We only pay attention to describe the hammer and nails instead of thinking of the house that we are building with these instruments
28 Сентября 2017
On September 22, 2017, the American Chamber of Commerce in Russia held its 17th annual Business & Investment conference on the theme "Accepting the New Challenges." During the opening panel session, leading economics and business experts discussed key issues for the Russian economy. The second panel focused on the digitalization of the economy. Below is the transcript of Dmitry Marinichev's speech at this conference.
The Russian business don’t need innovations because it exists in the environment of limited competition
-…I’m not the adherent of digitized society or digitized services, that are often discussed. We’ve been born, we live and possibly will die in the classic hierarchic state, in the classic state model, that we are habituated to and that we are defending with passion. To answer your question - why in Russia the business is what it is - I will answer, it is very simple. Because in Russia the business exists in the environment of limited competition within the country framework, political framework, economic framework. It acts on its working lot, services this lot, receives revenue, and it is not interested in global competition, neither in innovations, because it doesn’t need them, and this is an absolute truth.
The economy of future will be flat
Regarding the question of the importance of trust in the digital world, I’m inclined to believe that trust won’t be an important factor at all. Because the technologies such as blockchain, that have been mentioned today, or cryptomoney, - assume the cooperation of businesses or individuals on the basis of the absence of trust to each other? – and it is important to understand it. And all the economy of future will be flat, where everybody is connected to everybody, and where information and values are transmitted from one point to another instantly, without any intermediary.
The hierarchy is only a model that we keep in our heads
When I started to talk about the hierarchic model of state and the world in general, where we live and where we are used to live, we, of course, defend the idea that the state – this is correct, that the business within this model – this is correct. However we already see the examples where this model doesn’t work, when the most successful businesses are those who act in uncorrectable way, in a way different from out habits.
Only two hundreds years ago we had serfdom in Russia. If you would have asked any serf at those days, if he trusts his landlord, he would have answered: «Yes, I trust him, he is the only man that I trust, because he is the supporter, father breadwinner», - he had this hierarchic scheme in his head.
When the social and economic paradigm changes, the model of the state also changes
But from the point of view of technological revolution that was underway in Russia at that time, the new situation emerged, when an individual, the former serf, became able to start his own business, - as for example the peasant from Vologodskaya region invented a machine tool to squeeze oil from sunflower seeds, to make sunflower oil. And such people started to enter to economic relationship with each other. The business appeared, the capitalist system appeared, finally the democracy appeared. The social and economic paradigm changed, the model of the state also changed. The tzar as the Lord’s anointed was put under the question. The science starts to play a key role, technological businesses appear, including railways etc.
The digital technologies force the world change
… it is important to understand that the digitalization, digital technologies force the world change.
The digitalization opens the possibility for the businesses to go global
All the digital systems open for the businesses that create some added value to go global. Any business consisting of five people can attract money instantly today, - above national money, for instance cryptomoney, - and create a product to be sold all over the world. This product can be of physical or of informational nature either.
New opportunities, new relations open for businesses and individuals
What is important – it is that individuals and businesses get new opportunities and new relationship.
Everybody will be able to have his own currency, his own value
Respectively, the individual will be able in future to have his own value, which will be formed as information, as DNA. This value will list equity, compete and be marketed compared to other values, to other individuals, to other people on planet Earth, to all essenses that will be associated from other essenses. We can’t imagine it now yet, we are not ready yet to work with, to grasp such large numbers. But this is the future.
Information technologies will bring us to a new social and economic paradigm
…and when it will happen, the social and economic paradigm will change. The labor relations will change. Isn’t the modern job contract different in something from the slavery relationship of old days, when there was a landlord and a serf? We only don’t think about it. Of course we have invented a lot of social laws, in Russia we have KZOT (Code of Laws on Labor), that gives the possibility for an ordinary individual to protect himself from corporations, but in the essense this is slavery, this is a hierarchic system. The transition to the new paradigm with the help of information technologies will happen when the individual having his own cryptocurrency or his own value will make quick contacts with others. The creative teams will be able than to be formed and unformed quickly. And they will generate enormous amount of added value that will be registered immediately on the global scale.
Non-government superstructures will change the state models
I’m absolutely sure that above-state elements wil change state models. Because today the state is limiting competition when it opens the possibility to the banks or other respected companies – to receive their added value in the environment of limited competition.
The new model of social and economic cooperation
…the SCADA systems are not our invention. They were invented more than 50 years ago. SCADA is just a system collecting data from sensors and making solutions based in those data in purpose to improve costs or products. Nothing new here. But when the process embraces everybody and simultaneously, - it never happened with humanity yet. When everybody simultaneously participates in the process the humanity turns to become a single enormous organism. Respectively, the businesses stops to be in relations “client-manufacturer», the business becomes just the creator of a new product which is of common property. This will be the cryptoeconomy or the new model of social and economic relationship where everybody works on a single large task that can be named human society, human life, where everything is based on a consensus, both technological and negotiated.
We base our lives on the assumption of trust to the state and banks
…The question of trust, it touched me. If to compare with our life, look at the young ladies present here in this hall, they won’t let me lie, - when a young lady meets a young gentleman, she immediately rates him 10 scores to reflect how he is nice and magic. And she trusts him, he is the best. But after he starts to fail in some way, than she starts to discount his scores up to zero, than she says goodbye to him. And she thinks^ “How I could meet such a monster?” What happens with gentlemen? The opposite is true. When we meet we grant no trust to each other. Than we add scores to each other, score by score, score by score, when there are 10 scores, it is impossible to destroy the man-to-man friendship independently on any failures. Different pictures of the world. But both models exist and work. For a long time we live on trust. On trust to the state. The trust to the state is based on the trust to banks.
Russia of all others is the stepping stone for innovation technologies, because our mentality is prepared by the mistrust to the state
… the more complicated and old is the civilization, the less is the level of penetration of changes. In the presentation that we’ve just seen it was shown that in Germany, in the USA people are not much willing the automation, on the opposite from Russians. This is true. Because they have a very high threshold of trust to social institutions, trust to banks in particular. In those countries it is much more comfortable to go and put money in the bank, everybody knows that everything will be ok with it. What kind of trust do Russians have to our banks? What kind of trust to state model? Only during my short live the state model in the Russian Federations has changed three times. How many times value of money changed, and the state left us high and dry? Sometimes I think if we really have a state. That is why we have a high level of trust to new technologies, when we can be responsible for ourselves, when the token that we have doesn’t go to any intermediary, and I decide myself what to do with it, and it is my accumulated value, that I can give it to somebody as a gift, I can sell it, do anything I want to do. This is why of course Russia is the stepping stone for innovation technologies. For example, Uber, that also have been mentioned here today. I have met Uber top people, they told me a long story how they create working places for people, how innovative their model is. I told them: “You know, guys, with all my great respect to you, but from the point of view of software it would take a couple of months to a couple of our students. From the point of view of innovative model – it is far from being innovative”. In the 90th in Moscow I was getting out to the street, rising my hand and stopped a car in one second. I even didn’t need to click a button. Imagine what a high level of service it was. It was Moscow 90th kind of Uber. Why in Moscow Yandex.Taxi and Uber are so successful? Because of people’s mentality. We have adequate social expectations. It is different in other places – in France, in Germany. There Uber is a burnt-over land. Why? Because among taxists there is a latent bottled competition. One should purchase the right to be a taxist, the municipality limits the number of licenses to be sold. That’s all, here is the problem.
Phones, tablets are the instruments that are changing the people’s consciousness. As soon as it changes – the social and economic relations also change, and they start to make other demands on the model of the state
Of course people are not ready to change, and digitalization goes slow. Because we want it and welcome it with the same force that we reject it. The question of change of social and economic paradigms is only a question of time. From the point of view of business transformation I’m sure we should not talk about concrete types of gadgets, phones, tablets, about how Internet changes our lives, how cryptocurrencies enter our lives. All this is not essential. Those are only the tools. As Vladimir Iliych Lenin told, - being determines consoiusness, - the mentioned tools change consciousness, it becomes different. As soon as consciousness becomes different, the social and economic relationship of subjects change. As soon as they change, they start to make other demands to the state model, to the business, to relationship in general.
Today the nationality of the business has no importance. What is important – it’s the integration to the global value chain
I believe that we are currently within this moment of development, which is extremely interesting, curious, and this is what we should discuss. To my mind the nationality of the business is not important already. Made in China or made in USA.For instance, I don’t know where is made my iPhone, in California or in China or anywhere else – it doesn’t matter. What matters is only how everybody, every engineer, every manufacturer is integrated in the common added value chain that brings to the products and services.
It is necessary to create more global, higher level, above national superstructures or formats of cooperation
My idea is simple. We came to the state when volens-nolens, and it is true for all the countries, - we need to create more global, higher level, above national superstructures or formats of cooperation.
The world is changing. All the intermediary structures, including government structures, are squeezzed out
We should clearly understand that the world is changing, that all the intermediary structures, including governmental intermediaries, are being squeezed out of our life, and they should be squeezed out and pass to common property.
The state function of middleman is disappearing
The Gosuslugi.ru, of course, is the most popular and visited website, because if you make citizens receive any service from the state by means of centralized platform, - one has no other possibility to get what he needs as he needs bread, - and this will be the most visited site. If you pass this functionality to individuals, as it happens on blockchain, where the decentralized database and the service itself are supported by the participants of the process themselves.
We only pay attention to describe the hammer and nails instead of thinking of the house that we are building with these instruments
Today is this moment – that with the help of technologies, digitalization will transform our life radically, to the format that we are not thinking about for some reason. We only pay attention to describe the hammer and nails instead of thinking of the house that we are building with these instruments.
That’s all that I wanted to say, thank you.