“Study, study, and study some more!” is one of the most often cited sayings of revolutionary leader Vladimir Lenin. One hundred years after Lenin’s Bolshevik coup, Russia is undergoing another revolution. This time, it’s digital rather than political, but international politicians, industry leaders and futurists who gathered at the Open Innovations forum at Skolkovo on Tuesday agreed that the key to success is once again education.

Russian Prime Minister Dmitry Medvedev (right) and his Luxembourg counterpart Xavier Bettel. Photo: Sk.ru.

Russian Prime Minister Dmitry Medvedev headed a plenary panel titled “Digital Economy: Society, Business, Government” on the second day of the forum on Tuesday that also included the head of Chinese internet retail giant Alibaba Group, Jack Ma, Luxembourg Prime Minister Xavier Bettel, and Jacqueline Poh, CEO of GovTech Singapore.

“People say that data is the new oil, and those who learn how to turn the mass of information into useful solutions will win, and those who miss the chance will be left behind, maybe forever,” said Medvedev, who is known for his enthusiasm for new technologies and founded the Skolkovo innovation centre back in 2010 during his presidency.

The government has done a lot to make a culture of technology commonplace throughout Russia, he said, noting that 75 percent of homes have internet access, and the country has the highest number of users in Europe.

He acknowledged, however, that there are remote regions in the country with no high-speed internet access, and that there is a tech gap between generations – a problem that is not unique to Russia.

Investing in the future

Medvedev said Russia was continuing to develop maths and engineering programmes in its school curriculum: areas in which Russia has traditionally been strong.

“We have a lot of inventors, but few finished entrepreneurial projects: that’s our weak point,” he said. “In many foreign engineering and IT companies, including in Silicon Valley, there are a lot of Russians. Our task is to enable young talent to develop its potential here. That’s what we devised Skolkovo for, where we are currently located, and we need as many of these IQ centres as possible,” said the prime minister, adding that he recently signed off on the creation of a new innovations cluster in the town of Pushkin near St. Petersburg.

Many of the plenary session's speakers agreed that education is key to successful digitalisation. Photo: Sk.ru.

Medvedev’s Luxembourg counterpart agreed that education is crucial in developing a digital society: an area in which the small European nation has seen considerable success, and in which it regularly tops ratings.

“Education is a very important part,” said Bettel.

“We should believe in young people when they have good ideas. We often condemn them when they go bankrupt, but I prefer to take the risk and be part of the next big thing. We should have more support for people who fail the first time,” he said.

Like the Russian government via the Skolkovo Foundation, Luxembourg also provides startups with grants.

“I would be very happy if we could have the next Jack Ma in Luxembourg,” said Bettel. “He took the risk, and this is what we have to do.”

Ma, a former English teacher, said that the only thing he worries about is education.

“I don’t believe machines are going to take all our jobs,” he said. “In every tech revolution, lots of jobs were killed, and a lot were created. We are going to create more jobs for sure.”

Jack Ma, the founder and executive chairman of China's Alibaba Group. Photo: Sk.ru.

He said future generations would be smart enough to solve any problems in the future, but that it is essential to adapt education systems to the times.

“Think about our kids: if we teach them the same way [people have been taught for centuries], they will have problems,” he said.

“Machines are going to be smarter than us, you can’t compete: it’s like trying to run faster than a car. If we teach our kids how to memorise and calculate, they’re going to have no future. We have to teach them in another way.”

Professor Michio Kaku, a Japanese-American theoretical physicist, futurist and professor at the City College of New York, also agreed that education models would have to change, arguing that computer chips will soon be everywhere, including in contact lenses that would allow wearers to access information.

“My students will blink [to bring up the information they need], and they won’t have to memorise all the things we’ve been talking about. This will revolutionise education,” he said.

Perfect capitalism

Just like society, business is being fundamentally changed by the digital revolution.

The same computer chip-equipped contact lenses will lead to “perfect capitalism,” said Kaku.

Professor Michio Kaku is the author of three New York Times bestselling books. Photo: Sk.ru.

“In the future, contact lenses will scan everything in a store and tell you what the profit margin is and who’s scamming you,” he said.

“The losers will be middlemen. Why did companies like Amazon, Airbnb and Uber become so large? Because they digitised the middleman. I tell my friends: take any industry and write down where there’s any friction or frustration and digitize it, and you too could become the next Amazon.”

There are startups appearing in Russia that can challenge companies with new business models, and there is strong potential for more to appear during the next few years in areas including transport and logistics, education, health, financial services, smart cities and agriculture, said Medvedev.

“We will connect remote hospitals and schools to the internet, and 5G mobile networks will soon appear,” said the prime minister, adding that the government was continuing to work to create the necessary conditions to attract venture funding.

As for established companies, there are working groups and centres of excellence set up to help the adjust to the digital economy, but businesses have to take the initiative themselves, said Medvedev.

Sberbank CEO Herman Gref outlined how technology has changed the bank's operations. Photo: Sk.ru.

Russia’s state banking giant Sberbank has outlined three technologies that have great potential for the banking sector: blockchain, artificial intelligence, and quantum computing, said the bank’s CEO, Herman Gref. The bank, until recently known for its long queues and bureaucracy rather than innovations, now uses AI, machine learning and big data in decision making on issuing loans, as well as using chatbots to provide customers with financial advice, and AI and machine learning to fight hackers, said Gref.

“It’s very important to meet with the country’s leaders and business leaders at platforms like this,” said Gref. “It’s impossible to make progress without working with the authorities, since at every step we take, we face regulation,” he said, adding that in Russia, the government is paying a lot of attention to facilitating the transformation to the digital economy.

State dilemmas

Regulation is one of the issues faced by the third section of society affected by digitalization: the state, said Medvedev.

“More than half of state services are already available in digital format. It’s not always ideal yet, but the option is there,” said the prime minister.

Tuesday's plenary session took place in the Matrex building inside the Skolkovo innovation city. Photo: Sk.ru.

He acknowledged that the state faced the problem of trying to ready infrastructure for the security challenges posed by the Internet of Things and anonymous cryptocurrency transactions.

“It’s clear that regulation can’t keep up with the growth in technologies right now, but that doesn’t mean there should be no regulation,” he told the panel.  

Bettel agreed.

“Regulation shouldn’t be a brake on innovation, but regulation is a part of trust,” he said, citing the issue of data protection.

Bettel said that part of Luxembourg’s success in the digitalization of its society is its diverse population, of which nearly half are non-Luxembourgers.  

“We need people with different skills to work together in a team,” he said.

Medvedev said Russia was also open to working internationally on its digitalization.

‘We have potential for digital sovereignty, but we don’t intend to build a digital collective farm,” he said. “The volume of the Russian market is limited, and we will promote our developments on the global market. We’d like to do that in cooperation with international partners,” he said.