Evgeny Kuznetsov on Migration, Technology and Russia’s Development

Evgeny, thank you very much for the interview and the opportunity to meet you at the Valdai conference, thank you for your participation in the panel discussion The first question is about contours of what geopolitics could look like in 2030 or 2050 Andrei Sushentsov Valdai Club Programme Director Associate Professor ar Moscow State Institute of International Relations (MGIMO) Managing partner of Foreign Policy Advisory Group consultancy At previous Valdai panel sessions, it was discussed that the planet's demographic potential in the Middle East, Africa and Asia is so great that there will be a mass south-to-north population flow And in the context of 2050, it could make the current geopolitics, for example, between Russia and the West completely irrelevant Are there any high-tech solutions for these major shifts, and if yes, what are they? There are several important lead-ins for this discussion.

First. Geopolitics is a peculiar term. Evgeny Kuznetsov Interim CEO, Russian Venture Company Nevertheless, if we look at what the industrial and economic picture looks like right now globally in various countries, We see an end to the times when industrial production was attracted to countries with cheap labor And global profit was attracted to countries that controlled world trade. At its base, geopolitics is built on these two things Capital went to developing countries to do something, and then return it to developed countries. First and foremost because of changes in production, robotization, customization, new technologies like 3D printing It is becoming profitable to produce where the consumer lives, thanks to automated factories. For example, the fast growth of the industrial cluster in Boston In which several hundred people work, and an enormous amount of goods is produced. So automated factories return to America, China is forced to become an innovative technological country Because such an amount of labor is no longer necessary. Particularly in Southeast Asia.

Africa has no chance of becoming a second SE Asia of attracting industry The second lead-in is that the world is becoming truly global, including communications-wise because on-the-fly translations are becoming a practice Skype makes speech translation, thanks to Google and others, written communication is practically unlimited So cultural and language barriers are becoming a thing of the past. Third. The demographic picture is changing cardinally, most developed countries have a median age of over 45 With very low birth rates. Most developing countries, especially Africa, the Gulf of Guinea, have a 20-something median age and a billion people in practically 20 years from now or even eralier A really colossal demographic imbalance. If these people had somewhere to go in an industrial economy, Not even Europe, but Saudi Arabia, Gulf states, Egypt, where there was mass migration from Africa, the Philippines and so on. In a post-industrial, robotized, technological world, these people physically have nowhere to go and there are no jobs for them These lead-ins lead to the following conclusion: We are truly expecting a gigantic global redistribution of people But it does not lead to rational, effective economic consequences.

This is not a migration that leads to economic growth or an increase in prosperity This is a migration that leads to increased pressure on social, cultural and other foundations of society, And leads instead to a direct growth of destructiveness. This is a very unpleasant migration, for which it is difficult for me to find analogues Because in the industrial era, as a rule, migration was always positive one way or another. Another factor I forgot to mention: climate change If we take the most alarming forecasts, which are also the most likely, as a result of global temperature increases, the climate worsens first and foremost in places where most of the population lives This is Southern Europe, China, hundreds of millions of people. So besides the migration of the poor, there may be an issue of migration of the rich Who simply want to live in a more comfortable climate. What will this looks like? Will it be the US and Australia, or will it be Russia where the climate would change for the better This is a major question, as well as whether this migration would take place on our terms or on the terms of countries that want to comfortably migrate their elite This is an important question with no answer.

That's a very interesting principle that you pointed to. The pressure of protest potential in receiving societies and releasing societies will condense and possibly lead to a situation no one is prepared for No one even talks about this right now. You know, I found that Russia has practially no serious scientific study of the role of migration in Russia's development As an empire and later as the USSR. Few talk about how until 1880, Russia had a positive migrant ratio, most of whom were Europeans Austrians, Germans, and so on. This was a migration of officers, engineers, mining engineers, scientists, teachers, so an urban, educated estate In some sense we took the cream of Europe just like America, but America continued this and took them even more intensively as a result of WWI and WWII While we, starting in the late 19th century, became human capital exporters. Mainly intellectual capital at that More educated than we take in now.

So few analyze migration flows in the context of intellectual and educational potential Right now in the world, there is a flow of unskilled labor south-to-north, and skilled labor from Europe to the US, from China to Japan A kind of horizontal flow. We are becoming a state that takes in unskilled labor, while improving its own labor force and exporting it What happens to our average level is not hard to guess. We as a country are becoming a transit, service economy in the talent economy. This is a factor that is not talked about, but it is a very worrying one. The entire possibility of self-regeneration is in question: What critical mass of talent must leave for higher education to stop generating new talent? This is a very worrying issue As we see with the European migration crisis, modern states don't know how to hold back the flow of unconstructive migration It seems to me when Germany was becoming the leader in attracting Syrian refugees, they thought it would be the same as with Turkish workers 30 years ago, but pardon me, The European economy does not need Syrian refugees.

They need robots and people from China, Israel and Eastern Europe Together with their startups, technologies, engineering diplomas, to work in the knowledge economy. That's what they need. There is no need for unskilled labor there. So it looks like these global disbalances will worsen, so the further we go along the path of technological development, the scarier they become. Are there any ways of overcoming this? I don't know any actual solutions. There are several models. First is the Japanese. The country tried to bring in migrants, which had very bad consequences. The well-known story of how they tried to bring in Korean migration ended with organized crime-type destructive tendencies As a result, Japan's economy stagnates without fresh blood, but remains very high-tech, and it's society is very developed Because of intensive robotization and other similar things. The other is the Singapore model, which is becoming a global leader in pumping talent through itself And Switzerland, by the way.

These two countries are small, but they are taking the cream of the international high-tech startup elite The hybrid form that is America is nearby, sucking in a lot of talent, but easily dissolves them inside. So those who did not succeed in Silicon Valley just disappear, moving to Texas, Seattle or somewhere else Nearly half of Silicon Valley startups were created by first- or second-generation migrants. Second-generation is only around 10% So over 35% of startups are created by first-generation migrants, that's how the talent economy works right now Britain has turned into a transit economy, like our model, but its transit economy is the university economy British universities have a revenue of 70 billion pounds, this is more than pharma, construction, advertising and other key sectors in Britain So it's possible to make money on the transit economy, but one needs to have the same economically-organized education and universities as expensive as Britain's So there are several models: final beneficiaries, such as the US, Singapore or Switzerland, there are transit countries and there are suppliers We are currently suppliers and a transit country for unskilled labor.

We of course need a long-term proactive strategy To at least become a transit-earning country, and at most a transit-consuming country Evgeny, thank you very much for this interview, that's very interesting Thank you.