resource, safety of network in the course of its operation plus control of uninterrupted operation of operation of all equipment, necessary for giving, observance of the mode of the consumption provided by the contract – for the subscriber. The contract of supply with electric energy is an official agreement with power sale under which the electrosupplying company or the organization undertakes to provide to the consumer the electric power with accurately registered standard indicators, and the subscriber, in turn, is obliged to pay its cost without delay. Also the consumer has to

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provide safe operation of networks on standards of PUE (regulation for electrical installation) and use serviceable electric devices. Calculation of the spent energy for a certain period of time is controlled by special devices—counters which have to be checked and sealed up. Removal of seals and illegal connection to power supply networks by the metering device of electricity provider is prohibited and is punished by the law. According to provision No. 442 of 04.05.2012 as it is stated in item 72 of “Basic provisions of functioning of the retail electricity markets” for natural persons the contract for electrical supply can be signed not only on paper. For this purpose it is enough that the consumer properly in coordination with power sale was connected to power supply. In recent years in connection with development of digital technologies there was an opportunity to sign contracts in the online mode. Such opportunity is allowed also concerning the contract of power supply. The application for the conclusion online of the contract of power supply can be submitted on the website of the company which provides such service (the supplier of energy). For this purpose it is necessary to satisfy three conditions: 1. To have the digital signature. 2. To be the registered user of a private office of the company supplier. 3. To fill an online form on the website. The online application saves time for a visit of office and expectation of turn. As a rule, if the client attached not all required documents to the application, then on his e-mail the inquiry will come with the list of those documents which need to be transferred. The second way to submit the application—personally to address to the nearest office of the supplier of energy. Under the law term from the application moment until the conclusion is 30 days. However many electricity providers on own initiative reduce consideration term online of applications to 10 days. After the application is registered in a system (usually it is one day), its number will become known to the applicant. It needs to be kept further to control the status of consideration of the application for power supply signing of the contract. During consideration term application online to the applicant comes the answer. If the statement it is given on the established requirements, then the applicant will need to come to the nearest office for execution of the contract in writing or to use the digital signature on the website. The electricity provider will notify in that case the applicant on signing of the contract. The package of documents demanded from legal entities for online of the conclusion of such contract is wider. Enter it: 1. 2. 3. 4.

Draft of the scheme of supply of electricity. Act of connection. Installation of the wiring equipment. Act of responsibility of the parties.

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Statutory documents of firm. The documents confirming the head’s powers. Documents on the property of an object. Documents from tax inspection: certificate of incorporation. Confirmation of opening of the bank account. Passport of the authorized representative. Power of attorney.

After that it is necessary that inspection accepted an object. After that it is possible to address to office of the supplier. The application can be issued through a private office, having attached the package of documents and having used the digital signature. The legal entity will require statutory documents, inspection statements of the equipment, the power of attorney, the passport of the principal, the building plan. So, exchange of paper contracts with the authorized signature and with the press of the organization – not the only legitimate form of the conclusion of the transaction. The legislation of the Russian Federation provides an opportunity to sign contracts in electronic form. What rules need to be followed that the agreement between the parties in an electronic form had validity? The order of the conclusion of business documents of a such type as contracts, is regulated by articles from Civil and Labour Codes: • Article 434 of the Civil Code confirms that the contract between economic entities (legal entities, natural persons or non-profit organizations conducting on its own behalf economic activity) can be signed by exchange of electronic documents. The main thing that it was possible to establish that the electronic document proceeds from the party under the contract. • Articles 312.1 and 312.2 of the Labor Code provide that the contract with the remote employee can be issued in an electronic form. In digital space the strengthened digital signature acts as the guarantor of the invariance of the document and confirmation of authorship: qualified or unskilled. Application of the digital signature in Russia is regulated by federal law No. 63-FZ “About the digital signature” of 06.04.2011. That the transaction was considered as valid, the document has to have certain signs: • The form of the contract has to correspond to the legislation if the document belongs to formalized. • The contents of the contract have to correspond to the law. • The signer has to have the confirmed rights to conclude bargains. Let’s stop on features which are connected with signing of contracts in electronic form. Business documents can be divided into two views: formalized and unformalized. Depends on a type of the electronic document that will guarantee its validity.

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Carry the employment contract with the remote worker to such documents and other documents—for example, invoices or the reporting. To give to the formalized document validity, it is necessary to satisfy the following conditions: • To make the document according to the format established by the state. • To transfer him to other party of the transaction according to the established regulations of document transfer. • To sign with the qualified digital signature (further—the CAP). The CAP needs to be received personally or by proxy in certification center which is accredited the Ministry of Telecom and Mass Communications. The digital signature has to be valid for the moment of signing of the document. At signing of the contract in electronic form also other so-called unformalized documents can demand. All other business documents—for example, economic contracts, powers of attorney, letters belong to this category and. etc. The state does not regulate a format of unformalized documents. There are two ways to provide their validity: 1. To sign the contract CAP. As well as in a case with the formalized documents, the qualified signature confirms authorship and the invariance of contents of the document after it was signed. 2. To sign the contract with the simple digital signature or the unskilled digital signature (UDS). If the parties decide to use these types of signatures in document flow, they at first need to conclude the agreement in which they recognize validity of these types of digital signatures (Article 4 No. 63-FZ). Requirements to a type of the signature, to contract details, its format and other conditions register in this agreement. If such agreement is also the parties observe the time limit specified in it, electronic documents will have validity. The electronic contract, as well as any other document which was signed with the qualified digital signature is equivalent paper documents which was signed with own hand. But in this rule, there are several exceptions. Let’s note that in certain cases which are defined by the government the parties need to conclude the bargain only in a paper form (Paragraph 1 of Article No. 63-FZ). It is impossible to make in electronic form contracts if for them the requirement about the obligatory notarial certificate is established, for example: • contract of a rent, • contracts of purchase and sale of the real estate, donation, pledge of shares in authorized capital. There are separate categories of documents which can be made out only on paper in a simple written form—for example, the contract of guarantee (Article 362 of the Civil Code of the Russian Federation). And, on the contrary, there are cases when it is possible to sign the contract only in electronic form. For example, to sign the contract by results of an electronic auction within the federal law of 05.04.2013 No. 44-FZ “About a contract system in the sphere of purchases of goods, works, services for ensuring the state and municipal needs”.

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An opportunity to create the signature for the electronic document is realized in different systems and programs: • It is possible to sign the contract on electronic trading platform where the state and commercial customers hold the auction; • On the websites of the commercial organizations which give to clients an opportunity to sign the contract. For example, on the website of microfinance institution which gives loans under percent. Clients in this case need to be registered, install the special software for work with the digital signature and to begin work; • In registration systems (MS Dynamics, SAP, Oracle and others); • In specialized electronic document management systems; • In information systems (on the Gosuslug portal the service for signing is realized); • In special programs for signing of electronic documents which the user installs on the computer; • In web services in which it is possible to load the necessary electronic document, including the contract and to create for it the signature.

3 Results For consumers - the legal entities using the modern electronic document management system in work the possibility of expeditious obtaining documents, transfers of indications of metering devices was realized, and now there was a possibility of signing of the contract of power supply, without leaving office. It is possible to sign the contract thus only concerning the power accepting devices which are not attached to electrical networks yet.

4 Conclusion During an era of rapid information technology development, the conclusion of transactions by means of the Internet is an integral part of functioning of an electronic trade turnover. Worthy development of the studied institute gives the chance to most of subjects of an entrepreneurial activity to derive larger profit at implementation of the economic activity. This way of signing of the contract of power supply allows the consumer more simply and quicker to receive service in the favorable prices, despite distance between the parties.

References 1. Balzhirov, B.V.: Modern design of the contract of power supply. Lawyer 2, 4–5 (2013) 2. Vavilin, E.V.: The organization of contractual communications in the relations on power supply. Enterp. Right 1, 59–60 (2015) 3. Waipang, V.A.: Legal regulation of digital economy. Right Bus. 1, 12–13 (2018)

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4. Goncharova, E.V.: The contract of power supply in the system of civil contracts. Right Policy 3, 28–29 (2014) 5. Grin, O.S.: Transformations of requirements to a form of contracts taking into account development of digital technologies. Curr. Probl. Rus. Law 6, 49–50 (2019) 6. Kuryanova, Y.Y.: Subscriber and consumer as treaty parties of power supply. Taxes 11, 22– 23 (2014) 7. Ruff, A.U.: Contract of heat supply as one of types of contracts of power supply. Legislation Econ. 8, 49–50 (2016) 8. Svetlichny, A.V.: Freedom of the contract, or abuse of the right: contract of power supply. Arbitral Civil Proced. 9, 11–12 (2016) 9. Faustov, S.A.: Legal regulation electro-and heat supplies in the power supply system of the Russian Federation, Moscow (2014) 10. Tsibirova, I.G.: The contract of power supply in civil law of the Russian Federation, Moscow (2014)

Problems of Digitalization: Using Information Technology in Business, Science and Education Irina A. Rumyantseva(&) , Tatiana Yu. Krotenko and Marina B. Zhernakova

,

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

Abstract. The Problem and Purpose of the Work. Changes in Russia and the world persistently push business, science and education to step into the digital space. Digitalization, deployed as a government project, requires support in business, science, education. The aim is to examine in detail the problems associated with the use of digital technologies by representatives of these institutions. Methodology. In the course of the study, the authors studied the problems arising in business, science and education in the implementation of digital technologies, evaluated the required new professional competencies. The methods used in the study made it possible to draw conclusions from the results of the survey of three categories of respondents-scientists, programmers, businessmen, students. Results. The most typical problems associated with digitalization are Identified. A detailed analysis of the results of the survey of students of the State University of management is given. It is shown that the professional competence of modern managers required for digitalization will be expanded in the future, as evidenced by the need for information technologies of students of managerial specialties revealed by the survey. Conclusion. Organizations, regardless of their sphere of activity, need a certain readiness, without which any digital innovation will be premature or unnecessary measure. It is not only the «digital maturity» of an organization that influences the success of its transformation towards the use of new digital technologies. What matters is the ability of employees and the organization as a whole to experiment, as well as a certain enthusiasm that is based on awareness of progress in information technology. Keywords: Digitalization
Information technologies
Digital maturity
Problems of digitalization
Science
Business
Management education JEL Code: A22


I21
O32
O38

1 Introduction Digitalization is becoming today not just a fashion trend, but a prerequisite for the successful existence of the organization in the market. This is recognized by most leaders in developed countries. Russia, at the national level, is also taking steps in this © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 561–570, 2020. https://doi.org/10.1007/978-3-030-47945-9_61

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direction, realizing that today we cannot do without digital transformation. In particular, at the state level in 2017, the program “Digital economy of the Russian Federation” was adopted, which identified promising tasks for its development in 2017–2030 (The program “Digital economy of the Russian Federation”, 2017). Since 2017, the State University of management has been systematically holding conferences, seminars, round tables, where problems and opportunities related to digitalization are discussed (Rumyantseva 2018; Krotenko and Zhernakova 2019). On the eve of the 100th anniversary of the State University of management, within the framework of the permanent scientific and methodological seminar “Development of the theory and methodology of management in social systems”, the authors of the article conducted a study on the topic: “Digitalization: readiness of business, science, education”. It was attended by scientists, programmers, business representatives, University professors, students. In the process of preparation for the study, a list of problems was formulated, which were proposed for evaluation to business representatives from the point of view of the greatest relevance. Among them: • Real commitment to the business digitalization; • Use of the latest digital technologies by business, science, education; • Opportunities of modern education to provide personnel for the planned transition to digitalization. The analysis of the results of the survey of business representatives revealed the largest number of elections on the problem of insufficient formation of digital competencies, as a result, it was decided to conduct a survey of students of management specialties of the State University of management.

2 Materials and Methods Problem. Digitalization, deployed as a government project, requires support in business, science, education. Based on this assumption, we considered it important to consider in detail the problems associated with the use of digital technologies by representatives of these institutions. The following hypotheses of the study were formulated. Hypothesis 1. The leading problem hindering the introduction of information technology in business is the lack of financial resources and/or slow return on investment. Hypothesis 2. The academic scientific community is able to skillfully use the latest digital technologies in the field of IT. Hypothesis 3. The required professional competence of modern managers should be expanded and supplemented with knowledge and skills in the field of digital technologies. The impetus for this can be a conscious need of students in digital technologies. In the course of the study, methods were applied in the described sequence: 1) questioning of representatives of science, business and students of management

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specialties with subsequent processing and analysis of the collected data; 2) content analysis of answers to open questions. The text of the questionnaire for respondents who are software scientists included two open questions: 1. How do You assess the possible contribution of academic institutions (for example, the Russian Academy of Sciences and the Higher attestation Commission) to the process of digitalization? 2. What is the relationship between Russian academic science and the field of information technology? The text of the questionnaire for business representatives contained a number of closed and open questions concerning digitalization in their organizations: 1. Does your company have a digitization plan and/or program? 2. Does the organization have a position of Director of digital development? 3. Are significant digital technologies already (or are they being implemented today) in your company? 4. What are the most common challenges businesses face when engaging in digital transformation (check out at least 3 of the most relevant): a) concerns about the risks of the experiment; b) low level of enthusiasm, explained by lack of awareness in this area; c) inefficient horizontal organizational interaction; d) the weakness of the infrastructure necessary for the assimilation of digital technologies; e) low level of information and economic security; f) lack of a coherent plan and/or integrated digital transformation programme; g) implementation of pilot projects on introduction of popular technology does not correspond to the strategic plan of development of the company; h) lack of budget funds sufficient for implementation and/or slow return on investment; i) the inability of existing business processes to embrace digital solutions; j) insufficient level of IT-literacy of managers; k) weak formation of digital competencies on the part of managers and specialists. The questions of the questionnaire offered to students were formulated as follows: “What are the needs of future managers in the study and application of specific information technologies for future professional activities?” Further in the questionnaire 7 groups of modern digital technologies were presented: • • • • • • •

computer language; data base; corporate IT systems; data analysis tools; marketing tools for promotion through social networks; comprehensive search, analysis and forecasting tools; Machine Learning tools.

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For each group of digital technologies under consideration, possible answers were proposed from among the following: 1. 2. 3. 4.

I already work with these technologies, I study independently. I’m already working with these technologies, studying in paid classes. I’m just guessing I’ll need it. I’m very interested in these technologies, but I’m not sure if I’ll need them any time soon.

3 Results Results of the survey of business representatives. The applied content analysis allows to draw the following conclusions. Indeed, large Russian companies have embarked on the path of systematic digitalization, realizing that the introduction of digital technologies will reduce costs, provide an influx of investment and increase productivity. But there are not many of these companies that have embarked on “pilot digital projects”. Those organizations that have already digitalized, as well as those that, for a number of reasons, have not yet implemented the transformation, cited the difficulties involved.

Fig. 1. Obstacles to the use of IT in business

In the course of the analysis of the obtained results, the focus of respondents on the following obstacles to the introduction of information technologies was noted: insufficient level of IT literacy of managers (42% of respondents); weak formation of digital competencies of some managers and specialists (38% of respondents), the inability of existing business processes to perceive digital solutions (37% of respondents).

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Less than a third – 30% of the surveyed business representatives mentioned the lack of financial resources and/or slow return of funds invested in digitalization projects. It seems to us especially remarkable that these problems are discussed at the educational platform of the management University. The obtained information testifies to the need to strengthen educational programs of management specialties with such disciplines that will allow students to master digital competencies at the modern level (Khramtsova and Mayboroda 2019). Results of a survey of scientists-developers. The relationship between Russian science and information technology cannot be called simple and clear (Kovalev 2019). The Russian Academy of Sciences, which, since the 60s of the 20th century, has grown domestic programming to universally significant achievements of the world level, treats it after half a century condescendingly, and in the case of recognition of the Russian software product on the world market – patronizingly, but does not recognize science, arrogantly considering programming only as a process of creating computer programs activities from the sphere of art, craftsmanship. Rarely does anyone from the Russian Academy of Sciences call M. V. Donsky, I. A. Danilov, E. V. Kaspersky, I. V. Segalovich, whose scientific achievements are recognized in the world, scientists. Rather-successful entrepreneurs from programming. The Academy has displaced information technology from the field of basic research, and now these developments are conducted in structures far from it. Meanwhile, it is worth noting that more than 85% of “exact” American science occurs with the participation of IT. The contribution of the Russian Academy of Sciences to digitalization (a project of state and national scale) cannot be significant today. The Academy is reluctant to experiment with the achievements of the IT industry and repeatedly discovers its rigidity, inhibiting the progressive, competent, transparent examination of scientific achievements. The leading publications of the Academy have long and, it seems, for a long time disappeared from the public “online”, thereby excluding Russian publications from the world scientific space-instead of skillfully translating the best works of Russian scientists into generally accepted English and placing them in the public domain, using a variety of Webometrics capabilities. The growth of the content of our academic sites is reduced. Now in Russia it is actually unacceptable to place a scientific article for public access before publication in the journal. An even more unfair situation (in comparison with the “small genre” - scientific articles) has developed with the publication and review of monographs. In the list of scientific works of the scientist, a serious monograph began to be perceived (for the sake of formal international requirements) as a protest against the academic system and can secretly cross out the career achievements of the researcher. Work on the volume edition requires a lot of time and effort, and a significant result is no longer recognized. Such way of demonstration and discussion of the scientific results as “live publication” which could be used for the purpose of development and improvement of research work has not yet received support of the Russian Academy of Sciences. Although, of course, for both the scientist and the reader, this online method is more productive than static, since any changes in the industry and in a particular work immediately become noticeable.

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Communication of information technologies and the Higher attestation Commission is also ineffective: articles are not “published” (in the original sense of the word), that is, they are not brought to the public, but only accepted or rejected by the peerreviewed publication. The full texts and results of dissertations are still not submitted for General consideration and, moreover, do not become the object of operational adjustments and updates. Online dictionaries and encyclopedias have to overcome bureaucratic barriers to become a tool for their users. By the way, the project bigenc.ru he began his work with the support not of the Russian Academy of Sciences, but of the Ministry of culture of the Russian Federation. Software scientists in their answers are clearly not satisfied with the interaction of science and IT. And they Express their hopes for restoring the balance of fundamental Sciences in the structure of the Russian Academy of Sciences, and that ITdevelopments will once again take their rightful place in science. Results of the survey of students of the State University of management. The final stage of the study included a survey of 173 students from 11 groups enrolled in different courses and educational programs in the direction of “Management”. The questionnaire used a list of 7 types of information technologies listed above (programming languages; databases; corporate IT systems; data analysis tools; marketing tools for promotion through social networks; integrated search, analysis, forecasting; machine Learning tools). In addition, the section “other (name what, in any form)” was entered into the questionnaire. Within each type of IT in the questionnaire there was detail on a number of specific tools. The processing of the survey data is shown in the summary table (see Table 1). Table 1. The number of choices of types of IT that, in the opinion of the respondents, are necessary for their future professional activities Group View IT1 View IT2 View IT3 View IT4 View IT5 View IT6 View IT7 AU 2-1 23 15 24 40 10 2 3 AU 1-1 120 32 53 96 20 11 9 AU 3-1 35 11 38 44 10 3 5 RCP 1-2 71 23 31 49 6 5 4 TEK 1-1 97 41 70 98 10 4 4 RCP 1-1 41 16 28 42 7 2 2 UMS 1-1 114 38 76 111 12 12 13 LCP 1-1 148 54 93 144 16 14 14 MPO 1-1 94 34 64 93 10 10 10 UAB 1-1 106 34 61 100 13 11 11 LCP 1-2 45 16 31 40 4 3 3 Result 894 314 569 857 118 77 78 Source: research materials

As can be seen in the final row of the table, for all respondents, the first five types received the highest number of elections. The first place was taken by programming

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languages (1st view in the questionnaire), the second place was taken by various data analysis tools (4th view), the third place by corporate IT systems (3rd view), the fourthdatabases (2nd view), the fifth-marketing tools for product promotion in social networks (5th view in the questionnaire). In the context of training groups, only in one case (the first row in Table 1) the choice of the 4th type of IT (various data analysis tools) exceeded the 1st type (programming languages). In all other groups, the five most popular types of IT coincide with those in the final line. The analysis also showed that the respondents’ choice of already used types of IT is less than those that students believe are necessary in the future (see Fig. 2). This indicates not only the students’ assessment of current needs, but also their awareness of the increasing trend of digitalization in the future.

Fig. 2. The result of the respondents’ choice of the types of IT necessary for future activities

Thus, on the basis of the results of the study, conclusions are drawn that future managers are aware of the need for IT competencies for their professional activities. Therefore, it seems relevant to include in the educational programs of management universities a much more serious study of the relevant disciplines.

4 Conclusion Business representatives in their answers to the questions of the questionnaire proposed by them chose as the most significant problem weak digital competence and even simply insufficient IT literacy (in total, 90% of respondents noted these barriers). This refuted our first hypothesis that the leading problem hindering the introduction of

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information technology in business is the lack of financial resources and/or slow return on investment. Business quickly assimilates information technologies (Rumyantseva 2018; Udaltsova 2019). But there are barriers. As the most serious obstacles to the use of IT in business, respondents see problems associated with consistent planning (32% noted the lack of a plan and a transformation program, and 23% noted that pilot projects do not correspond to the company’s strategy). Other problems are related to the weakness of the infrastructure to assimilate the latest tools (35% of respondents) and the difficulty of combining business processes with “unfamiliar” IT solutions, often requiring many fundamental changes (37% of respondents). It should be noted that the picture of the results of our survey in this part does not contradict the data of other studies (Lokuge et al. 2019). Statements of experts in applied mathematics and programming allowed to sum up the following result of the opinions revealed during the survey. Digital developments, despite their innovativeness and prospects, are not perceived by academic science as fundamental (Kovalev 2019). At the same time, applied mathematicians themselves often consider the models they create to be “pure” mathematics. Hence-infringing all parties to the dispute and impoverishing the scientific process misunderstanding: scientists from the Russian Academy of Sciences do not consider IT-specialists part of their community, and this only inhibits the perception of academic science of the latest technologies in the field of IT. From this follows, unfortunately, the refutation of the second hypothesis of the study. Survey of students of management specialties and processing of the received answers allowed to draw a conclusion about confirmation of the third hypothesis, which was that the required professional competence of modern managers should be expanded and supplemented with knowledge and skills in the field of digital technologies. The impetus for this can be a conscious need of students in digital IT. Indeed, the survey of businessmen revealed as the most common problem of insufficient IT competence of employees. The study also revealed students’ awareness of the need to expand IT-literacy, acquisition of digital competencies. Moreover, it became clear that the new understanding of IT-literacy for managers includes a much greater amount of knowledge and skills than is now laid down in educational programs (Romanov 2018). The conclusion is obvious about the need to include digital competencies in modern educational practices, the search for specific opportunities for the formation of the required competencies (Krotenko and Zhernakova 2019; Khramtsova and Mayboroda 2019). Today, the professional competence of managers should be expanded in the direction of actual business needs, due to the conscious need of students in IT. The modern world forms a new space for people’s life (Baskakova and Soboleva 2019). While science, business, education have doubts about the use of a particular digital technology, the instrumentality of decisions, their harmony with the time, and finally, the ability to influence the competitiveness of almost any organization, is lost. Knowledge of modern digital technologies and the possibilities of their use in the organizational life of industries, universities, academic structures determines the diversity and novelty of digital initiatives. We, the University teachers, are pleased to note that digital technologies are increasingly entering the educational platforms, which explains the dynamic change in

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educational standards (Gianelli 2018). The “offensive” of digitalization requires an adequate response from education. Assimilate the resources of information technology in the educational process of the University is necessary not only to improve management digital literacy, but also to form a professional culture of future managers (Krotenko and Zhernakova 2019). It is impossible to master (often together with students, in the “here and now” mode) the possibilities of programming languages, databases, corporate IT systems, data analysis tools, marketing tools for promotion through social networks, complex search tools, analysis, forecasting, Machine Learning tools without understanding the didactic role of a digital tool (Soboleva et al. 2018). Emerging danger that accompanies any educational reform in the field of vocational training, requires a clear understanding of all participants of educational process in high school: knowledge of the possibilities of digitalization, the development of new information technologies is not a goal but a means by which students-managers can make informed management decisions in the future (Antonov et al. 2019). Such an attitude when introducing digital technologies into University educational programs is necessary - so that education, proclaimed as a priority, innovative, and now digital, does not perform only a service function, satisfying the spontaneously emerging needs of society in educational services, but becomes a factor in the development of society. Acknowledgment. The authors Express their gratitude to the administration of the State University of management for the opportunity to conduct the study, and to its participants for their activity and sincerity during the survey.

References Lokuge, S., Sedera, D., Grover, V., Dongming, X.: Organizational readiness for digital innovation: development and empirical calibration of a construct. Inf. Manag. 3(56), 445–461 (2019) Antonov, V.G., Rumyantseva, I.A., Krotenko, T.Yu.: Assessment of the level and structure of motivation to study undergraduate students as indicators of the quality of education. Prospects Sci. Educ. 2(38), 68–285 (2019) Baskakova, M.E., Soboleva, I.V.: New facets of functional illiteracy in the digital economy. Quest. Educ. 1, 244–263 (2019) Gianelli, M.: E-learning in theory, practice and research. Educ. Issues 4, 81–98 (2018) Kovalev, S.A.: True science is impartial, unselfish, and fearless. Trinity Variant-Sci. 7(276), 1–2 (2019) Krotenko, T.Yu., Zhernakova, M.B.: Competence manager of the digital revolution. J. Manag. 5, 23–27 (2019) Program “Digital economy of the Russian Federation”: Approved by the order of the Government of the Russian Federation dated 28 July 2017 No. 1632-R 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. Prospects Sci. Educ. 5(35), 33–43 (2018)

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Rumyantseva, I.A.: Readiness of the organization for digital transformation. Problems of interactions 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) Soboleva, E.V., Sokolova, A.N., Votintseva, M.L.: A model of cognitive activity in the digital environment of the quandary text maze. Prospects Sci. Educ. 5(35), 221–230 (2018) Udaltsova, N.L.: Digitalization of economic processes in the context of the industrial revolution 4.0. Creative Econ. 1(13), 49–62 (2019) Khramtsova, N.G., Mayboroda, T.Yu.: Approaches to the development of digital competencies of law students. Prospects Sci. Educ. 1(37), 80–93 (2019)

Development of the Crowdfunding Financial Mechanism in the Framework of the Digital Economy Ekaterina G. Sheina(&), Alexander V. Kurdyumov, and Andrei K. Izmodenov Urals State University of Economics, Ekaterinburg, Russia [email protected], [email protected], [email protected]

Abstract. The article is devoted to the problems and prospects of development of the financial mechanism of crowd platforms in Russia. The purpose of the study is to consider alternative models of enterprise financing in the context of the overall digitalization of the economy. The methodological base of the study is based on the theoretical principles of the finances of organizations, which allows us to consider modern sources of financing using IT platforms in various aspects. The authors applied a set of methods – deductive and structural-logical analysis, which allows us to move from formulating a common problem to comparing and identifying the advantages of each alternative source of financial resources – crowdfunding, crowdinvesting and crowdlending. The results of the study include a comparative analysis and systematization of the experience of using crowd technologies in foreign countries, identifying the most used alternative financial models in the world in 2017–2018, and considering the features of the bill being introduced in the field of crowdfunding in the Russian Federation. As recommendations, the authors formulated and logically substantiated conclusions about the importance for the national Russian economy, and in particular for small business, of improving digital financing technologies. The authors also developed and logically substantiated an algorithm for the formation of a financial and investment mechanism through crowdinvesting, which allows sharing functions and areas of responsibility between all participants in the process – the developer of an investment project (innovative small business), an information and analytical portal, an independent organization for evaluating projects, crowdinvesting platforms, and also investors. The introduction of the author’s algorithm will contribute to the development of financing in the Russian Federation through crowd platforms and accelerate the digitalization of the economy in the field of finance. Keywords: Financial model
Investment project
Digital economy platform
Crowdfunding platform
Crowdfunding
Crowdfunding JEL Code: O16


G38
E44

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 571–580, 2020. https://doi.org/10.1007/978-3-030-47945-9_62


Crowd

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1 Introduction The very phenomenon of “public funding” is not new to humanity: as early as the 18th century. In Europe, writers raised funds for the publication of books by subscription, and in Russia, thanks to folk money, a monument was erected to Minin and Pozharsky (Bill on Alternative Ways to Attract Investments (Crowdfunding 2019). However, modern crowdfunding has appeared and is actively developing in the world since the beginning of the 2000s. Thanks to the advent of the Internet and electronic payment systems, and in Russia this idea came in 2010 and is still actively developing. The relevance of this topic is explained, firstly, by the modernity and unconventionality of crowdfunding as a way to raise funds, and secondly, by the interest in the tool from small and medium-sized enterprises, as well as the lack of proper legislative regulation (JOBS 2012). The topic of financing through crowdfunding is actively studied by Russian researchers (Bogomolova 2018; Mikryukov et al. 2017). Some of them consider crowdfunding in terms of its impact on individual sectors of the economy (Kuznetsov 2017) made significant proposals for the regulation of crowdfunding in Russia. On the whole, the fragmentation and unsystematic nature of research indicates a lack of knowledge of the issue from a financial and economic point of view. Methodological approaches to the mechanism of application of crowdfunding platform. The term “crowdfunding” does not have a single definition, solely because its interpretation may indicate common features that combine the entire family of crowd technologies into one category, and at the same time, crowdfunding is one of the types of the same family (data in the Table 1). Crowdfunding is a technology of collective financing, within which fundraising for the implementation of a social or creative project is carried out by attracting a wide range of voluntary investors and is carried out via the Internet on specialized Internet resources – crowdfunding platform (Drogichinskaya 2018). Crowdinvesting – collective investment of a business, start-ups using various financial instruments. As a reward, investors receive part of the property, shares of the company or other assets of the enterprise (Zamolkin 2018). Crowdlending – online lending to businesses by individuals through a crowdlending platform. As a result, the investor returns both the amount of the debt itself and the interest on it (Zamolkin 2018). The principle of crowdfunding applies to all types of this category: a person who needs funds to implement his project is registered at the appropriate site, provides all the information required by the site, passes the appropriate checks, fills out his profile on the site, clearly describes his project and is waiting for investors who are ready invest in a project (Vasilchuk 2018). An agreement is concluded between the investor and the entrepreneur in electronic form, which stipulates the rights and obligations of the two parties, records the amount invested by the investor, deadlines, risks and remuneration of the investor. Despite the fact that crowdfunding in its present form has existed for almost 20 years, the first special legislative regulation of crowdfunding (mainly crowdinvesting) appeared

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Table 1. Comparison of crowdfunding types Type of project

Crowdfunding Creative, social character

Crowdinvesting Crowlending Start-ups, business projects Business projects covering (long-term investment) current expenses of the organization (short-term investment)

Required Cash resources Tools used to Transfer of a certain Loan, sale of a company’s share, issue of securities, finance the amount of money tokens (ICO) project without returning this amount Investors Individuals, legal entities Entities Individuals, creative Small, medium, large attracting and social business investments associations, Investor Small, medium Share in the capital, Compensation business dividends from shares, coupon income from bonds, income from the circulation of tokens on cryptocurrency exchanges Compiled by the authors using: [8].

Loan

Small, medium, large business Return of invested amount with accrued interest

in the United States. Recall, in this case, it is understood that as a remuneration to the investor, the start-up company offers shares (a share in the authorized capital). Crowd platforms are also quite common in Southeast Asia, for example, China, Singapore and Malaysia. The regulatory approaches for these countries are different, which may be explained by differences in cultures within countries. In China, steps have not yet been taken to regulate crowdinvesting in terms of crowdfunding. This issue was discussed back in 2014–2015, however, these discussions did not receive any legislative design. It is important that this legislative initiative concerns innovative small and micro-enterprises and involves the establishment of demarcations of the capabilities of platforms, investors and the business itself. Singapore actively uses regulatory sandboxes, which allows fintech start-ups to experiment and implement various innovations in the field of crowdfunding within the framework of existing legislation (Kuzmenko 2015). Prior to the adoption of the relevant bill in the Russian Federation, the financial mechanisms of crowd technology were subject to a number of other existing legal acts, for example, crowdfunding may fall under the regulation of the Civil Code of the Russian Federation regarding donations, as it fully complies with these provisions. As for crowdinvesting, one could use the Federal Law No. 335-ФЗ “On Investment Partnership”, that is, draw up a crowdinvesting project through an investment partnership agreement. An investment partnership is not a legal entity, it is an association of two or more investors on the basis of an investment partnership agreement (Knyaginin 2018).

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In the case of crowdlending, platforms have to obtain a license from a microfinance organization (MFI), which allows them to issue resale loans to individual creditors under an assignment agreement and to be guided in their activities by Federal Law No. 353-ФЗ “On Consumer Credit (Loan)” (Legal Aspects of Organization of Activities of Crowdfunding Platforms in Russia, 2018). At the moment, the bill on attracting investments using investment platforms has been adopted. There is also a bill on alternative ways to attract investment (crowdfunding). Consider what these documents contain. The Russian bill is more methodological in nature, since it gives clear definitions of concepts that will be found in the text and applied in practice, which unifies the conceptual apparatus of this category. An important aspect of the law is the definition of the types and types of contract. Contracts are executed in electronic form, signed by a simple electronic signature. All transactions on the site will be executed through smart contracts, and investment and the return of remuneration is carried out through the nominal account of the platform operator (not through the settlement account, as was done earlier). Thus, the bill really put an end to the calculations at the crowdfunding site. The incomplete process of forming regulatory assets does not currently allow making changes to the Tax Code of the Russian Federation related to the cancellation or simplification of the procedure for paying personal income tax by a borrower when raising funds through a crowdsite. Thus, start-ups that raise funds using crowdfunding technologies are forced to generate 2-NDFL certificates and send documents on investors who have invested funds to the tax office. Since often there are several hundred, this makes it difficult to collect and summarize data for each. Today, crowdfunding sites and start-ups attracting investment have to spend significant resources to create a service for automating tax accounting in connection with the above requirements. The need for using equity securities as a way of investing also becomes questionable (Polyakov 2018). Does it make sense to place securities of organizations that may not be anything from themselves, the investor from this method will not be very much at risk. The fears are justified, however, this method, as noted earlier, allows strat-ups to gradually grow to a large company, which during this period has tried many types of investments in its activities, and investors, in turn, will be able to get a fairly large income if this increases start-up.

2 Results Alternative financial models – platform solutions based on crowdfunding, crowdlending, crowdinvesting form the basis of the alternative financing market and can successfully attract funds, reduce transaction costs, increase the speed of settlements (Table 2). The regulator of investment platforms in the Russian Federation is the Bank of Russia, whose functions will be to maintain a register of operators of investment platforms, as well as conducting checks on the activities of operators.

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Table 2. The most used alternative financial models in the world in 2017–2018.

1 2 3 4 5 6 7

8

Alternative financial model name P2P Consumer Lending – Consumer Lending Invoice Trading – account trading P2P Business Lending – consumer P2P lending Real Estate crowdfunding – real estate crowdfunding Equity-based crowdfunding – reward-based crowdfunding Reward-based crowdfunding – reward-based crowdfunding Balance Sheet Business Lending – balance business lending Donation-based crowdfunding – donation-based crowdfunding

Model description Sponsors and individuals provide consumer loans to the borrower Private individuals and investors buy business accounts or receivables Sponsors or individuals provide business loans to the borrower Sponsors or individuals provide equity subsidies or debt financing Sponsors and individuals buy equity issued by enterprises on alternative financial platforms Sponsors provide financing to individuals, projects in exchange for non-monetary rewards The subject of the platform provides a loan directly to the business borrower Donors provide funding to individuals and/or enterprises on a charitable basis

Market share 41% 16% 14% 8, 9% 7% 6% 5, 5%

1, 6%

In 2018, the leaders in the number of financial platforms to support small and medium-sized enterprises in European countries are the UK (62 units), Germany (30 units), France (36 units), Italy (34 units), Spain (26 units).) (Gerber and Hui 2014). However, in practice, the introduction of alternative financing methods in the Russian Federation left questions regarding the taxation of investors, businesses and the crowds platform itself. According to the authors, it will be necessary to introduce tax incentives in order to stimulate business development and attract new investors to the sites. The emergence and development of crowdfunding in Russia is an important stage on the path to creating new opportunities in the digital economy and prospects for business and the welfare of the population. And at the same time, it’s important for the state to “not shackle” crowdfunding into the framework, and systematically and taking into account the wishes of its participants, as well as drawing on foreign experience, create such an effective financial mechanism that can stimulate the development of crowd technologies. It is also worth noting the resolution of the issue regarding the transfer of funds from investors to project initiators and vice versa by creating a nominal platform account, however, it is worth finalizing the functions and capabilities of the platform that did not contradict its status.

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The use of such a tool as a token in the future will be interesting and attractive for the population, only for its use it is necessary to allow the issuance and circulation of tokens in Russia. The relevant law “On Digital Financial Assets”, which gives green light tokens, is currently in development status, and therefore investors will be offered traditional investment tools [Legal aspects of organizing crowdfunding platform activities in Russia, 2018]. Statistical data from 2012 indicate the openness of the adoption by businesses and investors of this method of raising funds (Fig. 1). 70,000 60,000 50,000 40,000

Краудинвестинг Краудлендинг

30,000 20,000 10,000 0

2012

2013

2014

2015

2016

2017

2018

2019

Crowdinvesting Crowdlending Fig. 1. Dynamics of the development of crowdfunding platforms in Russia in 2012–2019, million rubles

Today, there are quite successful platforms on the Russian crowd market, such as StrartTrack, Venture Club, Potok, Planeta.ru, etc. All of them differ from each other by different criteria: thus, StartTrack will be attractive for innovative start-ups and the development of small enterprises, while Planeta.ru is open to social and creative projects. An important fact is the size of the commission for project authors, which is one of the main criteria for choosing a site (Table 3).

Table 3. The main crowdfunding sites of Russia Site name

Type of financing

Starttrack Crowdinvesting, crowdlending Gorod Crowdlending deneg Venture Crowdinvesting, club crowdlending Potok Crowdlending Planeta. Crowdfunding ru

Total turnover, million rubles

Average investment per company, million rubles

Average check per company from an investor, thousand rubles

Number of Commission investors for the in one company company

1498, 0

22, 0

426

52

5%

465, 8

1, 0

420,0

2–3

2–5, 5%

897, 0

13, 0

3 000, 0

4

1–5%

714, 4 760, 2

0, 5 0, 2

4, 5 1, 5

115 186

6, 7% 10–15%

Development of the Crowdfunding Financial Mechanism in the Framework

577

One of the key problems hindering the development of crowdinvesting in Russia is the lack of a well-developed judicial practice with regard to protecting investor interests from fraud and erosion of its share in the project after the completion of the fundraising stage. For example, the absence of guarantees for investors in the event that management refuses to implement the project after receiving financing (for example, in favor of developing another direction without obtaining the consent of the investor). The lack of tools to protect the crowdinvesting site from fraud charges in the event of default by the borrower is also an acute problem. A large number of potential investors are not ready to consciously accept the risk of default and the need to write off debt in case of its occurrence. It is necessary to create an institute of independent consultants and judicial practice, which will be able to confirm the bankruptcy of the borrowing company and assess whether the site is guilty in the current situation. Firstly, the quality of project evaluation (both from a financial point of view and from a marketing one), verification of documents describing the project, business plans, project implementation opportunities at the moment are completely determined by the procedures and rules of each crowdinvesting platform independently, which carries the possibility of underestimating the risks.

3 Conclusion/Recommendations From the perspective of investors, crowdinvesting is an alternative investment tool, which gives greater profitability compared to traditional investment options, especially during a period of lower interest rates on bank deposits. In addition, the growing interest of private investors in such an instrument as an individual investment account indicates that the population has savings that can be used to finance projects. Extending the automation of processes and lowering the tariffs for Internet services allow crowdinvesting to become an even more affordable tool for investing, and the investor can independently choose the project of interest for him according to the minimum amount of investment, terms and profitability (in the case of a loan format). Further in Fig. 2, the author’s model of the possible interaction of the main participants in the process of attracting financing through crowdinvesting in the Russian Federation is presented. The author’s model of interaction between the main participants in the process of attracting financing through crowdinvesting is based on the idea of creating a single information and analytical portal that allows you to combine several functions at once. The information and analytical portal of crowdinvesting projects is an Internet platform that allows you to freely obtain information about projects that attract investments using the crowdinvesting mechanism, and the main market participants. Firstly, this is another new way of financing small and medium-sized business projects, since traditional instruments for raising funds are in most cases unavailable due to the inability of such organizations to provide collateral for their obligations. Secondly, the crowdfunding platform becomes an “incubator” for small and medium-sized businesses and various innovative start-ups, as they will be able to try different ways of raising money on the platform itself – from loans to issuing securities – and thus help to grow from a small organization into a fairly large company.

Fig. 2. Model of interaction of the main participants in the process of attracting financing through crowdinvesting in the Russian Federation (Compiled by the authors)

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Thirdly, crowdfunding, specifically crowdinvesting, can give a new life to forgotten venture investment, as the circle of investors will expand significantly at the expense of individuals. Fourth, crowdfunding favors almost all areas of activity (including problem sectors): from creative and socially oriented to agricultural and industrial. Fifthly, crowdfunding simplifies the burden of project founders regarding the advertising of their projects, products and company. They get the opportunity of additional costs to advertise their products using word of mouth and the media who are interested in reviewing the news of crowdfunding projects. As a result, this should implement many plans for stimulating and real development of SMEs in Russia, create additional jobs, and also form a financial culture among the population, which can act as an entrepreneur or an investor in these relations. This is a rather promising direction for the development of a new Russia, whose formation is taking place before our eyes, but now there are a number of problems associated with crowdfunding activities in Russia. First of all, since the transfer of funds in favor of the project is carried out through bank cards, the crowdfunding platform, not being a credit institution, essentially performs the banking function of acquiring – a transaction with payment cards relating to the transfer of funds from investors to project initiators (Kharitonova 2018). Therefore, the question is about the responsibilities and functions of the crowd site itself and the possibility of determining its special status as the transfer of funds, or to find other ways to transfer funds from the investor to the project initiator. There are also no restrictions on the amount of funds sponsored by the authors of the projects, which jeopardizes the interests of investors, since there is a great possibility of non-return of investments to all investors at the end of the project. The problem remains how transactions will be executed on the crowdfunding platform, if all procedures are carried out through the platform’s website, and how the investor can make sure that the platform and the project itself are not fraud. Will the tax system (in terms of providing benefits) for the activities of project authors, investors and the site itself also be changed. In fact, such problems are due to the lack of clear legislative regulation that protects the interests of investors, businesses and crowdfunding sites. Therefore, for the normal functioning of crowdfunding, it is necessary to create a law that clearly defines the subject of regulation, the basic concepts of crowdfunding and was able to solve all the current problems that crowdfunding technologies face today. Often adapted foreign experience in regulation can be useful for lawmaking, therefore, to begin with, we will analyze how crowdfunding is regulated in other countries. Acknowledgments. The article is prepared with the financial support of the Russian Foundation for Basic Research within the project No. 19-010-00886 «The comprehensive economic and legal study of improving the competitiveness of the agro-industrial complex of the Russian Federation in the context of the development and integration of information digital systems».

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References The bill “On alternative methods of attracting investments (crowdfunding)” (2019). http:// regulation.gov.ru/. Accessed 01 Oct 2019 “JOBS Act obeshchaet vzryvnoj rost IT-kompaniyam v SShA” (2012). https://habr.com/ru/post/ 164181/. Accessed 01 Oct 2019 Bogomolova, A.: “Infografika: kak ustroen rynok kraudinvestinga v Rossii” (2018). https:// incrussia.ru/understand/infografika-kak-ustroen-rynok-kraudinvestinga-v-rossii/. Accessed 09 Oct 2019 V Gosdumu vnesen zakonoproekt o kraudfandinge (2018). https://tass.ru/ekonomika/5047375. Accessed 01 Oct 2019 Vasilchuk, T.: Zhertvovat ne zapretyat (2018). https://www.novayagazeta.ru/articles/2018/12/19/ 78981-zhertvovat-ne-zapretyat. Accessed 04 Oct 2019 Drogichinskaya, V.V.: “Prakticheskoe posobie po kraudfandingu” (2018). https://planeta.ru/faq/ article/2!paragraph9. Accessed 04 Oct 2019 Zamolkin, D.: Tolpa investorov: chto meshaet rasti rossijskomu rynku kraudfandinga (2018). https://www.forbes.ru/finansy-i-investicii/364695-tolpa-investorov-chto-meshaet-rastirossiyskomu-rynku-kraudfandinga. Accessed 09 Oct. 2019 Kraudfanding: kak privlech dengi s pomoshchyu kollektivnogo finansirovaniya (2019). https:// fincult.info/article/kraudfanding-kak-privlech-dengi-s-pomoshchyu-kollektivnogofinansirovaniya/. Accessed 01 Oct 2019 Kuznetsov, V.A.: Kraudfanding: Aktualnye voprosy regulirovaniya. Russ. J. Money Finan. 1, 65–71 (2017) Kuzmenko, V.: Kraudfanding: istoriya pohozhdenij v Rossii (2015). https://rb.ru/opinion/crowdrussia/. Accessed 09 Oct 2019 Mikryukov, A.V., et al.: Kraudfanding: tendencii, perspektivy razvitiya i socialnaya znachimost (2017). http://www.uecs.ru/uecs-106-1062017/item/4730-2017-12-26-20-55-33. Accessed 04 Oct 2019 Knyaginin, V.N.: Novye instrumenty privlecheniya finansirovaniya dlya razvitiya tekhnologicheskih kompanij: praktika ispolzovaniya i perspektivy razvitiya v Rossii (2018). https:// publications.hse.ru/mirror/pubs/share/direct/219492205. Accessed 04 Oct 2019 Polyakov, Ye.: Modern token: v Rossii predstavili zakon o kriptovalyutah (2018). https://lenta. ru/brief/2018/01/26/priehali/. Accessed 02 Oct 2019 Pravovye aspekty organizacii deyatelnosti kraudfandingovyh platform v Rossii (2018). https:// www.korpusprava.com/ru/publications/analytics/pravovie-aspekti-organizacii-deyatelnostikraudfandingovih-platform-v-rossii.html. Accessed 09 Oct 2019 Kharitonova, L.: Zabota o massah. Nuzhen li investoram zakon o kraudfandinge (2018). https:// www.forbes.ru/finansy-i-investicii/361507-zabota-o-massah-nuzhen-li-investoram-zakon-okraudfandinge. Accessed 02 Oct 2019 Gerber, E., Hui, J.: Crowdfunding: motivations and deterrents for participation. ACM Trans. Comput. Hum. Interact. 20, 32–34 (2014)

Forecasting Method of Product Shipment Michael N. Pavlenkov(&) and Rinat Zh. Reimov National Research Nizhny Novgorod State University named after N.I. Lobachevsky, Nizhny Novgorod, Russia [email protected], [email protected]

Abstract. The relevance of work is due to the fact that enterprises are insufficiently use effective mechanisms that ensure the identification of deviations from shipment plans, and forecasting of the fulfillment of shipment plans is practically not applied. To address these problems, new methods are required, either on the basis of identified deviations from shipping plans or on the basis of their forecast values, and need to develop proposals for accounting and coordination of changes in the production and financial plans of the enterprise. Proposed method can serve as one of the mechanisms for forecasting and deviations from shipment plans, which will allow to identify causes and develop recommendations for their elimination. The main method of forecasting is probability theory and mathematical statistics: construction of variational series and calculation of statistical characteristics, distribution of random variables, special Laplace function, and theory of verification of statistical hypotheses, statistical theory sample method to develop a better model for forecasting shipping plans. Results of this study are that the method of shipment forecasting has been developed. On the basis of statistical data of product shipment, the possibility of using Laplace integral function for forecasting of shipment plan is proved. The results after testing showed that the forecast indicators more accurately reflect the actual state of shipment at an enterprise. Keywords: Enterprise


Products
Sales
Variational series
Forecasting

1 Introduction Sales management system is a key link of all activities of an enterprise, as consumer either recognizes or does not recognize useful and necessary products of an enterprise, and marketing planning of products is the most important task in the system of interaction between an enterprise and consumer as subjects of economic relations. Many domestic and foreign economists have devoted their work to the problems of organizing the marketing activities of an industrial enterprise. On the basis of the forecast plan and contracts, the current (annual) plan is developed in physical and value terms by types of products and consumers for the planned period. Implementation plan is formed taking into account balances of unsold products in the previous period in value terms. The supply plan is fixed by the contract, which defines the terms of shipment, quantitative and qualitative characteristics of products. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 581–592, 2020. https://doi.org/10.1007/978-3-030-47945-9_63

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Volume of deliveries is agreed on the nomenclature of products, both in kind and in value terms. Shipment volume is the volume of production planned for shipment to consumers. At the final stage, schemes of transport flows are developed, schedules of preparation of goods for shipment and delivery of products to consumers are created. Operational planning is aimed at detailing the plans, agreeing on the terms of shipment and formation of shipment schedules of products. Violation or modification of shipping plans requires changes to production plans and financial plans. As practice shows, enterprises are insufficiently effective mechanisms that ensure the identification of deviations from shipment plans, and prediction of fulfillment of shipment plans is practically not applied. To address these problems, new methods are required, either on the basis of identified deviations from shipping plans or their forecast values, to develop proposals for accounting and coordination of changes in production and financial plans of an enterprise. Shipment planning is an essential sales function. The larger the time interval of shipment plan is formed, the lower its feasibility, which is determined by influence of external and internal factors. All this determines the need to develop monthly plans and schedules, taking into account the demand of consumers and conditions of production [2, 7]. In the process of product shipment, deviations from the terms and volumes of shipment occur; therefore, forecasting shipment volumes allows timely assessing possible violations of sales plans and payment for products, as well as adjusting schedules of vehicles and the need to replenish finished goods warehouses.

2 Forecasting Method of Product Shipment The sequence of stages of the forecasting method of product shipment is shown in Fig. 1. Phase 1. Constructing an interval variation series. Shipment of products at enterprises is carried out daily. At the same time, one type of product can be shipped within 24 h to different consumers and different modes of transport. On the basis of daily reports on shipment of products in value terms, a variation series is formed X ¼ fX1 ; X2 ; . . .; Xj g. Variation series data are ranked in ascending order. In order to build an interval variation series, first of all, it is necessary to select the optimal number of intervals and set the length of each of them. At the same time, the length of the interval should be constant, since during the analysis of the variational series frequencies from different groups are compared. An optimal number of groups should be chosen to reflect the diversity and at the same time their regular distribution, as well as exclude distortion by random frequency fluctuations. To determine the number of groups in the variation series, the Stergde formula [1, 3, 8, 9, 12] is used: J ¼ 1 þ 3; 332 lg K,

Forecasting Method of Product Shipment

583

Start

Phase 1

Creating an interval variational series

Phase 2

Calculation of theoretical frequencies

Phase 4

Forecasting the implementation of product shipment plan

Phase 5

Analysis of deviations and development of recommendations

End Fig. 1. Forecasting method of product shipment. Shift Phase 3

where J is the number of groups in the variational series; K is the number of the population. If obtained value turns out to be fractional, the nearest integer is chosen for the value of an interval step. Interval value is then determined: h ¼ ðxmax  xmin Þ= J;

ð1Þ

where xmax is the maximum value of variants of X series; xmin is the minimum value of variants of X series. The beginning of the first interval is a number, D1 ¼ xmin  h=2 the beginning of the second interval coincides with the end of the first interval, D2 ¼ D1 þ h etc. Once the interval scale has been established, the empirical frequency of observa. tions is determined Construction of the interval variational series is the first stage of processing the initial data. The next step is the identification of the main aggregating indicators. Phase 2. Calculation of theoretical frequencies. Variational series has a connection between frequencies and variable characteristics, so series is analyzed in order to identify patterns and type of distribution, as well as to construct a theoretical distribution curve [1.13]. In statistical modeling, the normal distribution is used, which is described by the curve: 1 t2 yt ¼ pffiffiffiffiffiffi e 2 ; 2p

ð2Þ

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where yt the ordinate of the normal distribution curve (frequency); t ¼ xkrx - normalized deviation (k ¼ 1; 2; . . .K); x - is the arithmetic mean of the variation series X; r - the standard deviation of the X variation range. To test empirical series, a normal distribution law needs to calculate the mean deviation x and standard deviation, and then theoretical frequencies are determined, which are compared with the empirical frequencies, i.e. normal curve align the empirical curve [1, 3, 14]. The theoretical frequencies are calculated in the following order: 1. The arithmetic means x and standard deviation r of the series X. 2. The normalized deviation t is defined by the formula: t ¼ xkrx : 3. It is determined by the table value of the function uðtÞ. 4. Theoretical frequencies are determined by the formula: mTi ¼

Kh  uðtÞ; r

ð3Þ

where K is the volume of aggregate; J - number of intervals into which the empirical series is broken. h - length of the interval; i - interval index (i ¼ 1; 2; . . .; J). 5. Build a graph of empirical and theoretical frequencies then compare them. Phase 3. Test the hypothesis. Consent criteria test hypotheses about the nature of distribution. It is necessary to determine whether discrepancies between empirical and theoretical frequencies are random or not. Consent test confirms or rejects the hypothesis. To test the hypothesis is used Pearson criterion x2 [1, 3, 10]. To estimate the null hypothesis, we use a random value: ð4Þ

- frequencies are empirical; where mTi - frequencies theoretical. Let’s consider the algorithm of applying the Pearson criterion. 1. A null hypothesis about the normal distribution law is put forward. 2. Parameters are defined . 3. The theoretical frequencies mTi corresponding to the experimental frequencies are determined. 4. The value is calculated x2 . 5. The number of freedom steps is determined r ¼ J  l  1,

Forecasting Method of Product Shipment

585

where J is the number of intervals; l - number of parameters (in the normal law distribution l = 2, hence = r J  3Þ. 6. The significance level a ¼ 1  c, where c the confidence probability is ðc ¼ 0; 95; a ¼ 0; 05:Þ. 7. At the table is the value x2T is given a and r, which is critical accurate x2jp ða; r Þ. 8. If x2  x2jp there is no reason to reject the zero hypothesis. If x2 [ x2jp —null hypothesis is rejected. Phase 4. Forecasting the shipment of products. Confirmation of the hypothesis suitability makes it possible to use results of distribution for forecasting. Compliance with the normal law allows predicting the execution of a delivery plan using Laplace integral function. Consider the Laplace function to calculate the probability of execution of a shipment plan [1, 3, 6, 11]: U ðt Þ ¼

1 1 þ uðtÞ; 2 2

ð5Þ

t2

R  where uðtÞ ¼ p2ffiffiffiffi e 2 dt; 2p

t

0

t¼

xk  x : r

Special tables are used to calculate it. Probability calculation allows you to predict the execution of a shipment plan ^yðsÞ at any planned period: ^yðsÞ ¼ yðsÞ  UðtÞ;

ð6Þ

where yðsÞ - planned volume of shipment for the period s; UðtÞ - probability of execution of shipment plan. Phase 5. Analysis of deviations and development of recommendations. At this stage, the forecast (theoretical) volume of shipment ^yðsÞ and planned is compared yðsÞ. DyðsÞ ¼ yðsÞ  ^yðsÞ:

ð7Þ

Analysis of possible deviations DyðsÞ will allow timely develop and coordinate with services necessary organizational and technical measures. For a company, it is important to have a forecast of shipment of products, because deviation from the plan of shipment schedules affects financial indicators, including penalties for late delivery of products.

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Comparison of forecast and planned volumes allows timely adjustment of production plans, schedules of vehicles provision, as well as financial and economic indicators. Developed method of forecasting shipment of products allows identifying and estimating deviation from the planned shipment schedule, developing recommendations, harmonizing and adjusting production plans, concluded contracts, financial and economic indicators of the enterprise.

3 Testing a Method for Predicting the Shipment of Products The method is tested on real data from one of the enterprises of the chemical complex in Nizhny Novgorod region. Statistical data have been collected to implement the methodology (Appendix 3.10). The sample size of statistical data for the month was 100 features (K = 100), i.e. during the month, products were shipped to consumers 100 times. The ranking variational series (in ascending order) was compiled from the statistical data. For the study of the original series, an interval series was formed, the number of intervals (J = 9), the length of the intervals (h = 0.72) and the empirical frequencies were determined . The results of calculations are shown in Table 1.

Table 1. Interval variation series Interval boundaries Interval median Empirical frequency

Accumulated frequencies

1,68–2,4 2,4–3,12 3,12–3,84 3,84–4,56 4,56–5,28 5,28–6,0 6,0–6,72 6,72–7,44 7,44–8,16

1 10 23 40 63 81 92 99 100

2.04 2.76 3.48 4.2 4.92 5.64 6.36 7.08 7.8

1 9 13 17 23 18 11 7 1 100

Forecasting Method of Product Shipment

587

Table 2 shows the calculation of theoretical frequencies. Table 2. Calculation results of theoretical frequencies xi 2.04 2.76 3.48 4.20 4.92 5.64 6.36 7.08 7.80

1 9 13 17 23 18 11 7 1 P

xi  x

t ¼ xi rx uðtÞ

Kh r

mTi ¼ Kh r  u ðt Þ

−2.815 −2.095 −1.275 −0.655 0.065 0.785 1.505 2.224 2.944

−0.223 −0.166 −0.109 −0.052 0.050 0.060 0.119 0.177 0.234

57.14 57.14 57.14 57.14 57.14 57.14 57.14 57.14 57.14

1,89 (2) 5,75 (6) 12,59 (13) 19,91 (20) 22,76 (23) 18,81 (19) 11,23 (11) 4,76 (5) 1,47 (1) P 100

0.332 0.1006 0.2203 0.3485 0.3984 0.3292 0.1965 0.0833 0.0258

100

On the basis of Tables 1 and 2, a graph of empirical was constructed (Fig. 2).

theoretical mTi frequencies

25

20

15

10

5

0 1

2

3

4

5

6

7

8

Fig. 2. The graph of empirical and theoretical frequencies.

9

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M. N. Pavlenkov and R. Zh. Reimov

To test the hypothesis, Pearson criterion is used x2 : ð13Þ Table 3 shows calculation of the consent criterion x2 . Table 3. Calculation of the consent criterion x2 xi

mTi

2.04 2.76 3.48 4.20 4.92 5.64 6.36 7.08 7.8

1 9 13 17 23 18 11 7 1 P

2 6 13 20 23 19 11 5 1 P

100

−1 3 0 −3 0 −1 0 2 0 100

x2 0.5 1.5 0 0.45 0 0.05 0 0.8 0 x2 ¼ 3:3

The number of degrees of freedom is determined by the formula: r ¼Jl1¼921¼6 The normal distribution depends on the arithmetic mean ðxÞ and standard deviation rü), so l = 2. To estimate the divergence of the value x2 ¼ 3; 3, we compare with x2jp . Evaluate the table value x2jp ¼ 14; 4, taking the significance level a ¼ 0; 025, and the number of degrees of freedom r = 6. Calculated value is x2 less than the table value x2jp , which confirms the hypothesis of a normal distribution of the source series. Therefore, it is proved that the integral Lagrange function can be used to calculate the probability of timely shipment of products in the planned period. The method was tested on real data of products shipment of an enterprise within a month. Let us write the Lagrange integral function as follows: U ðt Þ ¼

1 1 þ uðtÞ; 2 2

t2

R  where uðtÞ ¼ p2ffiffiffiffi e 2 dt; t ¼ xi rx : 2p

t

0

All necessary calculations are given in Table 4.

ð14Þ

Forecasting Method of Product Shipment

589

Table 4. Probability of products shipment xi  x

No. p/p Plan xi

ðxi  xÞ2

t ¼ xi rx uðtÞ

UðtÞ

Fact xU i

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

26.36 45.15 64.97 80.45 96.54 107.32 131.05 149.93 166.09 190.61 208.23 221.36 235.82 260.48 275.91 303.35 317.89 326.20 348.87 372.47 389.18 404.45 438.60 461.16 475.72 479.71 P 6569; 87

−226.33 −207.54 −187.72 −172.24 −156.15 −145.37 −121.64 −102.76 −86.6 −62.08 −44.46 −31.33 −16.87 7.79 23.22 50.56 65.20 73.51 88.18 119.78 136.49 151.76 185.92 208.47 223.03 227.02

51225.27 43079.08 35238.80 29666.62 24382.82 21132.44 14796.29 10559.62 7499.56 3853.93 1976.69 981.57 284.60 60.68 539.17 2566.44 4251.04 5403.72 7775.71 14347.25 18629.52 23031.10 34562.53 43459.74 49742.38 51538.08 P 500584; 65

−1.631 −1.496 −1.353 −1.241 −1.125 −1.048 −0.877 −0.741 −0.624 −0.447 −0.320 −0.226 −0.122 0.056 0.167 0.365 0.469 0.529 0.635 0.863 0.983 1.093 1.339 1.502 1.607 1.636

−0.8969 −0.86639 −0.82298 −0.78502 −0.74152 −0.70166 −0.62114 −0.54070 −0.46474 −0.34729 −0.25103 −0.18191 −0.09552 0.04784 0.13499 0.28115 0.36164 0.40389 0.47783 0.61121 0.67291 0.72429 0.81975 0.86639 0.89040 0.89899

0.05155 0.0668 0.08851 0.10749 0.12924 0.14917 0.18943 0.22965 0.26763 0.32636 0.37449 0.40905 0.45224 0.52392 0.56750 0.64058 0.68082 0.70195 0.73892 0.80561 0.83646 0.86215 0.90988 0.93320 0.94520 0.94950

24.729 32.047 42.459 51.564 61.998 71.558 90.871 110.165 128.384 156.556 179.644 196.223 216.944 251.330 272.233 307.290 326.596 336.730 354.465 386.457 401.256 413.580 436.476 447.663 453.422 455.482

23.529 33.648 40.460 54.282 60.012 73.455 86.670 110.270 130.450 155.556 180.625 195.225 215.886 252.424 274.133 305.221 320.873 339.725 353.600 391.452 400.246 410.259 428.205 445.626 450.552 451.262

Calculated:

P xi ¼ 252; 69; – arithmetic mean x ¼ K ¼ 6569;87 26 – mean square deviation: sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi rffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi ðxi  xÞ2 500584; 65 pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi r¼ ¼ ¼ 19253; 26 ¼ 138; 76: 26 r The probability of shipment is given in Table 4 (Graph 7). For clarity of the analysis of results, they are presented in the form of a graph (Fig. 3).

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M. N. Pavlenkov and R. Zh. Reimov 1 0.9 0.8 0.7 0.6 Φ(t)

0.5 0.4 0.3 0.2 0.1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 t

Fig. 3. The probability of shipment in the planned period.

On the basis of the probability of shipment, the volume of shipment at any date of the planned period is determined (Table 4) by the formula: X n ðtÞ ¼ Y
UðtÞ;

ð15Þ

where Y is the planned volume of shipment (graph 2). Results of the calculation of the shipment volume forecast for each date are shown in Table 4 (column 8), and column 9 shows the actual shipment for the planned period. As can be seen from Table 4, the shipment plan is 94.07%. At the same time, if the forecast is accepted as the plan, it will be executed by 99.07%. In other words, the forecast more realistically reflects the state of shipment at the enterprise. Table 5 shows the forecast for shipments of products for 5 months of 2018. The analysis of the table shows that the deviation of the forecast from the actual shipped volume of production is 0.41%, and the planned from the actual shipped volume is 1.96%. Table 5. Product shipment forecast Month Plan (x) Fact ðxU Þ Fact ðxP Þ 1 479.71 451.262 455.482 2 466.25 458.336 459.525 3 481.34 473.524 475.386 4 465.39 470.886 472.335 5 480.45 472.545 473.284 Total 2373.14 2326.553 2336.012

x  xU +28.448 +7.914 +7.816 −5.496 +7.905 46.587

xP  xU 4.22 1.189 1.862 1.449 0.739 9.459

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591

Therefore, the developed method can be used to better planing of a shipment volume. Calculation of the shipment probability allows you to determine at any date of deviation from the planned volume of shipment, which can be the basis for adjusting a schedule plan and financial indicators of an enterprise. At the operational level, determination of deviations and development of proposals for their elimination is carried out in the process of coordination with different services of an enterprise, as a deviation occurs on different reasons: non-availability of transport, failure in a production process, the bankruptcy of a consumer. Identification of causes, development of recommendations for their elimination and coordination is the task of specialists of an enterprise.

4 Conclusions The method of shipment forecasting of products is developed. On the basis of statistical data of product shipment, the possibility of using Laplace integral function for forecasting of shipment plan is proved. The results of testing of the method showed that the forecast indicators more accurately reflect the actual state of shipment at the enterprise. The check of the method on retrospective data for 5 months of 2018 showed that deviation of the forecast from the actual shipped volume of production is 0.41%, and planned volumes of shipment from the actual volume are 1.96%.

References 1. Ayvazyan, S.A.: Fundamentals of Econometrics. UNITI-DANA, Moscow (2001). 432 p. 2. Bolt, G.J.: A Practical Guide to Sales Management: Textbook. UNITI, Moscow (1991). 418 p. 3. Venetsky, I.G., Kildishev, G.S.: Probability Theory and Mathematical Statistics: Textbook. Statistics, Moscow (1975). 264 p. 4. Witt, V.: Sales Management. INFRA-M, Moscow (1996). 278 p. 5. Matsuro, Yu.: Stimulation of sales/Julia Matsuro. Marketing, Advertising and Sales, no. 1, p. 56 (2009) 6. Muravyova, V.S., Orlov, A.I.: Organizational and economic problems of forecasting at an industrial enterprise. Management of Large Systems, no. 17, pp. 143–158. IPU RAS, Moscow (2007) 7. Pavlenkov, M.N., Kulikov, A.L.: Methods and models of managerial decision making in economic systems. Publishing House of the Volgograd Vyatka Academy of State. Services, N.Novgorod (2004). 321 p. 8. Berenson, M.L., Levine, D.M.: Basic Business Statistics: Concept and Applications, 7th edn. Prentice-Hall, Upper Saddle River (1999) 9. Johnson, R.A., Wichern, D.W.: Business Statistics: Decision Making with Data. Wiley, New York (1997) 10. Fildes,, R., Hibon, M., Makridakis, S., Meade, N.: The accuracy of extrapolative forecasting methods: additional empirical evidence. Int. J. Forecast., 13 (1997)

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11. Makridakis, S., Andersen, A., Carbone, R., Fildes, R., Hibon, M., Lewandowski, R., Newton, J., Parzen, E., Winkler, R.: The accuracy of extrapolation (time series) methods: results of forecasting competition. J. Forecast. 1, 111–153 (1982) 12. Makridakis, S., Hibon, M.: The M-3 competition: results, conclusions and implications. Int. J. Forecast. 16, 451–476 (2000) 13. Hampel. F.R.: Robust estimation: a condensed partial serial survey. Z.Wahrscheinlichkeitsheory und werv. Geb, vol. 27, pp. 87–104 (1973) 14. Tukey, J.: The future of data analysis. Ann. Math. Stat. 33, 1–67 (1962)

Institutional Environment of the Digital Economy Svetlana L. Sazanova1(&) and Nikolay V. Kuznetsov2 1

2

State University of Management and Financial University under the Government of the Russian Federation, Moscow, Russia [email protected] Research Institute of Digital Economy Transformation Management of State University of Management, Moscow, Russia [email protected]

Abstract. In the article, researchers argue that the digital economy is a new type of economic system. It is established that the institutional environment is a combination of formal and informal institutions, including legal acts, informal norms, values of economic activity, behavioral patterns. Studying the institutional environment: a digital economy based on a synthesis of institutional, systemic, evolutionary and value-based approaches that create a unified environment in which institutional infrastructures play a decisive role in its development. Three levels of the digital economy are identified: micro-, meso- and macro-, subsystems of each level are identified, and features of the institutional environment of each level are identified and recommendations for its improvement are formulated. Keywords: Digital economy
Systems economy environment
Transaction costs JEL Code: B59


Institutions
Institutional


Q38

1 Introduction The modern global economy is at the stage of transition to a new, sixth, technological structure, which leads to the rapid development of digital technologies and their penetration into all spheres of human activity. Digitalization processes cover all sectors of the economy and contribute to the development of artificial intelligence, changing people’s perceptions of production activity, the sphere of production and nonproduction services, economic and social communications. The development of digital technologies contributes to the emergence of new types and forms of business, the growth of labor productivity, an increase in social welfare, and an increase in the level and quality of people’s lives. The digital economy is a unique phenomenon of our time, which has no analogues in world history, and therefore needs to be understood in order to reveal its essence and content, to identify patterns of development. The development of the digital economy requires the formation of such important components as information technology, information infrastructure, economic and social institutions, new forms of public communications. Digital technologies form a special environment of economic activity, © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 593–601, 2020. https://doi.org/10.1007/978-3-030-47945-9_64

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a significant part of economic communications moves to the Internet and intranet (internal corporate networks), social networks, that is, environmental subsystems of the economy (Kleiner 2011). The functioning of any systems and their subsystems is associated with formal and informal norms and rules at various levels, that is, with the institutional environment. The purpose of the study is to determine the nature and content of the institutional environment of the digital economy of the Russian Federation. The scientific problem of the study is that the institutional environment of the digital economy is studied as a combination of formal and informal institutions, including legal acts, informal norms, values of economic activity, and behavioral patterns. The object of the study is the digital economy of the Russian Federation, and the subject is the institutional environment of the digital economy. The novelty of the study lies in the fact that the institutional environment of the digital economy is investigated on the basis of a synthesis of institutional, systemic, evolutionary and value approaches.

2 Research Methods Features of the subject and object of study, the formulation of a scientific problem determine the choice of research methods and tools. General scientific methods (abstract method, analysis and synthesis method, comparison method, etc.) will highlight the essential features inherent in the digital economy and its institutional environment, explore the components of the subject of study, and identify the relationship between them. Institutional method - allows you to explore the impact of formal and informal rules and norms on the development of the digital economy. The theory of transaction costs - will identify the institutions of the digital economy that reduce/increase the transaction costs of economic agents, which will allow to evaluate these institutions. The economic theory of contracts - will reveal the features of contractual relations in the digital economy. The evolutionary method - will reveal external and internal factors of the formation and development of the institutional environment of the digital economy. The systemic method - allows you to structure the institutional environment of the digital economy, highlighting in it the subsystems of the micro-, meso- and macrolevels and the relationships between them.

3 Digital Economy. Digital Economy Institutions. Institutional Environment as a Subsystem of the Digital Economy The formation and development of economic systems took place under the influence of various technological, economic, historical, religious, cultural, geographical, geopolitical and other factors. Domestic and foreign scientists contributed to the study of the

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processes of evolution of economic systems: N. Danilevsky, K. Marx, W. Rostow, A. Toynbee, R. Allen, R. Cameron, J. Hicks, A. Greff, D. Lvov, G. Kleiner, S. Glazyev, R. Nureyev, Yu. Latov, M. Hayrapetyan, L. Borodkin, Yu. Petrov, A. Bessolitsin, A. Arsentyev, S. Afontsev, S. Zhuravlev, V. Zakharov, V. Kondrashin, G. Kornilov, S. Salomatina, M. Konotopov, O. Bogomolov, B. Gusev, Yu. Vorobyov, V. Martynov, V. Fedorov, N. Shmelev and others. Most scientists recognize that as the leading factor in the development of economic systems technologically factor, but more recently (since the second half of the XX century) to intensify research on the influence of institutional factors on the development of socio-economic systems in the works of Greff, G. Kleiner, Rudolf Nureyev, Latova Yu, M. Hayrapetyan and others. Digital economy is a relatively new economic phenomenon and an object of research, its formation and development is directly related to the development and dissemination of digital technologies and artificial intelligence in human economic activity. However, not all researchers recognize the digital economy as a special stage in the development of economic systems. S. Glazyev draws attention to the relationship of technological and institutional changes, proves that it lies at the basis of a change in technological patterns. The sixth technological structure, according to S. Glazyev, is based on a combination of information and communication technologies, artificial intelligence and bioengineering technologies. At the same time, he does not distinguish the digital economy as a special type of economic system. G. Kleiner notes that in the dissemination of digital technologies it covers all types of matter with which a person interacts in the process of economic activity: living, inanimate, spiritual, social (Kleiner 2015, 2017), and this leads to the formation of a new organizational and economic structure. Digital technologies penetrate into all spheres of human economic activity: production, services, communications, market and non-market infrastructure. Artificial intelligence can generate hybrid (human-machine) forms of consciousness and behavior. Under the influence of digital technologies and artificial intelligence, informal institutions and behavioral patterns are already changing (for example, special etiquette in social networks), human needs for work and leisure are changing (freelancer’s irregular working hours). Another aspect of the digital economy is the emergence of new economic benefits - digital goods and services. Also a hallmark of the digital economy is the emergence of a new type of economic resources - time and the psychic powers of a person, his emotions. Consequently, the digital economy is a new type of economic system, the characteristic features of which are: – – – –

digital digital digital digital

economic benefits; technology; communications; consumption.

The main factor in the formation and development of the digital economy as an economic system based on information and communication technologies and artificial intelligence is the technological one. However, the development of digital technologies would not have been possible without institutional changes, changes in behavioral and economic values and patterns.

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The formation and development of the digital economy in Russia involves the achievement of a number of goals, the most important of which are (Program 2017): – creating an ecosystem of the digital economy, which would ensure effective interaction, including cross-border, of business, citizens, government agencies and the scientific and educational community, based on the use of digital data as a key factor in production in all areas of human socio-economic activity; – creating conditions of an institutional and infrastructural nature, necessary and sufficient for the creation and/or development of high-tech businesses both in traditional sectors of the economy and in new sectors and high-tech markets, as well as eliminating existing and preventing the emergence of new obstacles and restrictions on the development of the country’s economy; – increasing the competitiveness of Russian businesses, individual industries and the economy as a whole in the global market. In our opinion, all this is impossible without the formation of effective formal and informal institutions, both at the micro and meso and macro levels. In modern economic science, two approaches to the study of institutions can be distinguished: functionalist and structuralist. The basis of the first is methodological atomism (economic individualism), and the second is methodological holism (economic collectivism). From a functionalist point of view, institutions are norms and rules that limit economic choices and mechanisms that enforce rules; Institutions provide cooperation between economic agents. From the point of view of structuralists, institutions are stereotypes of thought (“pre-reasoning,” according to T. Veblen), collective actions (J. Commons) and structure the interactions of people and groups. Various options for the emergence of institutions as rules have been studied: – formalization of an informal rule; – the formal rule arises as a counteraction (alternative) to the informal; – formal rule gives rise to informal rules. When a rule “grows” with mechanisms that prompt/force economic agents to comply with the rules, it can be argued that the rules are transformed into institutions. Formal rules and institutions formed on their basis are characterized by the existence of formal mechanisms that ensure their implementation. Informal rules and institutions rely more on informal behavioral and mental mechanisms to ensure their implementation. In this case, the core of this mechanism is not the law (as is the case with formal rules), but the opinion of the community/group, the likelihood of being ostracized and/or excluded from the community. Thus, any institution, both formal and informal, includes: – formal rules, – informal rules, – mechanisms for implementing the rules. The differences between formal and informal institutions are, in our opinion, the correlation of the formal and informal component. In formal institutions, the first prevails, in informal institutions, the second (both at the level of rules, in fact, and the mechanisms ensuring their implementation). In the pre-digital economy, in most cases,

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formal institutions were more effective than informal ones, since otherwise the costs of society to create and maintain formal institutions would lose their meaning. At the same time, informal institutions, especially behavioral and mental patterns, were preserved and transmitted from generation to generation, generating, among other things, negative effects such as the “rut effect” (Sazanova 2018). Are formal institutions more effective in the digital economy? Does the effectiveness of institutions at various levels (meso-, macro, micro-) in the digital economy differ depending on the ratio of the formal and informal component? In the digital economy, a significant part of the communication of economic agents is carried out on the Internet/intranet/social networks. Communications are based on formal (established by administrators/moderators) and informal rules (spontaneously arising within the local community). Based on the synthesis of these rules, the following are formed: the institute of communication in social networks, the institution of online shopping, the institute of network games, the institutes of business interactions on the intranet and the Internet, etc. Institutions in a market economy perform a number of functions, the most important of which are: – – – –

restrictive, coordination, informational, distribution.

The restrictive function of institutions is that they exclude/allow economic agents to resources/benefits. Thanks to institutions, economic agents can predict each other’s behavior (coordination function). Demonstrating possible decision-making options, institutions perform an information function. Influencing the movement of economic resources/goods between the subjects of economic activity, institutions realize their distribution function. Performing all of the above functions, institutions have an impact on the specification/erosion of property rights, as well as on the reduction/growth of transaction costs. Effective institutions perform their functions, helping to reduce transaction costs and specification of property rights based on maximum splitting, while the costs of creating and maintaining institutions are minimal, and the beneficial effect is maximum. In the modern economy, there are various types of transaction costs (costs associated with the conclusion of a transaction), including: costs of finding alternatives, costs of opportunistic behavior, costs of specification and protection of property rights, measurement costs, pre-contract, post-contract, etc. (Sazanova and Ryazanova 2019). How much does the spread of digital technologies (smart contracts, blockchain, aggregators) contribute to lower transaction costs? Studies show that as a result of the use of smart contracts, blockchain, etc., there is a change in the structure of transaction costs, rather than a decrease in their overall level. An analysis of productivity dynamics in a digital economy suggests that the “productivity paradox” continues to exist (Dementiev 2019) and that digitalization does not reduce transformation costs. Is it possible to create institutions of the digital economy at the micro-, meso- and macrolevels that contribute to lower transaction costs? In our opinion, the problem of creating effective institutions can be solved with the help of institutional design and a systematic approach.

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From the point of view of a systematic approach, an economic system consists of four subsystems: object, design, process, and environment (Kleiner 2011). The key criteria for such structuring is the space-time factor. The object subsystem is limited in time and space (for example, enterprise, authorities, etc.); the design subsystem is not limited in space, but limited in time (investment projects, etc.); the process subsystem is not limited in time, but limited in space (business processes, etc.); the environmental subsystem is not limited neither in space nor in time (institutional environment, cultural and value environment). Based on a systematic approach, it is possible to structure economic systems at each level, distinguishing object, design, process and environmental subsystems at the micro, meso and macro levels, respectively. From the point of view of a systematic approach, the digital economy can be represented as a system consisting of four subsystems (Kleiner 2011, 2015, 2017): – – – –

object project process environmental.

The object subsystem of the digital economy is enterprises/organizations (objects and entities) that use digital technologies to create goods and services, and to carry out other activities (for example, to ensure the functioning of institutions). The project subsystem is based on fixed-term contracts, activities involving two or more enterprises/organizations. The process subsystem is a combination of ordered, digital-based communications between the subjects of the digital economy during the implementation of projects, as well as within the objects themselves (enterprises, organizations). The environmental subsystem includes the institutional environment, economic and social communications through digital technologies. It is obvious that institutions (formal and informal rules, norms, behavioral patterns) are “woven” into the digital economy (Sazanova 2018; Sazanova et al. 2019), permeating all its subsystems and creating an institutional environment that is continuous in time and space. In our opinion, institutions should be designed for each of the subsystems of the digital economy. The concept of the institutional environment appeared in the works of foreign economic scientists in the early 1970s as a combination of fundamental political, social and legal rules that form the basis for the production, exchange and distribution of economic goods and freedoms (Davis and North 1971). Later, Russian scientists clarified and expanded this concept, and now the institutional environment is understood as a set of fundamental political, social and legal rules that form the basis for production, exchange and distribution and determine the framework of human behavior. Unambiguous and complete definitions of institutional infrastructure in Russian economic science have not yet been formed, but based on the context of numerous discussions on the nature and content of it, we can conclude that institutional infrastructure is a collection of formal institutions; organizations generating, supporting and

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broadcasting institutions in time and space; as well as strong relationships between them. Institutional infrastructure is also part of the institutional matrix, as is the institutional environment.

4 Recommendations for Improving the Institutional Environment of the Digital Economy The digital economy as an integrated socio-economic ecosystem includes the micro, meso, and macro levels. At each level, the “slice” of the digital economy can be represented as a system consisting of business ecosystems, project ecosystems, process ecosystems and environmental ecosystems of the corresponding level. Consider each level of the digital economy and highlight the features of the institutional environment at this level, which will allow us to formulate recommendations for its improvement. The micro level of the digital economy includes: – the business ecosystem of an individual enterprise (organization), which is a synthesis of artificial intelligence, human intelligence, digital technologies; – project ecosystem as a set of innovative projects of enterprises/organizations based on digital technologies; – process ecosystem as a combination of ordered, digital-based, production and nonproduction communications between subjects within an enterprise/organization, as well as with the environment. It must be borne in mind that the subjects of communications are not only people, but also artificial intelligence, as well as various hybrid forms; – environmental ecosystem, including the institutional micro-environment (ordered and interconnected rules and norms of interactions, routines, habits) and institutional micro-infrastructure (units of the enterprise/organization responsible for maintaining and translating institutions, routines, habits), value environment (individual values and enterprise/organization values). At first glance, a feature of the institutional environment of the micro level is that its elements are local and apply to a separate enterprise/organization. But the interaction of individual micro-level business ecosystems leads to the formation of their communities and thereby forms the mesoscale of the digital economy. On the one hand, the mesoscale is a space in which a rule (institute) developed by an entrepreneur (subject) is distributed in a group, then it first becomes a collective rule (informal or formal), and then it can even be institutionalized at the macro level. On the other hand, the mesoscale is “a space of institutionalization of rules, where collective attempts are made to overcome the conditions of uncertainty and minimize transaction costs” (Kruglova 2018). Therefore, the meso-level of the economy is a space in which the individual rules of an individual agent (individual, enterprise, organization) are transformed into group rules, and then into social rules. And vice versa, the rules of society become individual also through the mesoscale. The evolution of rules from individual to group and social is carried out through communication and this process

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proceeds the faster, the less transaction costs require communication. Obviously, values evolve from individual to group and social in a similar way. The undoubted advantage of digital technologies is that they simplify the communication process, reducing time lags, that is, accelerating communication. However, digital technologies can distort communication, because, as we noted earlier, the subject of communication can create a digital double (voluntarily or involuntarily) and replace his personality with it (derealization of the subject in social networks, computer games, etc.). It follows that the design of effective institutions is necessary in such a way that distortion is as small as possible. Maso-level of the digital economy includes: – business ecosystems of groups of enterprises (organizations) vertically or horizontally integrated; – design ecosystems as a set of innovative projects of groups of enterprises/ organizations; – process ecosystems as a combination of ordered, digital-based, production and nonproduction communications between groups of enterprises/organizations; – environmental ecosystems as ordered and interconnected systems of rules, norms, routines, habits, institutional infrastructures, value environment (individual values and values of groups of enterprises/organizations). Subsystems of the mesoscale of the digital economy “grow” from the subsystems of the micro level and themselves, in turn, evolve into subsystems of the macro level. Group rules (institutions) become general (formal and informal), creating the institutional environment of the macro level of the digital economy. The macro level of the digital economy includes: – business ecosystem of large national and transnational corporations/banks, vertically or horizontally integrated, as well as states; – project ecosystem as a set of innovative projects of large national and transnational corporations/banks, as well as national innovative projects; – process ecosystem as a set of streamlined, digital-based, production and nonproduction communications between large national and transnational corporations.

5 Conclusion This study examined the formation and development, the nature and content of the digital economy, concluded that the digital economy is an economic system of a new type, the characteristic features of which are: digital economic benefits; digital technology; digital communications; digital consumption. An in-depth analysis of the processes occurring in the economy in the context of digitalization showed that the institutional environment of the digital economy is a combination of formal and informal institutions, including legal acts, informal norms, values of economic activity, and behavioral patterns. A study of the institutional environment of the digital economy based on a synthesis of institutional, systemic, evolutionary and value-based approaches has made it possible to establish that in the

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future development of the digital economy, it is the holistic and consistent institutional environment, and not the elements of the institutional infrastructure, that will play a decisive role in its development. Acknowledgments. The publication was prepared on project No. 3 «Analysis of the implementation of the developed plans of the government program “Digital Economy of the Russian Federation» under donation contract dated March 1, 2019 No. 1154.

References Davis, L., North, D.: Institutional Change and American Economic Growth. Cambridge (1971). p. 6 Dementiev, V.E.: The paradox of productivity in the regional dimension. Econ. Reg. 15(1), 43– 56 (2019) Kleiner, G.B.: A new theory of economic systems and its applications. Her. Russ. Acad. Sci. 81 (5), 516–532 (2011) Kleiner, G.B.: State - region - field - enterprise: framework of economics system stability of Russia Part 2. Ekonomika Regiona-Econ. Reg. 3, 9-U370 (2015) Kleiner, G.B.: System modernization of domestic enterprises: theoretical background, motives, principles. Ekonomika Regiona-Econ. Reg. 13(1), 13–24 (2017) Kruglova, M.S.: Claude Menard’s theory of meso-institutions and its use in institutional design. J. Inst. Stud. 10(3.20), 49–57 (2018) Program “Digital Economy of the Russian Federation”: Approved by order of the Government of the Russian Federation dated July 28, 2017, No. 1632-r. Access mode. http://static. government.ru/media/files/9gFM4FHj4PsB79I5v7yLVuPgu4bvR7M0.pdf. Accessed 19 Sept 2019 Sazanova, S.L., Ryazanova, G.N.: Problems and opportunities of development of the agricultural industry of Russia from the point of view of marxist theory. In: Alpidovskaya, M.L., Popkova, E.G. (eds.) Marx and Modernity: A Political and Economic Analysis of Social Systems Management. A Collective Monograph. A Volume in Advances in Research on Russian Business, pp. 599–608. Information Age Publishing Inc. (2019). 651 p. ISBN: 978-164113-749-2 (Paperback), 978-1-64113-750-8 (Hardcover), 978-1-64113-751-5 (ebook) Sazanova, S.L., Sharipov, F.F., Dyakonova, M.A.: Spatial economics, geopolitics, and marxism. In: Alpidovskaya, M.L., Popkova, E.G. (eds.) Marx and Modernity: A Political and Economic Analysis of Social Systems Management. A Collective Monograph. A Volume in Advances in Research on Russian Business, pp. 279–288. Information Age Publishing Inc. (2019). 651 p. ISBN: 978-1-64113-749-2 (Paperback), 978-1-64113-750-8 (Hardcover), 978-164113-751-5 (ebook) Sazanova, S.L.: Structural modeling of the institution of Russian entrepreneurship in the spirit of “old” institutionalism. In: Popkova, E.G. (ed.) The Future of the Global Financial System: Downfall or Harmony. ISC 2018. Lecture Notes in Networks and Systems. LNNS, vol. 57, pp. 451–460 (2019). Springer, Cham (2019). https://doi.org/10.1007/978-3-030-00102-5_48

Creation of a Virtual Model of Educational Programs Management in a University Elvira K. Samerkhanova(&), Pavel A. Ruzanov, Elena P. Krupoderova, Klimentina R. Krupoderova, and Alexander V. Ponachugin Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. The main purpose is to analyze conditions of creation of a modern digital environment of management in basic professional educational programs (BPEP) of a university. Project/Methodology/Approach-Theoretical and methodological analysis and synthesis of available special national and foreign scientific and methodological literature, conceptual analysis of scientific articles and publications on the topic; study and synthesis of both domestic and foreign developments and implementation of projects on creation of digital environments in management of education; application of methods generalization, comparison, and prediction. The main results of the research are presented structural components of the digital environment of educational programs management in a university. An electronic service system has been developed to support the management of education and training in the life cycle, including: “Personal account of the head of BPEP”, “Personal account of a student”, and “Personal account of a teacher”. Practical relevance—The results of the formation of an electronic service system for managing educational programs at a university aimed at optimizing the administration processes of educational programs and improving the quality of service functions for students, research and teaching staff and employees are analyzed. The role of the head of educational programs in formation of content of the digital educational environment is defined. Prospects of development and improvement of the digital environment of a university are revealed. Obtained data - Structural components of the digital environment of educational programs management in higher education institution are defined. The system of electronic support of educational programs management at all stages of the life cycle of BPEP is presented. Keywords: Simulation model
Simulator
Head of educational programs Management of educational programs
Educational program

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 602–609, 2020. https://doi.org/10.1007/978-3-030-47945-9_65




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1 Introduction At present, in the Russian Federation, and in the post-Soviet space, in a context of global competition with often limited funding, one of the main criteria for viability educational institutions is the quality of educational services provided by them. In this regard, it is necessary to formulate and develop ways of solving a number of tasks to consolidate efforts on the part of the government, educational organizations, and employers. As it is noted in the work [1], one of the main indicators of quality education of graduates of an educational institution is the quality of educational programs provided to them. In the future, the educational program will be understood as a product that has many different aspects and dimensions (both qualitative and quantitative) in conditions of dynamically changing socio-economic environment. Competitive educational program should take into account the current requirements of employers in a given industry and adapt them to the training of graduates. Given the importance of the educational program development process, there is a need for a flexible, fairly informal and effective system of management of educational programs, which ensures the competitiveness of graduate training. One of the important tasks to be solved within the framework of this system is the creation of a new logistic scheme for management of education and training programs, definition of requirements for skills, abilities and professional competence of educational program managers within the life cycle of education and training programs and ways to practically acquire these skills. In the context of requirements for professional society at the present stage of its development, the following units of management of educational programs can be identified as a multifunctional product, oriented to the labor market and implementation of social and educational order: • Content management—provides the formation of an up-to-date portfolio of educational programs and intellectual products that open the way to the international level; • Resource management—ensures optimal distribution of personnel, information and methodological, material and technical equipment of the educational program; • Contingent management—provides subject-activity interaction of participants of the educational process; • Financial management—provides effective formation of the process of distribution (redistribution) of financial resources of the educational program; • Quality management—provides quality assurance of educational services provided by educational programs through formal rating procedures and their comparison with Russian and international analogs in accordance with the priority areas of science and technology.

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2 Research Methodology Strategic guidelines for development of digital environments are reflected in the government program “Modern Digital Educational Environment in University”. So, in 2019, the integration of the online learning platform with information systems will be implemented with the aim of automatically transmitting information about educational achievements, creating unified information and educational environment for students with simultaneous training in several educational organizations. Tasks of creating a technological infrastructure of online training related to the formation of a “one window” access, through mobile devices, to digital educational content, including online courses, interactive game resources, and simulators, online resources of educational events (tournaments, competitions, Olympiads, educational projects, etc.). Creation of a new system of effective management of educational programs in higher education institution requires a transition from linear-functional system to project-matrix with a delegation of personalized responsibility to the heads of educational programs, guaranteeing the achievement of modern quality of education aimed at the best world standards [9]. In our understanding, management of educational programs at the present stage of development of society is management of the multidimensional educational product, oriented to the labor market and implementation of social and educational order. Figure 1 presents components of the educational program management system.

Development of BPEP Contents Resources Finance

Implementation of BPEP Contents Process Resources Contingent

Replicability of BPEP

Quality

The life cycle of the basic professional educational program

Fig. 1. General structure of components of the life cycle of educational programs management

Digital environment for managing educational programs at a university is a complex open system, which is a system integration of the life cycle components of the education and training program for development, implementation and replication of educational programs, including management of content, process, resources, contingent, finances and quality ensuring the integrity and continuity of the educational process at all levels (Fig. 2).

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3 Analysis of Results of the Study Creation of a new architecture of the educational environment on the basis of mechanisms of support of life cycle for training of profession requires reforming of content, development, and implementation of a flexible and effective system of management in educational programs, ensuring the quality of preparation of graduates in accordance with modern trends of social and economic development. Necessary conditions for the implementation of a new model for managing educational programs at a university is the creation of a digital educational environment, which is a unified electronic system for managing educational programs, which includes all stages and components of the life cycle of an educational program. To train managers of educational programs, it is advisable to use training simulators. In general, the simulator is understood as software and hardware that create an impression of reality, displaying part of the real phenomena and properties in a virtual

Fig. 2. Model of digital environment of management of educational programs in higher education institution

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environment. The use of simulators will identify typical errors made by program managers and help identify ways of eliminating them. The main goal of creation and implementation of a simulator is to simulate a real situation for participants to make strategic and tactical decisions on implementation of the BPEP at all stages of the life cycle and to predict results obtained from its use in the educational environment. Simulator is a set of cases, the solution of which leads to the formation of various scenarios of implementation of BPEP and modeling of final results of a project. Several teams implementing their projects can play at the same time. Panel discussions can take place at all stages of managerial decision-making. Simulator should contain an interactive and intuitive interface. The simplest mathematical model, which is used in the control of the quality of the educational process, is the point model. Its essence is as follows. We fix some object. X1; X2; . . .; Xn—a set of quantitative indicators characterizing a condition of a selected object at the moment t and results of its activity for the previous control period. In this case, the general rating of the selected object can be calculated using the formula: R ¼ a1 X1 þ a2 X2 þ

 an Xn; where ai are weight multipliers assigned by experts heuristically. Advantages of the point model are its simplicity and low labor intensity, but it has a number of disadvantages: • The need to choose weight multipliers by expert means; lack of accounting for dependencies between quantitative indicators Xi, which are established during the mathematical processing of statistical data; • Summation of values having different dimensions; • Impossibility of assessing the degree of potential realization. More perfect, compared to the previous one, is the normative-classification model of rating calculation. Its essence comes down to the following. The whole set of initial indicators of the state and activity of the given object is divided into two sets of indicators: 1. Capacity indicators describing the status and potential of various activities. 2. Activity or performance indicators that characterize the performance of the facility during the previous planning period. In the literature of recent years, the model of ranking objects of higher education system is popular. We will introduce a complex integral indicator of the quality of the object, based on the objective importance of each factor: RðSi Þ ¼

n X

kij Hj ; i ¼ 1; . . .; m

j¼1

where RðSi Þ—integral quality of Si object, m—number of objects; n—number of features; Hj—significance of j-th attribute; kij—qualitative estimation of j - attribute for i-th object.

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It should be noted that at present, the so-called key performance indicators KPI (Key Performance Indicator) are used to evaluate the effectiveness of making a decision in almost any field of activity. In general, a key performance indicator is a measure of success in a particular activity or achievement of certain objectives. We can say that KPI is a quantifiable indicator of actually achieved results. The most relevant is the concept of KPI in business process management: KPI are measures of efficiency, and productivity of business processes. With regard to the practical application of KPI, this indicator is introduced in enterprises in order to make it convenient to measure the performance of the firm as a whole, individual units and directly staff, and motivate staff to achieve desired results. Here is the method of KPI calculation in the framework of implementation of specific subsystem “Informational and educational environment of BPEP”. For example, the head of BPEP, among other skills, should be able to form a portfolio of grants and know the regulatory documents necessary for the implementation of grant activities. The developed simulator should be implemented as a mechanism that allows you to check and evaluate skills of forming these normative documents by a potential leader of BPEP. This level of ownership is estimated using the KPI calculation method. Suppose there are m different regulatory documents that are required to apply for a grant. These documents make up some set of X ¼ fX1 ; X2 ; . . .; Xm g; Xi –some document. We rank these normative documents by assigning each of them some quantitative indicator, for example, an ordinal number, i.e. each document Xi is matched with a positive number zi . Since the degree of importance of a document may vary (some document is necessary and relevant and some documents can be neglected at some stage), for each document, it is advisable to compare some weight multiplier ai . Arrays fz1 ; z2 ; . . .zi ; . . .g and fa1 ; a2 ; . . .ai ; . . .g should also form experts - a group of people training heads of BPEP. Then the “ideal” knowledge of a listener of the program requirements for regulatory m P documents can be estimated by the value Sopt ¼ ai z i i¼1

Suppose that a learner is asked to form a package of documents necessary to receive the grant using a simulator. The user can select a list of these documents from some database supported by a simulator, or find them using legal reference systems or on the global Internet. If student finds some documents that can also be assigned some quantitative characteristics yj ; j ¼ 1; 2; . . .; k; k 6¼ m. Each document selected by the user can also assign, for certain reasons, some weight multiplier bj . Then it is necessary to check the ownership of each of the documents found by the user to reference database of documents formed by the expert. Perhaps a number of documents generated by a user will be redundant, and they should not be taken into account when calculating the indicator. Then the user’s actual knowledge of requirements to the package of normative documents, it is possible to estimate the number n P Sn ¼ bj yj ; n–of documents proposed by a listener and included it in a reference j¼1

database of the expert.

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In this case, the KPI can be calculated as follows: KPI ¼

Sn Sopt

It should be noted that proposed mathematical apparatus has certain limits of applicability, connected primarily with the quantitative interpretation of certain quality indicators of BPEP.

4 Conclusion On the basis of the analysis of domestic and foreign scientific literature on the subject of research, as well as national strategic orientations towards “digitalization of education” was justified a conclusion about the necessity of development of a modern digital environment of management of educational programs at a university. Our developed model of the digital environment for managing the main professional educational programs based on the life cycle and presented structure of a unified electronic service system at the level of the manager, teacher or student provides a flexible and effective system of interactive interaction between participants in the educational process, optimization of educational program management processes, operational management and personalized quality control of implemented educational programs.

References 1. Asmolov, A.G., Semenov, A.L., Uvarov, A.Yu.: Russian School and New Information Technologies: Look in the Next Decade. Publishing House “NeksPrint”, Moscow (2010). 84 p. 2. Bakhtiyarova, L.N.: Information educational space through the prism of synergetics. Journal “School of the Future”, no. 4, pp. 3–10. RO School of Security, Moscow (2016). 192 p. 3. Bryksina, O.F., Krupoderova, E.P.: Management of the main professional educational program in the conditions of information and educational environment on the basis of cloud technologies. Vestnik of Minin University, no. 4 (2016) 4. Karakozov, S.D., Suleymanov, R.S., Uvarov, A.Yu.: Directions of development of digital educational environment of Moscow Pedagogical State University. Science and School, no. 6 (2014). http://cyberleninka.ru/article/n/orientiry-razvitiya-tsifrovoy-obrazovatelnoy-sredymoskovskogo-pedagogicheskogo-gosudarstvennogo-universiteta. Accessed 25 Nov 2017 5. The concept of the Federal target program of development of education for 2016–2020 years [Electronic resource] — Access mode. http://government.ru/media/files/mlorxfXbbCk.pdf 6. Fedorov, A.A., et al.: Modernization of pedagogical education in the context of the global educational agenda: monograph. Nizhny Novgorod (2015). 296 p. 7. Pesotsky, Yu.S., Baranova, N.V.: Who should manage an educational program of the university? (statement of the problem). Modern problems of science and education. https:// www.science-education.ru/ru/article/view?id=25154. Accessed 04 Mar 2017 8. Ponachugin, A.V.: Organization of interactive interaction in e-learning. Vestnik of Minin University, no. 4 (2017)

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9. Samerkhanova, E.K.: Strategic guidelines of management in educational programs in the university. Vestnik of Minin University, no. 1 (2017) 10. Federal Law: “On Education in the Russian Federation”, No. 273-FL, Article 11 11. Samerkhanova, E., Krupoderova, E., Krupoderova, K., Bahtiyarova, L., Ponachugin, A.: Networking of lecturers and students in the information learning environment of higher school by means of cloud computing. Math. Educ. 11(10), 3551–3559 (2016) 12. Samerkhanova, E.K., Bakhtiyarova, L.N., Ponachugin, A.V., Krupoderova, E.P., Krupoderova, K.R.: Project activities of university students by means of digital technologies. In: Popkova, E., Sergi, B. (eds.) The 21st Century from the Positions of Modern Science: Intellectual, Digital and Innovative Aspects. ISC 2019. Lecture Notes in Networks and Systems, vol. 91. Springer, Cham (2020) 13. Samerkhanova, E.K., Krupoderova, E.P., Krupoderova, K.R., Bakhtiyarova, L.N., Ponachugin, A.V., Kanyanina, T.I.: Implementation of the competence approach with the help of network project activities. Opción, Año 35, Especial, no. 19, pp. 565–590 (2019) 14. Demidova, N., Krotova, E., Matveeva, A., Arefeva, S., Kiseleva, N., Valeriy, S.: Design and implementation of a model for research projects management in the school scientific and educational environment. Man India 97(15), 393–404 (2017) 15. Samerkhanova, E.K., Imzharova, Z.U.: Strategic guidelines for the management of educational programs in the university. Vestnik of Minin University, Part 1 (2017) 16. Samerkhanova, E.K., Imzharova, Z.U.: Design of a unified electronic platform for managing educational programs in the university. Vestnik of Minin University, Part 4 (2017) 17. Samerhanova, E.K.: Formation of competences in the field of mathematical modeling among teachers of vocational training in the conditions of the information and educational environment of the university. Vestnik of Minin University, vol. 7, no. 2, p. 4 (2019) 18. Ponachugin, A.V., Lapygin, Yu.N.: Digital educational resources of the university: design, analysis and expertise. Vestnik of Minin University, vol. 7, no. 2, p. 5 (2019)

Designing Digital Learning Environment for the Future Teacher of High School Elvira K. Samerkhanova(&), Elena P. Krupoderova, Klimentina R. Krupoderova, Lyudmila N. Bakhtiyarova, and Alexander V. Ponachugin Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. Purpose of the study: Development of a model of the personal digital educational environment of a university teacher based on an analysis of the teacher’s actions. Methodology: Theoretical and methodological analysis and synthesis of domestic and foreign literature, scientific articles and publications on the topic were carried out; studied the experience of domestic and foreign developments and the integration of projects to build personal digital educational environments; generalization, comparison, forecasting and pedagogical modeling were carried out. Results: The article discusses the model of the personal digital educational environment of a university teacher. Construction of the model is carried out on the basis of the analysis of work actions of the teacher. The components of a professionally regulated component of the personal digital environment can be components of the university’s electronic environment, implemented on the basis of LMS Moodle; wiki university information systems; ICT tools for organizing interaction with students and colleagues, their joint activities based on Web 2.0 services. Conclusion: designed a personal digital educational environment of a teacher of the Nizhny Novgorod State Pedagogical University named after Minin; the analysis of psychological and pedagogical literature on the problem of the formation of a personal digital educational environment of a university teacher; examples are given of the work functions of a university teacher using various ICT tools. Keywords: Personal digital educational environment
Teacher’s work activities
Electronic educational and methodological complexes
Joint activities
Wiki site
Web 2.0 services JEL Code: I230

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 610–618, 2020. https://doi.org/10.1007/978-3-030-47945-9_66

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1 Introduction The main goal of educational information environment for higher education is to create conditions for improving the quality, providing access and ensuring its openness (Samerkhanova et al. 2016). The concept of information and educational environment appeared at the end of the last century. Recently, due to the significant expansion of the capabilities of the Internet. The role of computer technologies in the education system is redefined. And also, in connection with the emergence in society of such concepts as “digital society” and “digital economy”, the concept of information and educational environment is replaced by the concept of digital educational environment. Starodubtsev believes that the information and educational environment of a teacher should contain professionally regulated informal, and individually-personal components (Starodubtsev 2013). Sharing this point of view, we believe that the design of the personal information and educational environment of a university teacher should be based on an analysis of the teacher’s work actions placed in its professional standard (Order of the Ministry of Labor of Russia 2015). The personal educational environment of a university teacher can include as components that are part of the structure of the digital educational environment of a university; and independently constructed components for the placement of educational content, organization of project and research activities, implementation of interaction and cooperation with students and colleagues, self-development and self-presentation. In the studies of Bryksina and Krupoderova (2016), Krupoderova and Kalinyak (2016), Patarakin and Shilova (2015), Starichenko et al. (2015), Yarmakhov and Rozhdestvenskaya (2015) substantiates the possibilities of using cloud technologies and network social services to build digital educational environments. An analysis of the capabilities of digital tools based on network services has led to the conclusion that activities of the project can create new unique network content and active interaction between its subjects (Samerkhanova et al. 2019). In 2015, the professional standard of a professional education teacher was approved in Russia (Order of the Ministry of Labor of Russia 2015). The document lists the 8 job functions of a teacher. The main labor function of a university teacher is to teach courses, and disciplines for undergraduate and graduate programs. Other functions are associated with the creation of pedagogical conditions for development of students; with the organization of career guidance activities; with the organization of research, design, educational, professional and other activities of students; with the development of educational and methodological support for the implementation of disciplines. Justification of the personal digital educational environment of a university teacher based on an analysis of the capabilities of various ICT tools for the implementation of the listed labor functions is considered by us as an urgent scientific and practical task. At present, in the Russian Federation and in the post-Soviet space, in conditions of global competition with often limited funding, one of the main criteria for the viability of educational institutions is the quality of their educational services (Samerkhanova et al. 2020).

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The educational environment is becoming one of the main conditions for improving the quality of education and successful competition in the educational services market (Henner 2014). An analysis of the current state of research and development in the field of information and educational environments of higher education institutions was performed by Gruzdeva (2019). A comparative analysis of the educational information environments of Russian and foreign universities showed that foreign teachers use more diverse digital content: if its own methodological development is used by about 60% of Russian and 70% of foreign teachers, then video recording of their own lectures in Russian universities is used much less frequently 26% of Russian teachers and 40% foreign. Detailed analysis of development problems of the information environment of the university was also carried out by Kvon et al. (2019). Samerkhanova and Krupoderova (2017) especially considering information and educational environments. This peculiarity lies in the fact that the main goal of the activity of a pedagogical university is to prepare a teacher, whose duties include, among other things, organizing the activities of students in the information and educational environment of the school. Pedagogical techniques and methods of work of university teachers in a digital educational environment are discussed by Gruzdeva and Bakhtiyarova (2014). The article is devoted to the construction of an information and communication subject environment (Krupoderova 2016). Examples of network social services to build an environment for teaching information technology for students of the Nizhny Novgorod State Pedagogical University named after K. Minin. It is shown that an effective means of organizing productive joint independent, design, research activities of students. Formation of their competencies is done by informational and educational environment, built on the basis of network social services. The author of the article comes to similar conclusions, which is devoted to formation of the competencies of bachelors of professional education in the information and educational environment based on cloud technologies (Krupoderova 2016). The publication is dedicated to the design of educational environment of the Information Technologies module (Shirshova and Sevyan 2017). Information and educational environment of the module includes electronic educational and methodological complexes of disciplines based on LMSMoodle, a university wiki, digital educational resources, and cloud services. Construction of personal information and education among university teachers is done by Starodubtsev (2013), Starichenko et al. (2015), Slepukhin (2014), Yarmakhov and Rozhdestvenskaya 2015.

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2 Methodology The methodological basis of the study was: – theoretical and methodological analysis and synthesis of available special domestic and foreign scientific and methodological literature, conceptual analysis of scientific articles and publications on this topic; – study and generalization of both domestic and foreign developments and implementation of projects for building personal digital educational environments; – application of generalization, comparison, forecasting methods; – pedagogical modeling.

3 Results As an example, we propose a model of personal digital educational environment of Nizhny Novgorod State Pedagogical University named after K. Minin. The university is developing a project “E-learning and electronic educational environment” (Prokhorova et al. 2015). This project is implemented on the basis of LMS Moodle. Each university teacher places electronic educational-methodical complexes of disciplines in the electronic environment of the university. Teacher has the opportunity to work with the “Electronic timetable” service, fill out an electronic sheet, draw up an individual plan for the professional development of a scientific and pedagogical worker and has access to the information systems “Workplans of disciplines” and “Scientific results”. As already noted, social network services Web 2.0 have good didactic opportunities to build a teacher’s personal digital educational environment (Patarakin and Shilova 2015). Let us analyze the labor actions of a higher education teacher, enshrined in his professional standard (Order of the Ministry of Labor of Russia 2015), and consider using which components of a teacher’s personal digital educational environment which can be implemented. For training courses, disciplines (modules) for undergraduate and graduate programs at the faculty of Nizhny Novgorod State Pedagogical University named after K. there is the possibility of organizing mixed learning. This is teaching with the participation of a teacher and online learning. Each university teacher creates electronic educational and methodological complexes to support readable disciplines in the Moodle SDE (Samerkhanova et al. 2012). To create electronic educational and methodological complexes, Moodle elements such as a lecture, assignment, forum, chat, glossary, test, survey are used. Also, when performing the considered labor function, the teacher uses digital educational resources and recommends students from electronic library systems literature (Ponachugin and Lapygin 2019). A component of the personal digital educational environment is also licensed software, including system software, office programs, graphic editors, mathematical packages, programming languages, simulators, test shells, and various software for different areas of training. When performing laboratory and practical work, students often individually and together create information products using Web 2.0 services. At the same time, independent work can be in classroom and extracurricular (Smirnova et al. 2016). The table shows some examples.

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Service Wiki Co-editing services

On-line mind maps On-line time lines On-line interactive boards Infographics

Example of an information product Report on the project task “Trends in the development of the information society” https://clck.ru/CDL7y Joint presentation “Great Mathematicians” https://clck.ru/KMUZg Joint presentation “Scientists who contributed to development of the information society concept” https://clck.ru/KMUd2 Mental map “Services of the portal of public services” https://clck.ru/ KMV9X Time line “10 Most Important Discoveries in Biology” https://www. timetoast.com/timelines/2137765 On-line board “Analysis of network projects” https://padlet.com/ shadrinairina1996/wwmlg529ezkm Reference notes on “Information Society” https://goo.gl/8j9vPf

In the professional standard the labor function “Creation of pedagogical conditions for the development of a group of students on base of higher education programs” is called. Interaction with students on this labor action can be carried out within the framework of the electronic educational environment of the university, through its own website or the teacher’s blog, using Web 2.0 services. For example, when organizing extracurricular activities of future bachelors at the Nizhny Novgorod State Pedagogical University named after K. Minin (Krupoderova and Bryksina 2018) actively uses project activities on the wiki site of the university (https://wiki.mininuniver.ru). Over the past two years, projects such as Russian Informatics: Yesterday, Today, Tomorrow”, “Encyclopedia of Russian Informatics”, “World Information Day”, etc. As part of these projects, students have prepared wiki articles about such scientists as Alan Turing, Norbert Wiener, Ralph Hartley, Bogdanov A.A., Lyapunov A.A., Poletaev I.A. and others, wiki articles about Soviet pioneer scientists in the field of computer technology, and domestic software products; various on-line timelines and infographics on the history of information theory; Google sites dedicated to the development of cybernetics, robotics, and virtual reality. Another labor function of a university teacher is to conduct career counseling activities with schoolchildren. Organization and holding of network events (open days, webinars, competitions, vacation schools, projects, etc.) is a good option for career guidance. An example is the network project “Go Online”, which was carried out for schoolchildren by teachers and students of the Nizhny Novgorod State Pedagogical University named after K. Minin. At the preparatory stage of this project, teams were registered on the website https:// wiki.mininununiver.ru. Each team had to create a wiki page to present the participants, their educational organization, motto and logo. At the stage of the project “Use reliable resources” students mastered the services of creating infographics. Infographics was dedicated to World Aviation and Space Day. The results of each team were posted in a joint on-line presentation (https://goo.gl/ZaET7m). The stage of the project “Virtual tour” was dedicated to the 150th anniversary of M. Gorky. Teams had to create their own virtual museum-tourist route to places related to the life and work of the writer, presenting it in the form of Yandex or Google Maps.

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For the stage “Raising Your Cultural Level” organizers prepared a puzzle of one of UNESCO objects for each team. It was necessary to unravel the UNESCO object, and find a video about this object. And come up with three questions and post them along with the video using one of the proposed network services. UNESCO sites were entered into a joint Google spreadsheet https://clck.ru/Jg5pT. During the “Using the Internet efficiently, ethically and safely” stage, participants had to prepare an interactive poster on the topic. Services such as https://padlet.com/, http://wikiwall.ru/, were used. During this project schoolchildren were motivated to learn modern information technologies. And for future bachelors, excellent conditions were created for the development of such universal competencies as the ability to search, critical analysis and synthesis of information, apply a systematic approach to solving the tasks; the ability to determine the range of tasks within the framework of the goal and choose the best ways to solve them; the ability to carry out social interaction and realize their role in the team. As for other labor actions of a university teacher, they can be effectively carried out with the help of personal digital educational environment. A model of the personal digital educational environment of a university teacher can be represented using a table. Components of the personal digital educational environment of a university teacher Learning content

Tools for organizing design, and research activities of students

Assessment and monitoring tools

Tools for communicating with students and colleagues Self development tools Information systems Personalization tools

ICT tools

EUMK disciplines at the LMS Moodle University; digital educational resources; electronic libraries; open online courses; content prepared using Web 2.0 services, including together with students and colleagues; licensed software Hypertext co-creation services (https://sites. google.com, https://wiki.mininuniver.ru), document collaboration services, online visualization services, etc. Tools in LMS Moodle: tests, polls; online tests and questionnaires; blogs discussion wiki pages, etc. E-mail, teacher’s site, blog, social networks, online polls, online interactive boards Massive open online courses, and professional networking communities “Work plans of disciplines”, “Scientific results” University website page, teacher’s website or blog, professional network communities

We have substantiated the possibility to realize the labor functions of the university teacher with the help of his personal digital educational environment. At the same time professionally regulated component of such environment can be components of the

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electronic environment of the university, implemented on the basis of LMS Moodle, wiki site of the university, network services Web 2.0, and other information systems. The informal component of a personal digital educational environment can be represented by a blog or a teacher’s website, a page on the university’s website or on a social network.

4 Conclusion Analysis of psychological and pedagogical literature on the problem of formation of personal digital educational environment of a university teacher, experience of practical activity of the authors of the article on creation of information and communication technologies. Educational environments and, the main professional educational program allowed to substantiate the model of the personal digital environment. It is shown that a professionally regulated component of the personal digital environment of a university teacher should be designed based on its labor functions. Such labor functions as teaching courses, disciplines for undergraduate and graduate programs are considered; creation of pedagogical conditions for students’ development; organization of career guidance activities; organization of research, design, educational, professional and other activities of students; development of educational and methodological support for disciplines. The design of the personal digital environment is performed for teachers of Nizhny Novgorod State Pedagogical University named after K. Minin. It is demonstrated that the labor actions of a higher education teacher, enshrined in his professional standard, can be carried out using various ICT tools. For example, for mixed learning, teachers develop electronic learning and methodical complexes to support disciplines. Teachers use the wiki site of the university to organize project, and research activities of students. Web 2.0 services are proposed for the development of educational and methodological support for disciplines, assessment, control, and for communication with students and colleagues. Various information systems of the university are used for the development of plans, and formation of reporting documentation. These components can form personal environments of teachers and other universities. Teachers’ blogs can be included in the environment, with related information systems of an educational organization. The teacher’s personal digital environment can be deployed on various cloud platforms. Comparison of various solutions distinguishes the Google Education environment in terms of the breadth of the spectrum of services and applications, flexibility, convenience for the teacher, and development prospects. Further research may be devoted to the informal component of the digital environment, as a result serving to the development of the teacher personality, the growth of his professional competence and active interaction with the professional community.

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Patarakin, Y., Shilova, O.: Concept of learning design for collaborative network activity. Procedia Soc. Behav. Sci. 214, 1083–1090 (2015) Samerkhanova, E.K., Krupoderova, E.P., Krupoderova, K.R., Bakhtiyarova, L.N., Ponachugin, A.V.: Networking of lecturers and students in the information learning environment of higher school by means of cloud computing. Math. Educ. 11(10), 3551–3559 (2016) Samerkhanova, E.K., Bahtiyarova, L.N., Krupoderova, E.P., Krupoderova, K.R., Ponachugin, A. V.: Creation of a modern digital environment for managing the educational programs in university. In: Growth Poles of the Global Economy: Emergence, Changes and Future Perspectives. Lecture Notes in Networks and Systems, vol. 73, pp. 1263–1273 (2020) Starichenko, B.E., Sardak, L.V., Slepukhin, A.V.: On interaction of educational environments of different levels. Mediterr. J. Soc. Sci. 6(5), 486–496 (2015) Smirnova, Zh.V., Gruzdeva, M.L., Chaykina, Zh.V., Terekhina, O.S., Tolsteneva, A.A., Frolova, N.H.: The role of students’ classroom independent work in higher educational institutions. Indian J. Sci. Technol. 9(22), 95568 (2016) Samerkhanova, E.K., Krupoderova, E.P., Krupoderova, K.R., Bakhtiyarova, L.N., Ponachugin, A.V., Kanyanina, T.I.: Implementation of the competence approach with the help of network project activities. Opción, Año 35, Especial No. 19, pp. 565–590 (2019)

Digital Economy and Sustainable Development of Northern Traditional Industries in the Paradigm of Ethnological Expertise Irina V. Samsonova1,2(&) , Matrena S. Malysheva1,2 , Maria B. Pavlova1,2 , and Lyubov A. Semenova1,2 1

Academy of Sciences of the Republic of Sakha (Yakutia), Yakutsk, Russia [email protected], [email protected], [email protected], [email protected] 2 North-Eastern Federal University, Yakutsk, Russia

Abstract. The goal of the study is to identify criteria for the implementation of the digital economy and concretization of principles of sustainable development of northern traditional industries in the paradigm of ethnological expertise. Our work is aimed at calculating the losses caused by damage to the native habitat of small indigenous peoples in the territories of industrial development. This article explores the application of digital technologies based on GIS and MS Office applications in an ethnological expertise on the example of the Republic of Sakha Yakutia. Work is devoted to the description of existing practice of application of modern technologies and identification of problems in terms of development and introduction of modern information systems in management of economic and ecological processes. According to results of this study, it is concluded that the digital economy is an economy in which the main resource is digital data, the use of which repeatedly increases productivity. Determination of losses to traditional branches of the indigenous minorities of the North is possible under the condition of use of spatial analysis tools, and database management systems. Practical significance of the research lies in the implementation of digital components of the economy in assessing the impact of industrial facilities on the economic activities of traditional nature management (hereinafter referred to as TNM) and effectiveness of state regulation in the sphere of protection of rights of small indigenous peoples of the North of the Republic of Sakha Yakutia. Keywords: Information technologies Ethnological expertise JEL Code: Q1


Traditional branches of the North



Q5

1 Introduction Modern stage of development of economy and society is determined by new conditions and factors such as knowledge, information, globalization, and also changing sources of economic growth. Dynamics of changes in information technologies is high, the degree © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 619–624, 2020. https://doi.org/10.1007/978-3-030-47945-9_67

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of their penetration into various spheres of the economy increases, in this regard the information lag or leadership in use of information technology (Gaven and Gusumano 2014; Muegge 2013) can be a decisive factor in the development of regional and national economies. Given the rapid changes facing northern social-ecological systems, adaptive and transformative potential is critical to the sustainability of the Arctic (Kofinas et al. 2012). Regional aspects play a leading role in the development of the country’s economy. In Russia, this is due to the fact that regions are developing disproportionately and this is an acute problem for sustainable regional development. The specificity of the Arctic territories is under the close attention of the state, scientists, industrialists, and managers. Development of boundaries of these territories raises many questions due to new problems, threats, and risks (Efimovich and Galynchik 2018). No sphere of public life can be left without involvement in global automation. This process affects not only the scientific and technological sectors but also socio-economic and environmental sectors. In the context of the discussion of innovation and introduction of digital technologies, the important issue of environmental policy formulation and implementation is often overlooked (Evtyanova 2017). Purpose of this research is to identify criteria for the implementation of the digital economy and concretization of principles of sustainable development (Vanclay et al. 2015), of northern traditional industries in the paradigm of ethnological expertise. The work is aimed at calculating losses caused by the native habitat of small indigenous peoples in the territories of industrial development. Scientific novelty consists in generalization of accumulated experience, concretization of measures and algorithm of introduction of information technologies in materials of ethnological expertise within the framework of sustainable development of northern traditional industries.

2 Methods For a comprehensive assessment of the resource potential of the territory of traditional nature software platforms based on geoinformation (hereinafter referred to as GIS) technologies are used. The main task in the solution of resource assessment is to assess the impact of industrial facilities on the economic activities of traditional nature management within the boundaries of TNM (Methods of ethno ecological expertise 1999). The creation of a damage assessment GIS consists of several steps. At the initial stage, the Department of ethno-social and ethno-economic studies of geosystems of “Academy of Sciences of the Republic of Sakha Yakutia formed a database “Territories of the traditional nature use of the Republic of Sakha Yakutia”. Next, we define the mathematical basis at which the transformation from one coordinate system to another occurs and projection changes using a coordinate reference, you can control layers or GIS objects of different types and scales (Samardak 2015). Hydrography, transport networks, settlements and industrial facilities are included in the cartographic basis of the research territory. Spatial data is generated from raster, vector, and space imagery. Creation of a spatial database of industrial facilities is an important step. Data of industrial facilities are provided by subsoil users. So, a unified picture of the situation on the ground is formed for further work.

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Next, we perform a spatial analysis based on the Buffer tool for each facility, depending on the characteristics of the affected areas. Based on the created vector layers, affected areas for each contour are calculated. At the end, thematic maps are created for generating reports on calculation of losses, zones of impact, and overview maps of the study area. In the MS Excel program the authors developed an application for calculating losses from traditional economic activities of the small indigenous peoples of the North according to the methodology for calculating the amount of losses caused by associations of the small indigenous peoples of the North, Siberia and the Far East of the Russian Federation as a result of economic and other activities of organizations of all forms of ownership and natural persons in places of traditional residence and traditional economic activity, approved by an order of the Ministry of Regional Development of the Russian Federation of December 9, 2009 № 565. The application consists of 28 sheets, which can be conditionally divided into sections “resource estimate”, “gross income” and “lost profit”. In turn, the sections of resource estimation and calculation of gross income are grouped by reindeer husbandry, hunting, harvesting of wild animals and fishing. Calculation of lost profits is carried out by subsections of land withdrawal zone, stress zone, and the final estimate. The loss of profits calculation includes types of work for which research, construction, and operation are carried out. Results of spatial analysis are introduced into the author’s program based on the MS Office spreadsheet processor to determine the amount of loss caused by damage to traditional activities small peoples.

3 Results Digital technologies are changing people’s daily lives, industrial relations, economic structure, and education, as well as new demands on communication, computing power, information systems, and services. Data is now becoming a new asset, mainly due to its alternative value, that is, as data are used for new purposes and used for new ideas. Russia has settled a large number of issues in information and telecommunication technologies in various spheres of activity. However, the regulatory environment has a number of shortcomings, in some cases creating significant barriers to the formation of new institutions of the digital economy, development information and telecommunication technologies and related economic activities. The Republic of Sakha Yakutia has made significant progress in the development of a digital platform for provision of public and municipal services, including the establishment of interoperability requirements systems, and use of information from other systems, including payment systems. Today, the main problems are observed in the application of information and telecommunication technologies at the level of local governments. Traditional natural resources use of small indigenous peoples is defined as historically established and providing sustainable nature management, ways of using animal objects and plant world, other natural resources indigenous small peoples of the North, Siberia and the Far East of the Russian Federation. For centuries indigenous small peoples inhabiting the territory Republic of Sakha Yakutia are engaged in

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breeding of deer, hunting animals and fishing, collecting wild berries and medicinal plants (Sleptsov 2015). Unfortunately, at this time, there is no well-functioning system of communication between representatives of small indigenous peoples, government structures and public associations. The main problem is that while the government sees the digital economy only as a virtual environment for storing and exchanging data, but with the help of information technology, we can manage real economic processes also. The introduction of a digital system would significantly increase productivity by allocating funding in direction, harmonizing production relationships and preserving the balance between industries, and development of a set of regional indicators of social and economic development in the Arctic through digital transformation. The purpose of introduction of a single information system is the introduction of modeling and forecasting of social and economic development of northern traditional industries, which in the absence of statistical observation will enable economic and environmental monitoring of the situation of nomadic ancestral communities with traditional lifestyles. The unified information system will consist of the client and server parts. For the client-side, the technical condition is to use HTML markup with nested cascading Excel tables. The information system of northern traditional industries will consist of the following subsystems: – – – – –

Database of northern traditional industries; Database of farms engaged in traditional industries; Database “Territories of Traditional Nature Use of the Republic of Sakha Yakutia”; Formation of the basis for normative and legal documents; Research results, innovative developments, participation in financing, organization of production; – Ethnological expertise; – Ethno-ecological monitoring of northern traditional industries;

The introduction of ethnological expertise is intended to help protect the indigenous peoples of the North from inappropriate management decisions that change their way of life. The authors have conducted studies of ethnological expertise using GIS on the example of the territory of the municipality “Machinskiy nasleg” of the Olekminsky district of the Republic of Sakha Yakutia. The southern version of the project of gas pipeline “Power of Siberia” was designed on the Machinskiy nasleg territory. Negative impact was made on MG “Power of Siberia” covering an area of 13 hectares and a length of 2.2 km on this site. The target software is represented by QGIS, which has extensive functionality of working with vector and raster data, as well as spatial analysis. In the QGIS program, a geobotanical layer spatial database has been created, containing an attribute table of the calculated reindeer capacity of each contour. A geobotanical layer is created from thematic vegetation maps and updated from space imagery. Such methods are successfully applied in evaluation and monitoring programs, data collection for interpretation of images with repeatability of forms, and multiple layers (Schrader 2011).

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SYM BOLS

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Power of Siberia main gas pipeline (southern version) Stress zone Heavy impact zone Rivers Geobotanical difference Larch green forests Larch shrub forests of green moss Larch forests shrub and sphagnum Larch shrub forests Larch forests with spruce Larch forests with pine greenery - contour number

Fig. 1. Map of vegetation in the territory of the surveyed object

Figure 1 shows a map of vegetation on the territory of the municipality “Machinskiy nasleg”. Impact assessment conducted on engineering and survey work on this project. Exposure areas for each geobotanical contour are calculated for the specified zones of influence and all indicators are formed in the initial table for further calculations. Also defined by spatial analysis tools are distance from each contour to the place where products of traditional activity are sold. As a result, thematic maps on the areas of allocation of land for linear and industrial objects (reindeer capacity and hunting grounds) were created for further work. Losses are estimated in the MS Excel application and presented in the research report work to assess the impact on the ethnological environment.

4 Conclusions This study identifies and describes the main directions in the implementation of digital components of the economy in assessing the impact of industrial facilities on the economic activities of traditional environmental management and the effectiveness of government regulation in the sphere of protection of rights. These areas include: 1. Introduction of a unified information system of northern traditional industries, with the aim of modeling and forecasting the socio-economic development of traditional sectors, which, in the absence of statistical observation, will allow economic and environmental monitoring of nomadic tribal communities; 2. The introduction of information technologies in ethnological expertise contributes to the calculation of amounts of compensation for violation of the native habitat of small indigenous peoples in the territories industrial development. For a comprehensive assessment of the resource potential of the territory of traditional nature software platforms based on GIS technologies are used. The main task in the

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solution of resource assessment is to assess the impact of industrial facilities on the economic activities of traditional nature management within the boundaries of traditional natural resources management and nomadic descent communities. 3. The results of components of digital technologies are thematic maps for calculation of losses, overview maps of territories of traditional nature use, nomadic ancestral communities and areas of impact are determined by spatial analysis.

References Gawer, A., Cusumano, M.: Industry platforms and ecosystem innovation. J. Prod. Innov. Manag. 31(3), 417–433 (2014) Evtyanova, D.V., Tiranova, M.V.: Digital economy as a mechanism for effective environmental and economic policy. “SCIENCE” 9(6) (2017). Internet Magazine Kofinas, G.P., Clark, D., Hovelsrud, G.K.: Adaptive and transformative capacity. In: Arctic Resilience Interim Report 2013, pp. 73–93. Stockholm Environment Institute and Stockholm Resilience Centre (2013) Methods of ethnoecological expertise, 299 p. IEA RAN Publ., Moscow (1999). (in Russian) Muegge, S.: Platforms, communities and business ecosystems: lessons learned about technology entrepreneurship in an compatible world. Technol. Innov. Manag. Rev. 3(2), 5–15 (2013) Efimovich, S.Y., Anatolyevna, G.T.: Vectors of sustainable development of the KMAO-Ugra in the digital economy. Reg. Econ. Manag.: Electron. Sci. J. 4(56), Article number 5617, ISSN 1999-2645 (2018). https://eee-region.ru/article/5617/ Sleptsov, A.N.: The state ethnologic expertise in the Republic of Sakha (Yakutia). In: Arktika. XXI vek. Gumanitarnye nauki [The Arctic in 21st century. Humanitarian sciences], vol. 1, no. 4, pp. 15–24 (2015). (in Russian) Samardak, A.S.: Geographic information systems [electr. Resource], Vladivostok, 123 s (2015) Schrader, T.S., Duniway, M.C.: Image interpreter tool: an ArcGIS tool for estimating vegetation cover from high-resolution imagery, rangelands, 33(4), 35–40, ISSN 0190-0528 (2011). https://doi.org/10.2111/1551-501X-33.4.35 Vanclay, F., Esteves, A.M., Aucamp, I., Franks, D.: Social Impact Assessment: Guidance for Assessing and Managing the Social Impacts of Projects, 99 p. International Association for Impact Assessment, Fargo (2015). (in English)

Formation of the Digital Economy Through Essence, Genesis and Technology Elena A. Zbinyakova1(&), Oleg V. Sizov1, Nataliya V. Pyanova1, Liliya M. Marchenkova2, and Elena M. Samorodova2 1

2

Orel State University, Orel, Russia [email protected], [email protected], [email protected] Orel State University of Economics and Trade, Orel, Russia [email protected], [email protected]

Abstract. The factors of environmental variability have displaced the postindustrial economy into the background. The basis of the development of society was the digital economy. The identification of practical areas of research allows us to identify current trends in the formation of the concept of the digital economy. The study of the theoretical background of the digital economy allows us to build a problem. This issue is aimed at the use of research to build a comprehensive framework in this aspect. Important this conclusion is in the context of the genesis of the essence, the genesis and technologies of the digital economy under consideration. This basis allows us to talk about the sufficient relevance of the research topic. The purpose of the scientific article is to consider the nature, the genesis and the technology of the digital economy. The objectives of the study are: to consider the genesis of the development of the digital economy in Russian realities, to determine the elements and directions of development of the digital economy, to identify the features of the digital economy through structural components (technologies, models and approaches), to the formation of some effects from the use of digital technologies. The research tools are based on: the method of detailing the system, the method of theorizing the attribute, the method of composing the factors, the method of stageization of the components under consideration, the method of historical integrity, the method of structural generalizations, the deduction method, the analysis method, the typology method, the graphical method, and the systematic method. Keywords: The digital economy
The digital technologies
The paradigm The intelligence
The virtual platform
The platform
Models
Processes




1 Introduction The paradigm of society regulated a new system of economic processes. Orientation to technologicalization in economic relations justified the emergence of digital – systems. The digital system has developed modern approaches to the development of the national economy. These approaches have formed a large layer of scientific knowledge. Scientific knowledge regulated the processes of the digital economy. The digital economy in its essence acts as a paradigm, concept, shift in public consciousness. The essence, © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 625–636, 2020. https://doi.org/10.1007/978-3-030-47945-9_68

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genesis and technology of the digital economy remain insufficiently disclosed within the framework of the existing problems. The essence of the digital economy is justified through the conceptual apparatus. Highlighted concepts don’t reflect the essence of the digital economy. Concepts form ideas about the existing directions of functioning of modern processes. Directions of functioning are not considered as factors. Directions determine the emergence and development of the digital economy. These areas serve as the structure that the digital economy generates. The digital economy was emerging in stages. The interchangeability of the conceptual foundations laid the foundation for the manifestation of the digital economy within the framework of the consumer economy. The selected foundation did not appear in the context of considering the essence of the digital economy. The digital economy is a technology field. Technologies are structured in models based on approaches to the studied problems. The digital economy allows us to form a fairly complete picture of the implementation of the process component in society. The selected problems allow us to make a conclusion about the sufficient importance of the research topic under consideration. The essence, genesis and technology determines the disclosure of the relevance of this research topic. The purpose of writing a scientific article is to examine the nature, genesis and technology of the digital economy. The objectives of the study are: – to consider the genesis of the development of the digital economy in Russian realities; – to identify the elements and directions of development of the digital economy; – to identify the features of the digital economy through structural components (technologies, models and approaches); – to form some effects from the use of digital technologies.

2 Research Methods The research base of the essence, genesis and technologies of the digital economy has been formed in three planes: a conceptual and theoretical group of methods, a staging and historical group of methods, and a scientific and systematic group of methods. The conceptual and theoretical research tools are aimed at studying the essential characteristics of the object under consideration. The conceptual-theoretical toolkit allows you to evaluate the basic functions, components, factors and principles of the studied object. In the context of this group of tools for researching the digital economy, the method of detailing the system, the method of theorizing attributes, the method of composition of factors are used. The method of detailing the system is aimed at highlighting existing components. The feature theorization method governs the disclosure of the most important foundations of the problem being investigated. The method of composition of factors accumulates structural elements in a single issue. The historical-historical instrumentation examines the issue of periodization. The disclosure of the genesis of the development of the digital economy determines the use of the method of staging, the method of historical integrity, the methods of structural

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generalizations. The method of staging includes stage-by-stage enlargement of blocks by formed periods. The method of historical integrity is an indication of the timing of the origin and fatalization of the system under study. The method of structural generalizations characterizes the studied period. The scientific and systematizing toolkit develops general methods for studying the problems. The toolkit includes methods of deduction and analysis, the typological examination method, the graphical method and the systematic method. The system of methods allows us to consider the digital economy in various aspects of the stated topic. We will consider the genesis of the development of the digital economy in Russian realities.

3 The Main Study The formation of the genesis of the development of the digital economy has determined the symmetry of worldviews. These views accumulate in the functioning of the national economy. The genesis of the development of the digital economy is determined by the beginning of the restructuring of the national economy in the framework of innovative functioning in the period 2014–2015 (Volokitin et al. 2018). The digital economy is entirely based on innovative processes. Innovative processes are determined by a sufficiently high degree of technological saturation. The process of technologicalization of the economy has led to the emergence of the beginnings of the digital paradigm for the development of society. Technologization regulates the period of the emergence of the digital economy in 2010–2012 (Radina 2019). The development of the digital economy must be compared with the moment of transition to the study of the issue of human capital. The digital economy is the concept of introducing digital technological rudiments into the economic activities of society and human life. This process is continuously associated with the implementation of the concept of the human capital. The human capital allows you to combine the intellectual and informational knowledge of the individual necessary for the implementation of the products of the digital economy. The earliest stages of regeneration of the digital economy are associated with the beginning of the emergence of the market economy. The scientific research has formed a phased algorithm for the genesis of the emergence of the digital economy. This period of development of a market economy in Russian realities begins in 1993. Three major periods of the formation and development of the digital economy stand out as the period of the emergence of the market capital, the period of desire to build innovative production, the period of attempts to transfer to the knowledge economy. The digital economy in Russian realities is only beginning to take shape (Komarevtseva 2019). The process of technologizing the country’s economy and the gradual transition of the digital economy ends (Merzlyakova 2018). Based on the above conclusions, the author’s genesis of the development of the digital economy in Russian realities was formulated (Fig. 1).

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THE ECONOMY OF CONSUMPTION 1990-2006 THE ECONOMY OF MODERNIZATION 2007-2009 THE ECONOMY OF HUMAN CAPITAL 2010-2012 THE INNOVATIVE ECONOMY 2013-2014

THE DIGITAL ECONOMY since 2017

ECONOMY OF KNOWLEDGE 2015–2016

Fig. 1. Genesis of the development of the digital economy in Russian realities

Periodization of the genesis of the development of the digital economy in Russian realities is mediated by the period of the emergence of conceptual foundations in excess of consumption. The methodology of studying the digital economy is considered through the cyclic stages of rational and irrational consumption (Gasparėnienė et al. 2017). The consumer economy was formed in the Russian realities in the early 1990s. The consumer economy lost its original purpose in 2006. Consumer economics has focused on the importance of speed of product creation and implementation. The basis of this period is the essence of customer-supplier interaction. The beginnings of the digital economy come from microeconomics (Hong and Lee 2018). Microeconomics is considering the irrationality of consumption in underserved markets. Limited resource generated an increase in demand and accordingly, supply. In the future, this stage was replaced by the economy of modernization. In the concept of modernization of the economy, the special place is given to technologization and improvement of the production process (Shvetsov 2018). The economics of modernization have identified the importance of the production factor. Production in the context of post-industrial society began to take shape not only as a tool for processing resources. Production is the technology of creating a unique product through the use of modernized systems. The policy of modernizing the economy began to develop the postulates that arose during the period of the consumer economy. The postulates have formed ideas about the importance of technology in the production system. The next period of genesis is aimed at introducing the rudiments of an intellectual product into the economic process. The formation of an intellectual product made it possible to satisfy a rather large part of the needs of the population due to small technological processes. The irrationality of the population remained at a fairly high

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level. This factor didn’t allow the formation of the institution of human capital. It was necessary to study the issue of regulation of economic processes and relations (Sutherland and Jarrahi 2018). An innovative economy wasn’t implemented in Russian realities. Elements of an innovative economy were partially emerging. The components of an innovative economy are: to the introduction of knowledge economy approaches, to the technological improvement of production and to the emergence of high valueadded products. The basis has carried out theoretical development activities in the field of digitalization of the economy. The digital economy has created a symbiosis of human capital and the technological revolution in the context of the knowledge economy. Many scientists argue about the primacy of the innovation economy and the knowledge economy (Stroeva et al. 2019; Lyapina et al. 2019). Most of them are inclined that the knowledge economy is primary in relation to the innovative economy. The formation of the knowledge economy occurred only after the implementation of the country’s innovative development strategy in Russian realities. The vector of digital development formed of the Russian Federation. Define the elements and directions of development of the digital economy. The digital economy functions through elements of properties and effects on the control object (Fig. 2).

Fig. 2. Elements of the digital economy

The main aspect of the elements that affect the management object is timely communication of information for key components of the digital economy (Vorobyov 2019). Another aspect is seen in the elements that highlight the key properties of the digital economy. The main objective of these elements is to create the conditions for the development of the digital economy (Xiangbing 2018). The elements of the digital economy are divided into four components: virtual space, comprehensive the agent – the firm – the state communication, the Internet of things, and real-time information transformation. Virtual space is an important platform for the digital economy. Virtual space is the area of the main manifestation of the digital economy (Munina 2017). Virtual space is an instrument of an innovative economy. Of course, this aspect is true. The concentration of digital functionality is based on platform software. Digital functionality is the result of virtualization of the

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conditions for the digital development of the country and society. Virtual space creates a close relationship between the agent – the firm – the state. In the digital economy, considered environmental agents are considered (Ageev and Radina 2019). Coordination of the interaction between these participants determines the status of the digital economy. The digital economy reduces the time of interaction between the agent – the firm – the state. In the digital economy, the Internet of things is mentioned. This element is also the concept and the technology. The Internet of things analyzes and distributes information. The interconnection of the elements of the digital economy indicates a clearly regulated program for the transition of economic relations into an electronic field. The Internet of things is modifying the system of interaction between economic entities. The Internet of things is transforming information in real time. Information flows are a resource of a digital economy with processes and an agent environment. The key distinctive element of the digital economy is the transformation of information in real time. This element is associated with the need for continuous accounting of information flows. Information flows are aimed at changing and modifying an element of the digital economy. The management object of the digital economy includes other elements. Elements examine the subjects, principles, functions and factors of the digital economy. The subjects of the digital economy are defined in the context of digital – interaction: the agent, the firm, the state. The relationship between the subjects of the digital economy is based on principles. Principles include: – to interactions within network technologies; – to introducing new models of interaction between actors in the digital economy; – to the formation of revenue flows, taking into account the application of measures to reduce risks and eliminate situations of uncertainty. The implementation of these principles is based on the functionality of the digital economy. The functionality of the digital economy lies in the tools to increase the growth of labor productivity, reduce production costs by translating into the framework of platform interaction, and create a competitive environment. The factors of the digital economy are: to meeting the needs of the population in the framework of the formation of the system of the fastest consumption, to creating competitive foundations in the context of economic development. Any elemental component determines the direction of development. The essence of the digital economy is complemented by some areas of development on the issue under study. Firstly, the digital economy allows us to transform consumer–producer relationships (Fig. 3). Significant importance in the framework of the digitalization of society is given to building relationships between the consumer of goods, services and manufacturers based on increasing speed, improving quality and synchronizing flows. The transformation of consumer-producer relations is based on a platform component. The platform is based on the formation of the economic activity of these agents in the framework of digital – systems. The interaction is two-factor. On the one hand, it minimizes the costs of the manufacturer. On the other hand, it allows you to meet the

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needs of the client. The highlighted aspect determines the third effectiveness of this for the state. The efficiency of transformation of the consumer – producer relationship takes shape in the context of stimulating the competitive environment.

Transformational consumer – producer relations

Changing the value chain in a business model

Modeling the microeconomic environment and the macroeconomic environment

Information accumulation

Change in supply and demand

Fig. 3. Development trends in the digital economy

Secondly, the change in the value chain in the business model. The business model of the digital economy is predetermined by close relations of the agent – the firm – the state. This participant form a common value system. The value system is aimed at unifying traditional forms of management and reducing the time for innovation of the declared environment. The revision of the value chain occurs through the relationship of the participants. The value chain determines the presence of flows. Flows involve equal margins for all participants in the digital economy. The selected basis also governs the processes of forming a value chain. The value chain processes are current changes. Thirdly, modeling of the macroeconomic environment and the microeconomic environment. All transformational relations have an impact on changes within the macroeconomic environment and the microeconomic environment. The microeconomic environment of the digital economy puts electronic relations in the first place in the formation of supply and demand for unlimited resources. The irrationality of the agent’s microeconomic behavior is realized in the ability to more quickly meet their needs at the lowest cost. Irrational behavior produces processes. The processes are aimed at the development of the consumer sector. The digital economy doesn’t take market oversaturation into account. The digital economy is driving new consumption paths. The macroeconomic environment is modeled with the postulates of microeconomics. Macroeconomics is manifested as a large business institution. The Institute of macroeconomics aims to create a new technological generation of goods and products using available limited resources.

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Fourthly, the accumulation of information within the digital economy. The infinity of data allows you to build a shared virtual environment. Information as the main source of the digital economy is supplemented and processed. The information distributed among participants in the digital economy is chaotic and transparent. Fifthly, the reduction of the period for the submission of proposals in order to satisfy demand. This aspect is also in the field of modeling a new microeconomic environment. The speed and the time are important factors in the digital economy. The speed is aimed at maintaining the resource component and the implantation of relationships between environmental agents. Product creation speed reflects innovation and customer satisfaction. This aspect is formed on the basis of the structural components of the digital economy. The most interesting will be the consideration of the digital economy on the basis of such components as: technology, approaches, models. Briefly describe the technology of the digital economy, presented in Fig. 4.

The artificial intelligence

Big data

Neurotechnology

The advent of customer-centric technology

Additive technology

Production technology

Engineering technologies

Reduce technology innovation

Transition to implementing concepts in a digital platform

Virtual reality

Wireless technology

5G technology

The personal data monetization model

The external resource attraction model

The integrated consumption model

Fig. 4. Technologies, approaches and models of the digital economy

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The main technologies of the digital economy are: – the artificial intelligence is software for obtaining, distributing and redistributing information flows for subsequent analysis and decision-making on given problems; – big data are the technology for structuring a large array of data accumulated through tools and methods of an information system; – neurotechnology are the software system of artificial intelligence by the biological properties of a functional system; – additive technologies are simulation technologies that create digital models with exact copies of the object; – production technologies are tools that form the production processes of the efficient use of the resource component and reduce the cost of creating the planned product; – engineering technologies are cyclical modeling tools for formatting the processes of the digital economy; – the virtual reality is a technology of sensory image of reality objects for translation into virtual space; – wireless technologies are means of the Internet environment without the participation of standardized means of connection; – 5G technologies are fifth generation wireless tools with more efficient use of big data. Technologies interact in the context of three approaches are the emergence of customer-oriented technologies, the reduction in the period of technology innovation, the transition to the implementation of digital economy concepts within platforms. Technologies and approaches in the digital economy have modified functioning models. The model of innovative transparency and the model of technological sale of goods were replaced by: 1. The model of monetization of personal data is aimed at the mutual strengthening of the revenue from the accumulation of information flows. The model determines the cycle of information and receipt based on the cyclical functioning of financial flow. The monetization model of personal data includes an approach. This approach is aimed at the emergence of customer-oriented technologies. As a toolkit of this approach, technologies are used big data and virtual reality. 2. The model of attracting external resources is aimed at a constant increase in the income of consumers and producers due to revenues from the external environment. The increase in the number of external agents in a virtual environment creates the system of replenishment of financial resources. The model of attracting external resources includes the approach of applying the conceptual foundations of digital platforms. The approach uses the following technologies are artificial intelligence, additive technologies, engineering technologies, virtual reality. 3. The model of integrated consumption considers irrationality. Irrationality is characterized by increased consumption by environmental agents. The lack of linkage to the process of overproduction within the framework of virtualization of the digital economy system doesn’t limit agents in finding and consuming resources. This fact is limited by the expensive resources of the digital economy. Limited resources are being replaced by cheaper offers. Substitutes appear on the market. The approach is to reduce the period of technology innovation. As a toolkit of this are approach, neurotechnology technologies, additive technologies, wireless technologies, 5G technologies.

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4 Results The implementation of the selected technologies, approaches, models of the digital economy are aimed at obtaining certain effects for the agent – the firm – the state. The effects of the introduction of digital technology are presented in Fig. 5. The process of technology effectiveness depends on a number of factors. The digital technology must be in demand. This issue is typical for small cities. Small cities don’t have a well-formed digital environment system for a number of reasons. The first reason is the limited budget resources. Evaluation of economic and budgetary costs due to digital technologies regulates the effect of the introduction of this toolkit. Components highlight programmatic approaches to developing ideal models to reduce budget expenditures. The economic growth is driven by digital technology. Economic growth is short-term.

– to the demand for digital technology; – to the digital growth; – to estimation of economic and budget expenses due to digital technologies; – to change in the importance of human capital;

The labor and life activities are formed in conditions of uncertainty

Emergence of new risks within the digital plane

Availability of competencies of flexibility and adaptation of specialists to various situations

Denial of formalized operations

Demanding soft skills

– to digital vulnerability of vulnerable people.

Fig. 5. The effects of digital technology

This feature is associated with quick interchangeable and obsolete innovative products. In addition to the rapid changeability of innovation, the human capital is subject to transformation. The human capital isn’t regarded as a subject of intellectual thought. The human capital is a full-fledged subject of the virtual environment of the digital economy today. Digital vulnerability is inherent to vulnerable groups. This problem doesn’t have a certain level of competencies and skills necessary to adapt to the realities of the digital economy.

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Based on these processes, five key effects of the digital economy were formulated: – the demand for soft skills is a manifestation of non-specialized skills and the establishment of their priority in the digital environment; – the denial of formalized operations is the replacement of formal attributes with creative thinking through the use of artificial intelligence; – the presence of competencies of flexibility and adaptation of specialists to various situations is a complete denial of one-sided thinking and vision of a person aimed at studying and analyzing the situation; – the emergence of new risks within the digital plane is the regulation of negative changes due to the constant influence of new data on the agent environment; – the labor and livelihoods are formed in conditions of uncertainty; this is the impossibility of clearly defining and forecasting information flows within the framework of differentiated areas of knowledge. The key foundations of the digital economy are clearly articulated in Russian realities. The basics of interaction between digital media agents require additions and decryption. The depth of the study of the technological apparatus of the study does not allow us to determine its essential characteristics in practice.

5 Conclusion The study generated some conclusions: 1. The genesis of the development of the digital economy in Russian realities began in 1990. Genesis is associated with the formation of the foundations of a consumer economy. Many authors indicate the period of technologicalization as a time lag for the emergence of the foundations of the digital economy. These studies don’t take into account the factor of the emergence of relations between all market agents. 2. Elements of the digital economy identify two important components. The first component is focused on the properties of the digital economy. These elements include comprehensive the agent – the firm – the state communications, the Internet of things, the real-time information transformation. The second component acts on the control object. It is implemented through the subjects, principles, functions and factors of the digital economy. The components are regulated by the directional environment of the digital economy. These include are transformation of consumer – producer relations, changing the value chain in a business model, modeling the macroeconomic environment and microeconomic environment, accumulating information within the digital economy and regulating supply and demand. 3. Features of the digital economy implied a comprehensive view of the interaction of elements over time. The digital economy models include technology and approaches. Dedicated tools are considered individually in the digital economy.

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4. The effects of the use of the digital technology are predetermined by the characteristic processes of the economic development. The process component proposed by the author identified five effects of the introduction of digital technologies: the demand for soft skills, the denial of formalized operations, the availability of competencies of flexibility and adaptation of specialists to various situations, the emergence of new risks, the formation of labor and life in the face of uncertainty.

References Ageev, A.I., Radina, V.A.: Metodika cifrovoj ekonomiki v chasti upravleniya i kontrol’noj deyatel’nosti v real’nom sektore ekonomiki. Ekonomicheskie strategii, 21(3) (161), 44–56 (2019) Gasparėnienė, L., Remeikienė, R., Bilan, Y., Ginevičius, R., Čepel, M.: The methodology of digital shadow economy estimation. E & M: Ekonomie a Management 20(4), 20–33 (2017) Hong, J., Lee, J.: The role of consumption–based analytics in digital publishing markets: implications for the creative digital economy. In: ICIS 2017: Transforming Society with Digital Innovation, p. 38 (2018) Komarevtseva, O.O.: A model for assessing the development of the economy of the “future cities” based on the regression data parameter constructive coste model. In: IOP Conference Series: Earth and Environmental Science (2019) Lyapina, I., Sotnikova, E., Lebedeva, O., Makarova, T., Skvortsova, N.: Smart technologies: perspectives of usage in higher education. Int. J. Educ. Manag. 33(3), 454–461 (2019) Merzlyakova, A.Yu.: Osobennosti cifrovoj ekonomiki v Rossii. Vestnik nauchnyh konferencij 44(32), 74–76 (2018) Munina, M.V.: Perspektivy razvitiya cifrovyh tekhnologij v ekonomike. Nauchnoe obozrenie 23, 89–93 (2017) Radina, V.A.: Metodika «Cifrovoj ekonomiki» v chasti upravleniya i kontrol’noj deyatel’nosti v real’nom sektore ekonomiki. Menedzhment i biznes-administrirovanie 2, 48–66 (2019) Shvecov, Yu.G.: Cifrovaya ekonomika i tendencii ee razvitiya. Nalogi i finansy, 1(37), 35–39 (2018) Stroeva, O., Zviagintceva, Y., Tokmakova, E., Petrukhina, E., Polyakova, O.: Application of remote technologies in education. Int. J. Educ. Manag. 33(3), 503–510 (2019) Sutherland, W., Jarrahi, M.H.: The sharing economy and digital platforms: a review and research agenda. Int. J. Inf. Manag. 43, 328–341 (2018) Volokitin, Yu.I., Kupriyanovskij, V.P., Grin’ko, O.V., Pokusaev, O.N., Sinyagov, S.A.: Problemy cifrovoj ekonomiki i formalizovannye otnologii. Int. J. Open Inf. Technol. 6, 87–96 (2018) Vorobev, A.D.: Cifrovaya ekonomika i ekonomika znanij. Problemy sovremennoj ekonomiki 1 (69), 16–22 (2019) Liu, X.: Digital economy and future education. In: Kostinsky Readings. Collection of the Materials of the First Scientific and Practical Conference, pp. 814–815 (2018)

Museum in a Single Digital Space Elena B. Ivushkina1(&), Elena V. Dashkova2, Natalya Z. Alieva1, Irina B. Kushnir1, and Anton N. Samodelov1 1

Don State Technical University, Rostov-on-Don, Russian Federation [email protected], [email protected], [email protected], [email protected] 2 Chechen State University, Grozny, Russian Federation [email protected]

Abstract. A museum, according to the essence of its activities, is a peculiar kind of repository of historical-cultural heritage of humankind. Museum activities are transformed through computing technologies. A contemporary museum integrates traditional collecting methods and sophisticated communication technologies. The trend of development of inter-museum unity intersects with the trend of the emergence and hasty growth of inter-museum information space. The electronic information space which is currently taking shape is the newest form of overcoming the “isolation” of the museum as a social institution. Contemporary museum is an information and integration center, which represents an association of various museum structures, types and forms of activity. By expanding the information space, the museum expands the circle of its partners, takes on the role of a center for civic initiatives, which helps solving social and economic problems. A single digital space contributes to the promotion of museums, increase in the range of museum services provided via use of digital technologies, improvement of quality of information services, and in general, enhances the importance and significance of museums in contemporary knowledge society. Keywords: Information society


Digital space
Culture

1 Introduction The informatization process covered all fields of activities. The introduction of state-ofthe-art information technologies became an indicator of the accomplished information revolutions of recent generations, the end result of which was the information society. A microprocessor become the guide to the information society. Writing and later book-printing brought revolutionary informational transformations to society. However, it was a transfer of information, not a processing of it. Today, information technologies, based on electronic technologies, provide infinite possibilities for processing, storing, transmitting information, copying it, standardizing presentation of information, and adapting it to various categories of users. The economic and sociocultural components of life of society directly depend on information, namely the degree of its accessibility and use. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 637–646, 2020. https://doi.org/10.1007/978-3-030-47945-9_69

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It appears that information is the primary resource, such as tangible or power resources. Therefore, the same basic questions are formulated in relation to it: the owner of this resource who is interested in this resource, how much this resource is accessible, whether this resource can be used commercially. The set of information resources created by entities of the information sphere, means of interaction of such entities, their information systems and the necessary information infrastructure, form information space. Information technologies are growing rapidly. An average person goes behind them. As a result, a new type of discrimination appears. In comparison, book-printing made people learn to read, the use of information technologies entails the proliferation of computer literacy, the ability to use information located on the Web. It appears that campaign to eradicate illiteracy which has been recently launched in the global community will lead to an increase in the number of advanced users. Over time, this indicator will become as important an indicator of the country’s development as once was the indicator reflecting the number of people who could read and write. There was a massive informatization process across the country. Information technologies were introduced in all spheres of life. The informatization was aimed at improving efficiency of activities of enterprises, democratization, humanization, harmonization and humanization of society. Information flows bring the development of society to a new level. All primary resources are updated through information resources. Information resources are selfdeveloping and self-organizing with the support of state policy. Their receipt, storage, and use determines the value of material, power, and organizational resources of the information society. Information becomes a strategic resource in the current information society. It defines the key systems of a sustainment society and the sustainability of a society. In fact, this is evidenced by the emergence of computer networks, where information has a huge impact on the development of the global community. The introduction of information and communication technologies determines the fundamental changes in society, that are much wider than the appearance of books and cinema. A new lifestyle is being established; relations between entities at various levels are getting fuzzy; a new global type of human thinking is being formed.

2 Theoretical Basis of Research The communication approach in the field of culture is the main trend that determines the line of thought of the global community. At the same time, as analysis of the literature shows, the structural views of communication in the field of culture, which are used by various authors, have not yet been reduced to a single typology. The analysis of the current sociocultural situation is indicative of the complex interactions of global and local processes taking place in the field of culture. The museum has always been traditionally perceived as a repository of historical and cultural heritage. Museums contribute to education. At this time, however, we should

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talk about the innovative museum belonging to the category of “active”. This work is based on the implementation of various methods: animation, audiovisuals, theatricality. Back in 1984, according to the Quebec Declaration, a transition to the active museum was to take place. And if it was a novelty back then, in our time it has become a necessity. The interpretation of the modern museum is represented by a wide range of directions. There is an integration of positions and principles of museum activities with the communicativeness of visitors represented by various categories. The emphasis in museum activities is placed on the emotions of visitors. A museum is a place where cultural interaction takes place, where a connection between feelings and knowledge is established. If we speculate on the direction in which museums are currently developing, we can say that today, having experienced revolutionary changes, they are looking for innovations in solving their problems. Overcoming the lag of museums in the field of informatization is a fundamental step in maintaining their positions in society, it is an opportunity to influence the processes taking place in it, and, therefore, to influence the formation of culture. Such a category as “electronic exhibition area” has become common among the museology experts. However, it should be noted that the exhibition area in this case means not only exhibition halls with the sequence order of visitors to the museum, but also a complete set of digital information offered to visitors. This set of information includes: touch kiosks and projection devices, information centers located next to exhibition halls, multimedia cinemas, rooms equipped with computers with Internet access, etc. The primary goal of the information and exhibition complex is the integration of cultural and scientific potentials of a museum, correlation with the interests of society, organization of targeted exhibition area focused on various categories of visitors. In communication areas, visitors can independently use information resources of a museum. In some areas these resources are represented by a museum website, while in others they are represented by software and databases specially developed for the information center; users can be enter their own information in them. The inclusion of interactive components in the exposition is primarily inherent in natural science museums – natural biology, technology, ethnography, and history museums. They mostly use reference and information electronic kiosks that specify the section of the exposition of subjects of interest. The information and exhibition environment of such an electronic complex immerses a visitor in a virtual world, reconstructed in the halls of the museum. The reproduction of information is facilitated by touch and projection screens, as well as mechanical and electronic elements specially made and built-in into exposition. Such a transformation goes far beyond the modernization of existing exhibition areas, for which it is usually enough to involve designers and equip exhibition areas with modern technical means. Museums are actively using 3D technologies. Museum kiosks are presented in the form of an electronic book with a touch panel. Visitors can “flip through” this book

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page by page. Drawings and schemes from this book can be displayed enlarged on a separate panel. Another innovation is the restoration of events of days long-gone. 3D television is used to reconstruct episodes of the life of ancient people, reflecting their life. In order to more accurately address the exhibition to various categories of visitors, the contemporary museum is improving the museum communications system. This process is facilitated by the integration of cultural and scientific potential. Cloud technology is one of the possible integration methods. It forms a single information space and serves as a single guide simultaneously to various museums that are geographically detached from each other at great distances. This technology is useful for moving exhibits. Moving the information component (for example, electronic guides, information kiosks, interior lighting solutions) allows quickly expanding the exposure in a new place, which reduces the time and money costs of this process. Museums are not satisfied with what has already been achieved; they are in a continuous search for new forms of displaying their collections; besides, they are developing new methods for interacting with the audience. A museum, according to the essence of its activities, is a peculiar kind of repository of historical-cultural heritage of humankind. “Museology at the present stage is one of the fastest growing fields of culture. The museum in the modern world still remains the most accessible cultural institution, capable, due to the presence of collections transmitting cultural values, of taking part in the formation of the intellectual culture of man and society. “With its richest collections, the museum can use them as a trigger so that a man could understand his role in the present by learning his historical past” [1, p. 11]. Today, museum activities are transformed through computing technologies. A contemporary museum integrates traditional collecting methods and sophisticated communication technologies. A museum can exist only if it is based on collections of objects of museum value. Therefore, formation of holdings of a museum is of particular significance in museum activities. Working with museum objects has long been the most labour-intensive work in a museum. The description of museum objects, their attribution, making numerous entries in scientific inventory books and in scientific passports of museum objects took a good deal of time. The integration of modern computer technologies into museum activities helped solve this problem. Local computer-aided systems “Atlant” of the State Hermitage Museum, “Nika” of the State Historical Museum, the system of the State Darwin Museum and a number of other systems created in Russia serve as examples of such work. Accounting and custodian programs are implemented in the domestic museum system: “(Computer-aided system)” Muzey “(developed by the Main Information-Computing Center of the Ministry for Culture of the Russian Federation) and Integrated Automated Museum Information System (IAMIS) (software product of OJSC “Alt-Soft”, Saint Petersburg)” [2]. The results of the introduction of computer-aided systems in Russian museums are presented in Table 1.

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Table 1. Results of the introduction of computer-aided systems in Russian museums. Museum type Military history museums Historical and architectural museums Museums of local lore

Literary Museums Memorial museums

Computer-aided system “Muzey” Open-air museums “The Battle of Kursk”, museum preserve “Borodino” Museum of wooden architecture “Malye Korely”, Arkhangelsk Rostov regional museum of local lore (Rostov-on-Don), museums of local lore in Chelyabinsk, Kirov, Arkhangelsk et al. Oryol United State Literary Museum named after I. Turgenev and I. Bunin The state memorial and natural museum preserve named after I. Turgenev “Spasskoye-Lutovinovo”

IAMIS Tula state armory museum Historical, architectural and ethnographic museum preserve “Kizhi” Museums of local lore in Samara, Togliatti, Syzran

Museum “Manor of the Rukavishnikovs”, Nizhny Novgorod Fyodor Dostoevsky literarymemorial museum, St. Petersburg Anna Akhmatova state literary-memorial museum, St. Petersburg et al.

Thus, computer-aided systems are used today not only in large museums in the capital of the country, but also in highly specialized provincial museums. Computer-aided systems have become indispensable tools for all types of activities of a contemporary museum: recording, description and storage of museum pieces, creating a video bank of images of museum pieces, carrying out research activities and regional studies, exposition and exhibition activities, dealing with visitors to a museum. Introduction of computer-aided systems into museum activities became one of the stages in creating a single digital space in the sociocultural sphere. Another important trend is characterized by the integration of museums of various types and profiles and the creation of a single information space of museums. The trend of development of inter-museum unity intersects with the trend of the emergence and hasty growth of inter-museum information space. The electronic information space which is currently taking shape is the newest form of overcoming the “isolation” of the museum as a social institution. In a point of fact, a user often gets involved in the online museum community via the websites of museums. This being said, many of them are created on the principles of interactivity and dynamic update of information. As a result, opportunities for dialogue and communication are created. Passive consumption of information fades into insignificance, and a regular visitor to a museum website becomes an unofficial member of the museum community. At present, in the evolving museum information infrastructure, a “visitor” is giving way to a “partner”, who is increasingly getting involved in the museum-related processes and is able to influence them.

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3 Methods and Objective Database of Research The methodology of our study is comprehensive, which is due to the interdisciplinarity of approaches to the study of the issue. The study of the issue of global information space is a complex and ambiguous process of using a whole range of philosophical and general scientific methods: analytical, phenomenological, standards of objectivity, common bond, contradiction, methods of comparative analysis and synthesis, scientific generalization. The study used a conceptual and logical analysis of theoretical definitions to define the term “global information space” for a sociocultural context. This process involved the methods of historical and genetic analysis of scientific methodology to analyze its refocusing from a formal theoretical attitude to a socially important attitude. The initial methodological idea of the study is the dialectic and systemic approaches.

4 Results Contemporary museum is an information and integration center, which represents an association of various museum structures, types and forms of activity. In our opinion, contemporary museum must include the following branches [2]: 1. The information and publishing center which is based on the automation of museology through the computer-aided museum systems described above. The information and publishing center is possible in case of creation of an inter-museum network of electronic communications which is integrated in the Internet. This branch of a contemporary museum is also involved in creating online catalogs of its collections, development of electronic publications and their replication on CD-ROMs. Hence, a technology will be developed which will shifts the development of electronic publications on CD-ROMs from the area of interpretative techniques into the area of social fulfillment. 2. Cultural center is an exhibition and presentation platform for the implementation of innovative museum projects. 3. Professional Advisory Center – an advisory service to facilitate the dissemination of professional knowledge. The work of the Professional Advisory Center (PAC) should primarily be focused on regional provincial museums whose employees experience the most acute shortage of professional information. Stage 1 of the PAC activity involves creating own information resources and holding trainings – internships and a regional-level project workshop for museum staff. The technological infrastructure of the PAC is formed in the same period. It should include modern computers, a printer and a copying machine, a voice recorder, a camera, a video camera, demonstration equipment (TV and VCR, multimedia projector with a screen) to provide home and away educational programs. Such technical capacity will enable the center to: – Regularly update the news of museum activities on the Web, while notifying the media (newspapers, radio and TV) of them.

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– Receive and provide latest information. Use conventional mail and email to perform regular mass distribution of messages about scheduled workshops, activities of charitable foundations, news about cultural life and museum events. – Improve the quality and efficiency of counselling through the use of capabilities of professional Internet resources. – Provide (together with other units) the technological infrastructure of conferences, workshops, and traineeships held by museums. In conclusion, we can state that today museums have entered a new stage of their development, where special emphasis is placed on the issue of the inclusion of a museum into the modern information space. A contemporary museum is a significant resource for the formation of the communication space. This provision can be visualized in the form of a figure (Fig. 1).

B Information resources

C Virtual design

Designation (description)

A Cultural resources

Analysis of information

Interpretation

D Information technologies Promotion (social realization)

Fig. 1. Diagram of the information process in a museum.

This process can be taken as a basis for the activities involving creation of information and integration centers on the basis of a certain museum. The activities on creation of this center can be implemented by means of the following stages:

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1. Computerization of the museum – purchasing appropriate equipment and software products, as well as training employees to work with this equipment and software. Computerization is an obligatory event for all of the following types of internal activity of a contemporary museum. 2. Creation of local databases for documents, collections and museum collections. This work is carried out as part of the museum’s fund activities and includes the development or acquisition of database management software; installing it in all local computers of employees responsible for the classification of the collection; training employees to work with it; data input; the use of created database on local computers with the ability to transfer data to portable storage media (e.g. disks). Electronic museum collections are electronic catalogs and arrays of electronic samples of museum objects united in the information environment of the museum. 3. Installation of local area networks in the museum. As a result of such an event, all computers in the institution are able to communicate with each other through special electronic systems. 4. Formation of the integrated database on the basis of local area networks. As a result, each employee with the appropriate access rights can use the entire amount of information entered in the database from different computers of the local network. This stage also results in the creation of electronic museum libraries. 5. Creation of information systems for museum visitors. For example, installing monitors in the exhibition halls of the museum, which display additional interactive information on the exhibition. 6. Creation of advertising and educating electronic publications on CD-ROMs, their replication and distribution. Such a project may at the very least result in an increase of the popularity of the institution. With a competent approach to promoting the CDs, it can bring financial benefits. 7. Internet connection of a museum. The significance of this step can hardly be overestimated. Museum staff receive the opportunity to get acquainted with the specialized professional resources of the World-Wide Web, gain access to the information array and are included in international communication. 8. Creation of the advertising and educating web-branch of a museum. In this case, we are referring to the creation of the website. This kind of activity, with a competent approach to it, can bring considerable dividends, not only moral but also material, due to wide dissemination of information about the museum, its collections and services. 9. Maintenance of the web-branch of a museum. If the information resource has been created, it should be used. The popularity of this resource can be significantly increased through constant update of information. The classification scheme of types and kinds of information activities of the museum through computing technologies is shown below for more clarity (Fig. 2).

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Activities aimed at using computer technology in the field of culture Internal activity Computerization of cultural establishments

Creation of local area networks

Creation of local databases

Creation of integrated databases on the basis of local area networks

External activity

Creation of data CDs

Creation of resources for visitors

Connection to the Internet

Creation of the web-branch

Maintenance of the web-branch of a museum

Creation of a virtual branch on the Internet

Required relations Preferable relations

Fig. 2. Kinds of information activities of the museum through computing technologies.

5 Conclusion In this day and age, activities on creation of information and integration centers as part of museums express the intention of an organization to take an active part in territorial development, to influence the cultural situation in its region, to upgrade the tools and technologies of professional activities. In addition, by expanding the information space, the museum expands the circle of its partners, takes on the role of a center for civic initiatives, which helps solving social and economic problems. A single digital space contributes to the promotion of museums, increase in the range of museum services provided via use of digital technologies, improvement of quality of information services, and in general, enhances the importance and significance of museums in contemporary knowledge society. The electronic information space becomes a form of overcoming the “isolation” of the museum as a social institution. Stage 1 in this field involves automation of museum activities. For this end, computer-aided systems “Muzey”, “IAMIS”, “NIKA-Muzey” are currently used in Russia. This is followed by the involvement of a user in the online museum community via the websites of museums. As a result, opportunities for dialogue and communication are created. Passive consumption of information fades into

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insignificance, and a regular visitor to a museum website becomes an unofficial member of the museum community.

References Lapteva, M.A.: Museum as a social institution (social and philosophical analysis): synopsis of the thesis of Candidate of philosophical sciences: 09.00.11. Siberian State Aerospace University named after academician Mikhail Fedorovich Reshetnev, Krasnoyarsk, p. 24 (2006) Ivushkina, E.B., Dashkova, E.V.: Introduction of modern means and methods of computer sciences into the field of information support of museums. Gumanitarnye i Sotsial’nye Nauki, (2), 967–970 (2014) Nasedkin, K.A.: Computerization of Russian museums: from the simple to the complex. In: Museum and Technical Innovations, pp. 131–141. Progress-Traditsiya (1999)

The Digital Approach to Managing Region’s Marketing Activities for Accelerating Its Growth and Development Yulia I. Dubova(&) Volgograd State Technical University, Volgograd, Russia [email protected]

Abstract. Purpose: The purpose of the paper consists in developing a concept of the digital approach to managing region’s marketing activities for acceleration of its growth and development and in substantiating the expedience of its application by the example of modern Russia’s regional economy. Design/methodology/approach: The author uses regression analysis for determining the contribution of each direction of place marketing – namely, regulation of socio-economic position, attraction of investments into region’s development, stimulation for innovative development of a region, and protection of region’s environment – into provision of competitiveness as the most important manifestation of region’s growth and development in the conditions of the market economy. The research objects are top 10 regions of Russia in the competitiveness ranking for 2019. Findings: It is substantiated by the example of modern Russia that there’s a necessity for the digital approach to managing region’s marketing activities for acceleration of its growth and development. The arguments in favor of the offered hypothesis include technological barriers on the path of determination of the social and ecological problems of the regions, its needs for innovations, conduct of monitoring of the economic activities in the regions, and communications between regional authorities and interested parties. Originality/value: As a result of practical implementation of the offered digital approach to managing region’s marketing activities for acceleration of its growth and development, it is offered to reduce the gap between regional authorities and interested parties by using simplified communications based on digital technologies. Secondly, it is recommended to increase social justice in the region. Thirdly, to accelerate diffusion of innovations in the region and use the program-oriented investment and innovative activities in the region. Fourthly, to improve the state of the environment in the region. The systemic result will consist in increase of region’s competitiveness and acceleration of its growth and development in the long-term. Keywords: Digital approach
Digital economy
Managing region’s marketing activities
Place marketing
Growth and development of region Region’s competitiveness
Regions of Russia JEL Code: D91
E01
F42
F43
F64
Q01
Q15 O38
Q56
Q57
O13
O41
O43
O44
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O31
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© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 647–654, 2020. https://doi.org/10.1007/978-3-030-47945-9_70

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1 Introduction Provision of acceleration of growth and development is among the most important tasks of state management, the manifestation of which in the conditions of the global market economy is competitiveness of a territory (region). While in developed countries, where the general level of competitiveness of the national economy is relatively high, disproportions between regions are not strong, while in developing countries they are high and require reduction. It is necessary to pay attention to the experience of countries with transitional economy, in which regulation of growth and development of region’s economy was performed (up to recently) through planning; only in the recent ten years the practice of place marketing became institutionalized. A vivid example of these countries is Russia. The initial point of this research is the hypothesis that in the age of the Fourth industrial revolution it is necessary to start a new wave of modernization of the practice of state management of growth and development of region – based on opportunities of the digital economy. It should be noted that in the context of digitization the example of Russia is also very good – for Russia was present in the rating of 63 digital economies of the world (IMD 2013–2019). The logic of the offered hypothesis is that foundation on the traditional approach to place marketing leads to excessive gap between regional authorities and economic subjects in the region, which does not allow for full implementation of the potential of increase of region’s competitiveness – which hinders its growth and development. The purpose of the paper consists in developing a concept of the digital approach to managing region’s marketing activities for acceleration of its growth and development and in substantiating the expedience of its application by the example of modern Russia’s regional economy.

2 Materials and Method Certain issues of place marketing in Russia are studied in the works Dubova (2019), Dubova et al. (2017a, b, 2019) and Popkova et al. (2017). The value and essence of transition to the digital economy, including at a region’s level, are reflected in the works Belokurova et al. (2020), Petrenko and Shevyakova (2019), Popkova (2019), Popkova and Gulzat (2020a, b), Popkova and Zmiyak (2019), Popkova and Sergi (2019), Ragulina (2019), Ragulina et al. (2019), Sergi et al. (2019a, b, c) and Shulus et al. (2020). However, insufficient elaboration of the need for and perspectives of formation and development of digital place marketing is a gap in the current scientific knowledge. Regression analysis is used for determining the contribution of each direction of place marketing – namely, regulation of socio-economic position, attraction of investments into region’s development, stimulation of innovative development of region, and protection of region’s environment – into provision of competitiveness as the most important manifestation of region’s growth and development in the conditions

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of the market economy. The research objects are top-10 regions of Russia in the 2019 competitiveness ranking (Table 1). Table 1. Statistics of the result and directions of place marketing of top 10 regions of Russia in the 2019 competitiveness ranking. Region

Index of competitiveness, points 1–5

Index of socioeconomic position, points 1–100

Position in the ranking of investment climate, position 7

Regional innovative index, shares of 1

Ecological index, points 1–100

Moscow 3.80 75.922 0.4616 46 Oblast Republic of 3.62 75.069 2 0.5375 56 Tatarstan Krasnodar 3.45 64.066 13 0.3723 61 Krai Sverdlovsk 3.19 67.910 n/a 0.4570 43 Oblast Krasnoyarsk 3.06 57.034 n/a 0.4124 46 Krai 2.95 78.398 17 0.3924 47 KhantyMansi Autonomous Okrug Rostov Oblast 2.94 59.238 n/a 0.3943 58 2.82 58.715 14 0.4957 46 Nizhny Novgorod Oblast Chelyabinsk 2.82 57.264 n/a 0.4288 42 Oblast Republic of 2.80 62.695 16 0.4118 53 Bashkortostan Source: compiled by the authors based on LC-AV (2020), Agency for Strategic Initiatives (2020), Green Patrol (2019), (National Research University “Higher School of Economics”) (2020), RiaRating (2020).

3 Results Based on the data from Table 1, graphic results of place marketing and the consequences for growth and development of top 10 regions of Russia in the 2019 competitiveness ranking are shown in Figs. 1, 2 and 3, 4.

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Competitiveness index, points 1-5

Index of socio-economic position, points 1-100 90 75.922 78.398 75.069 80 67.91 64.066 62.695 59.238 70 58.715 57.264 57.034 60 50 40 30 20 10 0

4 3.5 3 2.5 2 1.5 1 0.5 0

y = 0.027x + 1.3735 R² = 0.3788

0 50 Index of socio-economic position, points 1-100

100

Fig. 1. Results of managing the socio-economic position and the consequences for growth and development of top 10 regions of Russia in the 2019 competitiveness ranking. Source: calculated and compiled by the author.

As shown in Fig. 1, the best socio-economic position was observed in 2019 in Moscow Oblast (75.922 points), the Republic of Tatarstan (75.069 points), and the Khanty-Mansi Autonomous Okrug (73.398 points). Improvement of the socioeconomic position of region by 1 point leads to increase of its competitiveness by 0.027 points, correlation – 37.88%. The most probably reason of insignificant contribution of place social marketing in regions of Russia into their growth and development is high complexity of determining the categories of population that require social support and of determining the most popular social programs, due to failures in feedback between population and regional authorities.

Position in the investment climate ranking, place 17 16 14 13 7 2

4.5 Competitiveness index, points 1-5

18 16 14 12 10 8 6 4 2 0

4

3.5 3

2.5 2

1.5

y = -0.0616x + 3.9483 R² = 0.6725

1

0.5 0

0

5 10 15 20 Position in the investment climate ranking, place

Fig. 2. Results of investments management and the consequences for growth and development of top 10 regions of Russia in the 2019 competitiveness ranking. Source: calculated and compiled by the author.

Regional innovations index, shares of 1 0.6 0.5375 0.4957 0.457 0.5 0.4616 0.4288 0.4124 0.4118 0 .3943 0.3924 0.3723 0.4 0.3 0.2 0.1 0

Competitiveness index, points 1-5

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4 3.5 3 2.5 y = 2.3829x + 2.1051 R² = 0.116

2 1.5 1 0.5 0 0

0.2 0.4 0.6 Regional innovations index, shares of 1

Ecological index, points 1-100 70 60 50 40 30 20 10 0

56 46

61

58

43

46

47

46

53 42

Competitiveness index, points 1-5

Fig. 3. Results of innovations management and the consequences for growth and development of top 10 regions of Russia in the 2019 competitiveness ranking. Source: calculated and compiled by the author.

4 3.5 3 2.5 2 y = 0.0136x + 2.4695 R² = 0.063 1.5 1 0.5 0 0 50 100 Ecological index, points 1-100

Fig. 4. Results of environment management and the consequences for growth and development of top 10 regions of Russia in the 2019 competitiveness ranking. Source: calculated and compiled by the author.

As shown in Fig. 2, the most favorable investment climate is observed in the Republic of Tatarstan (2nd position) and Moscow Oblast (7th position). Improvement of region’s position in the investment climate ranking by 1 position leads to increase of its competitiveness by 0.0616 points, correlation – 67.25%. Complexity of attracting investments in regions of Russia includes lack of transparency of their economies and absence of the regional list of investment projects. As shown in Fig. 3, the highest innovative activity is peculiar for the Republic of Tatarstan (0.5375 points) and Nizhny Novgorod Oblast (0.4957 points). Growth of

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region’s innovative activity by 1 point leads to increase of its competitiveness by 2.3829 points, correlation – 11.60%. Low contribution of the innovative activities into growth and development of Russia’s regions’ economy consists in complexity of selection of the investment and innovative projects that would be in the highest demand in a region. As shown in Fig. 1, the most favorable ecological situation is observed in Krasnodar Krai (961 points), the Republic of Tatarstan (56 points), and Rostov Oblast (58 points). Increase of the ecological index by 1 point leads to increase of its competitiveness by 0.0136 points; correlation – 6.30%. Low contribution of environment protection into growth and development of Russia’s regions is explained by limited opportunities for state stimulation of ecological responsibility of population and business with the traditional approach to place ecological marketing. The determine drawbacks and limitations of the traditional approach to place marketing are to be overcome by the presented digital approach to managing region’s marketing activities for acceleration of its growth and development (Fig. 5).

Region’s socio-economic system as a part of the national economy digital place marketing digital place marketing of E-government of innovations investments digital place social and ecological marketing Digital investors digital monitoring, Investment and feedback collection innovative activities in Digital business Digital society region’s interests

Digital universities 8

Fig. 5. The digital approach to managing region’s marketing activities for acceleration of its growth and development. Source: developed and compiled by the author.

The digital approach (Fig. 5) shows that the four following directions of place marketing, which should be based on digital technologies, are peculiar for regions of modern Russia: – Digital place marketing of investments: digital monitoring of implementation of investment projects in the region, with a regional portal of investment projects with reports on the course of their execution, and digital marketing communications with potential and current investors into region’s economy; – Digital place marketing of innovations: digital monitoring of business activity and activity of households in region, digital collection of feedback from population and business and its digital translation to universities for marketing support for their R&D in the region’s interests;

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– Digital place social marketing: digital promotion of social programs of the region, collection of feedback on evaluation of these programs and the current needs of the population; – Digital place ecological marketing: digital promotion of ecological values of the region and monitoring of their implementation. The subject of implementing these directions is e-government in the region, and the management objects are digital investors, digital universities, digital business, and digital society.

4 Conclusion Thus, as a result of the research by the example of modern Russia it has been substantiated that there’s a necessity for the digital approach to managing region’s marketing activities for acceleration of its growth and development. The arguments in favor of the offered hypothesis are technological barriers on the path of determination of social and ecological problems and region and its needs for innovations, conducting monitoring of the economic activities in region, and communications between regional authorities and interested parties. The results of practical implementation of the offered digital approach to managing region’s marketing activities for acceleration of its growth and development include reduction of the distance between regional authorities and interested parties in the aspect of growth and development of region (digital investors, digital universities, digital business, and digital society), due to more preferable and simpler communications based on digital technologies. Secondly, increase of social justice in region. Thirdly, acceleration of the diffusion of innovations in region and the program-oriented orientation of investment and innovative activities in region. Fourthly, improvement of the state of environment in region. The systemic result envisages the increase of region’s competitiveness and acceleration of its growth and development in the long-term.

References Belokurova, E.V., Pizikov, S.V., Petrenko, E.S., Koshebayeva, G.K.: The institutional model of building the digital economy in modern Russia. Lecture Notes in Networks and Systems, vol. 87, pp. 64–70 (2020) Dubova, Y.I.: Information and communication technologies as a modern institute of increase of effectiveness of marketing activities in Russia. Advances in Intelligent Systems and Computing, vol. 726, pp. 386–392 (2019) Dubova, Y.I., Dugina, T.A., Korabelnikov, I.S., Gornostaeva, Z., Alekhina, E.: Institutional traps as barriers for development of regions’ marketing activities. Contributions to Economics, pp. 219–225 (2017a) Dubova, Y.I., Golikov, V.V., Gornostaeva, Z.V., Zhidkov, V.: Institutional frameworks of place marketing in Russia: barriers and new possibilities. Lecture Notes in Networks and Systems, vol. 57, pp. 213–218 (2019)

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Dubova, Y.I., Koryakina, T.V., Chimonina, I., Bogoviz, A.V.: Institutionalization of successful practices of place marketing within Russian–European cooperation. Contributions to Economics, pp. 255–260 (2017b) LC-AV: Ranking of Russia’s regions’ competitiveness (2020). http://lc-av.ru/wp-content/ uploads/2018/10/LC-AV.RCI-2018-181021.pdf. Accessed 13 Jan 2020) Petrenko, E.S., Shevyakova, A.L.: Features and perspectives of digitization in Kazakhstan. Studies in Computational Intelligence, vol. 826, pp. 889–899 (2019) 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., 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., Poluyufta, L., Beshanova, Y., Popova, L.V., Kolesnikova, E.: Innovations as a basis for marketing strategies of Russian oil companies in the conditions of oil prices reduction. Contributions to Economics (9783319606958), pp. 449–455 (2017) 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. (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. Studies in Systems, Decision and Control, vol. 169, pp. 167–174 (2019) Ragulina, Y.V., Semenova, E.I., Avkopashvili, P.T., Dmitrieva, E.A., Cherepukhin, T.Y.: Toppriority directions of implementing new internet technologies on the territories of rapid economic development. Advances in Intelligent Systems and Computing, vol. 726, pp. 182– 188 (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 (2019a) Sergi, B.S., Popkova, E.G., Sozinova, A.A., Fetisova, O.V.: Modeling Russian industrial, tech, and financial cooperation with the Asia-Pacific region. In: Sergi, B.S. (ed.) Tech, Smart Cities, and Regional Development in Contemporary Russia, pp. 195-223. Emerald Publishing Limited, Bingley (2019b) Sergi, B.S., Popkova, E.G., Borzenko, K.V., Przhedetskaya, N.V.: Public-private partnerships as a mechanism of financing sustainable development. In: Ziolo, M., Sergi, B.S. (eds.) Financing Sustainable Development: Key Challenges and Prospects, pp. 313–339. Palgrave Macmillan (2019c) 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) Agency for Strategic Initiatives: National ranking of the state of investment climate in the subjects of the Russian Federation (2020). https://asi.ru/investclimate/rating/. Accessed 13 Jan 2020 Green Patrol: Ecological ranking of Russia’s regions – 2019 (2019). https://greenpatrol.ru/ru/ novosti/ekologicheskiy-reyting-leto-2019. Accessed 13 Jan 2020 National Research University “Higher School of Economics”: Ranking of innovative development of subjects of the Russian Federation in 2019 (2020). https://issek.hse.ru/rirr2019. Accessed 13 Jan 2020 RiaRating: Rating of the socio-economic position of Russia’s regions – 2019 (2020). https:// riarating.ru/infografika/20190604/630126280.html. Accessed 13 Jan 2020

Social Environment of the Fourth Industrial Revolution and Its Consequences for Mankind

Research on Employers’ Attitude Towards Elderly Workers Elena B. Zavyalova(&) and Tatyana Krotova MGIMO University, Moscow, Russia [email protected], [email protected]

Abstract. The goal of this research is to show that in the current Russian situation of dynamic aging of the population, in which pensioners account for almost a third of the country’s population, government participation in creating jobs for senior people and ensuring their preservation are essential. This is impossible without the state participation. There are two types of measures to influence employers in this matter: “restrictive” and “incentive”. The governments of most foreign countries faced with this problem are introducing “restrictive” measures. However, there is a very effective experience of countries applying a combination of “restrictive” and “stimulating” measures. Russian employers, on their turn, request Government “incentive” measures, which give the right to tax benefits or subsidies to employers who employ pensioners, but do not deny the effectiveness of “restrictive” measures too. Keywords: Elderly people employment
State support for employment Federal funding of employer
Older workers
Pension reform
Age discrimination
Aging population
Silver economy JEL Code: J14





J28
O15
P21
H55

1 Introduction The problem of people of retirement and pre-retirement age employment has become acute in many countries of the world where the population of retirement age is constantly growing due to improved quality of life and health care with a steady decrease in the number of working-age people. According to Rosstat, in Russia the total number of people of retirement age accounts for 30% of the country’s population (43.9 million people) in 2019 (Rosstat 2019) (the total number of people receiving a pension is 46.07 million people, as it includes people receiving disability pension, loss of breadwinner pension, etc.), and it is projected to increase by 12% by 2035 (rbc.ru 2019). The number of economically active population will decrease by 3.7% (CBR 2018), amid a general decrease in the population by 2% (2.9 million people) by 2035. According to the Bank of Russia forecasts, this situation triggers a drop in GDP by 0.46% annually in the period from 2019 to 2025 with a slowdown in this fall to 0.16% annually from 2026 to 2035 (due to a decrease in the number of people under working © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 657–670, 2020. https://doi.org/10.1007/978-3-030-47945-9_71

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age after 2025) (CBR 2018). In 2019 the demographic burden is 1.7 people of working age per 1 pensioner (Rosstat 2019) (in 2035 1.8 people of working age per 1 pensioner (CBR 2018)). The increased retirement age will greatly help to improve the situation, as will reduce the number of retired by 3.4 million people by 2035 (easing the demographic burden to 2.6 people of working age per 1 pensioner), leaving them in the category of economically active population, which will add 0.22% annually to GDP growth in the period through to 2025 and 0.15% annually in the period from 2026 to 2035. In conjunction with the foregoing, the problem of creating jobs for senior people is extremely urgent. As can be seen from Fig. 1, the number of working pensioners over the past few years has declined both in absolute and in relative terms. One of the reasons for this decrease is the low attractiveness of pensioners in the labor market compared to younger candidates.

Fig. 1. The ratio of the working pensioners number to the total number of pensioners in Russia. Souce: Rosstat data for 01.01.2019. URL: https://www.gks.ru/search?q=чиcлeннocть+пeнcиo нepoв (date of reference: 25.11.2019 г.)

According to the survey conducted by the authors in the framework of the “Companies for All Ages” project (companies4all.ru 2019), in which 1,193 employers took part, including top managers, the heads of departments and HR managers of companies of various forms of ownership and number of employees, at present, only 3% of employers hire older workers without special conditions. Employment of retirement and pre-retirement age people, according to employers, is mainly hindered by the following factors: 1) in a high developing world, the requirements for skills and knowledge of specialists in the labor market are rapidly changing, making it difficult for senior people to keep pace with these changes;

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2) the health status of senior people does not allow them to work in the required rigorous schedule; 3) retirees are less efficient and ambitious than young specialists; But only 6% of the surveyed employers do not want to hire elderly workers, regardless of state support. The others are interested in state support and may reconsider their attitude to the labor market, depending of the form of this support (Report “Employers for older professionals: do companies need state support” 2019). Consequently, government intervention in stimulating employers and fostering retirees employment is necessary. Methodology. The research is based on analysis of online questionnaire survey of employers’ data and foreign experience. In the research the following method was applied: a comparative analysis of conceptual literature (the works of foreign and Russian authors) pertaining to the understanding methods of state influence on employers. Analysis, synthesis method and inductive reasoning were applied to make a conclusion. Conclusions Classification of Measures and International Practice of Their Application The authors have studied the approach of governments of different countries global regions (the European Union, South-East Asia, America, Australia, New Zealand) to the problem of elderly specialists employment and adaptation, as well as job preservation for employees of pre-retirement and retirement age (companies4all.ru 2019). As a result of the study, a conditional classification of all measures that states are taking in order to stimulate the business community to hire older workers was formed. In general, they can be divided into two types: “stimulating” and “restrictive”. Incentive measures for the employers include financial incentives for companies to hire or retain elderly employees: subsidies for companies for hiring age professionals; subsidies for companies to provide benefits, flexible working conditions and financial support for elderly employees’ families; advanced training; grants for development of management practices for teams and adaptation of elderly employees; multi-age corporate culture; wellness programs; work environment; preferential tax system (Report “Measures of state support” 2019). Restrictive measures impose obligations or penalties on the employer: mandatory quotas for the reception of older workers; fines for refusing an elderly applicant; ban on the dismissal of employees of pre-retirement or retirement age; long-term contracts to elderly employees; compensation payments, additional voluntary payments or assistance in further employment upon dismissal of elderly employees; proportional dismissal of employees of different ages; flexible working conditions (Report “Measures of state support” 2019). Two combined tables (q.v. Table 1 and 2) of the “restrictive” and “stimulating” measures of state support for the elderly specialists employment in different countries are shown below. Employers traditionally prefer “incentive” measures, however, there is no country which would apply only “incentive” measures to support employers hiring senior people. Some governments prefer combining “restrictive” and “incentive” measures.

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The most complex state approach to the problem of employment of senior specialists has been observed in the Eurozone and Singapore. However, the measures applied in these countries are very different. In the EU countries, employers are mainly subject to “restrictive” measures and social support provided for senior people is strong. Singapore in this regard is a phenomenon compared to other countries of Southeast Asia. In Singapore, a set of measures of state support for senior population employment has been introduced, with employment of citizens up to 64 years old accounting for 66%, which is a very high figure. Australia’s experience in subsidizing companies while hiring elderly specialists is interesting. Australian companies can receive preferential payment systems and additional bonuses. Further, it is necessary to analyze the “restrictive” and “stimulating” measures severally in order to concretize measures of state support for senior specialists employment in different countries. It is reasonable to begin the analysis with “restrictive” measures. Restrictive Measures in Different Countries “Restrictive” measures applied by governments worldwide are provided in Table 1. As can be seen from Table 1, the governments of most countries in Europe and Asia apply “restrictive” measures towards employers in realm of creating jobs for senior people. In most EU countries legally enshrined (The silver economy brings hundreds of millions of Euros to the European Union annually 2019): • • • • • •

deadlines for notifying employees of the possible dismissal; amount of compensation payments upon dismissal; a ban on the dismissal and revision of the employment contract; maximum proportion of senior employees among those subject to reduction; fines for the dismissal of senior employees; support for laid-off senior employees.

The period of employees’ notification of the upcoming dismissal in Croatia is extended by two weeks in respect to an employee older than fifty years and by a month if the employee is older than 55 years. In Lithuania, this period is at least four months for employees of pre-retirement age (5 years before retirement). In Sweden, the termination notice period is doubled for workers over 55 years old (Ivanova 2018). The amount of compensation payments is also directly dependent on the employment term at the workplace. So in Estonia, the amount of the additional compensation payment is equal to the monthly salary if the experience at the last workplace is from 5 to 10 years. If the job seniority is more than 10 years, the payment is 2 monthly salaries (this payment is provided by the Unemployment Insurance Fund). In Germany, laid off senior employees are subject to additional payments, the maximum amount of which reaches the employee’s 12-month salary. Moreover, if an employee is older than 50 years and has an experience at the last place of work not less than 15 years, the amount of compensation increases to a 15-month salary. If the employee is over 55 years old and his experience is at least 20 years, it ratchets up to a 18-month salary (Heywood and Jirjahn 2016).

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employers

Russian

Expectations of

Russia

Australia

EU

Japan

New Zealand

Great Britain

USA

Singapore

#

Measures

Table 1. Comparison of restrictive measures and expectations of Russian employers. Connections between expectations of Russian employers and existent measures are marked by green color; mismatch is marked by red color.

Restrictive measures Obligations or penalties on the employer Mandatory 1.1

quotas for the

25% of

reception of

Russian

elderly

employers

workers Fines for 1.2

refusing an elderly applicant

Only 15% of Russian employers

Prohibition of 1.3

the dismissal

Only 19%

of employees

of Russian

of pre-

employers

retirement age 1.4

Penalty for the

Only 9% of

dismissal of an

Russian

elderly

employers

employee Long term 1.5

contract with an elderly employee

Only 6% of Russian employers

Special labor contracts for 1.6

hiring employees of pre-retirement

Only 6% of Russian employers

age (Continued)

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E. B. Zavyalova and T. Krotova Table 1. (Continued) Increase in compensation payments upon 1.7

dismissal of employees of pre-retirement

21% of Russian employers

or retirement age Additional 1.8

voluntary payments

1.9

Proportional

Only 12%

dismissal of

of Russian

employees of

employers

different ages 1.10

Mandatory support

Only 14% of Russian employers

Flexible

24% of

1.11 working

Russian

conditions.

employers

Assistance in further 1.12

employment upon dismissal of elderly employees

1.13

Compensation payments

Source: Compiled by the authors based on the data of report “State support measures of the “Companies for all ages” project” .

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In case of a forced downsizing, older workers are protected by law in most EU countries. In Spain, Norway, Sweden and the Netherlands (Elsayed et al. 2018), in case of a staff reduction in a company, the “last in, first out” rule is applied to protect older workers, and in Greece, the proportion of laid-off employees aged 55–64 years cannot be more than 10% of the total number of laid-offs. In some European countries, the prohibition of the dismissal of employees of preretirement age is legislatively introduced. Such a law is valid in Slovenia and Poland (Ivanova 2018). In other European countries, fines for employers for the dismissal of senior employees are legislatively prescribed. So in Finland, a fine is paid upon dismissal of an employee older than 55 years, the amount of payment depends on the salary. In Spain, there is a fine for the collective dismissal of employees over 50 years old for organizations with more than 100 employees. A fine is 60–100% of the amount of the laid off staff unemployment benefit. In Austria, organizations are obliged to support laid off senior employees in case of a wholesale redundancy. The employer is to provide a social plan of the negative consequences of such a reduction mitigation, which may include additional voluntary payments to the dismissed or assistance in their employment (Eurofound 2019). Among the non-European countries, special attention should be paid to measures taken by the Singapore government, where, according to UN forecasts about half of the population (47%) will be over 65 years old by 2050. Here, the retirement employment problem is approached in its entirety (Singapore Keeps Older Employees Working 2018). A number of “restrictive” measures of influence on an employer is applied in the country. According to the Act on Pensions and Employment Reinstatement, upon the employee’s attainment of the age of 62, an employer is recommended to use the following options: • Offer re-employment to the employee (in the previous or another position); • Transfer the re-employment obligations to another employer (with the consent of all parties); • Offer a one-off Employment Assistance Payment (EAP) to the employee if it is impossible to fulfill the first two points (it is 3.5 monthly salaries for specialists of 62–64.5 years old) (Singapore Keeps Older Employees Working 2018). Furthermore, employers are recommended to conclude labor contracts for a period of 5 years, not of 3, as previously recommended, when hiring specialists older than 62 years. It was also suggested increasing lump sum payments to $13,000 for specialists who cannot be re-employed in the previous job or find a new one. “Incentive” measures to support employers in various regions are provided in Table 2. So, in addition to the above “restrictive” measures, state support for the retirement age population employment in Singapore includes a number of “incentive” measures for employers.

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employers

Russian

Expectations of

Russia

Australia

EU

Japan

New Zealand

Great Britain

USA

Singapore

#

Measures

Table 2. Comparison of incentive measures and expectations of Russian employers. Connections between expectations of Russian employers and existent measures are marked by green color; mismatch is marked by red color.

Incentive measures Financial incentives for companies to hire or retain elderly employees 2.1

Employment subsidies

43% of Russian employers

Benefits, flexible working 2.2

conditions and financial support for families

2.3

Staff

29% of

development

Russian

grants

employers

Development of management 2.4

practices, recruitment and adaptation

Only 11% of Russian employers

of elderly employees 2.5

2.6

Mixed age culture Wellness programs

Only 6% of Russian employers Only 11% of Russian employers (Continued)

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Table 2. (Continued)

2.7

2.8

2.9

Job reorganization Preferential tax system Bonuses

Only 14% of Russian employers 57% of Russian employers 29% of Russian employers

2.10

Social advertising

Only 10% Russian employers

Source: Compiled by the authors based on the data of report “State support measures of the “Companies for all ages” project” .

The Career Support Program (CSP) provides for partial older employee’s salary compensation. Compensation is paid to employers who have hired a senior employee who has been on a job search for more than 6 months. Payment is made by installments during the year. For specialists aged 40–50 years, compensation is 20% of monthly salary within 1,400 dollars per month for the first 6 months of work and 10% for the next 6 months (within 700 dollars per month). For employees over 50 years old, compensation paid to employers amounts to 40% of their salary within 2,800 dollars per month for the first 6 months and 20% within 1,400 dollars per month for the next 6 months. In addition, employers undertake to organize free training for them in a new workplace. In Singapore employers receive state subsidies for the re-equipment of workplaces and the convenient workspace creation for senior employees (companies can receive up to 300 thousand dollars). Grants of up to $20,000 are also allocated to employers for managing older employees and developing age-based managerial practices for hiring and adaptation “Age Management Grant”. Grants are claimed by companies with at least 5 employees over 50 years old (More help for companies to support older workers, 2016). Employed citizens of 55–64 years old account for 66% owing to the above set of measures implementation. And that is observed in the country where traditionally the care of elderly parents is assigned to children. In Australia, where, according to the forecast, the number of Australians over 65 years old will more than double by 2055, a number of government programs, including incentive ones, is operating. Under the Restart state support program, an employer who

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has hired a job seeker over 50 years old can apply for a subsidy of up to $10,000 for 12 months, provided that this employee has been paid during minimum of 6 months (worker’s employment should be permanent, at least 15 h/week). When hiring an employee for a part-time position, a reduced basic subsidy is possible - from $3,250 (for 15–29 h/week employment) (Australia: the number of active and productive adults is growing rapidly 2019). The Restart program has already helped more than two thousand Australian older specialists with employment by reducing employer’s hiring expenses (Employment Services Outcomes Report 2019). Russian Practice The practice of the Russian Federation is of particular attention. In domestic practice, in general, there are fewer tools. Nevertheless, a support system for senior people employment exists. According to the labor legislation of the Russian Federation, pensioners who continue to work after reaching the retirement age are provided with a number of privileges compared to other employees: • reduced working hours for medical reasons (TK RF, Art. 23); • opportunity to arrange an additional two-week unpaid leave (TK RF, Art. 128); • employer cannot lay off a pensioner or refuse employment for reasons of age (TK RF, Art. 77, 78, 80, 81). A survey conducted by the authors within the “Companies for All Ages” project among Russian employers indicates a rather poor awareness of the existence of measures to state support in hiring people of retirement and pre-retirement age. So 40% of respondents are not aware of such measures not only in Russian but also in foreign practice, and only 19% are (Report “Employers for older professionals: do companies need state support” 2019). These are mainly representatives of nonprofit organizations, organizations in the field of education and health. The most famous measures of state support are re-skilling and additional training at the state expense, protection against dismissal and tax benefits, i.e. common and transparent support measures. Most employers (88%) in various fields believe that the state should play a leading role in supporting employers in people of retirement and pre-retirement age employment issues, with 21% of them considering that only the state is responsible for this task. Mostly these are heads of organizations operating in the field of education and information activities. And the others believe that this is the task of both the state and the target research group and the interested business sector. Restrictive measures against employers are completely unpopular. At the same time, employers do not exclude restrictive measures along with incentive measures. 93% of employers consider that incentive measures are effective. More than half of employers from the private sector considers the state intervention fruitful. Owners and managers of companies recognize only incentive measures, the heads of departments and HR managers are more conservative, the use of a set of measures is most popular with NPOs.

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At the same time, the following “restrictive” measures have been deemed the most effective by employers (Report “Employers for older professionals: do companies need state support” 2019): • Introduction of mandatory quotas for the reception of elderly workers (25% of respondents); • Introduction of flexible working conditions for employees of retirement age instead of retirement (24%). • Increase in compensation payments upon dismissal of employees of pre-retirement or retirement age (21%); • Prohibition of the dismissal of employees of pre-retirement age on the initiative of the employer (19%); • Fines for refusing an elderly applicant (15%); • Mandatory support for laid off older employees – additional voluntary payments or assistance in further employment (14%). In general, “restrictive” measures are unpopular among Russian employers. Thus, 23% of respondents are absolutely against the introduction of such measures and consider them ineffective. Basically, these are the heads of microenterprises. Many admit that the introduction of restrictive measures will entail the forming up of workarounds and will not lead to the desired result. The most “demanded” “restrictive” measure is the introduction of quotas for the reception of older workers. A quarter of respondents support it. This measure is supported mainly by state-financed enterprises, medical and educational institutions, in which the number of employees of retirement and pre-retirement age is much higher than in other areas. The prohibition of the dismissal of senior people, which is one of the most frequently used measures in Western countries, is supported by 19% (Report “Employers for older professionals: do companies need state support” 2019). According to employers, this measure requires appropriate clauses such as “punitive discharge”. The introduction of flexible working conditions for pensioners is the most eligible measure for large enterprises, private trading and manufacturing companies. This corresponds to the specifics of their business and is easier to implement. “Incentive” measures of state support in the people of retirement and pre-retirement age employment, for obvious reasons, are much more popular with Russian employers. Based on the results of the survey, only 5% of the serveyed managers, mainly of commercial organizations, are convinced that such measures are ineffective. And such a reaction was triggered by a request for state noninterference in the internal affairs of the company. Employers believe that the most effective methods of stimulating the employment of pensioners are the following (employers could choose up to four answers to this question) (Report “Employers for older professionals: do companies need state support” 2019): • Preferential tax system when hiring elderly employees (57%); • Employment subsidies provided to the companies hiring an employee of senior age (43%);

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• Special bonuses for employers hiring employees of senior age (29%); • Staff development grants to companies for advanced training of employees of preretirement and retirement age (29%). The most “desired” measure of state support among employers is tax relief, which can be both in the form of preferential taxation for each full-time pensioner (reduced personal income tax for each pensioner and/or contributions to the Pension Fund, Social Insurance Fund and Federal Compulsory Medical Insurance Fund) and reduction in the overall taxation burden of a company that hires people of retirement and preretirement age. The heads of medium and large private production and service companies are highly interested in this type of government aid. The employers’ interest in subsidizing, bonuses and grants for conducting further vocational trainings for older workers is mainly shown by public sector companies, companies operating in the field of medicine and education, where large-scale digitalization is underway and the demand for such training courses is extremely high. It should also be highlighted that there is a request for co-financing the remuneration of working pensioners among employers (implementation is possible in the framework of company subsidies). The employers desire to hire older people depends on the level of candidate’s training, willingness and ability to work. A crucial criteria in hiring for employers is a computer and computer technology knowledge, as well as the physical well-being of the candidate, allowing him to work efficiently. The German experience, where pension reform provides for a retirement at the age of 67, has faced the problem of premature retirement due to health reasons. The ideal German picture of retiring at ehe age of 67 corresponds to groups of highly intellectual professions, medicine, and education. But for people of working professions, even the threshold of age-related disability at 65 years old is hard to reach. Consequently, despite the mild interest of Russian employers in grants for optimizing jobs and reorganizing the work environment (14% of respondents) and grants for developing and implementing programs in the company to maintain work-life balance, wellness programs (11% of respondents) (Report “Employers for older professionals: do companies need state support” 2019), this issue should be carefully considered. From the foregoing, it follows that in addition to “restrictive” and “incentive” measures of state support, additional subsidies are also required for the health examination of a selected group of workers and the organization of pertinent jobs.

2 Conclusions In Europe, “restrictive” measures prevail, among which the prohibitions on the dismissal of older employees, fines for the dismissal of senior people, the introduction of quotas for the number of laid off employees, and the extension of the period of employees’ notification of the upcoming dismissal are especially popular. European governments prefer to provide grants for re-skilling of senior generation and improving working conditions.

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There are countries with unique experience in applying an integrated approach to solving the employment of older people issue also outside Europe. Thus, Singapore uses “restrictive” measures, forcing employers to either keep people who have reached retirement age employed, or “find employment” for them in other companies, or pay compensation payments to them. At the same time, there is a system of incentives for employers hiring representatives of the senior generation. The Australian government solely applies “incentive” measures to support employers, subsidizing companies, which hire older specialists. In Russia exclusively “restrictive” measures are in force at the moment. In business circles, there is a persistent request for the application of “stimulating” measures of state support in the issue of pensioners’ employment. Half of the employers advocate the use of exclusively “incentive” support measures. Another 43% recognize application of a combination of “restrictive” and “incentive” measures the most effective. Currently, there is a request for the support from the state in the issue of pensioners’ employment among employers. It is shared by 89% of respondents, 68% of whom say that this is a concern not only for the state, but also for workers themselves and the business. Today employers consider that candidates have the necessary knowledge, qualifications, experience, health, as well as computer literacy and the ability to work in digital space as an extremely important factor for hiring senior citizens (every fifth employer is ready to hire older people, subject to these requirements). For employers, “incentive” measures of state support are preferable; mainly tax cuts (contributions to social funds for working retirees, or a general reduction in the tax burden on the company), as well as subsidies, grants and bonuses to companies hiring retirees. These subsidies can be targeted and can be used for re-skilling or advanced training of workers of retirement and pre-retirement age, organizing work space for pensioners and ensuring control over their health status, and conducting additional medical examinations for senior people. 43% of the respondents are confident in the effectiveness of the combination of “stimulating” and “restrictive” measures of state influence in this matter. Therefore, employers do not exclude the introduction of not only stimulating but also restrictive measures. The most effective of which respondents consider the introduction of quotas for the number of older workers and the introduction of flexible working hours, while protection against dismissal, which is so popular in the West, is considered effective by only 19% of respondents. In addition to introducing the measures of state support, it is necessary to raise awareness of the existence of such measures among company management. At the moment, 40% of those on whom the employment of senior people depends do not even know about the existence of such measures.

References The labour code Article 93, Part-time work. http://www.consultant.ru/document/cons_doc_ LAW_34683/4fc377218364ee95162e6c077045035d75c92c6d/. Accessed 26 Nov 2019 The labour code Article 128. Leave without pay. http://www.consultant.ru/document/cons_doc_ LAW_34683/ac98e98a7f06d32e7efc3643733e00e94c4fb1b6/. Accessed 26 Nov 2019

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The labour code, available at: articles 77, 78, 80, 81. http://www.consultant.ru/document/cons_ doc_LAW_34683/790f7da763bc677a4a37e1a58868ebe831fe4c00/. Accessed 26 Nov 2019 Elsayed, A., de Grip, A., Fouarge, D., Montizaan, R.: Gradual retirement, financial incentives, and labour supply of older workers: Evidence from a stated preference analysis. J. Econ. Behav. Organ. 150, 277–294 (2018) Heywood, J.S., Jirjahn, U.: The hiring and employment of older workers in Germany: a compare. J. Labour Mark. Res. 49(4), 349–366 (2016) Ivanova, M.A.: Pension system and labor activity: international experience. J. Vopr. Ekon. 2018(10), 53–75 (2018) Labour market change State initiatives supporting the labour market integration of older workers. https://www.eurofound.europa.eu/sites/default/files/wpef18003.pdf. Accessed 26 Nov 2019 Netherlands: government measures to support age-related applicants. http://companies4all.ru/ articles/niderlandy-gosudarstvennye-mery-podderzhki-vozrastnyh-soiskateley. Accessed 26 Nov 2019 Singapore Keeps Older Employees Working. https://www.shrm.org/resourcesandtools/legal-andcompliance/employment-law/pages/singapore-keeps-older-employees-working.aspx The legislation of the EU countries guards the employment of age specialists. http:// companies4all.ru/articles/zakonodatelstvo-stran-evrosoyuza-na-strazhe-zanyatostivozrastnyh-specialistov. Accessed 26 Nov 2019 The number of economically active population of Russia has collapsed at a record since the beginning of the century. https://www.finanz.ru/novosti/aktsii/chislennost-ekonomicheskiaktivnogo-naseleniya-rossii-rukhnula-rekordno-s-nachala-veka-1028235021. Accessed 28 May 2019 The silver economy brings hundreds of millions of Euros to the European Union annually. http:// companies4all.ru/articles/serebryanaya-ekonomika-ezhegodno-prinosit-evrosoyuzu-sotnimillionov-evro. Accessed 25 Nov 2019 Report “Employers for older professionals: do companies need state support”. http:// companies4all.ru/articles. Accessed 25 Nov 2019 Report “Measures of state support”. http://companies4all.ru/articles. Accessed 25 Nov 2019 https://www.gks.ru/search?q=чиcлeннocть+пeнcиoнepoв. Accessed 25 Nov 2019 Australia: the number of active and productive adults is growing rapidly. http://companies4all.ru/ articles/avstraliya-chislo-aktivnyh-i-produktivnyh-lyudey-zrelogo-vozrasta-bystro-rastet. Accessed 26 Nov 2019 More help for companies to support older workers. http://www.straitstimes.com/singapore/ manpower/more-help-for-companies-to-support-older-workers. Accessed 21 Nov 2019 Employment Services Outcomes Report. https://docs.employment.gov.au/node/34083. Accessed 26 Nov 2019 Report of the Bank of Russia “What do trends say”. http://www.cbr.ru/collection/collection/file/ 9161/bulletin_18-07.pdf. Accessed 18 July 2018. https://www.rbc.ru/economics/28/06/2019/ 5d14b6cb9a79473f3ff4931b/. Accessed 28 June 2019; 21 Nov 2019 http://companies4all.ru/. Accessed 26 Nov 2019

Vocational Training and Re-skilling of Senior Citizens Ellina A. Shamanina(&) and Anastasia E. Bryzhinskaya Moscow State Institute of International Relations (MGIMO University), Moscow, Russia [email protected], [email protected] Abstract. The formation of a new technological economy serves as the basis for the study of factors that influence the human capital development. One of these factors is the knowledge acquired by a person throughout his life and which became an integral part of it. The necessity for a set of skills and competencies development is reflected in the concept of lifelong learning, which began to spread actively in the second half of the 20th century. The stage of the country’s adult population involvement in lifelong learning is considered one of the indicators of human capital development. The development of the lifelong learning system allows to solve a number of socio-economic problems, for example, increased labor productivity, obtaining skills necessary to use new technologies, and also, which is especially important for citizens of pre-retirement and retirement ages, the ability to combine personal aspirations in social adaptation with the working capacity maintenance. Which is directly connected with the labor market transformation, in which the issue of the population re-skilling in order to integrate it into rapidly growing, generally, technologically advanced sectors of the economy, is acute. Furthermore, the escalating global trend of population aging calls for the development of measures to attract senior generation to the programs of additional vocational training in order to update their professional competencies and acquire new skills. In this regard, the fact that Russia lags behind many countries, in particular the OECD in terms of the adult population coverage, especially of the senior generation in all forms of additional education, claims special attention. The purpose of this article is to analyze the current state, dynamics and the main institutions and tools of the lifelong learning system of the senior population, operating in some foreign countries, in particular in Europe, as well as in Russia. Keywords: Lifelong learning
Retirees
Senior citizens
Additional vocational training
Lifelong learning system
Re-skilling
Universities of the Third Age
People of the “third age”
The Russian Federation
Europe JEL Code: J14


J26
J28
H52
H55
O15

1 Methodology An analysis of the development of the idea of senior generation education has been developing within a specific time period, in particular, starting from the second half of the 20th century to the present day, taking into account the sociocultural characteristics © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 671–688, 2020. https://doi.org/10.1007/978-3-030-47945-9_72

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of the regions in interest, in which the implementation of the practices of the lifelong learning system was carried out. The article focuses on the consideration of education at the “third age” as an informal, additional, often professionally-oriented type of education with a set of corresponding features, viz.: – Accessibility; – Voluntary participation; – Orientation to the personal experience of the listener, taking into account its complement with those professional competencies that are in demand on the modern labor market; – Practical focus of education. The necessary research depth, the reliability of the conclusions are ensured by applying a systematic approach and other general scientific methods of cognition, such as methods of analysis and synthesis, the method of grouping, classification, statistical and graphical analysis, as well as descriptive methods based on the compiling and study of facts on the citizens of pre-retirement and retirement ages education. The statistical data presented in the study is compiled and evaluated on the basis of a comparative analysis by the method of statistical observations using the appropriate databases, in particular, the materials of the ANCO “The Formation and Development of a Friendly Multi-Aged Environment, Professional and Intergenerational Communication Organization “It’s Time to Live””, as well as of the survey “Companies for all ages”. The methodology of the comparative practice of education made it possible to draw a conclusion regarding the development of the considered education type, on the basis of a comparison of concepts, programs and lifelong learning technologies. The research methodology was based on fundamental research by Russian and foreign economists, in particular, Bonadrenko N.V., Korshunova I.A., Gaponova O.S., Peshkova V.M., Krasilnikova N.V., Lysova T.S., Th. W. Schultz, G.S. Becker, E. Hanushek, L. Woessman, as well as on the regulatory documents, guidelines relating to the development of the lifelong learning system, particularly the education practices of senior generation, in Russia and abroad. Introduction. Socio-demographic background for the development of a re-skilling system for people of the “third age”. According to the latest forecast of the United Nations Population and Development Commission, the world’s population is growing and will amount to 9.7 billion people by 2050. Life expectancy has also increased from 64.9 to 72.3 years since 1994 to 2019, and this indicator may increase by another two years by 2050. Today, the share of people aged 65 and over continues to grow in the total world population, rising annually by about 2.4%. The growth of the average age world’s population is also not slowing down, and according to UN forecasts, it will be 37.3 years by 2050 compared with 30.9 years in 2019 (UN News, Global perspective Human stories, 2019). It is worth making a point that the Russian population is on average older than the world’s average figure; the median age in Russia is 39.6 years. According to Rosstat, life expectancy by age distribution will be 68.1 years for men and 78.2 years for women by 2030 (Demographic forecast until 2036, FSGS of the RF 2018).

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According to the demographic forecast, in Russia, an increase in the number of citizens of pre-retirement and retirement ages will be accompanied by a gradual decrease in the working age population over the next 17 years (Demographic forecast until 2036, FSGS of the RF 2018) (Diagram 1).

100000.0 90000.0

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80000.0 70000.0 60000.0 50000.0 40000.0 30000.0 20000.0 10000.0 0.0

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43306.7

Diagram 1. Population forecast for certain age groups until 2036 (thousand people). Source: Demographic forecast until 2036, Federal State Statistics Service of the Russian Federation available at: https://www.gks.ru/folder/12781, (accessed 19 November 2019).

Due to the development of such trends, as well as with retirement age rising, a sensible increase in the employment level is unlikely. For this reason, the issue of the need to introduce systems of senior citizens training and re-skilling in order to maintain their competencies and skills at the proper level for Russia is really urgent. Thus, on the one hand, an increase in median age and life expectancy indicates an increase in the world social welfare level. On the other hand, an increase in the number of senior citizens necessitates the search for opportunities to support their activity and performance. Maintaining the potential of senior citizens through the promotion of lifelong learning, in order to keep them as active participants in business processes, can serve as the basis for the socio-economic environment modernization, as well as lay the foundation for robust development of countries around the world (Zavyalova et al. 2018). The social involvement of older population groups is directly associated with the updating and acquisition of new professional skills necessary to adapt to rapidly changing social and economic conditions. An analysis of the accumulated foreign and Russian experience in senior generation education, in particular the existing institutional environment and educational process implementation technologies, will make it possible to identify problems and contradictions that arise in the field of additional education for this category of citizens efficiently.

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Moreover, taking into consideration the experience of foreign partners in the area of the development of the lifelong learning system, Russia will have the opportunity to enhance existing and develop new educational practices and methods.

2 Training Organization for the Senior Generation: Foreign Experience It was mentioned above that a third of the developed countries population will overcome the milestone of 60 years old by 2030. In this regard, the idea the older generation training and re-skilling, the so-called “third-generation”, generation which basically includes women over 55 and men who have crossed the 60-year mark, is becoming most topical. Senior people education is one of the areas lifelong learning system development. Currently, there are three different concepts of lifelong learning: 1. Lifelong learning as an education throughout life. 2. Lifelong learning as an adult education. 3. Lifelong learning as a continuing vocational training (Karpuhina 2006). The definition of lifelong learning (LLL) was formulated by the European Statistical Office based on the documents of the European Employment Strategy (1997) and recorded in the Classification of learning activities (CLA) manual. According to the presented documents, lifelong learning provides for “a variety of learning activities that are implemented throughout a person’s life, with the aim of improving his knowledge, skills and competencies in the framework of personal, civil, social and/or labor employment” ((CLA), Eurostat, European Union 2016). The current approach deals with all segments of the population, regardless of gender, age and status of the individual in the labor market. Thus, it covers the educational route from preschool to higher education to organization of retirees leisure time. In foreign literature, for example, in the works of P. Blossfeld, E. Kilpi-Jakonen, D. V. de Vilhena, S. Buchholz, Foster L., Triventi M., Barone C., Wahler S., Buchholz S., Jensen V.M., Unfried J., dedicated to the lifelong learning development in modern societies, it is often understood as various forms of Adult Learning and Education ALE, which can be related not only to professional activities. Generally, the conducted analytical research characterizes lifelong learning in the countries of the European Union, OECD and Russia, as adult or senior citizens education, i.e. persons from 18 to 70 years old and older (Blossfeld et al. 2014; Foster 2012; Triventi and Barone 2014; Wahler et al. 2014). For example, in 2003, the European Centre for the Development of Vocational Education and Training (Cedefop) conducted a survey to study the attitude of adult groups of European countries towards lifelong learning, the results of which confirmed that the development of such a system fosters personal development and also makes it easier to get through the process of adaptation to changing socio-economic conditions. In addition, about 80% of the total number of Europeans surveyed claimed that lifelong learning programs should be attended not only by young citizens, but also by representatives of the senior generation (Cedefop 2003).

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The positive aspects of senior citizens training were identified as part of the ET 2020 Working Group 2016–2018 research, on the basis of which the table below is compiled (Table 1). Table 1. The benefits of senior generation training. For trainees For employers For society – Increase in country’s – Company’s innovation – Wage increase economy and GDP potential expansion – Professional adaptation growth competitiveness and gain (enhanced employment – Quality of human capital – Increase in staff opportunities) assets improvement motivation to work – Individual wealth and physical – Company’s productivity – Positive impact on the well-being increase welfare of a country total and income increase – Social involvement and level performance increase Source: Promoting adult learning in the workplace. Final report of the ET 2020 Working Group 2016–2018 on Adult Learning // European Commission, Luxembourg: Publications Office of the European Union, 2018. P. 7, 58 p.

According to the Europe-wide population survey within the framework of the EU Labor Force Survey (LFS) from 2009 to 2018 an increase in the proportion of adults aged 25–64 and 25–74 years participating in lifelong learning was recorded. So, in 2016 it was recorded that 45% of the total European population aged 25 to 64 years took part in various forms of lifelong learning Adult Learning Statistics (2019) (Graph 1).

12 10 8

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25-64 years old

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25-74 years old 4 2 0 2009

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Graph 1. Participation of adult population of EU countries in any form of lifelong learning related not only to professional activities (share of respondents aged 25–64 years and 25–74 years participating in various forms of lifelong learning during the four weeks preceding the survey, %). Source: Compiled by the author based on the data Participation rate in education and training (last 4 weeks) by sex and age. Eurostat // URL: https://appsso.eurostat.ec.europa.eu/ nui/submitViewTableAction.do

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It is worth highlighting that in international practice, in accordance with existing approaches, lifelong learning is usually divided into: – Formal, which generally allows adult groups to receive basic training in the relevant educational organizations without interruption from the work process. – Non-formal, which covers all possible forms of education that are not part of the basic (formal) education programs. It also includes additional vocational training, various short-term seminars, lectures, trainings, distance learning programs, etc. – Self-education, in the framework of which the individual develops skills and knowledge independently in the process of visiting libraries, studying relevant literature, etc. According to the report “Monitoring of the education economic”, the Information Note of the NRU Higher School of Economics, when comparing the figure of adult involvement in formal and non-formal (additional) education, Russia is significantly inferior to most European countries. According to the Eurostat survey, in 28 EU countries, on average, two out of five residents between the ages of 25 and 64 years old received formal or additional education in the previous 12 months, in Russia, relying on the 2016 survey, only every fifth resident. In its turn, there was also a difference between the age groups participating in formal and non-formal education. For example, in Russia, involvement in formal or additional education of people aged 25 to 35 was three times more than their fellow citizens aged 55 to 64 years inclusive. In EU countries, this differentiation is half as much (Bonadrenko 2017). Another way of lifelong learning is the vocational education system or Vocational Education and Training (VET), or Continuing Vocational Training (CVT), which appeared, in particular, in European countries, at the turn of the 1990s. It provides an opportunity for the adult population, including pensioners, to update or gain new competencies and skills as part of their professional activities. Generally this type of training can be carried out in various forms, for example, planned training through guided on-the-job training; planned training through job exchanges, secondments or study visits; planned training by self-directed learning (e.g. self-directed e-learning). No doubt that the indicated educational programs of CVT are hardly the only possible ones; there are many educational lectures, seminars, fairs, conferences and other types of practices (Research Paper No. 48, Cedefop 2015). Many scientists, in particular Th. W. Schultz, G.S. Becker, E. Hanushek, L. Woessman, consider that education is an economic growth driver. They emphasize that it contributes to a labor productivity growth by increasing the volume of human capital. Furthermore, education triggers the process of new knowledge expansion required for the implementation of innovation technologies, which in turn ensures not only economic growth, but also increases its innovation potential. Thus, the economic component gave rise to the vigorous activity of many world’s countries regarding the development of tools for the implementation of lifelong learning (Schultz 1971; 1972; Becker 1975; Hanushek and Wessman 2007; Teixeira 2014) (Korshunov and Gaponova 2017). For example, already at the beginning of the XXI century, at the G8 summit, “Goals and aspirations of lifelong learning” were established, and the principles set in

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the “Memorandum on Lifelong Learning” adopted in the framework of the US Lisbon Summit served as the basis for shaping the directions of national educational policy. It is worth stressing that the state political influence on the adult education market turns it into a major coordinator or stakeholder, whose participation becomes necessary for cofinancing and building an effective organization of processes of the continuous professional competencies of the senior generation updating. State activity in the development of lifelong learning is confirmed by the formation of relevant programs. In particular, the EU has adopted the so-called “umbrella” Lifelong Learning Program (LLP), which in its turn is divided into four sub-programmes, which include a set of educational activities from primary education to re-skilling in senior age, viz.: – “Comenius” programm aimed at school education improvement; – Programm for tertiary education “Erasmus” (“Erasmus+” from 2014 to 2020) aimed at cooperation support in the field of education, vocational training; – Programms aimed at vocational training and re-skilling and senior education – Leonardo da Vinci, Gruntvig (The EuBiA Guide 2010). By the beginning of the 2000s most of the rich countries have already formed and approved their national concepts of adult lifelong learning, which were further improved and supplemented by a variety of government incentive measures. Already in 2016, the European Commission adopted the New Skills Agenda for Europe, whose goals included not only old skills improving and development of new competencies among senior citizens, but also identifying of new skills in demand on the labor market through appropriate assessments (New Skills Agenda for Europe 2016). The development and expansion of the lifelong learning system measures are confirmed by its inclusion as goals in the UN Sustainable Development Program until 2030 (Transforming our World: The 2030 Agenda for Sustainable Development) (Transforming our World, UN). The adoption of such programs is attributed to the growing citizens interest in developing their personal potential and raising the level of qualification. While considering the comparative statistical data on the adult population coverage (aged 25–64 years) with various types of lifelong learning, it is worth noting that the highest figures from 50% to 65% are demonstrated by market-oriented economies, as well as with established practice of partnership between the state and business, in particular Switzerland, Netherlands, Denmark, Sweden, Austria, United Kingdom. The lowest figures are in Poland, Lithuania, Romania, Bulgaria and Greece - about 15–25% of the total number of adult population. An important role in ensuring competitive supplementary vocational training for the senior generation is assigned to the business sector. Generally, it is employers, guided by their own initiative and market requirements, who organize training for their employees on-the-job in order to master new technologies and skills. Moreover, the innovations necessary for implementation in the production, for example, new equipment may be the reason for a company making a decision on the staff training organization. An innovative product or technology require new knowledge and skills from employees, and this is the reason why a staff training strategy becomes effective (Korshunov and Gaponova 2017).

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The employers expenditure item on vocational training is included in the total labor costs. According to the Eurostat research, in 2015 the training and re-skilling costs of European companies amounted to about 1.7% of the total labor costs, which is 1.4% less compared to the costs of companies in Russia, which account for 0.3% starting from 2000 to 2015, as well as according to the latest data of 2017 (Eurostat 2019; FSGS of the RF (Rosstat) 2018). Taking into consideration the total number of enterprises providing supplementary vocational training, it is necessary to resort to the European Continuous Vocational Education and Training Survey (CVTS). Since 2005, the share of the European business sector in the provision of vocational training for employees has increased from 60% to 73% in 2015, which indicates a positive trend in the companies’ participation in the lifelong learning system. Employers mostly on their own initiative organize and pay for their employees’ additional training in competencies and new skills necessary for the specific industry in which the company operates. It should be emphasized that the educational activity of the company is determined by its internal culture of employee training planning. If a company has a developed training culture, it carries out an analysis that identifies demands in the relevant training directions and subsequently develops a systematic training plan that covers various factors and areas of the educational activity of the company, for example, forms of training; number of employees requiring re-skilling; budget of expenditure, etc. According to the “Monitoring of the Economics of Education”, the Information Note of the NRU Higher School of Economics, which conducted a comparative analysis of training and re-skilling organization in Russia and European countries, in particular in the UK, it was found that in Russian practice, a business culture in staff training planning preparation is still not widespread enough, especially in small and medium enterprises. Thus, companies implementing training for their employees in Europe account for about 80%, while in Russia about 17% less (Bondarenko et al. 2016). A significant share of the UK companies, about 34%, implements employee training on the basis of in-house resources. In particular, about 17% of the total number of companies develop their training courses, while 12% have their own training centers. At the same time, most companies resort to the third-party services in order to realize effective training, According to the Monitoring, about 70% of UK companies financed their employees training, turning to third-party organizations, while the share of Russian companies implementing this practice is much lower - 40% (Bondarenko et al. 2016). Moreover, it is pointed out that Russian companies typically prefer courses and programs that do not provide for a long employee absence from work. As a rule, these are such forms of training as mini-trainings, a series of short modules, or speeches of various kinds of consultants at conferences. Nevertheless, companies create their own corporate universities and training centers in order to create well-established professional competencies and skills among their employees. Corporate universities are the most actively developed providers of supplementary vocational training for adults. Large transnational corporations, which, due to their complex organizational structure, as well as the need to maintain production standards

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at a high level, required constant development from their employees, triggered their advent. In this regard, training and development of educational system within corporations have become an integral part of the management structure. Being a corporation structural element, corporate university, together with the management of companies, not only takes part in the development of common corporate values and business technologies, but also establishes training in order to acquire competencies and develop the skills necessary for a concrete company operating in the particular industry. Thus, the key aim of such university is to improve the management of a company itself through the introduction and development of a lifelong learning system for employees. The GDP value per capita should be also taken into account. In accordance with the study of I.A. Korshunov and O.S. Gaponov on “Adult lifelong learning in the context of economic development and quality of public administration”, the variety of measures for the lifelong learning development is directly correlated with the level of GDP in different countries (Korshunov and Gaponova 2017). For example, countries with high GDP, such as Denmark, Germany, Norway, apply such actions as eLearning, which include the development of special educational platforms of direct financial support of adult qualification programs operating in various industries, etc. In Germany they issue re-skilling vouchers, which may cover 20% of expenditures. In its turn, legislation guarantees employees who are taking training at work time that they will keep their salaries. In United Kingdom they accept initiatives for senior people training. To push these initiatives they established National Institute for Continuing Senior Education (NISCE) (Skills Commission 2017). Such type of programs is in force in countries of Asian-Pacific area. For example, training program in Singapore worth noting. Frequently, employers provide their employees with direct finance and training programs aimed at high-tech production. In particular, senior population do re-skilling and training courses created by consulting technological companies, departments of industry associations and training centers of polytechnic universities. People elder 45 years attract more employers’ attention. To improve their working potential and keep at the workplace companies fund their reskilling and government compensate their expenditures. Moreover, in Singapore they established Singapore Workforce Skills Qualifications (WSQ). This center provides employees with skills development course in accordance with requirements and expectations from employees (The National Trades Union Congress 2016). Having analyzed foreign system of lifelong learning trends, it is possible to outline set of tools, which involve senior population into training. Firstly, it is when government stimulates market of educational program to improve professional competencies of senior people. Secondly, the formation of the institutional environment, the educational infrastructure by developing the necessary programs and implementing events that meet the market demands (Korshunov et al. 2019).

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3 Senior Employee Training: Russian Experience The advent of modern system of lifelong learning in Russia started with the adoption of a “Strategy for the innovative development of the Russian Federation till 2020” in 2011. One of the strategy key points was “Formation of the system of lifelong learning which meets innovative economy requirements; creating environment for constant reskilling for economically active population”. The development of supplementary vocational training implies support to adult people training program and educational program for senior people. Further, the adoption of the Federal Law No. 273 «Education in the Russian Federation» in 2012 boosted the integration between the system of lifelong learning and educational system (Federal Law No. 273 2012). The national project «Education» is planned to boost lifelong learning development. The aim of this project is to develop skills of 3 million senior employees. This project provides for development of public service platform aimed at supporting people while they are choosing training programs and educational organizations (National targeted projects of the RF 2019). Nowadays, Russian system of lifelong learning consists of educational programs for achieving professional and personal goals: basic training programs and supplementary vocational training. Moreover, senior people also take part in additional basic programs (Table 2). Table 2. Institutional models of education and training in Russia Name of model Center of senior people education (AVE and/or vocational training) based on secondary vocational education level

Characteristic Activities: Acquisition of vocational skills and entering the labor market in the form of being employed by a big industrial company or by small business enterprise Faculty (institute, center, department) Operates within university, branch research additional vocational education institute and Russian Academy of Science Activities: Ensures skills development and mastering new competencies Corporate universities Studying center within entity structure Activities: For employees from the same industry. Mastering new and high-tech competencies ensures career development within the same organization or industry Independent AVE organizations and training Activities: centers The program consists of different methods of studying It helps to master new competencies and skills for new segment of the labor market; It often encourages employees to change the workplace (continued)

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Table 2. (continued) Name of model Organizations not included in the educational system

Characteristic Educational organizations of Russian association “Znaniye”, Russian geographical community, historical clubs, libraries and cultural centers and etc. Activities: The training is aimed at mastering life literacy and achieving social inclusion of senior generation through organizing friendly communication Source: Korshunov, I.A., Gaponova, O.S., Peshkova, V.M. (2019), Vek zhivi – vek uchis’: nepreryvnoe obrazovanie v Rossii [Live and Learn: lifelong learning in Russia], I.A. Korshunova and I.D. Frumina (Eds.), NRU «Higher School of Economics», Moscow, 312 p.

Nowadays, the Russian young population is taking more active part in re-skilling than senior employees. This fact is verified by the Rosstat data. Employees aged 25–50 accounts for a maximum share (nearly 8–11%) of total number of employees, who got supplementary vocational training. But share of employees over 60 years old who got supplementary vocational training is lower by 2–3% (FSSS of the RF 2016). Therefore, existing number of employees involved into re-skilling does not support productivity of senior population. As a result it is important to support senior employees’ skills in order to keep labor market and investment activity effective. Moreover, according to the “Monitoring of the Economics of Education”, the Information Note of the NRU Higher School of Economics, when the age indicator increases, the degree of population involvement into lifelong learning system goes down. Thus, the share of people under the age of 35, participating in additional training program, is 23%. At the same time the indicator for people elder 35 years old decreases to 18% and 8% for people of senior generation (55–64 years old). In European countries lifelong learning programs involve about 27% of people at the age of 55–64 (Bonadrenko 2017). Today most of the Russian big companies in different industries own training departments (Corporate Universities, 2016). It is important to outline such examples as corporate universities of «Sberbank», «Gazprom», «Rostelekom». According to the «Association of all ages companies» survey, in the present about 48% companies of all questioned companies organize supplementary vocational training for senior employees (New Generation Employer Community. Companies for all ages 2019). In the frame of corporate educational departments, which 11% of all serveyed companies have, 72% of employees of pre-retirement and retirement age get supplementary vocational training. Generally they study on common basis and in 15% cases they have special training programs. It is worth noting that it is a rare case if a company has special conditions for senior employees training (New Generation Employer Community. Companies for all ages 2019) (Diagram 2).

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Doing additional vocational training on a general basis

Doing supplementaryl vocational education on a special basis

Special training courses for senior people

5%

7%

Other faciliƟes for AVE 10% 15% 20% 25% 30% 35% 40% 45% 50%

36%

4%

1%

Diagram 2. The prevalence of cases of supplementary vocational education for pre-retirement and retirement workers in 2019 (% of all questioned). Source: “Rabotodateli o dopolnitel’nom professional’nom obuchenii rabotnikov” (2019) [“Employers on vocational training for employees”], Rezul’taty onlajn oprosa [Online Survey Results], Soobshchestvo rabotodatelej novogo pokoleniya. Kompanii dlya vsekh vozrastov [New Generation Employer Community. Companies for all ages], Moscow, available at: http://companies4all.ru/, (accessed 22 November 2019).

Companies without AVE for senior employees account for about 27%. Such type of companies does not employ people of such age category or they do not need these training programs because their competencies meet the company’s requirements. However, the larger the company is, the more likely it employs senior people therefore it realizes AVE programs. Priority spheres with AVE programs for senior people: – – – – –

Education, science (64%); Medicine (64%); Public structures, force structures (59%); Culture, art, media (63%); Trade, services (27%) (New Generation Employer Community. Companies for all ages 2019).

Many countries are trying to mitigate risks connected with population ageing: increase in the number of senior people in the workforce. Special programs are developed and implemented in the educational system. They are aimed at maintaining the most suitable types of activities for senior generation by ensuring economic efficiency. Gerontogenesis, the method of teaching senior people and specialists who are working with senior generation, plays a big role in sphere of senior people education. Global trend in development of this sphere is establishment of The Third Age Universities (Educational Centre VERITI 2018). The first universities for senior people began to be founded abroad in the second half of XX century. New York had the institute for retired people founded in 1962 and France had the third age university founded in 1973. USA is a good example in terms of development of training programs for senior people. In USA they have developed network of schools that teach immigrants English language, art and etc. (Schools for Adults, Study.com). This training is realized both on formal educational platforms and on informal clubs.

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«The third age community» appeared in the United Kingdom in 1980s. And later, by the beginning of the XXI century, «The British model» of organization of senior generation training was formed. This system was supposed to enable senior people to organize courses on their own, for example, in the form of autonomous interest groups. Such system was quickly popularized and today the UK has about 11 thousands campuses of the Third Age University (Zhuravlyov 2018). Trend for senior people education was supported by many countries, for instance, USA, France, the UK, Netherlands, Germany, Japan. This phenomenon is not absolutely new for Russia. In the second half of 90 s of XX century with the assistance of association “Znaniye” they formed studying groups for «the third age» people at Yaroslavl University, Orel University, Stavropol-region University, Chelyabinsk University and Magnitigorsk University. Those studying groups involved 120–1500 students at the age of 40–84 (Dzhurinskij 2018). It is important to emphasize that association “Znaniye” is one of the leading and oldest entity providing studying courses (1947). It pays special attention to organizing free lectures and seminars aimed at helping senior people (Russian association “Znaniye”). Today this sphere is actively developed within the system of «Comprehensive Center for Social Services» (CCSS). The crucial goal is to show people all spheres of life where they can work. According to the CCSS research together with the research «Silver university» by «Skolkovo» business school, about 40% of the total number of senior people wanted to change their profile (Levintov 2015). The main goal of these universities is to let retired people get into digital, law, psychology and other areas. Today in Russia “The third age ITMO online university” realizes not only the Internet courses but also art courses (photography, literature etc.). Moreover, the third age universities in Kazan, Moscow, Voronezh, Saint Petersburg also carry out trainings for senior generation (University of the Third Age ITMO). However, according to the ANO «Social Technology Development Center», necessity for re-skilling is often considered as obstacle for senior employees who want to work. «Social Technology Development Center» designed «Center of new opportunities 50+» to face this challenge. The aim of this project is to help retired and preretired people who want to be employed. The Center identifies the applicant demands and helps to find appropriate organization, which not only organizes training but also provides an applicant with the workplace in case of conclusion of an agreement on training courses. The Center takes all expenses. On the basis of the ANO «Social Technology Development Center» the «Silver age» University was founded to let retired and pre-retired people master new skills. Moreover, The ANO «Social Technology Development Center» also realizes voluntary work training courses for retired and pre-retired people which aimed at helping them to keep their cognitive abilities (ANO “Social Technologies Development Center”). Another sphere of senior generation education development is teaching them how to use computers and creating online-platforms, which can unite group of senior population. Russia has online-platforms for senior population. For example, onlineplatform «50+» which informs senior people on training courses they can attend (“50+” The benefits of the third age education). As a result of implementing pension reform, pre-retired employees became a very vulnerable group of population. The government faced the challenge to provide a workplace to a lot of employees who did not get retired due to the pension reform.

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To support this group of population the Russian government adopted «Special program of vocational training and supplementary vocational training for citizens of pre-retired age for the period till 2024» (Garant. Ru 2018). This program is aimed at realizing vocational trainings for pre-retired citizens. Despite the difficulties connected with the implementation of this program the senior employees’ re-skilling should be completed before retirement age. This program has already involved 3.5 thousands citizens of senior age. In the context of this program companies realize training programs within their departments in case if they are licensed or they can make a deal with an educational entity participating in the program. Moreover, educational programs for senior people might be organized on the basis of international vocational education standards using tools of WorldSkills International, educational movement that Russia joined in 2012. WorldSkills Russia academy provides five kinds of training courses for senior population. Participants pass tests and get allocated into five different training courses (World Skills Russia). In particular, 4% of companies encourage their employees get supplementary vocational training within WorldSkills Russia structures (New Generation Employer Community. Companies for all ages 2019). The opportunity for pre-retirement people learning is given also by «Academy of business and systems management». The academy programs let senior people do 13 kinds of vocational re-skilling while they are working at their main workplace (Academy of Business and Systems Management 2019). Senior employees can also do vocational re-skilling on online-platform “Kontur” within online-school (“Kontur”, School of Accountant 2019). While forming the senior generation education system it is important to take into account specificity of dealing with such age category. In particular, most retired people do not want to consider themselves as «students». Therefore, training programs and methods should be flexible and interactive. That is why the most effective method is when employees study at their workplace, communicating with their colleges and saving their salaries. Senior people education should not only help them socially integrate but also increase their standards of living by making them economically active category of population.

4 Conclusions In conclusion, educational trend for the system of lifelong learning is worldwide developed. This trend boosts creating opportunities for people of different age categories including senior age category to maintain competitiveness at the labor market. Although the nature of the development of lifelong learning system of persons of pre-retirement and retirement age is diverse, it is worth noting that senior people education is becoming an integral tool which boosts economic growth and social stability. Educational trainings for senior generation are a sign of positive dynamics in development of the lifelong learning system, which unites three core stakeholders: government, which is interested in good specialists, employers and employees.

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Increased role of entrepreneurial sector in expanding the scale of training both abroad and in Russia is an integral part of designing new models of employers and employees communications within the lifelong learning system. It is proved by the development of corporate universities as autonomous independent structures. About a third of Russian companies are ready to introduce lifelong learning system for pre-retirement and retirement employees. Companies not only use their own educational departments but also apply to independent educational centers including training centers of other companies and departments of the employment centers and WorldSkills Russia. As a result it might be contended that by this time Russia has built prerequisites for the development of market of additional educational programs for senior generation. The government takes part in these programs and regulates this market by stimulating its activity and reducing the cost of provided services. The measures taken by the National project «Education», «Senior generation», «Demography» should inevitably initiate the launch and the further development of the lifelong learning market.

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“Special’naya programma professional’nogo obucheniya i dopolnitel’nogo professional’nogo obrazovaniya grazhdan predpensionnogo vozrasta na period do 2024 goda” (2018) [“Special program of vocational training and continuing professional education of citizens of pre retirement age for the period until 2024”], Garant. Ru, Informacionno-cifrovoj portal [Digital Information Portal]. https://www.garant.ru/products/ipo/prime/doc/72041820/. Accessed 22 Nov 2019 Spotlight on…Lifelong Learning for an Ageing Workforce: Skills Commission, London (2017). 48 p. Teixeira, P.: Gary Becker’s early work on human capital: Collaborations and distinctiveness. IZA J. Labor Econ. 3, 1–20 (2014). https://www.econstor.eu/bitstream/10419/152338/1/ 815411251.pdf. Accessed 15 Nov 2019 Transforming our World: The 2030 Agenda for Sustainable Development. United Nations. https://sustainabledevelopment.un.org/content/documents/21252030%20Agenda%20for% 20Sustainable%20Development%20web.pdf. Accessed 14 Nov 2019 Triventi, M., Barone, C.: Returns to adult learning in comparative perspective. In: Blossfeld, H. P., Kilpi-Jakonen, E., de Vilhena, D.V., Buchholz, S. (eds.) Adult learning in Modern Societies. An International Comparison from a Life-Course Perspective. Edward Elgar Publishing, Cheltenham (2014) Understanding Re-employment. Guidebook. Unipress Holdings Pte Ltd., The National Trades Union Congress, Singapore (2016). 22 p. Universitety tret’ego vozrasta v Rossii i za rubezhom: [Universities of the Third Age in Russia and Abroad], Obrazovatel’nyj centr VERITI [Educational Centre VERITI], Moscow (2018). http://xn–b1agja2bn.xn–p1ai/gerontologiya. Accessed 17 Nov 2019 Universitet tret’ego vozrasta ITMO [University of the Third Age UITMO]. http://u3a.itmo.ru/. Accessed 15 Nov 2019 V Voronezhe startoval social’nyj proekt “Universitet tret’ego vozrasta” [Social project “University of the Third Age” launched in Voronezh], KOMMUNA Informacionnyj portal Voronezha i Voronezhskoj oblasti [COMMUNA Information portal of Voronezh and Voronezh region]. https://communa.ru/obshchestvo/v_voronezhe_startoval_sotsialnyy_ proekt_-universitet_tretego_vozrasta/. Accessed 15 Nov 2019 Wahler, S., Buchholz, S., Jensen, V.M., Unfried, J.: Adult learning in Denmark: patterns of participation in adult learning and its impact on individuals’ labor market outcomes. In: Blossfeld, H.P., Kilpi-Jakonen, E., de Vilhena, D.V., Buchholz, S. (eds.) Adult Learning in Modern Societies: An International Comparison from a Life-Course Perspective. Edward Elgar Publishing, Cheltenham (2014) Zavyalova, E., Studenikin, N., Starikova, E.: Business participation in implementation of socially oriented sustainable development goals in countries of central Asia and the Caucasus region. Cent. Asia Caucasus. J. Soc. Polit. Stud. 19(2), 56–64 (2018) Zhuravlyov, A.: Universitet tret’ego vozrasta: kak i chemu uchatsya pozhilye britancy [University of the Third Age: How and What Elderly British Learn]. BBC News, Russian Service (2018). https://www.bbc.com/russian/features-42991562. Accessed 19 Nov 2019 “50+” Vse plyusy zrelogo vozrasta [“50+” The benefits of the third age education]. https://www. 50plus.ru/about/. Accessed 15 Nov 2019

Effective Leadership to Senior Workforce: Opportunities and Challenges Olga Dubovskaya(&) and Vladimir Naumets Moscow State Institute of International Relations, Moscow, Russia [email protected], [email protected]

Abstract. Currently, age-diverse workforce has become a reality companies and institutions all over the world have to deal with. This trend is largely determined by increasing lifespan in developed countries which inevitably results in the extension of working life that is supported in different countries by governmental initiatives such as ‘active ageing’ in the European Union or the directives of the Ministry of Labour and Social Protection of the Russian Federation. Multigenerational workplace management requires a sophisticated approach both in terms of age management strategies and communication styles, as communication across generations can generate discomfort and misunderstanding. We supposed that both younger and older employees might feel uncomfortable when reporting to each other in an age-reverse hierarchical structure. This study aims to explore whether the challenges of age-diverse workplace cause discomfort in both older workers who have to report to younger managers and in younger staff who manage senior employees. The research was conducted at Moscow State Institute of International Relations (MGIMO University). We surveyed a total of 125 employees aged 22–75. Respondents were asked to complete anonymously a questionnaire. Contrary to our supposition, the results of the survey clearly indicate that both younger and older employees are ready to work in an age-diverse environment. At the same time both groups showed awareness of the challenges that can arise in a multigenerational workplace. Keywords: Leadership
Generation gap
Age-diversity
Age-diverse workforce
Active ageing
Working life
Senior employment
Multigenerational workplace
Age management policy JELCode: M54

1 Introduction The increasing age-diversity of the workforce in European countries, the USA, Australia is a trend that is largely determined by the extension of working life. In the EU it is facilitated by the European Union’s promotion of ‘active ageing’ (Hamblin 2013). On 6 December 2012 The Council of the European Union adopted the Guiding Principles for Active Ageing and Solidarity between Generations, the primary aim of which is the “creation of a Europe for all ages – a competitive, prosperous and © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 689–694, 2020. https://doi.org/10.1007/978-3-030-47945-9_73

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cooperative Europe of innovation, creativity, social inclusion and cohesion” (The Council of the European Union, 17468/12). According to Eurostat (May 2019) senior employment (employees aged 55–64) in the EU increased over the period from 2002 (38,4%) to 2018 (58,7%). A similar trend can be observed in the Russian Federation. According to the Ministry of Labour and Social Protection the proportion of working pensioners in the RF is 20,4%, which means that one out of 5 individuals continues working after retirement. Coupled with the ageing trend and currently announced pension reform that prolongs the age of retirement up to 60 years for women and 65 years for men, senior employment is bound to continue growing. The report stresses that “stimulating the employment of senior citizens is one of the primary policies of the Russian Federation, that is relevant both in terms of the income of senior citizens, use of their educational and labour potential to the benefit of the economy, as well as in terms of social adaptation of senior citizen and their participation in social life” (June, 2019). Thus, working across generations has become a reality facing many companies.

2 Literature Review Since the problem of ageing populations across the Western countries has been a pressing issue for several decades already, the research into ageing employees is numerous and of varied approach. It covers the principal challenges that senior employment presents for employers, managing staff and employees. Different researchers undertook painstaking analysis of such issues as communication difficulties, age-aware ecruiting policies (Altmann 2015), stereotypes (Henkens 2005), teaching and retraining (Beck 2014; Felstead 2011), HR (Hedge 2008) as well as agemanagement practices (Furunes 2011). The study by Brooke and Taylor was aimed both at identifying the barriers to the employment of senior workers and the benefits of age-conscious HR management policies to businesses and to older employees. The authors outlined the limits of such policies that focus solely on older workers ignoring the overall dynamics of multigenerational workplaces and stipulated the necessity for age-aware (rather that agefree) HR policies. (Brooke and Taylor 2005). From the prospective of employers, older workers are not a problem, rather they represent a valuable resource that encourages growth (Altmann 2015). The attitudes of managers towards older workers is an important factor for effective employment of senior staff. Henkens (2005), who undertook a study into stereotypes managers hold of their older staff and the inclination of managers to retain the latter in employment, found out that older managers who are in frequent contact with older workers are likely to have more positive views on them (Henkens 2005). Age stereotypes still persist in candidates selection, which is supported with the study by Swift (2017) that revealed implicit age biases. For instance, older workers are regarded employable only for positions that are subordinate to those of younger people. Thus the researcher seeks to analyse age-positive selection practices and ways to minimise the negative effect of ageism (Swift 2017).

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Important research into learning and training opportunities for senior workforce was conducted by Beck (2014) in the UK. The author explored employers’ view on the role of learning and training of older staff. The interviews revealed a general acceptance by HR professional, managing directors and owners of the necessity to provide older workers with learning opportunities, which are not being used sufficiently. In their research Furunes, Mykletunaand and Solem identified managers’ attitude and behavior as crucial factors for age-management and extending senior workers’ careers (Furunes 2011). Japan is a highly industrialied country that is faced with prolonging working life. Oka (2013) undertook research evaluating developments in employment extension for senior workers and future implications. Japan possesses relevant experience in addressing the issue. Being one of the first countries to officially articulate a strategy aimed at abolishing mandatory retirement age (known as “Teinen”), Japan adopted a number of laws, including The 1971 Law Concerning Stabilization of Employment of Older Persons, in order to assure employment security for older workforce (Oka 2013). Though the research is ample and relevant, there seems to have been no extensive analysis of challenges that arise specifically for younger managers who supervise older employees and vice versa, either in the world or in the Russian Federation. This research aims at filling this void. The authors of the study seek to analyse crossgenerational communication problems in the workplace in Russian educational institutions in order to verify the supposition that in the Russian Federation both younger workers managing older staff and senior employees who are subordinates to younger managers are likely to feel uncomfortable and perceive such age-reverse hierarchy as confusing and creating additional challenges in the workplace.

3 Materials and Methods 3.1

Method

In the research the following methods were applied: a comparative analysis of literature, questionnaires and interviews. 3.2

Participants

The participants of the study were the faculty and administrative staff of the Moscow State Institute of International Relations. A total of 125 people aged 22–75 participated in the survey. 3.3

Research Design and Procedure

Respondents were asked to complete anonymously a questionnaire, where they had to answer the following questions. 1) 2) 3) 4)

How comfortable would you be reporting to a manager who is younger than you? What is the biggest challenge in reporting to a manager younger than you? How comfortable would you be managing a worker who is older than you? What is the biggest challenge in managing a worker who is older than you?

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In questions 1 and 3 respondents were asked to choose from the following answers: a) b) c) d)

very comfortable, somewhat comfortable, somewhat uncomfortable, very uncomfortable.

4 Results Young managers are ready to work in age-diverse environment and are aware of the challenges they are to face when working with senior employees. We classified the challenges the leaders face when managing older workforce into several categories. Psychological challenges include the fear to hurt the feelings of senior employees by expressing some sort of arrogance, miscommunication due to generation gap, differences in work ethics and stress resistance. Such technological challenges as digital literacy can illustrate another aspect of generation gap. Since different generations have various learning styles special approaches are to be implemented in the fast altering environment. Communication styles in multigenerational workplace create another challenge, as senior employees prefer face-to-face communication and younger managers have to bear it in mind. One more challenge is creation of environment to the benefit of the company where people can realise their potential and get job satisfaction.

5 Discussion and Conclusions The research carried out at the Moscow State Institute of International Relations showed that 87% of respondents aged 22–34, 97% of respondents aged 35–54 and 95% of respondents older than 55 years are comfortable when reporting to a manager who is younger than they are (see Table 1), while 94% of respondents aged 22–34, 92% of respondents aged 35–54 and 95% of respondents older than 55 years are ready to supervise employees older than themselves (see Table 2). Table 1. Reporting to a manager who is younger than you. How comfortable would you be reporting manager who is younger than you? Age 22–34 35–54 Very comfortable 45% 57% Somewhat comfortable 42% 40% Somewhat uncomfortable 10% 2% Very uncomfortable 3% 1%

to a

55+ 62% 33% 3% 2%

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Table 2. Managing a worker who is older than you. How comfortable would you be managing a worker who is older than you? Age 22–34 35–54 55+ Very comfortable 57% 60% 68% Somewhat comfortable 37% 32% 27% Somewhat uncomfortable 5% 7% 4% Very uncomfortable 1% 1% 1%

At the same time a survey conducted by independent research firms (responses from more than 1,000 U.S. workers 18 years of age or older and employed in office environments) for staffing firm OfficeTeam revealed that 82% of the respondents claimed to be comfortable reporting to a manager who is younger than they are, while 91% are ready to supervise employees older than themselves. The younger manager/older workforce configuration can create various challenges, as different generations have their own perspectives on everything from communication style to work ethic to dress code. Teamwork can suffer as the generations understand loyalty and hard work in different ways. While senior generations tend to prefer faceto-face or written communication, younger workers prefer text messages, which can lead to miscommunication. The study has showed that respondents of different age groups are aware of the challenges that can arise in a multigenerational workplace. The majority of the respondents highlighted a psychological challenge in managing a worker who is older than you, as you can hurt someone’s feelings by expressing some sort of arrogance. The interviews of young managers revealed that they believe that they are more stress resistant but it is highly subjective. Age-diverse workforce can create a competitive edge. A wide range of approaches and perspectives can enhance a work team’s creativity and contribute to broader-based decisions; employees can realize their full potential. It is human nature to treat people the way we want to be treated, but even here each generation has its own perception of respect. Creating a climate of respect is of a paramount importance for bringing out the best in every person. Young managers should also bear in mind that senior employees can share their experience and such environment should be created which will help to turn the listed challenges into opportunities for the company or university. The results of the survey clearly suggest that workers of different age groups in academic settings in the Russian Federation are willing and ready to co-work in an agediverse workplace, fully understand difficulties that are likely to arise. However, more detailed knowledge about and research into the differences in work values, leadership and learning styles are needed, as it should help both senior workers and managing staff proactively address the miscommunication issues that can negatively affect the performance and workplace atmosphere and condition effective leadership to older workforce.

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References Hamblin, K.: Active Ageing in the European Union: Policy Convergence and Divergence. Palgrave Macmillan, London (2013) The Council of the European Union declaration on the European Year 2012 (17468/12) https://www.prnewswire.com/news-releases/what-generation-gap-most-workers-fine-withhaving-younger-boss-or-managing-someone-older-300529586.html Altmann, R.: A New Vision for Older Workers: Retain, Retrain, Recruit. Department for Work and Pensions, London (2015) Beck, V.: Employers’ views of learning and training for an ageing workforce. Manag. Learn. 45 (2), 200–215 (2014) Brooke, L., Taylor, P.: Older workers and employment: managing age relations. Ageing Soc. 25 (3), 415–429 (2005) Felstead, A.: The importance of ‘teaching old dogs new tricks’: training and learning opportunities for older workers. In: Parry, E., Tyson, S. (eds.) Managing an Age Divers Workforce, pp. 189–205. Palgrave, Basingstoke (2011) Hedge, J.: Strategic human resource management and the older worker. J. Workplace Behav. Health 23(1/2), 109–123 (2008) Henkens, K.: Stereotyping older workers and retirement: the managers’ point of view. Can. J. Ageing 24(4), 353–366 (2005) The Ministry of Labour and Social Protection Report. https://rosmintrud.ru/docs/1340 Oka M.: Older workers in japan: the present situation and future challenges. In: Taylor, P. (ed.) Older Workers in an Ageing Society. Critical Topics in Research and Policy, pp. 62–67. Edward Elgar, Cheltenham (2013) Swift, H.: Old and unemployable? How age-based stereotypes affect willingness to hire job candidates. Innov. Aging 1, 117 (2017) Eurostat, Employment (total, female, male, youth and senior), 2002–2018, June 2019 Furunes, T., Mykletun, R., Solemn, P.E.: Age management in the public sector in Norway: exploring managers’ decision latitude. Int. J. Hum. Resour. Manag. 22(6), 1232–1247 (2011)

Entrepreneurship at a Mature Age Elena B. Zavyalova(&), Evgeniya A. Starikova, and Natalia N. Chubaeva Moscow State Institute of International Relations (MGIMO University), Moscow, Russia [email protected], [email protected], [email protected]

Abstract. This article addresses the question of entrepreneurial activity of older people. Using the methods of comparative analysis and benchmarking, as well as the experience of Russian and foreign companies, the authors identify common patterns and national characteristics, as well as the specifics of support and development of entrepreneurship at a mature age. Based on the conducted analysis, the authors give recommendations on the support system for older entrepreneurs, including such measures as the creation of the specific educational courses, corporate mentoring and curatorial programmes as well as the development of special lending systems. Methodology The methods of the scientific cognition that comprise the methodological basis of this research are the following: comparative and cross-disciplinary analysis, synthesis, deduction and induction, abstraction, generalization. Keywords: Entrepreneurship Pensioners
Silver age JEL Code: D1


Small business
Start-up
Older people



O1
O3
O4

1 Introduction Economic growth intersects with going concerns and emerging companies (Wennekers et al. 2010). It is difficult to imagine that enabling and disruptive technologies can arise in the economic environment without creating a new business. Existing companies can upgrade and update their products and production technologies, but the main innovations are usually associated with the emergence of new companies. By the same token, other various factors, including demographics, have an impact on the dynamics of the business environment. Against the global trend background of average life growth and the current situation of the economic crisis in Russia, an increase in the period of its physiological disability, the age structure of the population’s employment is changing. Against the recent social reforms background in Russia in the field of increasing the retirement age, the issue of employment of older people has become particularly relevant.

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 695–706, 2020. https://doi.org/10.1007/978-3-030-47945-9_74

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2 Research Over the past 50 years, a significant demographic transition has occurred in most mature economies. Japan is an example. Just after World War II, the birth rate in Japan quickly fell below the level of the 1960s. Since the 2000s, the birth rate in Japan has remained one of the lowest in the world - around 1.3, which means that each generation will be 35% less than the generation of its parents. In a similar vein, the birth rate in European countries also declined in the 1950s and 1960s and currently averages around 1.6, which means that each generation will be 20% less than the generation of its parents. In fact, until recent years, the United States was the only large mature economy with a population reproduction rate that resisted natural decline in the population; similar situation is observed in some large developing economies, such as China, where the population reproduction rate is also at level 2. In the years ahead, aging and reduction in the number of employees is likely to become the common feature for most of the world (Liang et al. 2016). So, in 2017 in the United States, the birth rate has plummeted to 1.87, while in Russia this indicator in 2018 was 1.61 (Central intelligence agency, 2019). According to the Trade Economy analytic agency (Trading Economics 2019), the average retirement age in European countries for women is 62–65 years old, for men 65 years old, in South American countries it is 60 and 65 years old, respectively, in Canada, the retirement age for both sexes is 65 years. At the same time, the retirement age in Russia equals the indicators of Africa and East and Southeast Asia countries and, averagely, is 55 years for women and 60 years for men. Working hours upword trend is observed, first of all, in countries with a high level of economic and social development, and the increased retirement age is a natural consequence of the increase in life expectancy. However, at the same time, primary target of countries that have raised the retirement age was creation of working conditions for older workers. For example, in leading countries such as Sweden, Germany, the United Kingdom and others, popular practice - creating special jobs on which older employees are involved in mentoring and curatorial activities to help young colleagues. Companies like General Electric’s, Google, Caterpillar and many others are famous for such methods. Such a method benefits not only the company, but also the social sector. The company reduces staff turnover and advantageously trains future employees (according to OECD, employees positively respond to such practices, which potentially increase productivity), and the social sector has employed older people, which allows raising the retirement age without critical consequences for the aged population group. In Russia, this practice is not popular, since neither state nor private companies see the benefits of employing older employees. And although the entrepreneurial activity of pensioners in Russia seems more like a fantasy, such measures have already shown their effectiveness on a global scale.

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In Western countries, people over 50 are one of the most active entrepreneurial audiences. For example, in the UK, one in four business owners is over 55. It is important to note that this concerns not only people who aged, having received a position at a young age. In 2015, 43% of people starting a business were over 50 years old. In turn, the elderly employees of British companies accounted for less than a third part of the entire staff. In the United States, in 1997 entrepreneurs from 55 to 64 accounted for 15% of the total staff, and in 2016 this figure increased to 24%. Despite the difficult situation of elderly entrepreneurs in Russia, there are also successful examples. 71-year-old Vladimir Khoroshevsky, who spent most of his life researching developments in the field of artificial intelligence, in 2015 was at the forefront of the company Semantic Hub. The company is engaged in pharmaceuticals using artificial intelligence technologies. Former sailor Oleg Zagvozdkin, 55 years old, inspired by national costumes in the countries of the world, established the production of “kosovorotka” in Yekaterinburg, in 2008, naming his company “Danila - Russian Kosovorotka”. At the moment, the entrepreneur plans to launch a franchise. At the age of 50, Boris Smorodov decided to start producing valenki. However, upon entering the market, the entrepreneur faced powerful competition. To counter the large companies Smorodov decided to produce handmade valenki and win with the quality of his goods. At the moment, two retails and one online store are open. The entrepreneur is also considering entering the world market. The main problem for entrepreneurs of silver age is the lack of funds to create startup capital. Therefore, a solution should be sought either in the problem of employment of pensioners, or in increasing the pension provision of older people. Since the majority of employers refuse to recruit older employees, referring to the fact that young employees are mostly more active and have a more creative approach to work. In turn, having solved the problem of pension provision, it is possible to assist in resolving the situation with the employment of pensioners, as well as significantly facilitate their entrepreneurial activity, the stumbling block of which, as mentioned above, was the lack of start-up budget. However, it should be borne in mind that not all older persons have a high level of qualification that meets the job requirements. In the conditions of a busy schedule, older employees cannot perform labor duties efficiently, adapt to technological modernization and quickly work with large volumes of information. Since the majority of employers refuse to recruit older employees, referring to the fact that young employees are mostly more active and have a more creative approach to work. According to the Federal State Statistics Service, the remuneration of employees with significant work experience in the period from 2008 to 2014 decreased almost 2 times and is currently equivalent to the average salary of the youngest employees aged 20 to 24 years (Fig. 1).

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Fig. 1. Wages of young and old people in comparison with the average wage on a nationwide scale, %. Source: Rosstat, Average accrued wages of employees by age group

These circumstances encourage the older generation to organize their own business, as a rule, in accordance with the criteria for determining the size of enterprises in the EU and Russia, these are micro and small enterprises (Spulber 2016) (Table 1).

Table 1. Criteria defining small businesses in the European Union and the Russian Federation. Source: Monograph. An innovative approach to the work of individuals of the third age: education, labor potential, entrepreneurship. Countries

European Union

Russian Federation

Maximum value of the criteria Number of employed people Annual turnover, Euro Annual final balance, Euro Degree of independence Number of employed people Revenue Book value

Categories of enterprises Microenterprises Small enterprises Less than 9 10–49

Medium-sized enterprises 50–249

Large enterprises Over 250

Less than 2

Less than 10 Less than 50

Over 50

Less than 2

Less than 10 Less than 43

Over 43

The threshold value of equity participation or voting rights owned by another company or organization is more than 25% Less than 15 15–100 101–250 Over 250 Thershold values of revenue from the sale of goods (works, services) and the book value of assets are set once every five years, taking into account the data of continuous statistical observations of the activities of small and medium-sized enterprises (the regulation entered into force on January 1, 2020)

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Despite the fact that material interest is the main motivating factor, half of the respondents expressed satisfaction with occupying a “prestigious position”, slightly less than half of the respondents are pleased with the opportunity to remain useful to society (Table 2). Table 2. Attitude to work depending on the respondent’s employment status, %. Source: Motivation of the labor behavior of the older generation. A.S. Barashkova. - Economic analysis: theory and practice. – 2015 Employment status

Labor is an unpleasant duty

Labor is a means of declaring identity and personal enhancement

Labor is the meaning of life

Off-the-job Employed Individual entrepreneur

1 2,3 0

10,6 10,6 9,1

41,3 39 36,4

Labor is a source of material well-being 47,1 48,1 54,5

According to the project “Active Life of the Older Generation”, successfully implemented by the Foundation for Support of Public Projects under a grant from the President of the Russian Federation, today in Russia there are about 1.5 million entrepreneurs aged 50 to 72 years. Two-thirds of them are people under the age of 60, while only 5–6% of Russians of retirement and under-retirement age want to be entrepreneurs, another 12% tend to become self-employed (Komissarova 2016). The problem of choosing a successful policy on implementation of the reform of raising the retirement age is acute for Russia and the EU countries, in which, through the increase in life expectancy from 66.5 to 77 years (Federal State Statistics Service 2017) the number of pensioners is increasing, but the number of employees remains the same. Consequently, the insurance payments burden for each employee increases (RBC 2018), while in 1970 there were 3.7 employees per pensioner, then by 2044, according to the estimates of the Center for Strategic Research, this value will be 1.5. Under such demographic, institutional and economic conditions in the country it will be impossible to ensure a decent pension, therefore, a solution should be sought either in the problem of employment of pensioners, or in increasing the pension provision of older people. Involvement of older persons in entrepreneurial activity in order to increase personal material security, and economic indicators in the country, is a priority area of modern state policy. To develop a recommendation for implementation of the aforementioned in Russia, we will analyze the experience of the countries of northern Europe implementing the most effective socially-oriented model of the economy. According to the Global Retirement Index, compiled by Natixis, the most financially secured are pensioners from Norway and Switzerland (Kommersant 2018). System of national pensions of Northern Europe countries consists of three components: national (main), additional (official or labor), partial (incomplete), which is paid in Sweden and Finland. Compared to Russia, the size of the basic pension differs

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significantly from pension payments in Norway - 180 thousand rubles a year, compared to 1 million 572 thousand (Pension Fund of the Russian Federation, n.d.) which is directly proportional to the size of the income of working citizens and is the same for all citizens. The size of monthly deductions in the northern countries is 5–11% of the income of working citizens versus 22% in Russia. In percentage terms, the size of the basic pension is not large and amounts to 20% of the average earnings. Citizens who have worked for a considerable time can expect an additional part of the pension, 30 years in Sweden, 40 in Finland, Denmark and Norway. Pension in this case is more than 50% of the average income, and more than 70% of the national income. In Russia, the amount of this allowance is not so significant, and according to the Pension Fund of the Russian Federation, it amounts to 20% of the basic pension (Pension Fund of the Russian Federation, n.d.). It should be noted that when people retire early, Sweden, Germany, Denmark and the United Kingdom bear significant expenses (when they retire early, PF loses income and incurs expenses at the same time). In this regard, pension funds committed themselves to create jobs for the elderly and to provide substantial pension benefits after termination of employment. According to the given examples of a significant difference in the amount of the basic payments that form the size of the pension, we can speak of insufficient financial support for citizens of retirement age, with a subsistence rate in accordance with the Moscow Government Decree of September 10, 2019 No. 1177-ПП equal to 17 679 rubles. According to the National Institute for Systematic Research on Entrepreneurship, a significant contribution to the development of the country’s economy is made by small and medium-sized enterprises (Spulber 2016). The share of small businesses in the formation of GDP is up to 60% in Japan, up to 40% in the United States (Office Of Advocacy 2019). At the same time, the work place swap at small and medium-sized enterprises for older people reaches 72% on average in EU countries and 54% in the USA. In Russia, there is also a systematic increase in the number of small enterprises from 105 thousand registered in the EGRN (USRN) system in 2008 to 2 million 335 thousand in 2016 (Spulber 2016). An active social policy aimed at improving the legal, computer and financial literacy of the senior population increases the prestige of entrepreneurship among older people (All-Russian public organization union of pensioners of Russia 2019). According to the United Credit Bureau, in 2018 the number of borrowers over 60 years old increased by 11% and amounted to 8.28 million people. As part of the study, an attempt was made to study the current situation related to the problem of employment of older people, the results of which offer recommendations that have the maximum economic effect for both senior citizens and for the economic development of the country. As optimal options, it is proposed to engage in mentoring, curating young employees and organizing a company on a franchise basis, as a type of entrepreneurial activity, for example, in the form of self-employment. These types of businesses require knowledge acquired over time. Therefore, the ability and tendency of people to provide services that require experience, such as counseling, increases gradually over time, as shown in Figs. 2 and 3. Based on the above statistics, a clear increase in counseling tendency with an increase in age can be traced. Thus, acquired skills can be as a competitive advantage for younger entrepreneurs.

Entrepreneurship at a Mature Age Under 30 y.o.

13

30-39 y.o.

6

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40-49 y.o.

4

50-55 y.o.

3

4

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4 5

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Older 60 y.o.

8

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3

56-60 y.o.

9

4

2

5

5

2 1

3

2 3

2 2

701

2 11

3

3

2

3

2 11 2 1

2 1111

Public services

Consulting (law, audit, real estate)

Trade

Construction, repair

Design, engineering, digital technology, advertising

Production

Education, medicine

Transportation (passenger, freight)

Rental business

Fig. 2. Answers to the question: “In what area is your business, what exactly do you do?”, number of respondents. Source: “Readiness for entrepreneurship of age cohorts of job seekers in searching employment”, Results of an online survey of job seekers, 2019, New Generation Community of Employers

0%

Under 30 y.o.

10%

20%

30%

40%

30-39 y.o.

29

40-49 y.o.

30

50-55 y.o.

28

56-60 y.o.

28

Older 60 y.o.

50%

21

31

70% 6

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9

19

10 11

5

14

5 5

7

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100%

4 3 11 6 6

3 2 21 9

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90%

6 5

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80% 8

7

16

22 17

37

60% 14

3 2 21

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121

9

6

2 2 2

Public services

Trade

Production, agriculture, energy

Consulting

Digital technologies, IT, advertising

Education, medicine, science, design, art

Construction, installation

Needlework, hand-made, craft, creativity

Transport, transportation

Social sphere, public activity, NCO

12

Not sure

Fig. 3. Answers to the question: “In what area would you like to open your own business?”, % of respondents in each age group. Source: “Readiness for entrepreneurship of age cohorts of job seekers in searching employment”, Results of an online survey of job seekers, 2019, New Generation Community of Employers

Importance of experience can also be traced in the way of acquiring knowledge for starting your own business. At the same time, it is possible to observe an increase in its significance with the transition to each subsequent age group that can be traced from Fig. 4.

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Under 30 y.o. 30-39 y.o. 40-49 y.o. 50-55 y.o. 56-60 y.o. Older 60 y.o.

0.02

1 1 1 1 2 1 1

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

2 3 2

3 1

3 4

5 3

1

3

10

3

Wherever I can Personal experience, including business experience Various information media, literature, Internet My education Learning from other entrepreneurs, professionals Nowhere, I don’t need it, I don’t know where, for now I’m doing nothing

Fig. 4. “Answers to the question about obtaining knowledge for starting a business, independently proposed by respondents”, % of respondents in each age group. Source: “Readiness for entrepreneurship of age cohorts of job seekers in searching employment”, Results of an online survey of job seekers, 2019, New Generation Community of Employers

Thus, experience can become an extremely important factor in starting a business, which is of particular importance if we take into account the fact that motivation in adulthood is reduced, which is confirmed by surveys (see Fig. 5) and statistics on the share of entrepreneurs in different age groups, the distribution of which can be described as u-inverted. This may affect the general performance of the entrepreneur or interest in starting a business.

0%

Under 30 y.o. 30-39 y.o. 40-49 y.o. 50-55 y.o. 56-60 y.o. Older 60 y.o.

20%

40% 15 16 19

35 32 32 26 26 24

15 17 15

60%

80% 30 34 37

47 40 53

100% 20 18 12 11 17 8

State subsidies for starting a business Successful examples of starting a business be close friends Nothing motivates Affordable quality education on the subject

Fig. 5. Answers to the question: “Answers to the question” What would motivate you to open your own business? “”, % of respondents in each age group. Source: “Readiness for entrepreneurship of age cohorts of job seekers in searching employment”, Results of an online survey of job seekers, 2019, New Generation Community of Employers

The issue of interest in doing business manifests itself in macroeconomic indicators, as James Liang, Hui Wang and, Edward P. Lazear write about. The study claims

Entrepreneurship at a Mature Age

703

that the decrease of life expectancy among the population by 3.5 years (at the time of 2010), results an increase in entrepreneurial activity by 2.5%. Secondly, and just as importantly, in general, in societies with a more mature population, entrepreneurial activity among all age categories is falling. The result is a steady decline in the private sector with a decreasing number of new companies, which can be illustrated by the example of Japan. Between 1999 and 2014, the number of SMEs decreased by 21%, from 4.8 million to 3.8 million, which is a result of aging business owners who are unable to find a successor and weak entrepreneurial interest within society, especially among women. Caused by the low level of entry into the business, Japan’s SME sector is relatively old; companies older than 10 years make up three-quarters of Japan’s small enterprises (less than 50 employees), compared with less than half in most OECD countries. Thus, aging business owners are not replaced by new young companies. Due to the specifics of the above-mentioned business areas, the number of people required to carry out the company’s activities is small. Therefore, people of a mature age run their business as self-employment. Of course, the possibilities for raising the level of self-employed at a mature age depend on the willingness of older people to become entrepreneurs and the presence of effective political measures to increase people’s readiness for this. This choice may also be a necessary measure if a person has no other options, such as applying for a job as a hired labor. An increase in the proportion of self-employed, in terms of EP, among older people can lead to many positive results. The main ones are: 1) extending the working life of people (Webster and Walker 2005), 2) reducing unemployment among older people (PRIME 2005), 3) increase the social integration of older people (Kautonen et al. 2008) and 4) increase the innovative potential of the economy by using the human and social capital of older people through new innovative types of business. It also follows that some older workers are switching from employment not to retirement but to self-employment, which can provide flexibility in the work schedule and type of activity that is preferable for people in old age. However, in general, few research has been devoted to the relationship between aging and entrepreneurship, and even less attention has been paid to people 50 years of age and older who are self-employed (de Bruin and Firkin 2001; Singh and DeNoble 2003; Karoly and Zissimopoulos 2004; Kerr and ArmstrongStassen 2011). The experience of some countries of northern Europe and the European Union as a whole is worth mentioning. For example, the share of self-employed has traditionally been low in Sweden over the past decade compared with the average numbers for the European Union: 8.6% against 13.7% in 2017. However, women’s share among the self-employed in recent years has increased slightly and amounts to more than 35% of the total. There was also a shift in the proportions in different age groups. The group of older people (over 65 years old) has grown the most. The structure of self-employment in Sweden is substantially reminiscent of the experience of other countries in the northern part of the EU. Another way to measure entrepreneurial activity is the early-stage entrepreneurial activity measure (TEA), which measures the proportion of people involved in setting up or running a new business that is less than 42 months old. Sweden’s overall TEA is slightly above the EU average (7.3% versus 6.7%). These figures are also higher than the EU average for men (9.2% versus 8.5%) and older people (6.1% versus 4.3%),

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while Swedish youth had a lower TEA than in the European average (7.1% versus 7.7%). TEA for older people is one of the highest in the EU. Nevertheless, “compelled” entrepreneurship, based on the need to create their own business, is still very poorly distributed in Sweden and is also significantly lower than the EU average (7.0% versus 20.3%). Although among all age groups, older people aged 50 to 64 are more likely than others to undertake need-based entrepreneurship (7.4%), which is still much lower than the EU average for this age group (24.3%) (Backman and Karlsson 2017). The opposite situation occurs in Denmark. In general, Danes are less likely to be selfemployed than the EU average. It is caused mostly by lower unemployment rates compared with the EU average. As well as the Danish social unemployment security and other social security systems alter the decision on running a business. Self-employment rates for various social target groups have been stable over the past decade. In 2017, the level of self-employment was approximately half the indicator for the EU (7.3% versus 13.7%). About 11% of working seniors (55 years and older) were self-employed in 2017, and this proportion has been unchanged over the past decade. Denmark’s overall early-stage entrepreneurial activity (TEA) was below the EU 2013-17 level. 5.5% of the adult population (18–64 years old) in Denmark was involved in starting a new business or running a new business (less than 42 months), while there were 6.7% of the population in the EU (Backman and Karlsson 2017). In both Denmark and the EU, the likelihood that men will start a new business is about two times higher than that of women. Similarly, young people in Denmark and the EU were more active than older people. However, this state of affairs is not dangerous for the Danish economy due to low unemployment. The relevance of self-employment is additionally reduced due to social policy measures that reduce the risks of people left without work (OECD 2018a, b). In order to increase the business literacy of older people at universities, officials launch specific programmes for training potential and aspiring entrepreneurs. For instance, the so-called “third-age” universities in Kazan and Moscow or St. Petersburg “Silver Age” Universities have annual programmes in economics and law, psychology, and the German language within the curricula of the five university departments – the Humanitarian, the Mass Communications and Computer Science, the Culture and Creativity, the Health and Safety, and the Personal Psychological Support ones. The “Silver Age” University in St. Petersburg, among other things, has a specialization in graphics and design. As part of these programmes, students are trained to develop a business plan aiming to further implementing a business project and starting their own business. Despite the created conditions for the development of small businesses, the problems related to the financing of start-ups remain relevant. A start-up entrepreneur requires significant financial investments, which turn out to be unbearable even for older workers over 50 years old. As a possible way out of this situation, the state offers pensioners attractive loan conditions for the creation of small businesses. The stateowned bank SME Bank, specializing in small and medium-sized businesses, is part of the Vnesheconombank group which in turn is a state-owned corporation. A borrower over 45 years of age is offered a loan of up to 10 million rubles for a period of up to 7 years at 6.5% per annum. However, at the moment, not a single application has been approved. In other banks, similar projects have long been under development.

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Also, few elderly people go for loans to banks, preferring to borrow money from friends or look for other ways to collect money due to distrust of the banking system. This state of affairs is forcing retirees to turn to private investors. Appeals to private investors do not bring any significant results since the latter treat older entrepreneurs with extreme caution, in view of the lack of financial guarantees and are in no hurry to give them large sums for the development of their enterprises. Investors justify their restraint by the fact that an extremely small number of pensioners comes to them with really promising ideas. Disappointing statistics shows a low percentage of success of the created start-ups due to the complex adaptation to constantly changing market conditions. Pensioners are not ready to change their lifestyle for the sake of maintaining their entrepreneurial activity. Thus, they either have to open a business in traditional areas and walk along the already well-trodden path, but face fierce competition, or open franchises, which are a kind of imitation of entrepreneurial activity although they have a chance.

3 Conclusions Within the framework of the problem under consideration, it is advisable to draw several conclusions. • Firstly, the problem of population aging exists not only in Russia but also in other developing and developed countries. This global trend is associated with an increase in life expectancy and a decrease in the reproduction rate of the population. As a result, there is no replacement for the older age groups with younger ones. • Secondly, such demographic dynamics creates economic turbulence. This happens not only because the growth rate of employees may decrease, but also because of a drop in business activity of the existing and potential mature entrepreneurs. • Thirdly, a range of measures can be taken to combat the negative manifestations of age-related shifts in the age structure. The possible solution to the aforementioned problems can be the active involvement of citizens over 50 years old through the implementation of university educational programmes aimed at raising awareness of business methods. Such measures as pursuing human capital development policies, introducing special lending systems and stimulating the launch of mentoring and curatorial programmes in companies in order to create extra jobs and employ the older part of the population can also help to tackle the issue.

References Backman, M., Karlsson, C.: Entrepreneurship and age across time and space. Tijdschrift voor Economische en Sociale Geografie 109, 371–385 (2017) Central intelligence agency: Russia. https://www.cia.gov/library/publications/the-worldfactbook/geos/rs.html. Accessed 01 Dec 2019 Central intelligence agency: United States. https://www.cia.gov/library/publications/the-worldfactbook/geos/us.html. Accessed 04 Dec 2019

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de Bruin, A., Firkin, P.: Self-Employment of the Older Worker (2001) Federal State Statistics Service. https://www.gks.ru/free_doc/doc_2017/demo17.pdf. Accessed 04 Dec 2019 Kautonen, T.: Understanding the older entrepreneur: comparing third age and prime age entrepreneurs in Finland. Int. J. Bus. Sci. Appl. Manag. 3, 3–13 (2008) Kerr, G., Armstrong-Stassen, M.: The bridge to retirement older workers’ engagement in postcareer entrepreneurship and wage-and-salary employment. J. Enterpren. 20, 55–76 (2011). https://doi.org/10.1177/097135571002000103 Komissarova, T.: Active professional life upon reaching retirement age (2016). https://isp.hse.ru/ data/2018/01/24/1163176285/Komissarova%20Tatiana_HSE_22-01-2018_%D0%B8%D1% 82%D0%BE%D0%B3.pdf. Accessed 04 Dec 2019 Kommersant 2018. https://www.kommersant.ru/doc/3889468 Kommersant: Bcя cтapocть миpa, 19 July 2019. https://www.kommersant.ru/doc/3689648. Accessed 03 Dec 2019 Liang, J., Wang, H., Lazear, E.P.: Demographics and Entrepreneurship. Stanford University (2016) OECD: Inclusive Entrepreneurship Policies: Country Assessment Notes, Sweden (2018a). https://www.oecd.org/cfe/smes/SWEDEN-IE-Country-Note-2018.pdf.Accessed 04 Dec 2019 OECD: Inclusive entrepreneurship trends and policies in Denmark (2018b). http://www.oecd. org/cfe/smes/DENMARK-IE-County-Note-2018.pdf. Accessed 02 Dec 2019 OECD: Japan Policy Brief, April 2015. https://www.oecd.org/japan/japan–greater-genderequality-for-more-inclusive-growth.pdf. Accessed 04 Dec 2019 Pension Fund of the Russian Federation. http://www.pfrf.ru/opendata/. Accessed 29 Nov 2019 Trading Economics: Retirement age in different countries of the world. https://tradingeconomics. com/indicators. Accessed 28 Dec 2019 Singh, G., DeNoble, A.: Early retirees as the next generation of entrepreneurs. Enterpren. Theory Pract. 27, 207–226 (2003). https://doi.org/10.1111/1540-8520.t01-1-00001 Spulber, D.: An innovative approach to the work of individuals of the third age: education, labor potential, entrepreneurship. Samara State Technological University, Samara (2016) Stirzaker, R., Galloway, L.: Entrepreneurial intentions in the third age: a review of the UK situation (2014) Webster, B., Walker, E.: Smart training for the older entrepreneur. ECU Publications (2005) Wennekers, S., van Stel, A., Carree, M., Thurik, R.: The relationship between entrepreneurship and economic development: is it U-shaped? (2010) Zissimopoulos, J., Karoly, L.: Self-Employment and the 50+ Population (2012)

Uniform Approximations for Solutions of a Singularly Perturbed System of Differential Equations in a Particularly Critical Case S. Karimov(&) and G. Anarbaeva Osh State University, Osh, Kyrgyzstan [email protected], [email protected]

Abstract. This paper is describing solutions for singularly perturbed linear systems which are considered in a particularly critical case. The matrix of a linear system has complex conjugate eigenvalues. The eigenvalues of the matrix system under consideration do not have zeros on the boundary of the region under consideration and outside of this region. Imaginary parts of the eigenvalues of the matrix are positive with the exception of boundary points in the considered domain. For evaluation of functions, a proved lemma was used. A uniform approximation was constructed for the solution of the initial Cauchy problem in particularly critical case with a certain degree of accuracy. Keywords: Singularly perturbed system
Differential equations problem
Solution
Critical case
Uniform approximations


Cauchy

1 Introduction Interest in studying the asymptotic behavior of differential equation [1] system solutions with a small parameter and high derivatives is closely related to demands of physics and technology, where such systems are often applied [2]. It is well known that mathematical models of many physical processes are differential equations containing parameters [3]. These parameters are included in the equation, and serve as a quantitative characteristics of various factors that influence the course of the process under study; if a certain factor slightly affects the process, then the corresponding parameter will be small. In such cases, it is natural to set the small parameter equal to zero and obtain a simpler problem, which is called unperturbed [4]. Moreover, one can hope that the solution of the original (perturbed) problem for sufficiently small values of the parameter will differ little from the solution of the unperturbed problem. However, in singularly perturbed problems [5], the proximity of a small parameter to zero does not provide uniform closeness of the solutions to the unperturbed (in this case it is called degenerate) and perturbed problems. The class of singularly perturbed problems includes differential equations containing a small parameter [6] as a factor in the highest derivative. When passing to a degenerate problem, the order of such an equation decreases; therefore, the solution of a degenerate equation, generally speaking, cannot satisfy all the additional conditions specified for the original equation, and some of the additional © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 707–714, 2020. https://doi.org/10.1007/978-3-030-47945-9_75

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conditions must be discarded. As a result, in the vicinity of that part of the boundary of the region under consideration, where additional conditions turned out to be discarded, the solution of the degenerate problem will certainly not approximate the solution of the original problem. In the case of a change in stability, singularly perturbed problems arise as mathematical models in many applied problems. In particular, in the problems of chemical kinetics, they describe fast bimolecular reactions. Problems of singular perturbation equations are of common occurrence in all branches of applied mathematics [7–9]. Earlier, the singular perturbation theory for ordinary differential equations have been studied [10–12]. Also, the numerical solution of singularly perturbed nonlinear partial differential equations was reported [13]. Solutions of the Cauchy problem for a class of nonlinear integrodifferential equations [14], the critical nonlinear Schrödinger equation [15], and for nonlinear Schrödinger equations in modulation spaces [16] were performed. In this paper we are describing solutions for uniform approximations of a singularly perturbed system of differential equations in a particularly critical case. Functions were evaluated by a proved lemma as shown below. The problem under consideration is as follows: ex0 ðt; eÞ ¼ DðtÞxðt; eÞ þ e½f ðtÞ þ BðtÞxðt; eÞ

xðt0 ; eÞ ¼ x0 ðeÞ;
x0 ðeÞ
¼ OðeÞ;

ð1Þ ð2Þ

where DðtÞ ¼ diagðk1 ðtÞ; k2 ðtÞÞ; f ðtÞ ¼ colonðf1 ðtÞ; f2 ðtÞÞ; BðtÞ ¼ ðbkj ðtÞÞ21 ; e [ 0 small parameter; ½t0 ; T0 - segment of actual axis, t0 \T0 ; t ¼ t1 þ it2 ; t1 ; t2  actual; H0 ¼

8 < :

Zt ðt1 ; t2 Þ : Re

kj ðsÞds  0ðj ¼ 1; 2Þ t0

9 = ;

¼ fðt1 ; t2 Þ : t0  t1  T0 ; 1 \t2 \ þ 1g  S ¼

¼ fðt1 ; t2 Þ : t0  c\t1 \T0 þ c; 1\t2 þ 1; 0\c\\1g;

^ OðSÞ space of analytical functions in S; For the solution xðt; eÞ ¼ ^ colonðx1 ðt; eÞ; x2 ðt; eÞÞ we will look in the class xj ðt; eÞ 2 OðSÞ ðj ¼ 1; 2Þ at t.

2 Demanding Solution of the Following Conditions ^ ^ ^ I. kk ðtÞ 2 OðSÞ; fk ðtÞ 2 OðSÞ; bkj ðtÞ 2 OðSÞ; k1 ðtÞ ¼ k2 ðtÞ; kk ðtÞ has no zeros in the area of H0 . II. k1 ðtÞ ¼ aðtÞ þ ibðtÞ; k2 ðtÞ ¼ aðtÞ  ibðtÞ; where aðtÞ; bðtÞ real functions, and aðtÞ\0 at t0  t\a0 ; aðtÞ [ 0 at a0 \t  T0 ; aða0 Þ ¼ 0; but bða0 Þ 6¼ 0:

Uniform Approximations for Solutions of a Singularly Perturbed System

709

III. We assume the existence of a line-level connecting any point of the segment ½t0 ; a0 Þ Rt with some segment of ða0 ; T0 . For the function of uj ðt1 ; t2 Þ ¼ Re kj ðsÞds; t0

j ¼ 1; 2 the condition of u1 ðt0 ; t2 Þ ¼ u1 ðT0 ; t2 Þ ¼ 0 is completed at 1\t2 \ þ 1; 8t 2 H0 : Imk1 ðtÞ [ 0 with the exception of the directs t1 ¼ t0 ; t1 ¼ T0 . First, the problem (1), (2) is replaced by the following equivalent problem: Zt xðt; eÞ ¼ Eðt; t0 ; eÞx ðeÞ þ

Eðt; s; eÞ½BðsÞxðs; eÞ þ f ðsÞds;

0

ð3Þ

t0

Rt where Eðt; s; eÞ ¼ expð1e DðsÞÞds. s

As in our previous work, we recursively define the following functions: ð0Þ

Zt

ð1Þ

x ðt; eÞ  0; x ðt; eÞ ¼ Eðt; t0 ; eÞx ðeÞ þ

Eðt; s; eÞf ðsÞds;

0

t0

x

ðn þ 1Þ

Zt ðt; eÞ ¼

Eðt; s; eÞBðsÞxðnÞ ðs; eÞdsðn ¼ 1; 2; . . .Þ

ð4Þ

t0

Obviously, xð1Þ ðt; eÞ is determined from (3) as a regular first approximation; x ðt; eÞ ðn ¼ 2; 3; . . .Þ is not a conventional serial approach. Then the solution of the problem (1), (2) can be represented as: ðnÞ

xðt; eÞ ¼ xð1Þ ðt; eÞ þ xð2Þ ðt; eÞ þ . . . þ xðnÞ ðt; eÞ þ . . .

ð5Þ

3 Solution of the Problem Now the problem is that how to build a majorant series coming down to a series of functions (5) at 0 \ e  e0  const; t 2 H0 :   We will note, that xðnÞ ðt; eÞ 2 UðH0 Þ; where H0 ¼ ðt1 ; t2 Þ : uj ðt1 ; t2 Þ  0; j ¼ 1; 2 . Let dðeÞ ¼ e ln e, at 0\e  e1 and dð0Þ ¼ 0; where d0 - constant, and 0\d0 \\1; Let fC1 g ðu1 ðt1 ; t2 Þ ¼ C1 Þ connect the points ðt01 ; 0Þ; ðT1 ; 0Þ; and fC2 g ðu1 ðt1 ; t2 Þ ¼ C2 Þ points ðt02 ; 0Þ; ðT2 ; 0Þ; ðt0 \t01 \t02 \a0 ; a0 \T2 \T1 \T0 Þ. We will consider line P bounded by the curves of the levels fC1 g и fC2 g and segments of the real axis ½t01 ; t02 ; ½T2 ; T1  :

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On the line P we will consider the following equations: u1 ðt1 ; t2 Þ ¼ at1 þ b;

ð6Þ

C1 2 t01 where a ¼ CT22t ; b ¼ C1 TT22 C t01 : 01

The Main Lemma: If level lines u1 ðt1 ; t2 Þ ¼ C ðC2  C  C1 Þ completely cover line P and an arbitrary point ðt1 ; t2 Þ of the line P belongs to a single line-level, Imk1 ðtÞ 6¼ 0; then the Eq. (6) in the line P defines valued continuously differentiable function t2 ¼ uðt1 Þ with the region of existing of ðt01  t1  T2 Þ and the curve segment ðK0 Þ, defined by this function, connects points ðt01 ; 0Þ; ðT2 ; 0Þ; and at this u1 ðt1 ; uðt1 ÞÞ decreasing on ½t01 ; T2 : Proof. Let wðt1 Þ ¼ at1 þ b: As wðt1 Þ defined, continuously and monotonically decreasing on the interval and wðt01 Þ ¼ C1 ; wðT2 Þ ¼ C2 \C1 ; then at ðt01  t1  T2 Þ is just C1  wðt1 Þ  C2 : Let’s consider the level line u1 ðt1 ; t2 Þ ¼ C ðC2  C  C1 Þ. Level lines fC g  P: For the given value C is uniquely determined by the value of t1 ¼ t1 from equality   wðt1 Þ ¼ C t1 ¼ Cb a ; and t1 2 ½t01 ; T2 : And now via the point ðt1 ; 0Þ we will draw a line parallel to the y-axis. This line is the line of the level fCg that intersects at a single point ðt1 ; t2 Þ. Thus, to each value of t1 ¼ t1 2 ½t01 ; T2  corresponds a single point of ðt1 ; t2 Þ 2 fC g that of u1 ðt1 ; t2 Þ ¼ C ¼ wðt1 Þ ¼ at1 þ b; and u1 ðt01 ; 0Þ ¼ C1 ¼ wðt01 Þ ¼ C1 ; u1 ðT2 ; 0Þ ¼ C2 ¼ wðT2 Þ ¼ C2 : The existence of the curve ðK0 Þ, connecting the points ðt02 ; 0Þ; ðT2 ; 0Þ; wholly belonging to the line P and having the Eq. (6) is proved. As u1t2 ðt1 ; t2 Þ ¼ Jmk1 ðt1 ; t2Þ 6¼ 0; then from (6) the valued continuously differentiable function of t ¼ uðt Þ; uðt Þ ¼ Re k1 ðt1 ;t2 Þa : is defined. 2

1

1

Jmk1 ðt1 ;t2 Þ

u1 ðt1 ; uðt1 ÞÞ  at1 þ b; т.e. u1 ðt1 ; uðt1 ÞÞ is decreasing on ½t01 ; T2 : The lemma has been completely proved. The main lemma was proved with an original method in [1]. Here we have Here we have another proof. Let aðeÞ be defined, continuously and monotonically decreasing on the interval 0  e  e0 ; and at að0Þ ¼ 0. Then from the equality u1 ðt1 ; 0Þ ¼ aðeÞ

ð7Þ

In a neighbourhood of the point ðt1 ¼ t0 ; e ¼ 0Þ is uniquely determined t1 ¼ t0 þ cðeÞ, and lim cðeÞ ¼ 0; where cðeÞ  0 is a continuous function from e at e!0

0  e  e0 : Similarly, from (7) in a neighbourhood of ðt1 ¼ T0 ; e ¼ 0Þ is uniquely c ðeÞ; where e c ðeÞ  0 is a continuous function from e at determined t1 ¼ T0  e 0  e  e0 , and lim e c ðeÞ ¼ 0 e!0

Uniform Approximations for Solutions of a Singularly Perturbed System

n To value the functions of

711

o ðnÞ xj ðt; eÞ ðj ¼ 1; 2; n ¼ 1; . . .Þ we will use the main

lemma. Let the line of the level ðC1 Þ connect the points ðt01 ; 0Þ; ðT2 ; 0Þ, the line of the level ðC2 Þ connect the points ðt02 ; 0Þ; ðT2 ; 0Þ. Let’s take the curve ðK0 Þ symmetrical to ðK0 Þ. ~ ¼ D [ H, where D ¼ Area bounded ðK0 Þ and ðK0 Þ we will mark by H  H0 : H ðnÞ

fðt1 ; t2 Þ : t0  t1  t01 ; t2 ¼ 0g: And now we will value x1 ðt; eÞ ðn ¼ 1; 2; . . .Þ for 8t 2 ~ For all functions xðnÞ ðt; eÞðn ¼ 1; 2; . . .Þ the path of integration of l will be constant. H: 1 There is also the path of integration of l that is determined depending on which set the point belongs ðt1 ; t2 Þ. If ðt1 ; t2 Þ 2 Dðt ¼ t1 ; t2 ¼ 0Þ; then l consists of one segment of linear segment, connecting the point ðt0 ; 0Þ with the point ðt1 ; 0Þ ðt0  t1  t01 Þ. In this case Re kk ðtÞ   a; a [ 0  const: 3 S Let ðt1 ; t2 Þ 2 H. Then l ¼ lk ; where l1 - linear segment, connecting the points k¼1

ðt0 ; 0Þ with the point ðt01 ; 0Þ; l2 - curve segment ðK0 Þ, connecting the points ðt01 ; 0Þ with the point ðt1 ; t2 Þ;; l3 - linear segment, connecting the points ðt1 ; t2 Þ; with the point ðt1 ; t2 Þ;. We will note that if ðt1 ; t2 Þ 2 H; then the vertical line passing through the point ðt1 ; t2 Þ intersects the curve ðK0 Þ at the single point ðt1 ; t2 Þ: Further the path of integration of l is determined as here. ðnÞ For x2 ðt; eÞðn  1Þ the path of integration of l is symmetrical for l in respect to the real axis. If C1 ¼ d0 ; C2 ¼ 2d0 ; then Z exp 1 ½u1 ðt1 ; t2 Þ  u1 ðs1 ; s2 Þ jdsj ¼ OðeÞ: e

ð8Þ

l

e 0Þ where b [ 0 ðb ~ [ 0Þ The curve ðK0 Þ connects the points ðt0 þ b; 0Þ; ðT0  b; const: ~ [ Hc ; ~c ¼ D In this case the area bounded ðK0 Þ and ðK0 Þ we will mark by Hc and H ~ ¼ fðt1 ; t2 Þ : t0  t1  t0 þ b; t2 ¼ 0g: where D So in this case we have the estimate: ðnÞ n ð9Þ xj ðt; eÞ  ðceÞÞ ðj ¼ 1; 2; n ¼ 1; 2; . . .Þ; ~ c: where the constant c depends neither on n, nor on e; ðt1 ; t2 Þ 2 H pffiffiffi pffiffiffi If C1 ¼  e; C2 ¼ 2 e; than the curve ðK0 Þ connects the points ðt0 þ c1 ðeÞ; 0Þ; c 1 ðeÞ; 0Þ: In this case the area bounded ðK0 Þ and ðK 0 Þ we will mark by He and ðT0  e ~ e ¼ De [ He ; where De ¼ fðt1 ; t2 Þ : t0  t1  t0 þ c1 ðeÞ; t2 ¼ 0g. H

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Then, if

then the estimates are just: pffiffi n ðnÞ xj ðt; eÞ  ðc eÞ ðj ¼ 1; 2; n ¼ 1; 2; . . .Þ;

ð10Þ

where the constant c depends neither on n, nor on e; If C1 ¼ dðeÞ; C2 ¼ 2dðeÞ; than the curve ðK0 Þ connects the points ðt0 þ c2 ðeÞ; 0Þ; ðT0  e c 2 ðeÞ; 0Þ: In this case the area bounded ðK0 Þ and ðK 0 Þ we will mark by Ke ~ e [ Ke , where D ~ e ¼ fðt1 ; t2 Þ : t0  t1  t0 þ c ðeÞ; t2 ¼ 0g: Then, if ~e ¼ D and K 2 ~ ðt1 ; t2 Þ 2 Ke ; then the estimates are just:  ~n n ðnÞ ð0\e  e0 ; j ¼ 1; 2; n ¼ 1; 2; . . .Þ; xj ðt; eÞ  jln ej

ð11Þ

where the constant c depends neither on n, nor on e. c k ðeÞ ðk ¼ 1; 2Þ have the same properties as the cðeÞ; e c ðeÞ: Here ck ðeÞ; e The following theorem is just: ~e Theorem 1. Let conditions I, II, and III be completed. Then for the problem (1), (2) at K ~ c ; (10) at H ~ e ; (11) at K ~e: there is the only solution and the value is correct for it: (9) at H We will consider a definite problem: e_x0 ðt; eÞ ¼ AðtÞxðt; eÞ þ f ðtÞ;

x0 ðt0 ; eÞ ¼ x0 ðeÞ;
x0 ðeÞ
¼ Oð1Þ;  where AðtÞ ¼

sin t  cos t

ð1aÞ ð2bÞ

cos t ; t0 ¼  p2 ; T0 ¼ p2 ; e [ 0 – small parameter; sin t

4 Main Results

Theorem 2. If
A1 ðtÞf ðtÞ
¼ Oð1Þ in H0 , then the problem (1a), (2b) has a single solution and for it the following values are just:

wðt; eÞ 
xðt; eÞ þ A1 ðtÞf ðtÞ
¼ OðeÞ at t0  t  T0  arcsin d0 ; d0  const; 0\d0 \\1; , wðt; eÞ ¼ Oðea Þat T0  arcsin d0  t  T0  arcsin ep ; p  const; 0\p\1; a ¼ 1  p; ;  1 wðt; eÞ ¼ O at T0  arcsin ep  t  T0  arcsinðejln ejÞ; jln ej

T0  arcsinðejln ejÞ  t  T0 :

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5 Conclusions Thus, uniform approximations were constructed for the solution of a singularly perturbed system of differential equations with any degree of accuracy in a particularly critical case. Results of the asymptotic of singularly perturbed problems study, and their applications can be applied in the theory of nonlinear oscillations, in solving stationary and non-stationary problems in the theory of semiconductor devices, in various fields of radio engineering of physical and technical acoustics, in hydro and aerodynamics, etc. These results can be used by students, graduate students and young scientists in solving specific problems and in studying the asymptotic behavior of singularly perturbed systems in an unstable region.

References 1. Akhmet, M.U.: Asymptotic behavior of solutions of differential equations with piecewise constant arguments. Appl. Math. Lett. 21(9), 951–956 (2008). https://doi.org/10.1016/j.aml. 2007.10.008 2. Cherruault, Y., Choubane, M., Valleton, J.M., Vincent, J.C.: Stability and asymptotic behavior of a numerical solution corresponding to a diffusion-reaction equation solved by a finite difference scheme (Crank-Nicolson). Comput. Math Appl. 20(11), 37–46 (1990). https://doi.org/10.1016/0898-1221(90)90217-8 3. Hoppensteadt, F.: On systems of ordinary differential equations with several parameters multiplying the derivatives. J. Differ. Equ. 5(1), 106–116 (1969). https://doi.org/10.1016/ 0022-0396(69)90106-5 4. Zhang, X., Liu, L., Wu, Y.: Multiple positive solutions of a singular fractional differential equation with negatively perturbed term, Math. Comput. Modell. 55(3–4), 1263–1274 (2012). https://doi.org/10.1016/j.mcm.2011.10.006 5. Mo, J., Ni, M.J.: Recent progress in study of singular perturbation problems. Shanghai Univ. (Engl. Ed.) 13, 1 (2009). https://doi.org/10.1007/s11741-009-0101-1 6. Mainardi, F.: Fractional Calculus: Theory and Applications. https://doi.org/10.3390/ books978-3-03897-207-5. ISBN 978-3-03897-206-8 7. Kumar, M., Parul, : Methods for solving singular perturbation problems arising in science and engineering. Math. Comput. Modell. 54(1–2), 556–575 (2011). https://doi.org/10.1016/ j.mcm.2011.02.045 8. Atangana, A.: On the singular perturbations for fractional differential equation. Sci. World J. 2014, 9 (2014). https://doi.org/10.1155/2014/752371. Article ID 752371 9. Zhang, S., Zhang, H.Q.: Fractional sub-equation method and its applications to nonlinear fractional PDEs. Phys. Lett. A 375(7), 1069–1073 (2011). https://doi.org/10.1016/j.physleta. 2011.01.029 10. Fenichel, N.: Geometric singular perturbation theory for ordinary differential equations. J. Differ. Equ. 31(1), 53–98 (1979). https://doi.org/10.1016/0022-0396(79)90152-9 11. Athanassov, Z.S.: Perturbation theorems for nonlinear systems of ordinary differential equations. J. Math. Anal. Appl. 86(1), 194–207 (1982). https://doi.org/10.1016/0022-247X (82)90264-5 12. Fečkan, M.: Singular perturbed problems in ordinary differential equations. J. Math. Anal. Appl. 163(1), 38–46 (1992). https://doi.org/10.1016/0022-247X(92)90275-I

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13. Lipitakis, A.D.: The Numerical Solution of Singularly Perturbed Nonlinear Partial Differential Equations in Three Space Variables: The Adaptive Explicit Inverse Preconditioning Approach. Modell. Simul. Eng. 2019, 9 (2019). https://doi.org/10.1155/2019/ 5157145. Article ID 5157145 14. Bonzani, I., Vacca, M.T.: The solution to the Cauchy problem for a class of nonlinear integrodifferential equations. Appl. Math. Lett. 8(4), 25–28 (1995). https://doi.org/10.1016/ 0893-9659(95)00041-N 15. Cazenave, T., Weissler, F.B.: The Cauchy problem for the critical nonlinear Schrödinger equation in Hs. Nonlinear Anal. Theor. Methods Appl. 14(10), 807–836 (1990). https://doi. org/10.1016/0362-546X(90)90023-A 16. Ru, S., Chen, J.: The Cauchy problem for nonlinear Schrödinger equations in modulation spaces. Nonlinear Anal. Real World Appl. 24, 83–97 (2015). https://doi.org/10.1016/j. nonrwa.2015.01.005

Classification of Constitutional Principles of the Modern Economic System E. E. Barinov1(&), L. G. Berlyavskiy1, M. A. Manukyan1, and Sh. M. Nuradinov2 1

2

Rostov State University of Economics, Rostov-on-Don, Russia [email protected], [email protected] Moscow University of the Ministry of Internal Affairs of Russian Federation, Moscow, Russia [email protected]

Abstract. Purpose. The presented paper is devoted to the classification of the constitutional principles of the modern economic system. The concept of the foundations of the constitutional system in the context of the study of the Economic Constitution is studied, the approaches of theorists of Constitutional law on this problem are compared. The classification of the constitutional principles of the modern economic system that consists of ten components is proposed. Design/Methodology/Approach. In the process of studying the formal-legal, comparative-legal and historical-legal methods were used. An important way of scholarly analysis of the foundations of the constitutional system is their classification, built on the basis of a systematic approach to the study of sources of Constitutional law. The classification refers to the established system of knowledge, the concept of which means the ordered groups, which are distributed objects of the subject area of Constitutional law on the basis of their similarity in certain properties. This system is designed to solve two main problems: first, to present all the objects of this subject area in a reliable form for observation and recognition; second, to contain as much essential information about them as possible. At the same time, the classification is not just a statement of already achieved knowledge, but performs an important methodological function: by systematizing a certain subject area, it sets the general direction of its further targeted research and can provoke the creation of new scientific directions. Findings. The constitutional principles of the modern economic system are the basic, fundamental principles of functioning of the economic system of the State in the conditions of market relations, subjects of economic activity, realization of social and economic rights and freedoms of man and citizen, interaction of the State and business. These constitutional principles are an important factor in stabilizing the socio-economic development of the State, strengthening its economic sovereignty, protecting the rights and legitimate interests of all subjects of economic activity. Practical Implications. The main results may be implemented into research practices in order to improve and increase the effectiveness of scientific innovation transformation of Constitutional law. They may be used in legislative and legal enforcement practice. © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 715–724, 2020. https://doi.org/10.1007/978-3-030-47945-9_76

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E. E. Barinov et al. Originality/Value. The main contribution of this study is the classification the of constitutional principles of modern economic system based on the analysis of the norms of the Constitution of the Russian Federation 1993 and the existing approaches in Russian and foreign state legal sciences. Keywords: Classification
Constitutional principles
Economic system
Market economy
Economic Constitution
Constitutional and legal norms JEL code: K1


K4
Z0

Paper Type: Research paper

1 Introduction The complex analysis of the economic content of the main components of the system of constitutionalism, including political, social, cultural and historical institutions of constitutionalism in their economic significance is relevant for the constitutional and legal science. The most important of them are the constitutional principles of the modern economic system. The Economic Constitution as a subsystem of constitutional and legal norms along with the constitutional norms on fundamental economic rights and freedoms and fundamental rights of economic and constitutional importance, the norms establishing the constitutional economic public order, includes the principles of the foundations of the constitutional system on freedom of economic activity, the common economic space, diversity and equality of different forms of ownership, protection of competition (art. 8 of the Constitution of the Russian Federation), the social nature of the state (article 7). The constitutional order is a set of economic, social, political, legal, ideological relations, regulated mainly by the norms of the Constitution, arising from the organization of the Supreme bodies of power and administration, the state structure and legal relations between the person, civil society and the State. The modern concept of the constitutional system is based on three main categories: power, sovereignty, and individual freedom. There are many different definitions of the constitutional system, taking into account its essential facets and aspects. Uniting in the interpretation of the constitutional system of prominent domestic theorists of Constitutional law Bondar (2017), Rumyantsev (1994) an others is that they consider this category as a system of certain constitutional legal relations. At the same time, as Mishin (2013) rightly believed, the constitutions of all the States, without exception, raise issues of the economy, emphasizing their primary importance. This is inherent not only in the new but also in the oldest constitutions. Thus, the preamble of the US Constitution proclaims that one of the purposes of its adoption is to promote the welfare of all. The economic nature has a good half of all the powers assigned to the Congress (Sect. 8 art. I, Sect. 3 art. IV). These ideas were picked up and developed by the constitutions of many countries. The constitutional documents of the French revolution - the Declaration of human and civil rights of 1789

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and the Constitution of 1793 - proclaimed that the right of ownership consists in the possibility of every citizen to use and dispose of his property, his income, the fruits of his labor and his craft, that citizens may not be forbidden to engage in any kind of work, agriculture, fishing, trade and that no one may be deprived of the slightest part of his property without his consent. In a market economy, the ratio of public and private interest is changing. The point is not so much about the nature of the legal acts themselves, as it was in disputes on economic law, but about the nature of regulated relations. It is important to take this into account in market conditions, when the State’s relations with an individual should not and cannot be subject to a special regime, as this leads to the violation of competition conditions and the destruction of the market itself. The fundamental principles of the Economic Constitution are the constitutional norms that enshrine economic freedom, the rights of citizens in the economic sphere, and the limits of their restrictions. From the point of view of Hajiyev (2002; 2010), the State, fixing the norms of its functions in the economy in the constitutions, undertakes a new constitutional obligation, protecting the basic economic rights, to observe a reasonable measure in the application of restrictive legal means. The principles forming the constitutional economic system do not exist outside the systemic connection with other principles of the constitutional system, in particular with the principles of the legal and social state, as well as with other constitutional provisions related to the regulation of economic relations. The Constitution of the Russian Federation 1993 uses the generalized concept “Bases of the constitutional system”. Avakyan (2014) supposes that the state and society should have the foundations reflecting the nature of the state, society and public relations, the state of man and citizen, political regime, property and forms of management. It is these foundations, reflected in the Basic law, that determine the constitutional order of society and the state (hence, are its foundations), which, in turn, determines the entire course of public and state-political life in the country. The six foundations of the constitutional system, in other words, its main features (foundations) include, in particular, freedom of management and diversity of forms of ownership. The new model of the constitutional economy was based on the ideas of the social role of the state, strengthening its regulatory role, limiting property rights. Thus, the Constitution of Germany 1949 states: “Property obliges. Its use should simultaneously serve the common good.” The Constitution of Japan proclaims that legal property is determined by law so that it does not conflict with public welfare (art. 29). The provisions on the social functions of private property are contained in the Italian Constitution: private property is recognized and guaranteed by law, which defines the means of its acquisition and use, as well as its limits, in order to ensure its social function and accessibility for all (art. 42). In many constitutions, especially after World War II, economic issues are subject to the most careful regulation. Moreover, they are devoted to separate sections or parts of the constitutions: economic relations are devoted to Chapter 3 of the first Constitution of Italy; finance - Chapter 10 of the Basic Law of Germany 1949; taxation and financial management - Chapter 6 of the Constitution of Greece 1975; economic organization of society - part two of the Constitution of Portugal 1976.

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There are countries that prefer detailed regulation of economic relations in their Basic Laws, including the principles of the economic system (Albania, Moldova, Malta), state guarantees of economic development (Armenia), economic functions (duties, tasks) of the state (Azerbaijan, Croatia, Malta, Portugal, Romania, Turkey), etc. The freedom of economic activity is guaranteed in the Constitutions of Albania, Lithuania, Poland; freedom of entrepreneurship - in the Constitutions of Andorra, Estonia, Georgia, Croatia, Yugoslavia; freedom of economic activity - in the Constitutions of Armenia, Switzerland. In Tajikistan, the Constitution guarantees freedom of economic and entrepreneurial activity. The wording “freedom of economic (entrepreneurial, economic) activity” is thus the most typical. However, the constitutions of some foreign countries prefer a more detailed disclosure of this concept, including: the right to trade or freedom of trade (Cyprus, Liechtenstein, Malta), the right to income-generating activities (Cyprus, Finland), freedom of crafts (Liechtenstein, Malta, Finland), freedom of industry (Liechtenstein). Under Swiss constitutional law, the guarantee of economic freedom means access to and free exercise of private economic activity. The highest courts of a number of States, as well as constitutional oversight bodies, have repeatedly interpreted the economic foundations of the constitutional system. The Supreme court of Mexico in its decision of 15 December 1998 on the question of the unconstitutionality of the Law on privatization has given a legal definition of the Economic Constitution. It was also contained in several decisions of the Constitutional chamber of Venezuela, in particular in the decision of 6 February 2001, and known in Latin America the decision of the Constitutional court of Chile on June 5, 2005 on the question of unconstitutionality of article 1 Emergency decree No. 140-2001 of 28 December 2001 refers to the principles of the Economic Constitution. At the same time, the economic foundations, and in general the social system, were usually out of sight of foreign constitutionalists of the West. On the contrary, Soviet and Russian textbooks always contained parts (chapters, paragraphs, etc.) devoted to the constitutional regulation of the foundations of economic relations, published relevant books and published articles. Chirkin (2011) came to the conclusion that by analyzing and synthesizing the norms of not only the first two chapters, but also other provisions of the Constitution of the Russian Federation (in other chapters, too, there are some norms relating to the foundations of the constitutional system), using a logical method and a method of comparison with the previous Russian constitutions, it can be established that the foundations of the constitutional system of modern Russia include five components: the foundations of the legal status of a person, the constitutional foundations of the economic system, social system, political system and spiritual life of society. Describing the economic role of the current Constitution of Russia, Bondar (2017) made a methodological conclusion that its economic content has a multi-level hierarchical beginning of normative manifestations, which largely determines the possibilities and limits of the economic impact of the Constitution. These are, first, constitutional principles as the most general legal ideas that define the very foundations of the organization and functioning of the economic life of society and the State. Moreover, it is not only the constitutional principles of the market economy (such as art. 8, 9), but in the context of economic constitutionalism are no less important and

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such general principles as national and state sovereignty (art.3, 4), federalism (art. 5), social statehood (art.7), separation of powers (art. 10), local self-government (art. 12), political and ideological pluralism (art. 13) etc. Secondly, it is the competent rules of the Constitution of the Russian Federation on financial and economic issues (art. 72, 73, 130), the competence of the highest organs of public authority (art. 80, 83, 84, 102, 103,114, 132 etc.).Third, these are constitutional institutions of economic freedom not only for individuals (art. 34–37), but also for collective subjects, including territorial communities (art. 130 and 132) and society as a whole (art. 8 and 9 of the Constitution). Fourth, no less important is the identification of the economic importance of social protection of citizens (art. 38–44), political rights and freedoms of man and citizen (art. 30–33), as well as constitutional categories of justice (preamble to the Constitution), equality (art. 19), dignity of the person (art. 21) in their economic manifestation.

2 Discussions on Constitutional Principles of the Modern Economic System The modern science of Constitutional law continues to discuss such problems as the implementation of the norms establishing the economic foundations of the constitutional system, as well as the degree of detail of the principles of the modern economic system in the current Russian Constitution and constitutional legislation. In particular, assessing the results of the establishment of constitutional economic principles in the real practice of modern economic development, Kuznetsov (2017) admits that these basic values are still not fully implemented. The reasons should not be found in the text of the Constitution of the Russian Federation, but in a simplified, formal approach to its basic legal principles, in the distortion of political and economic reforms, including the underestimation of the constitutional analysis of existing risks and problems, in the absence of expertise of the legality of economic decisions of the State for their compliance with constitutional requirements, norms and principles. A number of researchers believe that the modern constitutional system of Russia is largely different from the constitutional and legal regulation of Soviet Russia in terms of establishing the general principles of the organization and functioning of the economic system. Economic and constitutional nature of the Constitution are only prescriptions 8–9, 34–37 of the Constitution of the Russian Federation 1993, the other chapters and articles of the Basic Law indirectly affect the economic theme. The subject and methodology of the Constitutional law do not presuppose excessive interference in the economic sphere of social relations. Their constitutional regulation is permissible to the extent that it is expressed by the basic, most fundamental and essential principles and norms designed for the long term. In the most generalized form they include the following general provisions of the constitutional and legal nature: first, the subordination of the economy to democratic power; second, freedom of market and entrepreneurship, private economic initiative, independence and equality of economic entities; third, the balance between government intervention and private enterprise, support for competition; fourth, social partnership and business responsibility to society.

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Opposite position (Bondar 2017) boils down to the fact that almost every component of modern constitutionalism, reflecting the unity of legal, doctrinal, philosophical, ideological, practical and ontological principles of this category has its economic content. It is implemented both through the constitutional and legal formalization of economic relations themselves (property, entrepreneurship, budget, taxes, etc.) and by the constitutional recognition of the economic importance of political institutions of democracy, civil and political rights and freedoms of man and citizen. In this regard, the solution of modern economic problems is largely associated with the development and improvement of the current system of constitutionalism, is of a political and legal nature. At the same time, the economic system itself in all its components including finance, taxes, banking system, property relations is an important component of the Russian system of constitutionalism.

3 Constitutional Principles of the Modern Economic System and Their Classification in the Context of Russian Federation Based on the analysis of the norms of the Constitution of the Russian Federation 1993 and the existing approaches in the state legal science, the constitutional principles of the modern economic system can be classified as follows: 1) diversity and equality of forms of ownership, including private property (part 2 of art. 8). The Constitution of the Russian Federation named the following forms of ownership in Russia: private, state, municipal, said about the possibility of other forms (part 2 of art. 8). In Russia there is property of public associations, religious organizations, cooperative and personal property, not named in the Constitution of the Russian Federation; 2) the principle of unity of economic space, that is of particular importance in federal states whose subjects have their own legislation (art. 5 of the Constitution of the Russian Federation). This principle (part 1 of art. 8), means that in the territory of the Russian Federation is not allowed the establishment of customs borders, duties, fees and any other obstacles to the free movement of goods, services and financial resources (part 1 of art. 74), and restrictions on the movement of goods and services may be imposed in accordance with Federal law, if necessary to ensure safety, protection of life and health of people, protection of nature and cultural values (part 2 of art. 74). This principle is related to the category of “state unity” used in the preamble to the Constitution. A number of constitutional provisions in Chapter 3, “Federal structure” of the Constitution establish guarantees of the economic integrity of the federal state. The Constitutional Court of the Russian Federation applied the principle of unity of economic space to justify tax centralization in the Russian Federation. Its resolution of March 21, 1997 N 5P contains the legal position according to which the principles of the taxation and collecting in the part that is directly predetermined by provisions of the Constitution according to its item “a” art. 71 are under the authority of the Russian Federation. These include: ensuring a single financial policy that includes a single

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4)

5)

6)

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tax policy, the unity of the tax system, equal tax burden and the establishment of tax exemptions only on the basis of the law; the principle of a single financial policy is enshrined in a number of articles of the Constitution, primarily in paragraph “b” part 1 of art. 114. According to it the Government of the Russian Federation ensures the implementation of a single financial, credit and monetary policy. From this point of view, it is unacceptable to introduce such regional taxes that may directly or indirectly restrict the free movement of goods, services and financial resources within the common economic space and that allow forming the budgets of some territories at the expense of tax revenues of other territories or transfer the payment of taxes to taxpayers of other regions. The unity of the economic space and, consequently, the unity of the tax system is ensured by a single system of the federal tax authorities. Tax authorities as belonging to the federal economic services, in accordance with the Constitution are the responsibility of the Russian Federation (art. 71). The tax authorities in the constituent entities of the Russian Federation are territorial bodies of the federal bodies of executive power (part 1 of art. 78), not bodies of subjects of the Russian Federation. By Resolution of 21 March, 1997 N 5-P the Constitutional Court of the Russian Federation noted that identification of the constitutional sense of the right guaranteed by the Constitution to public authorities of subjects of the Russian Federation to establish taxes is possible only taking into account the basic human and civil rights enshrined in art. 34 and 35 of the Constitution, and also the constitutional principle of unity of economic space; the constitutional principle of free movement of goods, services and financial resources is the basis of a special constitutional and legal regime of stability of economic turnover that is based on the principle of maintaining confidence in the law. The Constitutional Court of the Russian Federation also explained that, specifying the duty of the State to guarantee the unity of the economic space, the Constitution (p. “g” art. 71) considers establishment of legal bases of the uniform market to maintaining the Russian Federation. Freedom of economic activity cannot be realized without ensuring priority, direct action of the laws fixing these legal bases (the Civil code of the Russian Federation, laws in the field of Antimonopoly policy and protection of the competition, pricing, financial, currency, credit, customs regulation, etc.) in the territory of all the State (Resolution of the Constitutional Court of the Russian Federation of March 4, 1997 N 4-P); legal regulation of the market should not violate the basic principles of the market economy: equality of participants in the turnover, freedom of economic decisionmaking and independent responsibility for their results, responsibility for the harm caused. By virtue of this principle, the State is obliged to provide conditions for stable civil circulation and to use legal regulation for this purpose. State regulation of market relations is expressed in the establishment of the order of creation and activities of their participants; the principle of free movement of funds is twofold. On the one hand, it is understood as a guarantee of the movement of goods and services, since their market turnover is possible only with the simultaneous circulation of money. On the other hand, it is an independent principle of legal regulation of relations arising from the circulation of funds outside the turnover of goods and services.

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This constitutional principle is the basis of legal regulation of the financial market, including the market of issue securities; 7) state-guaranteed support for competition is a constitutional and legal instrument for creating a favourable economic environment. Based on the provision of part 2 of art. 34 of the Constitution of the Russian Federation on the inadmissibility of economic activity aimed at monopolization and unfair competition, the State must, through the adoption of competition laws, provide support for fair competition between business entities, establishing the necessary restrictions (limits) of freedom of economic activity; 8) freedom of entrepreneurial activity is an integrated principle of Constitutional law, combining several relatively independent principles of legal regulation of relations in the sphere of entrepreneurial activity: the principle of freedom of contract, general principle of freedom of competition, etc. This principle is enshrined in the foundations of the constitutional system (article 8 of the Constitution of the Russian Federation). The Russian constitutional and legal model of relations between public authorities and business is based on the principle of economic freedom. It is based on the recognition of objectively existing limits of regulation by the public authorities of entrepreneurial activity; 9) guaranteeing by the State of the basic economic rights and freedoms of the person included in Chapter 2 of the Constitution of the Russian Federation. These include: – human right to choose one’s occupation or occupation means freedom of economic choice: to be either an employer or an employee (art. 37); – human right to move freely, to choose the place of stay and residence - means the freedom of the labour market (art. 27); – human right to association assumes the corresponding right for joint economic activity, and therefore, freedom of the choice of organizational and legal forms of business activity and establishment in the notification order of various business structures (part 1 of art. 30); – human right to own property, to own, use and dispose of it both individually and jointly with other persons (part 2 of art. 35), the freedom to own, use and dispose of land and other natural resources (part 2 of art. 36), to use the property for the purposes of entrepreneurial activity (part 1 of art. 34) means the freedom of formation of the property base of entrepreneurship, the use of property, the freedom to sell the produced goods on the market, including the right to freedom of contract; – human right to protection from monopolism and unfair competition (art. 34) presupposes freedom of competition; 10) the principle of independence and interaction of business and government that is specified in the following provisions: – freedom of economic activity is guaranteed (part 1 of art. 8 of the Constitution);

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– private by its nature economic activity of corporations can not be developed in contradiction with publicly significant goals, its implementation should not violate the rights and freedoms of other persons (part 3 of art. 17); – the State establishes the legal basis of the single market (article 71 (g) of the Constitution); – in the process of establishing the legal basis of the single market the State may impose restrictions on the freedom of economic activity of corporations (part 3 of art. 55 of the Constitution) that must be strictly proportionate (the principle of proportionality) and implemented in the form of a Federal law (the reservation to the law).

4 Conclusion Thus, the economic basis of the constitutional system of the Russian Federation is a social market economy in the stage of formation, within which the production and distribution of goods are carried out mainly through market relations. Their participants are private economic entities competing with each other. The Russian Federation supports this competition, as well as takes measures to prevent monopoly privileges and exercises appropriate control. The economic system of the Russian Federation is characterized by a variety of forms of ownership. Regulation of property relations is carried out by means of various legal norms, the central place among which belongs to the Constitutional norms - the basis of all legal regulation of property relations. Constitutional regulation of property relations has its own specifics. It is expressed in the fact that the main task is the legal consolidation of forms of ownership recognized by the State. Thus, it is the Constitutional norms that decide which forms of ownership are recognized and guaranteed by the State.

References Avakyan, S.A.: Constitutional law of Russia. Train. Cour. 2(1) (2014) Andreeva: Economic constitution in foreign countries. Moscow (2006) The Backhaus, J.G., Elgar, E.: The Elgar Companion to Law and Economics. Edward Elgar Publishing, Cheltenham (2005) Berlyavsky, L.G.: Formation of antimonopoly legislation in the United States. Compet. Law 2, 9–13 (2017) Berlyavsky, L.G., Golovko, A.G., Kolyushkina, L.Yu., Ponezhin, M.Yu.: The formation of constitutional economics as a scholarly direction. Eur. Res. Stud. J. 21(S1), 41–50 (2018) Bondar, N.S.: Economic constitutionalism in Russia: Essays on the theory and practice. Moscow (2017) Cooper, N.S.: Economic constitution, constitutional economy or economic constitutionalism? (Part 1). Law Econ. 1, 5–15 (2018) Hajiyev, G.A.: Constitutional economics. Moscow (2010) Hajiyev, G.A.: Constitutional principles of market economy: development of the foundations of civil law in the decisions of the constitutional court of the Russian Federation. Monograph (2002)

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Polinsky, A., Shavel, S.: Handbook of Law and Economics. Elsevier, Amsterdam (2007) Komkova, G.N., Kolesnikov E.V., Lipchanskaya, M.A.: Constitutional law of the Russian Federation. Moscow (2013) Zorkin, V.D.: Commentary on the constitution of the Russian Federation (2011) Kuznetsov, V.M.: Basic principles of the constitutional economy in Russia. Soc.: Polit. Econ. Law 2, 59–62 (2017) Mishin, M.: Constitutional (state) law of foreign countries. Moscow (2013) Rumyantsev, O.G.: Fundamentals of the constitutional system of Russia (concept, content, issues of formation). Moscow (1994) Chirkin, V.E.: Fundamentals of the constitutional system as a factor of sustainable development of Russia. Actual Probl. Econ. Law 1, 114–117 (2015) Chirkin, V.E.: Comparative constitutional law. Moscow (2011)

Archetype of “Self/Other” in Modern European Social Advertising Marina V. Aksenova(&), Tatyana G. Charchoglyan, Ekaterina V. Ignatyeva, Anna V. Merzlyakova, and Yuliya V. Ryabkova Minin Nizhny Novgorod State Pedagogical University, Nizhny Novgorod, Russia [email protected], [email protected], [email protected], [email protected], [email protected]

Abstract. Topicality: Advertising industry and media discourses’ development led to the fact that advertising is used not only for products and services promotion but also for regulation of social and spiritual processes. It forms individual and group concepts about the appropriate behavior. Actuality of the research is connected with the necessity to analyze linguistic means of social advertising used for verbalization of basic cultural concepts aiming at motivation of the general public to certain actions and formation of public opinion corresponding to cultural mindsets. The article discusses special aspects of verbalization of archetypal opposition “self/other” in printed social advertising studied by the cases in German and French languages. Purpose of the article – to consider cultural factor in the language of advertising and ways of linguistic objectivization of concepts and stereotypical perceptions significant for each culture. The paper presents an attempt to trace strategies and tactics that make it possible to have a necessary informational or emotional impact on the addressee. The main methods of research are semantic and contextual analysis, linguocultural interpretation of the units under analysis. As a result of the research the conclusion is made about the dynamic nature of the border between the concepts “self” and “other”, determined by the influence of the context on the lexemes verbalizing the mentioned concepts, as well as the special features of the linguistic experience of the individual. Discussion. Application of the above-mentioned methods enables the distinguishing of a set of linguistic means for verbalization of a cultural concept. For the first time evaluative enuntiosemic character of concepts “self/other” in social advertising is described. Conclusion. The results may be used for analysis of other archetypes in various discourses. Keywords: Archetype “self/other” function
Persuasive text


Social advertising
Manipulative

JEL Code: M37 © Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 725–730, 2020. https://doi.org/10.1007/978-3-030-47945-9_77

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1 Introduction Disunity and plurality of opinions of the deconstruction epoch transforms the mentality, imagination and needs of the man (Kozlova 2018), that determine quick development of media discourses, and particularly social advertising. Text in social advertising is of persuasive type, because its main task is to influence the mind of the addressee, to change his attitude and, consequently, the further behaviour. Contrary to the text of commercial advertising, the basic message of which is to stimulate the consumer to purchase goods and services, social advertising communicates spiritual and social messages (Kazakova 2013). Structure of an advertising text should include a slogan that transmits the main idea. The text of the advertisement has the general semantic charge completeing the image (Zintsova and Ryabkova 2017). Social advertising sets its goal to form or anchor in the recipient’s mind a certain opinion about some acute topic, to understand if this or that way of conduct is appropriate, thereby to associate oneself with some social group. The difference of the aims results in differences in the linguistic expressive means in social and commercial advertising. The latter uses all available means to attract attention, including outrageous lexical or video content. Realization of the manipulative function of social advertising is encouraged by appealing to binary cultural archetypal oppositions life/death, male/female, self/other etc. These oppositions have a great potential to influence mass audience because they present basic components of categorization, are reflected in individual and national linguistic world-images. M.S. Uvarov qualifies the principle of antinomies as the universal semiotic code of European culture: «Generally speaking we may say that various variants of binary discourse (differing basically in forms of possible synthesis of the contraries) are specific for spiritual experience of mankind in general, besides the European tradition expresses this experience to the fullest extent, meaning that it has a tendency to “sharpen” the opposite sides of the attitude (thesis and synthesis) with quite an indefinite (at first) inclination to synthesis» (Uvarov 1996). Analysis of the practical material revealed the common resort to the archetype “self/other” in social advertising. It stands to mention that the concept under analysis is most frequently exposed in advertising that encourage the tolerant attitude to people. Basic cognitive categories are often seen in persuasive discourse, with the dichotomy “self/other” being especially popular (Kvyat 2009): «Productivity of this category can be explained by its flexibility, convenience and simplicity in manipulation of mind» (Issers 1999). As noted by Yu.S. Stepanov, «this opposition in different varieties penetrates all culture and presents one of the main concepts for all collective, mass, folk, national world perception» (Stepanov 2001).

2 Methodology It was noted in the research that the opposition “self/other” in social advertising is used for demonstration of appropriate and inappropriate.

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For example, a German advertising supporting people with HIV says: Was machst du, wenn dein bester Freund HIV hat? (What will you do if your best friend has HIV?) Alles, was wir immer machen. (Everything what we always do.) Was machst du, wenn dein Date HIV hat? (What will you do if your date has HIV?) Weiter kräftig Komplimente. (More compliments) Was macht ihr, wenn euer Stürmer HIV hat? (What will you do if your striker has HIV?) Hoffentlich viele Tore. (Many goals, hopefully) Concept “the other” is expressed by lexeme HIV, which instantly triggers the recipient’s reaction of estrangement, unbelonging to that group of people, fear. But in the given poster the idea of “self” levels down the idea of “other”. Thus, word groups «bester Freund», «Date» are associated in everybody’s mind with an acquaintance, a familiar person, and consequently involuntarily makes him “try on” the situation. The striker is also a part of the whole team. Besides, addressing the audience with the use of second person in singular, «du», or in plural, “ihr” implies a closer connection. The reply has the pronoun “wir”, that represents the notion of community. Another example of verbalization of the opposition “self/other” for translation of the idea of acceptability/inacceptability is a French poster defending wild animals from hunting. Text “Imagine que c’est le tien” (Imagine this is yours) is supported by visual means – a gun aiming at a child dressed as a baby tiger. The opposition “self/other” is actualised by using the possessive pronoun le tien. The given example is unique because the semantic charge is not on a noun or a verb, thesaurus information of which may be enriched, but on the pronoun that does not name an object or aт attribute but is only a substitutor. Moreover, as much as paradoxal it is, the purpose of this usage is not to separate the notions of “self” and “other”, but to make them closer. In today’s world something new appears every day. These new things are often interesting for a man but they do not fit into traditional cultural standards of the society. This leads to stereotypes occurring (Shmeleva and Spasskii 2018). Switzerland social company, which fights for tolerance towards citizens of all countries, presented a range of provocative posters in which there are questions in large print and answers to them – in small. Wozu brauchen Türkinnen einen Müllsack? (Why do Turkish women need a bin bag?) Um Abfall zu entsorgen, wie die meisten Schweizerinnen auch. (They take the rubbish out in them, like majority of Swiss women do.) Was machen Tailanderinnen, wenn es dunkel wird? (What do Thais do when it gets dark?) Licht, wie die meisten Schweizerinnen auch. (Switch on the light, like Swiss women do.) Wie kommen Juden zu ihrem Geld? (How do Jews come to their money?) Mit Arbeiten, wie andere Leute auch. (By working as other people do) After reading a question a recepient firstly is struck by a stereotypical thought connected with the country or its citizens. In his mind the recipient marks the frontier between himself and a representative of the country referring him to the category of

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“other”. The answer to the question turns out a surprise; it causes a sense of shame and makes the recipient think that people from different countries do not differ. So these posters propagandize the idea of equality and lead a recepient from estrangement to the “self” concept. In French-language literature there are opposite examples of the concept “self/other” actualization. This is connected with modern social and political situation in France. The range of posters represents the social problems of Frenchmen – residence, pension and other problems in their personified form: «Julie attend un logement en résidence étudiante depuis 2 ans. (Julie has been waiting for a students’ dormitory place for two years). After stating a problem in the posters there is a quotation Hélas pour elle/il. Elle/il n’est pas migrant(e) (Unfortunately for him/her, he/she is not a migrant). Lexical item “migrant” is a part of the nucleus of the concept “other” which is released in its variants “bad”, “hostile”, “dangerous”. The opposition “self/other” in the social advertisement texts also may be expressed with the help of definite markers such as precedence. It means that preceding reality, events, which are already known for society members, a priori connect them and include into the category of “self” and strange realias extract them from this category (Solomina 2014). “Worldview of any person includes self-perception as a subject of a specific family”, and together with it – specific nation (Pomnikova 2019). One of the examples of social advertisement texts including precedent-setting component, is advertisement calling for separation of waste: Lola trennt. Biogas aus Biogut. (Lola recycles. Biogas from bio good) This poster makes reference to the famous German film “Lola rennt”. This way it marks German people as a nation because not everybody can understand the meaning of the text. The next example of precedent-setting component is a slogan calling for fight with racism: Zeig Rassismus die Rote Karte! (Show racism the red card!) In the whole world red card means “early bath”. This metaphor serves to appeal to extract racism from the field of life making all the people in the world equal. The motto: “Nous sommes 7 Milliards d‘etrangers sur terre” (We are seven billions of foreigners in the world) – conveys the same idea. An emotional component of tolerant consciousness is expressed in comprehension of the emotional state of other people, in empathy, in their ability to objectively evaluate other people (Dmitrieva et al. 2018). The word “foreigner” without context has a meaning “other”. In this poster the pronoun “nous” points to the community to which all the people in the world appear to belong. The opposition “self/other” is brightly expressed here because on the one hand a foreigner is a stranger for us, a person with another culture, from the other hand this notion unites all the people on the Earth. This way opposing and comparing yourself and “other” it is possible to understand your own self-identity (Aksenova 2018).

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3 Results The analysis showed that the conceptual opposition “self/other” is not stable. The borders between “self” and “other” are dynamic. And the distribution of the notions to two spheres reflects the peculiarities of a subject`s categorization and world cognition (Merzlyakova 2014). Verbal means of the concept expression are various. There some stable means, such as lexical item “migrant”, which belong to the nucleus of the concept. The often use of the means verbalizing the concept “other” in the contexts promotes the enrichment of the lexical unit semantics with evaluating components with the meaning “bad”, “dangerous”, “poor”, etc. It leads to linguocultural stereotypes creation. However, on the other hand tendency to overcome false national stereotypes is visible in the social advertisement. The inclusion of the lexical item in the context contributes to the actualization of the discursive meaning corresponding to the tasks of a particular utterance. Purposeful choice leads to contextual “flicker” of the meaning of a language unit and, as a consequence, to its evaluative enantiosemy. Occasional usage of linguistic means for the concept verbalizing when either additional emotional colouring is created or the poles “self/other” change is also possible. The variety of language means and the dynamic nature of the opposition “self/other” contribute to one of the main functions of social advertising – the manipulative function which is used on the one hand to consolidate society, on the other – to create media myths and introduce ideas into the public consciousness.

References Aksenova, M.V.: Travelog: puteshestvie zhanra i zhanr puteshestvii. Aktual’nye problemy filologii i pedagogicheskoi lingvistiki, No. 31 (2018). https://cyberleninka.ru/article/n/ travelog-puteshestvie-zhanra-i-zhanr-puteshestviy. Accessed 08 Apr 2019 Dmitrieva, E.E., Kashtanova, S.N., Medvedeva, E.Y., Olkhina, E.A., Kudryavtsev, V.A.: Tolerant consciousness of educational and multicultural space subjects. Espacios 39(38), 9 (2018) Issers, O.S.: Kommunikativnye strategii i taktiki russkoi rechi: Monografiya, Omsk, 288 p. (1999) Kazakova, L.P.: Psikhologicheskie zakonomernosti vospriyatiya sotsial’noi reklamy, no. 8. Vestnik MGUP (2013). https://cyberleninka.ru/article/n/psihologicheskie-zakonomernostivospriyatiya-sotsialnoy-reklamy. Accessed 10 Apr 2019 Kozlova, T.A.: Klassicheskaya i neklassicheskaya filosofskaya antropologiya: komparativistskii analiz, vol. 6, no. 1. Vestnik of Minin University (2018). https://vestnik.mininuniver.ru/jour/ article/view/764/655. Accessed 08 Apr 2019 Kvyat, A.G.: Svoi sredi chuzhikh: mifotekhnologii reklamnogo pozitsionirovaniya, no. 29. Politicheskaya lingvistika (2009). https://cyberleninka.ru/article/n/svoy-sredi-chuzhihmifotehnologii-reklamnogo-pozitsionirovaniya. Accessed 10 Apr 2019 Merzlyakova, A.V.: “Osobennosti verbalizatsii kontsepta «svoe – chuzhoe» v toponimike” in Teoreticheskie i prakticheskie voprosy nauki XXIv. In: 2014 proccedings of the International Conference in Ufa, vol. 2, pp. 128–131 (2014)

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Pomnikova, A.Yu.: Semeinaya istoriya v diskursivnom prostranstve, vol. 7, no. 1. Vestnik of Minin University (2019). https://vestnik.mininuniver.ru/jour/article/view/930. Accessed 08 Apr 2019 Ryabkova, Yu.V., Zintsova, Yu.N.: Rol’ teksta v naruzhnoi sotsial’noi reklame (na materiale nemetskoi sotsial’noi reklamy Runter vom Gas), no. 38, pp. 108–117. Vestnik NGLU (2017) Shmeleva, N.V., Spasskii, A.N.: Features of culturology as an academic discipline: goals, objectives. Perspektivy nauki i obrazovaniya 33(3), 179–183 (2018) Solomina, V.V.: Osobennosti realizatsii oppozitsii «Svoi chuzhoi» v razlichnykh vidakh diskursov, no. 3. pp. 176–182. Vestnik LGU im. A.S. Pushkina (2014). https://cyberleninka. ru/article/n/osobennosti-realizatsii-oppozitsii-svoy-chuzhoy-v-razlichnyh-vidah-diskursov. Accessed 10 Apr 2019 Stepanov, Yu.S.: Konstanty. Slovar’ russkoi kul’tury, 991 p. Akademicheskii proekt, Moscow (2001) Uvarov, M.S.: Binarnyi arkhetip. Evolyutsiya idei antinomizma v istorii evropeiskoi filosofii i kul’tury, 214 p. Publ. BGTU, Saint-Petersburg (1996)

Diagnostics of Methodological Competence Development of Preschool Teachers Lyudmila V. Aleksieienko-Lemovska(&) National Pedagogical Dragomanov University, Кyiv, Ukraine [email protected]

Abstract. The article is devoted to the problem of methodical competence development of preschool teachers. It requires diagnosis of the real level of this competence development. The relevance of the study is justified by the need to develop and implement a pedagogical model of methodical competence development of preschool teachers. Checking the effectiveness of the pedagogical model of methodical competence development of preschool teachers requires the development of a special diagnostic system to determine the level of methodical competence development of preschool teachers. Objective determination of the level in the context of the implemented diagnostic system can be understood by selecting a set of criteria and their indicators. Thus, the purpose of this article is to develop a diagnostic system for determining the level of methodical competence development of preschool teachers. The article describes the process of experimental diagnostics of methodical competence development of preschool teachers. On the basis of application of universal methods of scientific knowledge (analysis, synthesis, modeling, generalization) theoretical aspects of levels of pedagogical education, criteria and indicators of their definition are studied in the article. By means of theoretical methods (idealization, design) the system of criteria and indicators of methodical competence development of preschool teachers was developed. On the basis of the application of empirical methods (observation, testing, questioning, pedagogical diagnostics, pedagogical experiment) professionally significant qualities of teachers through the use of diagnostic tools are determined. The elements of novelty in the study are presented by the developed diagnostic tools, a system of criteria and indicators for determining the level of methodical competence development of preschool teachers and characteristics of each possible level (creative, productive, basic). Keywords: Teacher of preschool education
Methodical competence
Competence approach
Method of formation of methodical competence
Pedagogical model
Pedagogical diagnostics
Levels
Criteria
Indicators JEL Code: I20


I21
I26

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 731–739, 2020. https://doi.org/10.1007/978-3-030-47945-9_78

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1 Introduction Analysis of the trends in the development of modern society allows us to talk about processes such as globalization, transformational and integration processes that characterize the domestic and world society at the turn of the century. These processes and their consequences require concerted action by the world community not only in the field of politics and economics, but also in the field of education. The tendencies of society at economic, social, spiritual, scientific levels provoke the emergence of new priorities and stereotypes that have historically been formed and that are relevant at all times. Thus, the role of the teacher in the modern world is changing, the range of his personal responsibility is expanding. Modern teachers need to be able to work in a team, plan educational activities together, work in a virtual environment and open educational space, monitor and direct the development of children’s individual success, organize project activities and participate in projects, provide professional advice to parents, integrate children with special needs. A teacher should be able to organize activities of children in an innovative educational environment. Within the framework of the modern educational paradigm, the goal of education is the development of personality, the disclosure and development of its inclinations. Thus, today society needs, first of all, a competent teacher who is able to act effectively, solve standard and problematic tasks, has the technique of applying innovative educational technologies, the ability to build a subject-subject pedagogical interaction taking into account humanistic, personality-oriented, system-activity approaches. From the position of a competence-based approach, the level of education is determined by the ability to solve problems and professional tasks of varying complexity based on existing knowledge and experience. So, in the system of professional readiness of a teacher, in particular, a specialist in the field of pre-school education, an important component is methodological competence. Thus, this competence is one of the most important components teachers’ professional activities in preschool educational institutions. Most modern scholars consider pedagogical methodological competence as mastering the system of knowledge and skills, taking into account individual qualities of a person. A number of researchers consider this competence in the sense of the teacher’s readiness to conduct classes in the framework of educational process and to creative self-realization. In the study, under this term we mean a multi-component system, including knowledge, skills, practical experience in the field of methodology, readiness and ability to effectively solve standard and problematic methodological tasks and the ability of the teacher to creative self-realization and continuous self-improvement. The methodological competence of a teacher of preschool education is formed empirically or in the process of purposeful preparation and retraining in a higher educational institution, where the personality masters professional competencies. Increase in the level of formation of this competence involves the development and implementation of a pedagogical model for the development of methodological competence of pre-school teachers. The development of a truly effective pedagogical model requires the study of the real level of development of methodological competence of teachers of preschool education.

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So, in a broad sense, the purpose of this study is to develop approaches for determining the state of methodical competence development of preschool teachers. More specifically, the goal of our research is represented by the development of a system of criteria and indicators for determining the level of formation of the methodological competence of preschool education teachers. For this purpose, according to methodology for the implementation of pedagogical diagnostics (Levchenko 2006), criteria and indicators were defined, development levels of methodical competence development of preschool teachers were characterized, and experimental diagnostics of the level of methodical competence development of preschool teachers were carried out.

2 Methodology The methodological basis of the study was developed on the basis of taking into account the provisions of the competence-based, environmental, system-activity approaches. The implementation of the goals and objectives of the study involved referring to the following universal methods of scientific knowledge: analysis, synthesis, modeling, generalization; theoretical methods: idealization, design; empirical methods: observation, testing, questioning, pedagogical diagnostics, pedagogical experiment.

3 Results Speaking about the problem of determining the level of methodical competence development of preschool teachers, it is necessary to clarify the meaning of the analyzed concept. In this study, the concept of “level” will be considered as the degree, magnitude of the development of a particular pedagogical phenomenon, the fact of its differentiation or classification (Babansky 1988). In pedagogical science, the level of formation of certain personal education is determined by a number of criteria as optimal samples for comparison with real phenomena (Akimova 2005). In this study, the criterion, following Z.A. Mendubaeva, we will be considered as an ideal sample expressing the highest, most perfect level of the phenomenon being studied. By comparing with the criterion of real phenomena, it is possible to establish the degree of their conformity, approximation to the norm, the ideal (Mendubaeva 2012). To determine the level of methodical competence development of preschool teachers, we selected the following objective (according to the classification criteria of AK Markova) (Markov 1990) criteria: – – – –

motivational; cognitive; technological; reflexive (Zakharova 1998).

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The choice of the motivational criterion is due to the presence of motivation for methodical work, abilities and readiness for the creative self-realization of the teacher in the methodological and pedagogical activity. The choice of the cognitive criterion is due to the need to reflect in the professional activity of the educator the system level of functioning of methodological, methodical and research knowledge, the ability to update them in case of need. The technological criterion was chosen based on the need for the teachers to develop professional and methodological skills and skills of the teacher in the field of methodology, ability to optimally combine the methods of professional pedagogical activity, their own effective professional experience of teachers’ methodological work in preschool educational institutions. The choice of the reflexive criterion is connected with the need to analyze one’s own activities with the aim of self-improvement. The state of development or the level of a criterion is fixed by indicators that represent phenomena or events by which one can judge the dynamics of a certain process (Semenova 2016). The use of indicators makes it possible to assess the quality and level of development of certain personal education (Mendubaeva 2012). So, for each of the specified criteria, within the framework of the study, appropriate indicators were selected allowing to determine the correspondence of the level of formation of one or another personal education in the structure of the methodological competence of preschool education teachers. Indicators of motivational criteria were: – sustainable motivation and interest in methodical work; – readiness for creative self-realization in methodical activity. – Indicators of cognitive criteria were: – awareness of the forms, methods, techniques of methodical work; – knowledge of modern technologies of methodical work in a preschool educational institution. Indicators of technological criteria were: – availability of professional and methodological skills; – ability to optimal combination of methods of professional pedagogical activity. Indicators of the reflexive criterion were: – the level of development of methodical reflection; – the ability to self-analysis and self-esteem. Based on certain criteria and indicators, the levels of methodical competence development of preschool teachers are characterized: – basic; – productive; – creative (Ivanov 2003).

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The creative level of development of methodological competence was characterized by sustained motivation and interest in methodological work; readiness for creative self-realization in methodical activity; awareness of the forms, methods, techniques of methodical work; knowledge of modern technologies of methodical work in a preschool educational institution; the presence of professional and methodological skills; ability to optimal combination of methods of professional pedagogical activity; a sufficient level of development of methodical reflection; the ability to self-analyze and self-esteem. Sustainable motivation and interest in methodological work, awareness of forms, methods, techniques of methodical work are characteristic of the productive level of development of methodical competence; knowledge of modern technologies of methodical work in a preschool educational institution; availability of professional and methodological skills; ability to self-analyze and self-esteem. At the same time, respondents of this level are not always ready for creative self-realization in methodological activities. The level of formation of methodical reflection in them was insufficient. The basic level of development of methodological competence was inherent in teachers of pre-school educational institutions, who are knowledgeable with the forms, methods and techniques of methodological work; with modern technologies of methodical work in a preschool educational institution (Solomennikova 2007). Professional-methodical skills were formed. At the same time, their motivation and interest in the methodological work were fragmentary. They were not ready for creative self-realization in methodological activity, the optimal combination of methods of professional pedagogical activity, self-analysis, and self-assessment. The level of formation of methodical reflection was low. On the basis of certain criteria, indicators and levels, primary diagnostics of the level of methodical competence development of preschool teachers took place. The chronological framework of the primary diagnostic experiment: March-May 2018. The respondents of the study: teachers of preschool education, combined into two groups: experimental (EG - 24 people) and control (CG - 18 people). The study was conducted on the basis of the Transcarpathian Institute of Postgraduate Pedagogical Education. The methodological basis of the study was the works of G.I. Zakharova, D.A. Ivanova, A.K. Markova, K.G. Mitrofanova, O.V. Sokolova, O.A. Solomennikova and other theorists of the competence approach. Each of the indicators was tested using diagnostic examination methods. Indicators of motivational criterion were investigated on the basis of application of the method of questioning. The quantitative results of the tasks of the motivational criterion are reflected in Table 1.

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Table 1. Levels of methodological competence development in the framework of motivational criterion Levels 1 task/% Experimental group Base 38.2 Productive 53.2 Creative 8.6 Control group Base 38,8 Productive 53 Creative 8.2

1 task/% General level/% 40.2 52.4 7.4

39.2 52,8 Eight

41.2 51.2 7,6

40 52.1 7.9

The indicators of the cognitive criterion were checked by the method of analyzing the abilities of teachers of preschool education to compile the basic methodological documentation, in particular, the plan of methodical work for the year, as well as by the method of the Technique “Modern technologies of methodical work”. The results of the analysis of teachers’ achievements according to this criterion are presented in Table 2. Table 2. Levels of methodological competence development in the framework of the cognitive criterion Levels 3 task/% Experimental group Base 39.4 Productive 52.4 Creative 8.2 Control group Base 40.2 Productive 51.4 Creative 8.4

4 task/% General level/% 42.6 50.6 6.8

41 51.5 7.5

43.2 50.2 6,6

41.7 50.8 7.5

Indicators of the technological criterion were tested on the basis of the application of the testing method and methodology of the “Creating and analyzing situations.” The quantitative results of the tasks of the technological criterion are shown in Table 3.

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Table 3. Levels of methodological competence development in the framework of technological criteria Levels 5 task/% 6 task/% Experimental group Base 44.8 46.4 Productive 48.8 47.8 Creative 6.4 5.8 Control group Base 45.4 46,8 Productive 48.4 47.6 Creative 6.2 5.6

General level/% 45.6 48.3 6.1 46.1 48 5.9

Indicators of the reflexive criterion were determined on the basis of Methodology for determining the level of pedagogical reflection development O.V. Kalashnikova (1999), Methods for the study of self-assessment according to the method of DemboRubinstein (modified by P.V. Yanshin) (Yanshin 2004). The quantitative results of the tasks of the reflexive criterion are shown in Table 4. Table 4. Levels of development of methodological competence in the framework of the reflexive criterion Levels 7 task/% Experimental group Base 48.8 Productive 47.6 Creative 3.6 Control group Base 48.4 Productive 48.2 Creative 3.4

8 task/% General level/% 47.4 48.8 3.8

48.1 48.2 3.7

47.8 48 4.2

48.1 48.1 3.8

The quantitative results of assignments for all criteria are shown in Table 5.

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Levels

Motivational criterion Experimental group Base 39.2 Productive 52,8 Creative Eight Control group Base 40 Productive 52.1 Creative 7.9

Cognitive criterion

Technological criteria

Reflexive criterion

General level

41 51.5 7.5

45.6 48.3 6.1

48.1 48.2 3.7

43.5 50.2 6.3

41.7 50.8 7.5

46.1 48 5.9

48.1 48.1 3.8

44 50 6

4 Conclusions In conclusion, we summarize that the article examines theoretical aspects of pedagogical education levels, criteria and indicators for their definition, develops a system of criteria and indicators for the level of methodical competence development of preschool teachers, as well as diagnostic tools for its assessment. Using empirical methods of scientific research, we determined and characterized the levels of professionally significant qualities of teachers (creative, productive, basic) through the use of the developed diagnostic tools. Summarizing the above, we conclude that the analysis of the results of the initial diagnostic examination showed that the overwhelming majority of respondents recorded productive (50.2% in the experimental and 50% in the control group) and baseline (43.5% in the experimental and 44% in the control group) levels of methodical competence development. Only 6.3% of the respondents in the experimental and 6% in the control groups were at a creative level. The results indicate the need for systematic and focused work on methodical competence development of preschool teachers, that is, the introduction of a pedagogical model of its formation, which will be the subject of further research; and implementation of re-diagnosis of the level of formation of the components of the analyzed competence of preschool teachers using the diagnostic tools developed and described in this article.

References Babansky, Yu.K.: Pedagogical experiment. In: Zhuravleva, V.I. (ed.) Introduction to Pedagogy Research, Moscow (1988) Zakharova, G.I.: The development of professional competence of a teacher of a preschool educational institution by means of psychological and pedagogical training. Author. dis. kand. ped.nauk - Chelyabinsk (1998). http://www.dslib.net/obw-pedagogika/razvitie-professionalnoj–kompetentnosti-pedagoga-doshkolnogo-obrazovatelnogo.html. Accessed 02 Mar 2016

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Assessing the Impact of Intellectual Potential on the Innovative Development of Resource-Based Region Zoya A. Vasilieva(&), Anastasiya N. Rusina , Irina S. Bagdasarian , and Irina V. Filimonenko Siberian Federal University, Krasnoyarsk, Russia {priem,ifilimonenko}@sfu-kras.ru, [email protected], [email protected]

Abstract. Forming a system of innovative development factors for the Russian regions is challenging due to peculiarities of the federal government, economic specialization and social structure of the population. Consequently, the Russian regions are characterized by a heterogeneous basis for the development of industries. This made it possible to classify Russian regions as resource-based and non-resource-based and put forward a hypothesis about the different influence of intellectual potential characteristics as a factor of innovative growth on the development of the above regions. Despite an extensive system of classification criteria for economic growth factors, the peculiar impact of factors in resource-based and non-resource-based regions have not been studied, and quantitative relationships between factors and outcomes of innovative development of the region have not been established. Determining the group of factors having an impact on the innovative development of the region’s economy being selected, and the subsequent comparison of outcomes in the resource-based and non-resource-based regions of the Russian Federation, the authors have explored the peculiar action of intellectual potential characteristics on the innovative activity of regional development. It has been suggested to classify regions as resource-based (extraction of mineral resources; agriculture) and non-resource-based through structural analysis of gross added value and volume of goods shipped by type of economic activity. The studies allowed determining the regions for each model group and degree of factors’ impact by their placing in the “intellectual potential index; innovative development index” with the subsequent assessment of averaged values and identification of differences in factors. Modeling of quantitative relationships between groups of factors and outcomes of the region’s innovative development makes it possible to prove the key factors of innovative development being selected and determine the degree of their influence in resource-based and nonresource-based regions, to justify the reasons for differences and outline possible ways of further growth. Keywords: Innovative development
Innovative growth factors potential
Resource-based regions
Classification of regions JEL Classification Codes: J21


Intellectual


J22
J23
O15
R13

© Springer Nature Switzerland AG 2020 E. G. Popkova and B. S. Sergi (Eds.): ISC 2019, LNNS 129, pp. 740–754, 2020. https://doi.org/10.1007/978-3-030-47945-9_79

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1 Introduction Against the background of higher rates of innovative development, establishment, development and efficient utilization of the intellectual potential of economic actors is becoming increasingly topical. This issue is particularly important when developing programs for the socio-economic development of regions, which lay the basis of competitive relations. The recognition of the region’s intellectual potential as a factor of economic development and growth of the population’s well-being is crucial in these relations (Borovikova and Filinov 2015). Forming a system of innovative development factors for the Russian regions is challenging due to the peculiarities of the federal government, economic specialization and social structure of the population. Russia is the first among federal states by the number of constituent entities of the Federation, as a consequence, Russian regions are characterized by a highly differentiated basis for the development of industries. This allowed classifying the regions of the Russian Federation into resource-based ones (the structures of volumes of goods shipped and gross added value are prevailed by economic activities from Section B “Extraction of Mineral Resources” or Section A. “Agriculture, Forest Management, Hunting, Fishing and Fish Farming1) and nonresource-based ones and put forward a hypothesis about the different influence of intellectual potential on the development of regions. Thus, the purpose of the research is to reveal the peculiar influence of intellectual potential on innovative development in resource-based and non-resource-based regions.

2 Methodology Proving research hypothesis requires to substantiate different degrees of the influence of intellectual potential characteristics on innovative development in enlarged groups of territories with similar development conditions and challenges, and to sum up the peculiarities of the factor impact on the innovative development of the economy for regions of a particular type. To accomplish the tasks, we suggest using a technique that enables us: – to determine the composition of typical groups of regions on the back of a structural analysis of gross added value and volumes of goods shipped by sectors of the economy; – to explain different degree and outcomes of the influence of intellectual potential characteristics in typical groups of regions based on cluster analysis and crossclassification of factor levels and regional development progress; – to establish the relationship and degree of the factors’ influence on innovative development indices in each model group of regions through regression analysis. The algorithm of the technique to reveal the peculiarities and degree of factors’ influence on the innovative development of the regions is presented in Fig. 1.

1

In accordance with OKVED 2017 (Russian Classification of Types of Economic Activity).

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Stage 1 Classifica on of regions

Resource-based regions (extrac on of mineral resources)

Resource-based regions (agriculture)

Non-resource-based regions

Stage 2 Determining peculiar influence of factors in resource-based and non-resource-based regions

Step 2.1 Classifying regions by “Intellectual Poten al Index” axis

Low Ipi

Average Ipi

Step 2.2 Classifying regions by “Innova ve Development Index” axis

High Ipi

Low Idi

Average Idi

High Idi

The matrix of placing the regions in the axes “index of intellectual potential” and “index of innovative development”

Step 2.3

Stage 3 Es ma ng closeness of the rela onship

Step 3.1 Correla on analysis Correla on coefficient between Ki и Ki+1 >0,6

Correla on coefficient between Ki и Ki+1 0,6

0

Iden fica on of colliga on closeness