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National Interests: Priorities and Security
 

Digitalization and domestic machine building: Prospects and risks

Vol. 16, Iss. 4, APRIL 2020

Received: 3 February 2020

Received in revised form: 20 February 2020

Accepted: 16 March 2020

Available online: 15 April 2020

Subject Heading: ECONOMIC POLICY OF THE STATE

JEL Classification: E23, F01, O11, O14, O25

Pages: 678–694

https://doi.org/10.24891/ni.16.4.678

Kuznetsova G.V. Plekhanov Russian University of Economics (PRUE), Moscow, Russian Federation
gkuznet3@gmail.com

https://orcid.org/0000-0001-5370-9732

Korovkin V.V. SKOLKOVO Moscow School of Management, Skolkovo, Moscow Oblast, Russian Federation
vladimir_korovkin@skolkovo.ru

https://orcid.org/0000-0002-0068-9544

Subject. The article discusses the current and future development of domestic machine building as digital transformation processes are under way worldwide.
Objectives. The study explores how a new wave of S&T progress influences the coming future of the industry by predicting and analyzing domestic machine building as is. We also substantiate that, as the most critical part of the Russian economy, the machine building sector should be redesigned in terms of its structure and management so as to adapt to challenges brought by digitalization.
Methods. The study employs the logic systems analysis of statistical data and expert assessments, techniques for generalization and grouping, abstraction-logic method.
Results. The domestic machine building crisis was proved to still linger. Those meager achievements are not viable without the State aid. What describes the industry is that the Russian enterprises and products are hardly integrated into global chain values, resulting from their low competitiveness globally. Most of them are designated for the domestic market or even narrower regional markets.
Conclusions and Relevance. There is still no definite conclusion on the impact of digitalization on the future of domestic machine building. However, the industry is not very prepared for innovation, with the governmental domination of the economy impeding the innovative transformation, which requires the freedom of business. As a preliminary requirement for Russia to join a group of global leaders, it should create conditions for the free development of businesses by integrating into global value chains and become more competitive. The findings can underlie practical measures to formulate the industrial policy from macro- and microeconomic perspectives.

Keywords: mechanical engineering, digitalization, economic policy

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