The Prime Minister took part in the plenary session, Digital Independence of Industrial Russia, and visited an exhibition of the latest developments by Russian companies.
Excerpts from the transcript:
Mikhail Mushustin attends the 8thI Digital Industry of Industrial Russia conference
Mikhail Mushustin: Good afternoon, friends and colleagues,
I am delighted to be here in Nizhny Novgorod, the home place of major enterprises and a developed IT industry.
We have come here for an important industry event. The role of digital solutions has become invaluable in the world. They have become an integral part of all spheres of human endeavour and are playing a vital role in the industrial sector.
Ideas can only take the form of highly competitive products through powerful platform solutions ranging from computer-assisted design to robot software. There is no future without our own software.
This has been proved by the sanctions, when large international companies left the Russian market after promoting their technological solutions here for years, and our enterprises lost access to foreign solutions overnight, solutions they had come to rely on.
There is relentless competition for high technology in the world. In fact, it is a matter of national security.
Our President has tasked us with attaining technological independence from foreign software, which calls for creating a strong IT sector capable of creating top-tier digital solutions customised for our producers. This will create the basis for our industrial sovereignty. We have the necessary experience, research potential and resources, which we must use more energetically.
A number of special instruments such as the tax manoeuvre, targeted support packages, low-interest loan programmes and special grants have been created to stimulate the creation and manufacturing of novel products. They are provided on instructions from the President. To date, the provision of substantial subsidies has been digitised and has become more accessible for businesses.
We intend to simplify our designers’ access to contracts with state-run companies that are major industrial contractors. This involves receiving the system-relevant status, which will help such designers receive contracts without a tender. A draft law to this effect has been submitted to the State Duma.
We are also considering the idea of obligatory deductions for the use of foreign software to be made until a given company transitions to national solutions. Half of the funds could be used to issue grants to Russian IT companies. The other half will be used as collateral for the issuance of low-interest loans to them.
Our industry is well on the path towards using Russian software. According to experts, the demand for individual Russian software products increased by 10 to 12 times last year. There is no doubt that it will continue to grow.
This is a serious challenge for software designers. Over 22,000 of them have been accredited in Russia, and they are actively revising their operations with due regard for the current realities.
As for programmers, their number has increased by 13 percent compared to last year. There are over 740,000 of them now.
A good example of the situation in the industry is the sale of their own solutions and services, which has increased by nearly 25 percent to approximately 2.2 trillion roubles. It is a very positive trend.
When we met here last year, we held in-depth discussions on the industry’s requirements for innovations and end-to-end technologies, including in artificial intelligence and big data cybersecurity.
I would like to note that we have managed to launch and streamline the operation of industrial competence centres (ICC), a new mechanism of interaction between sectors and companies in the IT sphere. It comes down to joining the efforts of large clients and experienced designers. It was the first and, so far, the largest example of public-private partnership.
Overall, there are 33 such consortiums comprising over 300 industry leaders and 700 experts. They have been created in all the main sectors, such as automobile, aircraft and rolling stock manufacturing, metallurgy, oil and gas sector, and petrochemistry. Their main task is to identify sectors with critical dependence on foreign digital products and to formulate clear priorities for creating and implementing Russian software.
Overall, we have identified over a thousand foreign solutions which have a direct bearing on the manufacturing processes in terms of their sustainability. However, only one in six of them lacked a Russian equivalent. Of course, it is essential that we come up with an adequate replacement without delay. We launched the effort to develop universal software solutions in the key technological sectors, primarily in product life cycle management, digital design and virtual testing. By the way, we have seen quite a few great examples of these solutions at the exhibition stands. These are all serious end-to-end solutions that are just as good as similar Western products. If we are to succeed in putting manufacturers across the country on a sustainable development path, we must ensure that this system-wide approach is effective. Tangible results have already started to materialise.
Over 160 projects of this kind worth over 210 billion roubles in total received the green light, with only 10 percent of this amount coming from federal grants. Companies took care of the rest, making a meaningful contribution to laying the groundwork for and facilitating industrial development in Russia.
I want to extend my special gratitude to the senior executives in these companies for serving as role models in terms of their corporate technological responsibility. Many of them are here in this room. I am certain that together we will deliver on the objectives the President has set for us and make our economy even stronger.
Let me note that since the creation of the competence centres, some of them, as well as their customers have already emerged as the frontrunners. There are also those falling behind. What sectors am I referring to? Pharmaceuticals, trade, food and processing, and crop farming. We supported their projects back in 2022, but have yet to see them implemented. In fact, they never got off the ground. Moreover, the agreements to award grants to these organisations have not been signed.
Some major manufacturers adopted a passive attitude, which is utterly puzzling. Maybe they believe that the foreign solutions will last them many years.
Colleagues, let’s do away with illusions: waiting it out is not an option. We need to shape an up-to-date IT product landscape, and start ranking projects and companies in terms of their readiness and the results they achieve.
In December, the Government signed several agreements with state corporations to develop high-technology sectors as part of an effort to promote import substitution in the software industry. We also drafted roadmaps for each of these documents, covering all the initiatives whose implementation will enable us to increase the share of homegrown solutions and reach an import substitutions rate of 90 percent by the end of the decade while reducing the number of foreign solutions in the key sectors of the economy.
The transition to Russian hardware will be the next major milestone, and a very challenging one at that. It is obvious that this kind of hardware will not work unless we have Russian software to run it.
Mikhail Mushustin attends the 8thI Digital Industry of Industrial Russia conference
Colleagues!
We should not decide to just blindly copy Western solutions. We need to develop our own competitive advantages in segments where Russia is a technological leader or where we have potential for such leadership.
The President has instructed the Government to make a number of changes to national projects and state programmes. This includes the introduction of AI-enabled solutions in every industry and public service. So far, penetration is modest – within 20 percent, according to the experts. Obviously, the leaders here are airports, railway engineering and the gaming industry. If the imported software that we want to substitute involves artificial intelligence, it needs to be studied and used. If we miss our chance now, there is a great risk that our newly developed software will be outdated and uncompetitive by the time it reaches the market.
Colleagues, we cannot allow this. Therefore, in the near future, we need experts to assess and analyze the integration of AI-enabled modules in new products, identify the functionality that has the greatest financial, economic and social impact and include it in the terms of reference for new projects. And if a company does not use such technologies, it will have to explain why not.
We must certainly improve the coordination of the developers’ efforts. A single bank of industry-specific software solutions is needed to build AI modules faster. We must consider including such a list in the domestic software registry and establish copyright mechanisms, which will benefit all parties to the process.
It is also very important to identify the main types of digital solutions that the industry needs the most. The government will focus on supporting such projects. To do this, industry players need to provide high-quality feedback. First of all, these are design automation systems, engineering systems, and product life cycle management systems. Second, in terms of importance, are systems for managing production processes and assets, accounting, monitoring the condition of equipment, and planning maintenance and repair. All professionals are perfectly familiar with these technological components and cycles.
As of now, we have provided grants for 26 such projects worth 17 billion roubles. All these are innovative products that use, among other things, the Internet of Things, predictive analytics, and artificial intelligence. Also, Building Information Modeling software is in high demand from various sectors of the economy. I examined one such product today, and was impressed. It is almost ready, with all model elements included, except materials performance. All the rest is already there. The application practically designed a university – all the calculations, everything was done with Russian software, with an embedded nanoCAD module. Colleagues, that was real progress, real import substitution.
Enterprise management systems, factory-floor control and many other projects need to be developed. Of course, we will also pay special attention to projects to create integrated software and hardware systems that can be used in industrial infrastructure.
Many domestic developments can be successfully applied outside Russia. They will undoubtedly be of interest to our partners from friendly countries. Our friends from Belarus who are here today have shown us a number of interesting solutions.
To strengthen Russian-Belarusian cooperation, we are considering new joint projects to introduce industrial software at our joint and national companies. I think these projects can be presented as soon as July, during the Innoprom international exhibition in Yekaterinburg. I am inviting all of you to attend it, my friends.
Let me emphasise that unlocking our export potential is one of the national priorities. We have created a special mechanism that will help expand Russian IT companies’ presence in foreign markets, the so-called digital attaché service to be established at Russian trade missions in foreign countries.
In the near future, such attachés will be posted in 26 countries in Asia, Africa, the Near and Middle East, Eastern Europe, South America, and the Caribbean. They will be responsible for supporting the export of Russian software products.
Now, about another important decision that was made last year. As part of the Labor Productivity national project, the Эффективность.рф (efficiency) digital ecosystem was created and put into operation.
Today, it offers proactive and responsive services for identifying growth opportunities. Manufacturing sites use dedicated software for generating valuable analytical insights – the data it generates helps define the contours of state support measures for the priority segments of the IT industry.
Speaking of data, I must note that it is taking on an increasingly important role and as years go by this data will help up overcome challenges and bridge the existing gaps, including in software development. As we have already said on multiple occasions, data is the gold, the oil, the platinum – or what have you – of the 21st century. Being able to put data to effective use is a prerequisite of success, including in industrial software development.
Today, about 1,500 companies from across the spectrum contribute to this process, including in radio electronics, the oil and gas complex, the chemical industry, pharmaceuticals, energy, heavy engineering, consumer goods, and timber processing.
It is important that experts who use this platform help their corporate customers draft the terms of reference and design requirements. Accordingly, they help them acquire the technology they need.
There are already about 500 Russian solutions from over 200 developers available today for this purpose.
Colleagues, friends, we need to have a strategic approach by investing our efforts in developing serious manufacturing and engineering solutions. Of course, implementing them will take quite some time. After all, this is quite a challenging process. And it takes projects of this kind time to generate a return on investment. At the same time this is what guarantees the country’s technological independence. There is no other way for us.
By the way, the level of digitisation in the key sectors of the processing industry is under 50 percent.
Today, our mission is to continue introducing the most advanced technology, including virtual testing, digital modelling, and many other solutions.
I am sure all of you know what I mean. This is essential for streamlining manufacturing processes, reducing downtime, bringing high-technology products to the market faster and at a lower cost.
To deliver on these objectives, we will update the digital transformation strategy for the processing sector soon.
Today, a lot of work is underway to create software and programme systems for critical infrastructure.
The President has instructed us to ensure the safe and stable operation of the core information systems for all economic sectors. And the Government will set common approaches to implementing the state policy in this sphere. All issues related to having key technologies and solutions, forming appropriate conditions for their development, production, support and servicing must be resolved. And of course, we should not forget about the training of qualified personnel.
We also need a transparent system for assessing the level of technological independence of critical information infrastructure. It should be independent assessment, including for the heads of the federal executive bodies, because of course, when you are responsible for this, you want to make the percentage higher. But independent assessment, feedback, which the President always insists on, should serve as a catalyst for the entire process for us. And the public-private partnerships should agree on this independent assessment.
At the same time, it is important to synchronise the schedule for transitioning to Russian-made software products to the schedule for their development. A flexible approach is required here. Standard solutions will be defined for each sector, and deadlines set for substituting Russian products for their foreign analogues, as we agreed.
In addition, we have a lot of startups created by young and talented people with ideas on how to improve production. We give them grants to develop prototypes. But they, of course, need help to find customers, in the first place. In this regard, I believe that it is necessary to create industry venture funds and remove barriers so that these funds could get investment from our citizens, and these companies could enter the stock exchange freely. The Government will prepare a separate action plan for this.
Friends!
Today is a time for unique opportunities and great breakthroughs. I call everyone to action – to be more active in implementing the results of Russian research and development. Inaction today is more destructive than ever. What is needed are bold, extraordinary initiatives that will help our country achieve a high level of digital maturity in the shortest time possible. The input from each of you will be valuable.
At the same time, it is extremely important to be one step ahead in all key areas of industrial development. We should try not to catch up, but set our own standards for technology, goods, services, thus defining a new quality of life for people. This is the goal towards which we must move together.
I hope that at today’s plenary meeting we will discuss various proposals to achieve Russia’s technological leadership, decide what support mechanisms need to be fine-tuned or initiated, and exchange best practices.
I remember very well everything we agreed on last year, here, in this hall. We will talk about this too.
Let’s get to work.
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