The current goal of the import substitution strategy is. Import substitution - what is it? Meaning, strategy, program. The importance of import substitution in Russia

19.01.2024

Keywords

IMPORT SUBSTITUTION / INDUSTRIAL POLICY / COMPETITIVENESS / NATIONAL SECURITY/ IMPORT SUBSTITUTION / INDUSTRIAL POLICY / COMPETITIVENESS / NATIONAL SECURITY

annotation scientific article on economics and business, author of the scientific work - Olga Yuryevna Sokolova, Evgeniy Alekseevich Kolotyrin, Valentina Alekseevna Skvortsova

Relevance and goals. In the context of the imposition of sanctions by Western countries, the Russian leadership proclaimed a policy import substitution. Understanding the modern role import substitution, modern interpretation and determination of the limits of applicability in implementation industrial policy are current issues of economic science. The purpose of the article is to offer a modern vision import substitution, highlight key differences with the concept of “protectionism”, and also identify some features of the implementation of the strategy import substitution. Materials and methods. The implementation of the research goal was achieved through analysis and generalization of the theoretical provisions of foreign and domestic researchers, systematization of existing approaches to implementation industrial policy. Based on the use of methods of logical analogy and synthesis of existing theoretical developments, a description of the main strategies is given industrial policy(export-oriented strategy, strategy import substitution, innovation strategy), the place of strategy is determined import substitution. Results. As a result of the study, three approaches to the concept “ import substitution": it can be considered both as an economic category, and as a process, and as a strategy implemented by the state. It is shown that from the theoretical point of view import substitution has a contradictory essence: on the one hand, it is a model of the country’s integration into the world economy, focused on economic growth, on the other hand, one of the tools for implementing the policy of economic protectionism. The article identifies the key differences import substitution from protectionism, the concept of “innovative import substitution" Conclusions. Strategy import substitution is gaining significant relevance at the moment. The author proposes to understand by import substitution state policy aimed at increasing domestic demand for domestic products by introducing certain measures to reduce the consumption of similar products of foreign origin, in order to create competitive on the global market of national producers and goods. The article concludes that it is necessary to apply an innovative strategy import substitution.Background. In terms of the introduction of sanctions the Russian leadership declared the policy of import substitution. Understanding of the modern role of import substitution, modern interpretation and applicability limits definition in implementation of the industrial policy are topical issues of economic science. The article aims at offering a modern vision of import substitution, at identifying key differences from the concept of “protectionism”, and at determining some implementation features of the import substitution strategy. Materials and methods. The research objectives were implemented through analyzing and generalizing theoretical positions of foreign and domestic researchers, through systematizing the existing approaches to implementation of the industrial policy. Applying the methods of logical analogy and synthesis of the existing theoretical developments, the authors characterized the main strategies of the industrial policy (export-oriented strategy, strategy of import substitution, innovation strategy) and determined the place of the import substitution strategy. Results. The study identified three approaches to the concept of “import substitution”: it can be considered as an economic category, a process and a strategy implemented by the state. The article shows that, theoretically, import substitution has a contradictory nature: on the one hand, it is a model of integration into the global economy focused on economic growth, on the other hand it is one of the instruments of implementation of the policy of economic protectionism. The article identifies key differences of import substitution from protectionism and reads about the concept of “innovative import substitution”. Conclusions. The strategy of import substitution is becoming quite significant at this moment. The author suggests to understand import substitution as a state policy aimed at increasing internal demand for domestic products by introducing certain measures to reduce the consumption of foreign similar products in order to create globally competitive domestic producers and goods. The article concludes about a necessity of implementing a strategy of innovative import substitution.

Text of scientific work on the topic “Import substitution as an industrial policy strategy”

ECONOMY

UDC 330.101.541

DOI: 10.21685/2072-3016-2017-1-13

O. Yu. Sokolova, E. A. Kolotyrin, V. A. Skvortsova

IMPORT SUBSTITUTION AS A STRATEGY OF INDUSTRIAL POLICY

Annotation.

Relevance and goals. In the context of the imposition of sanctions by Western countries, the Russian leadership proclaimed a policy of import substitution. Understanding the modern role of import substitution, modern interpretation and determining the limits of applicability in the implementation of industrial policy are pressing issues in economic science. The purpose of the article is to offer a modern vision of import substitution, highlight key differences with the concept of “protectionism,” and also identify some features of the implementation of the import substitution strategy.

Materials and methods. The implementation of the research goal was achieved through analysis and generalization of the theoretical provisions of foreign and domestic researchers, systematization of existing approaches to the implementation of industrial policy. Based on the application of logical analogy methods and synthesis of existing theoretical developments, the characteristics of the main industrial policy strategies (export-oriented strategy, import substitution strategy, innovation strategy) are given, and the place of the import substitution strategy is determined.

Results. As a result of the study, three approaches to the concept of “import substitution” were identified: it can be considered both as an economic category, and as a process, and as a strategy implemented by the state. It is shown that, from a theoretical point of view, import substitution has a contradictory essence: on the one hand, it is a model of country integration into the world economy, focused on economic growth, on the other hand, one of the tools for implementing the policy of economic protectionism. The article identifies the key differences between import substitution and protectionism and reveals the concept of “innovative import substitution”.

Conclusions. The import substitution strategy is gaining significant relevance at the moment. The author proposes to understand import substitution as a state policy aimed at increasing domestic demand for domestic products by introducing certain measures to reduce the consumption of similar products of foreign origin, in order to create national producers and goods competitive in the global market. The article concludes that it is necessary to apply a strategy of innovative import substitution.

Key words: import substitution, industrial policy, competitiveness, national security.

O. Yu. Sokolova, E. A. Kolotyrin, V. A. Skvortsova

IMPORT SUBSTITUTION AS A STRATEGY OF THE INDUSTRIAL POLICY

Background. In terms of the introduction of sanctions the Russian leadership declared the policy of import substitution. Understanding of the modern role of import substitution, modern interpretation and applicability limits definition in implementation of the industrial policy are topical issues of economic science. The article aims at offering a modern vision of import substitution, at identifying key differences from the concept of "protectionism", and at determining some implementation features of the import substitution strategy.

Materials and methods. The research objectives were implemented through analyzing and generalizing theoretical positions of foreign and domestic researchers, through systematizing the existing approaches to implementation of the industrial policy. Applying the methods of logical analogy and synthesis of the existing theoretical developments, the authors are characterized by main strategies of the industrial policy (export-oriented strategy, strategy of import substitution, innovation strategy) and determined the place of the import substitution strategy.

Results. The study identified three approaches to the concept of "import substitution": it can be considered as an economic category, a process and a strategy implemented by the state. The article shows that, theoretically, import substitution has a contradictory nature: on the one hand, it is a model of integration into the global economy focused on economic growth, on the other hand it is one of the instruments of implementation of the policy of economic protectionism. The article identifies key differences of import substitution from protectionism and reads about the concept of "innovative import substitution".

Conclusions. The strategy of import substitution is becoming quite significant at this moment. The author suggests to understand import substitution as a state policy aimed at increasing internal demand for domestic products by introducing certain measures to reduce the consumption of foreign similar products in order to create globally competitive domestic producers and goods. The article concludes about a necessity of implementing a strategy of innovative import substitution.

Key words: import substitution, industrial policy, competitiveness, national security.

In the context of globalization and the growing openness of the borders of the world's economies, international competition is increasing. Increasing competitive advantages is becoming one of the priority tasks for the development of states, and the role of the competitiveness of the country's economy is increasing.

Over the past three decades, during which the country is in the process of transformation, transition from a planned to a market economy, many key positions in the production of strategically important products have been lost. During the years of the planned economy, the country was much less dependent on imported products than in the current period. However, due to the current global political situation, the state has to adapt to the new conditions for conducting international economic relations. In the context of the introduction of sanctions by Western countries, the

The Russian leadership proclaimed a policy of import substitution. However, so far there is little real economy in the announced import substitution program; it is largely dictated by political reasons, and this can cause significant expenditure of state funds and failure to achieve the desired result.

Understanding the modern role of import substitution, modern interpretation and determining the limits of applicability in the implementation of industrial policy are the key issues of this article.

Import substitution processes play a big role for developing and transforming economies. This explains the attention of foreign and Russian economists to them.

Among the fundamental works that discuss the theory and practice of import substitution in an industrial society, it is necessary to note the works of N. Carter, P. Lindert, A. Straug, H. Chenery. Thus, the American economist P. Lindert examines the impact of import-substituting growth on changes in international terms of trade. H. Chenery and A. Straug interpret industrial import substitution as one of the main goals of economic development. In general, these economists associated the achievement of favorable economic development with a greater use of domestic sources of financing, as well as with the replacement of imported goods with domestic ones.

Nowadays, many Russian scientists are also working on the problems of import substitution. Recently, several studies have appeared where the authors are looking for new approaches to defining the concept of “import substitution”.

Import substitution can be considered from several positions: as an economic category, as an economic process and as a state economic policy or a state industrial policy strategy.

Thus, E. N. Nazarchuk points out that “import substitution should be understood, first of all, as an increase in the production of domestic products while reducing the consumption of imported goods (only for goods for which such substitution is possible and economically feasible).”

According to L.N. Peregorodyeva, “import substitution is a type of economic strategy and industrial policy of the state aimed at protecting domestic producers by replacing imported industrial goods with goods of national production.”

P. A. Kadochnikov understands the process of import substitution as “an increase in production and domestic consumption of domestic goods while reducing the consumption of imported goods (in physical terms).”

The author N. A. Suchkova rightly distinguishes two approaches to the concept of “import substitution”. The first approach considers import substitution as a kind of unregulated, generally positive for the country, often time-limited process, as a result of which foreign products and goods are gradually replaced by their domestic counterparts. The second approach uses a broad functional view, considering import substitution as a certain type of economic strategy and government policy aimed at replacing imports of goods,

goods of national production that are in demand in the domestic market. High import duties are combined with tax breaks for local producers. A program for the development of the necessary production infrastructure is being developed and implemented. The implementation of an import substitution strategy is typical for the import substitution stage of industrialization.

In the article by A. N. Makarov, one can find an interpretation of import substitution from the perspective of the needs of the regional economy: “... import substitution is traditionally understood as a long-term system of measures that ensures the achievement of the goals set by the region in terms of volumes and structure of production of domestic products while simultaneously reducing the consumption of imported goods goods. In the context of the policy of import substitution, the concentration of one’s own efforts and resources on the formation of a competitive market economy dominates.”

Thus, in general, import substitution can be considered both as an economic category, and as a process, and as a strategy implemented by the state, but the essence of import substitution is the same - it is the growth of domestic production replacing imported goods.

From the point of view of regulating the development of the national economy, import substitution can be considered as one of the industrial policy strategies. In the context of the internationalization of economic activity, industrial policy can no longer be considered only within the framework of the national economy; it must meet the requirements of the world market and ensure the competitiveness of many industries.

From the point of view of interaction with global markets and ensuring a global technological level, three types of industrial policy strategies can be distinguished: export-oriented, innovative and import-substitution. Each of these strategies has its own advantages and limitations (Table 1).

Due to the presence of shortcomings and limitations, none of the strategies can be used in its pure form, therefore the synthesis of strategies should form the basis of any industrial policy.

Currently, the strategy of import substitution is becoming especially relevant due to the high import dependence of the national market, crisis phenomena in the global and national economies, as well as due to the increasing role of the political factor in international economic relations.

The concept of “import dependence” is closely related to the concept of import substitution. This term should be understood as the use of foreign technologies, equipment, materials and products to carry out business activities. This dependence may be based on several factors: firstly, the lack of analogues of national production, secondly, the qualitative characteristics of the product, when a domestic product does not meet the necessary characteristics of the consumer, thirdly, the lack of production capacity to meet demand in the domestic market.

Table 1

Industrial Policy Strategies

Description of strategy Advantages Disadvantages

Export-oriented strategy - Creating favorable conditions for industries focused on exporting products. - The main task is to produce products that are competitive on the international market, to win the largest share of the world market - Inclusion of the country in the world economy and access to world resources and technologies. - Development of competitive sectors of the economy, ensuring the development of other sectors and being the main sources of funds for the budget. - Creating conditions for attracting foreign investment in the development of production and services - The danger of raw materials exports, an excessive share of which in the overall structure of exported products can lead to negative consequences (increased corruption, transfer of human and financial resources from the manufacturing industry, decreased economic growth rates)

Import substitution strategy - Ensuring the domestic market based on the development of national production through protectionist policies - Improving the structure of the balance of payments. - Increase in domestic demand. - Providing employment. - Development of production. - Development of scientific potential - Possibility of technological lag behind advanced countries. - The danger of creating too comfortable conditions for national producers, when they will not be interested in producing quality products due to the lack of competition. - Isolation from advanced trends in the global economy. - The need to build complete production chains, which may be more capital- and resource-intensive than those already existing in other countries

Innovation strategy - Creation and use of new technologies, their production, economic and social-organizational potential. - Development of the country based on the latest trends in technological development using high-tech and capital-intensive production - Maintaining the scientific and technical potential of the country. - Stimulating the development of educational institutions, which, in turn, makes it possible to provide the economy with qualified specialists. - Creation of new jobs within the country. - Maintaining a stable and high exchange rate of the national currency. - Focus on the development of production with high added value of manufactured products - Significant investments in the development of innovative infrastructure and updating the material and technical base. - The need for a large number of highly qualified personnel

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The criterion for sustainable development of the domestic economy is its balance in exports, imports, domestic production and consumption. Therefore, in a crisis, for the stable development of Russia, the best option is an economy where the import and export of strategically important products does not exceed a quarter of what is needed for consumption. If the share of imports of any strategically or socially important product exceeds 20-25%, then a threat to national and economic security arises.

However, from a theoretical point of view, import substitution has a contradictory essence: on the one hand, it is considered as a model of integration of the country into the system of world economic relations, focused on the economic growth of the state, but, on the other hand, as one of the tools for implementing the policy of economic protectionism, characteristic mainly of developing countries. and transition economies, whose national markets are not yet stable enough, which ultimately contradicts the principles of the free market and competition.

That is why, when talking about the concept of “import substitution”, it is necessary to separate it from the concept of “state protectionism”. In modern economic scientific literature there is still no clear understanding and distinction between these two important and completely different economic categories. These two processes have both common features and differences.

Let us note two main features of import substitution: competitiveness and economic efficiency.

These features make it possible to determine the main differences between import substitution and protectionist policies. Firstly, protectionism is carried out only by the state, and when applying the import substitution policy, the process is aimed at improving the system of international economic relations. The process of import importation is possible both with and without state support. Secondly, the goals of these two processes differ. If protectionism is limited to protecting domestic producers from external competition, then the goal of import substitution is to create effective products of appropriate quality with the possibility of their subsequent sale not only in the domestic but also in the foreign market.

The contradiction between these two processes lies in the fact that import substitution is often used as a cover for state protectionism and is included in the economic security system. In the short term, the goals of protectionism and import substitution coincide with national objectives. If you look at it from the perspective of state interests, then import substitution is tantamount to increasing exports. However, many government projects designed to regulate international trade relations should be considered not as import substitution, but as protectionist policy measures that do not always benefit economic recovery.

It should be noted that import substitution is usually limited by the size of the domestic market. Further expansion can only be achieved through exports. But if industries have been nurtured only through protectionist measures, they will be unable to compete in global markets.

Thus, having analyzed already existing approaches to import substitution, the authors can offer their own vision of the problem. It is proposed to understand import substitution as a state policy aimed at increasing domestic demand for domestic products by introducing certain measures to reduce the consumption of similar products of foreign origin, in order to create national producers and goods competitive in the global market.

From the point of view of modern industrial policy and the role of import substitution strategy in it, the term “competitiveness” is synonymous with the word “import substitution”. To effectively solve the problems facing the import substitution strategy, it is necessary to achieve a high level of product quality, no worse, but better than foreign analogues, while costs and product prices must be competitive. Therefore, the only correct way to implement the import substitution strategy is to focus on the global market, and not on the national one. The corresponding conclusion can be drawn from the example of countries such as India and Brazil, which, trying to create competitive products on the local market, failed, but, focusing on the global market, achieved success: India in the field of IT outsourcing, Brazil in the creation of Embraer aircraft. Thus, we must not forget that the product created in import-substituting production should be oriented not only to the domestic market, but also to the external one, since only in this case the level of competitiveness of the product will be acceptable and the successes achieved as a result will not be lost when returning to the rate customary for the given country. That is, it is necessary to develop not only the production of certain industries within the country, but also to increase the level of development of the economy, social sphere, and infrastructure, making the country itself capable of competing on equal terms with developed industrial countries.

The state plays an important role in implementing the import substitution strategy. It is this that is the driving force that creates incentives and guides the development of the import substitution process.

It is also necessary to understand that the use of a strategy should lead to the development of more high-tech production than that of competitors. The development of knowledge-intensive industries will allow us to enter the world market. However, it is necessary to carefully approach the implementation of the strategy to avoid industrial stagnation, since reduced competition with foreign manufacturers can lead to a decrease in the desire to develop innovations and to the complete dependence of enterprises on government subsidies.

If applied correctly, the import substitution policy should have a multiplier effect on related industries and on the country's economy as a whole.

It should be noted that the implementation of an import substitution strategy is often driven by the issue of national security. In many strategic industries, such as the military-industrial complex, agricultural sector, pharmaceutical industry, etc., domestically produced products should prevail. Therefore, it is important to preserve the national

safety is the full cycle of manufacturing strategically important products from domestic raw materials and on its territory. It is for such goods that it is especially important to pursue an import substitution strategy. Among those industries where the share of imports has increased significantly over the past decades are the food and pharmaceutical industries.

As already noted, the use of only an import substitution strategy is inappropriate due to the presence of shortcomings and limitations, therefore, at the intersection of two industrial policy strategies - innovation and import substitution - the category “innovative import substitution” appeared as one of the modern directions in the development of economic theory. The goal of innovative import substitution is the creation and promotion of high-tech import-substituting products to world markets. Innovative import substitution should be considered in parallel with resource saving and increasing energy efficiency. It seems that the task of the state’s industrial policy is to form a national model of innovative import substitution and create a system of incentives that will help balance the relative effectiveness of various types of import-substituting industries and thus support the national production of innovative products, while simultaneously stimulating innovative production for export.

Due to resource limitations, it is impossible to apply the import substitution strategy to all industries at the same time. Therefore, one should focus on those industries where the country has a certain industry advantage. It must be emphasized that it is much more effective to select several industries; dispersing into many may not give the desired result.

There are several approaches to selecting suitable industries for applying an import substitution strategy. First, select those areas where there is great growth potential, and develop production there. Secondly, find the most developed technologies, and on their basis develop certain industries.

Currently, a large share in the production of domestic products is made up of imported components. This is due to increasing competition, as a result of which enterprises strive to use all global achievements to conquer the market. Therefore, the application of an import substitution policy removes certain tensions arising from the need to use foreign components in the production of a domestic product. Thus, studying the possibilities of using an import substitution strategy when pursuing industrial policy is a very important issue for Russian economic science, especially in modern conditions.

The result of implementing an import substitution strategy should be to strengthen the position of domestic goods in sales markets through the use of technological modernization of production and stimulation of its efficiency. As a result, a transition is expected from the production of simple products to high-tech ones by increasing the level of development of technology and production.

Bibliography

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Sokolova Olga Yuryevna Doctor of Economics, Professor, Head of the Department of World Economy and Management of Foreign Economic Activity, Saratov Socio-Economic Institute of the Russian Economic University. G. V. Plekhanova (Russia, Saratov, Radishcheva str., 89)

Email: [email protected]

Kolotyrin Evgeniy Alekseevich postgraduate student, Saratov Socio-Economic Institute of the Russian Economic University. G. V. Plekhanova (Russia, Saratov, Radishcheva str., 89)

Email: [email protected]

Skvortsova Valentina Alekseevna Doctor of Economics, Professor, Department of Economic Theory and International Relations, Penza State University (Russia, Penza, Krasnaya St., 40)

Email: [email protected]

Sokolova Ol"ga Yur"evna

Doctor of economic sciences, professor,

head of sub-department of world economy

and foreign economic activities, Saratov

Socioeconomic Institute of Plekhanov

Russian University of Economics

(89 Radishcheva street, Saratov, Russia)

Kolotyrin Evgeniy Alekseevich Postgraduate student, Saratov Socioeconomic Institute of Plekhanov Russian University of Economics (89 Radishcheva street, Saratov, Russia)

Skvortsova Valentina Alekseevna Doctor of economic sciences, professor, sub-department of economics and international relations, Penza State University

(40 Krasnaya street, Penza, Russia)

UDC 330.101.541 Sokolova, O. Yu.

Import substitution as an industrial policy strategy /

O. Yu. Sokolova, E. A. Kolotyrin, V. A. Skvortsova // News of higher educational institutions. Volga region. Social Sciences. - 2017. - No. 1 (41). -WITH. 130-139. BOT: 10.21685/2072-3016-2017-1-13

The article discusses the problems of forming an import substitution strategy. The concepts of “import substitution” and “import-substituting element” have been clarified. An analysis of the dynamics of gross domestic product and export-import operations was carried out. The special role of the competitiveness of national industries and the further influence of the export of national goods on the world market in the process of the country's transition to an innovative path of development are emphasized. The possibility and necessity of using advanced production technologies in Russian industry are substantiated. It has been revealed that the implementation of the import substitution strategy of industrial enterprises is possible both with an emphasis on investment demand and with an emphasis on stimulating consumer demand. Various options for an import substitution strategy have been proposed. A system of classification characteristics of alternative import substitution strategies is presented, and a system of factors for choosing the strategic direction of import substitution by industrial enterprises is proposed. The article was carried out under grant No. 1.87.14 “Theoretical and methodological foundations for the development and implementation of cluster policy at the regional level and scientific and methodological substantiation of the tools for progressive structural transformations of regional socio-economic systems.”

import substitution

import substitution strategy

import substitution factors

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The import substitution policy is entirely related to the creation of a favorable environment for the growth of domestic industry. Proponents of this concept argue that sustainable economic development of the state is possible only on the basis of every possible increase in the level of industrial self-sufficiency and an increase in the volume of production of its own products. The emphasis on self-sufficiency is generated by the instability of processes occurring in the global economy and a wary attitude towards foreign capital. All this dictates the need for increased attention to the public sector in industry and strict regulation of the participation of foreign capital in industrialization. The policy of replacing imports of industrial products with local production is accompanied by the protection of national industry from the influence of the world market.

Industrial import substitution was proclaimed as one of the goals of economic development in theoretical models developed by such representatives of the neo-Keynesian school as H. Chenery, M. Bruno, A. Straug, N. Carter. The model of economic growth with two deficits that they proposed in the 60-70s of the 20th century interpreted economic development as the gradual displacement of external sources of financing by internal ones, as the replacement of imported goods with domestic ones. The elimination of the savings deficit and trade deficit in this model was associated with attracting external borrowing, while the country’s internal resources were not taken into account. The majority of Russian scientists also do not see an alternative to industrial import substitution in relation to the growth prospects of the national economy.

In the economic literature one can find different interpretations of the concept of “import substitution”. P.A. Kadochnikov understands the process of import substitution as “an increase in production and domestic consumption of domestic goods while reducing the consumption of imported goods (in physical terms).” According to D.N. Zaitsev, “import substitution can be understood as a relative reduction or cessation of the import of a certain product into a country in connection with the organization of production of the same or similar product locally.”

From our point of view, import substitution should be understood, first of all, as an increase in the production of domestic products while reducing the consumption of imported goods (only for goods for which such substitution is possible and economically feasible). Consequently, import-substituting products are products of domestic producers that displace imported analogues from the market due to their more attractive consumer properties.

If import substitution is implemented at the production stage, the concept of “import-substituting element” arises. An import-substituting element is understood as a part of a product or a service of imported production that can be replaced with a domestic analogue. Accordingly, such a domestic analog acts as an import-substituting element.

Import-substituting elements can be raw materials, materials, components, equipment, intangible assets, technologies, certification, services of third-party organizations that the enterprise resorts to in the process of designing and manufacturing products (consulting, engineering, marketing research).

The ultimate goal of import substitution as a factor in Russia's integration into global market segments is to increase the competitiveness of national industries and subsequently export national goods to the world market.

In countries that have successfully implemented import substitution policies, it was not considered as a long-term economic strategy. It was necessary to protect domestic producers and ensure economic independence. However, both international experience and research results confirm that in a modern open economy, import substitution as an end in itself is unproductive; moreover, it is unacceptable to implement a policy of economic isolation. The task of import substitution policy is to create a system of incentives to support national production of import-substituting products that are competitive in foreign markets, while simultaneously promoting their export.

We have analyzed the economic development of the BRICS countries, which allows us to draw a number of conclusions (Table 1). In Brazil, GDP growth rates are relatively low and close to those of South Africa. This indicates that, despite serious financial problems, these countries managed to create not only economic models competitive in the foreign market, but also a capacious domestic market. China gravitates more toward an open economic model with a high share of imports and exports in GDP, which is explained by its geographic proximity to Russia and the location in the country of numerous branches and subsidiaries of both Russian and American industrial enterprises that successfully cooperate with local manufacturers.

Table 1

Dynamics of GDP and the ratio of exports and imports in the BRICS countries in 2012-2014.

	GDP growth rate, % compared to previous. year	GDP per capita, US dollars	Ratio of export and import of goods, %

Brazil

Notes: 1 2014 - preliminary estimate of the National Bureau of Statistics of the People's Republic of China.

Source: .

In India, the ratio of exports to imports of goods is slightly lower and generally lags behind the indicators of the BRICS countries. Russia has a fairly high level of GDP per capita; the ratio of exports to imports is dominated by export operations. Thus, the performance of the BRICS countries is heterogeneous and much more dependent on imports.

Over the past decades, differences in the growth rates and directions of Russia's foreign trade activities have become noticeable. Such trends have led to significant shifts in both the geographical and commodity structure of Russia’s foreign trade turnover.

Over the first fourteen years of the new millennium, the Russian Federation has consistently brought its foreign trade balance to a positive balance. This also applies to the balance of Russia’s export-import operations with foreign countries. In general, the dynamics and geographical structure of Russian foreign trade are as follows (Table 2).

Since 2000, the growth rate of foreign trade between the Russian Federation and Germany has been quite good, and in 2014, exports to this country exceeded imports. In 2014, China imported 1.5 times more products to Russia than Russia exports. The turnover of imports from the United States has increased 9 times since 2000, while Russian exports to the United States have increased only 2 times. Thus, expanding cooperation with foreign countries is one of the priority areas of Russia’s foreign trade and foreign economic relations, which are established at three levels: the CIS, the near abroad, and the far abroad. The CIS countries account for about 1/4 of Russia's total foreign trade turnover.

The potential of the Russian economy to formulate an import-substituting industrial policy is quite high.

table 2

Dynamics of foreign trade of the Russian Federation in 2000-2014. (USD million)


Imports from countries - main trading partners
1. Germany
2. Netherlands




7. France

9. Brazil

Export to countries - main trading partners
1. Germany
2. Netherlands




7. France

9. Brazil

Source : .

One of the current directions of import-substituting industrial policy is to reduce technological dependence on foreign suppliers. And although some industrial enterprises manage to create technologies that are competitive in the domestic market, in general the dynamics of the creation and use of advanced production technologies do not allow us to hope for quick results. Technological exchange in Russia is slowing down, and the number of advanced production technologies used in the manufacturing industry is decreasing. The number of developed production technologies is growing, but in most cases these are technologies that are new to Russia, but do not allow for competitiveness in foreign markets.

The following factors objectively contribute to the implementation of import-substituting industrial policy:

Positive sustainable dynamics of labor productivity;

The financial stability of the country, which allows, when implementing a targeted industrial policy, to stimulate domestic demand for the products of domestic manufacturers and the export of competitive industrial products for a long period;

Deterioration of the macroeconomic environment, primarily a downward trend in energy prices, which stimulates both import substitution and replacement of exports of low-level processed products with products of a higher level of processing with an increase in the share of added value and level of manufacturability;

Russia’s participation in European and global “technological platforms”, its involvement in global processes of technological exchange, which allows, if not the creation of new advanced production technologies, then the effective copying of existing ones.

The factors for choosing one or another strategic direction for the development of import substitution at different enterprises and industries are different, but they can be divided into two groups. External uncontrollable factors include market factors (the level of demand in domestic and foreign markets, competition in the industry), the system of state regulation of export-import operations (the level of protection of domestic markets, the level of export stimulation). Internal factors that an enterprise can control include enterprise resources (investment resources, production capacity, technology, availability of qualified personnel), the enterprise management system (company mission, system of strategic goals and objectives, quality management system).

A reserve for increasing the efficiency of an enterprise at the production stage is the import substitution of individual or several elements of the product.

At the enterprise level, import substitution can be organized in one of two directions: transition to the use of domestic analogues already on the market, organization of in-house production of import-substituting elements.

The most important condition determining the feasibility of import substitution is the ability to ensure an appropriate level of quality for domestic analogues and their recognition in foreign markets, especially in non-CIS markets. At the same time, it should be noted that there are differences in the very perception of the level of quality in a geographical context. That is, the level of quality that is quite acceptable for domestic consumption and consumers, for example, from the CIS countries, does not satisfy the needs of consumers, for example, from the EU, USA.

The effectiveness of import substitution at the production stage is determined by the ratio of the effect obtained as a result of saving resources in monetary terms when using an import-substituting element in production, taking into account production volumes within the planning time interval (compared to the resources spent on purchasing imported analogues) and investment costs for organizing it production

It should be noted that organizing the production of import-substituting products “from scratch” in today’s economic conditions is complicated by a lack of investment resources, therefore the most important direction in the development of import substitution can and should be the placement of production of import-substituting products on the basis of existing enterprises.

The implementation of the import substitution strategy of industrial enterprises is possible in two main directions: with an emphasis on investment demand and with an emphasis on stimulating consumer demand.

In relation to Russian industrial enterprises, three options for an import substitution strategy can be proposed: a strategy of internally oriented import substitution, a strategy of externally oriented import substitution, and a mixed import substitution strategy. Determining the strategic direction for the development of import substitution and identifying the measures whose implementation is necessary to achieve strategic goals comes down to determining the classification characteristics of import-substituting products and the target markets where the import-substituting products will be sent (figure).

System of classification characteristics of alternative import substitution strategies

Thus, the basic principles for implementing import-substituting industrial policy in Russia are:

Reindustrialization, increasing the share of industry in GDP and technologically advanced industries in the industrial structure;

Stimulating domestic demand for the products of industrial enterprises, including through “subsidized” prices and the state order system;

The long-term nature of the activities being carried out, allowing to attract long-term investments;

Maintaining a high degree of openness of the economy. Development of cooperation with foreign partners in the areas of technological exchange, scientific cooperation and the creation of advanced production technologies. It should be remembered that the creation of artificial restrictions on the import and export of technologies leads to a decrease in the efficiency of operations and the competitiveness of products;

State support for the export of competitive industrial products.

It can be concluded that import-substituting industrial policy serves as a tool for increasing the competitiveness of the domestic economy and ensuring the economic security of the country.

Reviewers:

Shatokhin M.V., Doctor of Economics, Professor of the Department of Economics and Finance, Kursk Branch, Financial University under the Government of the Russian Federation, Kursk;

Vertakova Yu.V., Doctor of Economics, Professor of the Department of Regional Economics and Management, Southwestern State University, Kursk.

Bibliographic link

Ershov A.Yu. FORMATION OF AN IMPORT SUBSTITUTION STRATEGY // Fundamental Research. – 2015. – No. 8-2. – P. 374-379;
URL: http://fundamental-research.ru/ru/article/view?id=38904 (access date: 12/13/2019). We bring to your attention magazines published by the publishing house "Academy of Natural Sciences"

The main goal of import substitution is to create an environment for national industry in which greater growth will be observed.

According to the Concept of long-term socio-economic development of the Russian Federation for the period up to 2020, when forming the import substitution policy within the framework of the transition from the export-raw materials to an innovative model of economic growth, the following directions were identified as goal-setting directions Gusakov N.P., Andronova I.V. Conceptual approaches to the development of a new Economic Security Strategy // National interests: priorities and security. 2014. No. 46. P. 8.:

Consolidating and expanding Russia's global competitive advantages in traditional areas (energy, transport, agricultural sector, natural resource processing), including the realization of agricultural potential in terms of developing the export of grain and other agricultural products, production of environmentally friendly products, import substitution in the domestic market for livestock products ;

Growth (including through import substitution) of medium-tech production - the food industry, the building materials industry, the woodworking and pulp and paper industries, as well as the export-oriented chemical industry and non-ferrous metallurgy;

Development of dual technologies, technological renewal of mass sectors of the economy (automotive industry, transport engineering and machine tool industry), which play a decisive role in increasing the average technological level of industry and import substitution;

Intensive processes of import substitution in the food industry, the production of household appliances and the automotive industry.

The National Security Strategy of the Russian Federation until 2020, along with the three main national security priorities (national defense, state security, public safety), identifies five sustainable development priorities:

Improving the quality of life of Russian citizens by guaranteeing personal safety and high standards of life support;

Economic growth, primarily through the development of the national innovation system and investment in human capital;

Science, technology, education, healthcare and culture, which are developed by strengthening the role of the state and improving public-private partnerships;

Ecology of living systems and rational use of natural resources through balanced consumption, development of advanced technologies and expedient reproduction of the country’s natural resource potential;

Strategic stability and equal strategic partnership.

Import substitution of goods with products of domestic producers at the present stage shows a noticeable increase and is especially important in the field of public procurement. Government orders are currently given paramount importance as a mechanism that stimulates both macro- and microeconomic processes in a modern state. This mechanism, in one form or another, is actively used by a number of countries, including countries with high economic performance, as a measure to support domestic producers. Our country is no exception.

In this strategic document, import substitution is directly indicated only in connection with the development of conceptual and program documents for interregional and territorial planning, the creation of an integrated risk control system, primarily in the field of food security (clause 50 “through the development of biotechnologies and import substitution for basic food products”). and in the financial sector (clause 63 “carrying out active state anti-inflationary foreign exchange, exchange rate, monetary and fiscal policies focused on import substitution and supporting the real sector of the economy”).

Nevertheless, it seems that this institution of import substitution is directly related to all declared strategic priorities of national security.

President of the country V.V. Putin spoke about the need for import substitution in May 2014, speaking at SPIEF: “I consider it necessary to quickly analyze the possibilities of competitive import substitution in industry and agriculture.” At the same time, the president noted that the import substitution policy will be carried out in accordance with WTO norms and Russia’s obligations to its partners in the Eurasian Economic Union. The basis for import substitution should be internal sources of growth.

Prime Minister D. Medvedev called the development of import-substituting industries one of the policy priorities. It is important to note that this is not only about replacing the production of existing finished products.

According to experts, in the event of a large-scale unforeseen situation (war, international isolation, etc.), Russia will practically not be able to provide itself with strategically necessary products.

Import substitution as the main element of industrial policy will minimize the negative effect of the imposed sanctions. The main goals of import substitution are:

Ensuring national and state security of the Russian Federation;

Achieving technological independence in critical areas;

Promoting the formation of a positive trade balance;

Growing national leaders to conquer the global market.

The import substitution policy can lead to important changes in various areas, in particular:

Increased employment and, as a result, a reduction in unemployment and an increase in living standards;

Intensifying scientific and technological progress and increasing the level of education;

Strengthening the economic and military security of the country;

Growing demand for domestically produced goods;

Expansion of production capacity.

The main criteria for the import substitution process should be economic, social and strategic feasibility. The stability of the resource supply of the economy, and therefore economic security, depends on the stability of the foreign trade balance.

Deputy Minister of Industry and Trade of the Russian Federation S. Tsyb emphasized: “... while solving the problems of import substitution in industry, we should not deny the principles of international economic integration. We do not isolate ourselves from the world, but conduct dialogue with our foreign partners as openly and transparently as possible. The development and support of domestic production does not exclude the possibility of technology transfer, creation and localization of production with the attraction of foreign investment.”

According to V.V. Putin, special attention when developing an import substitution strategy should be paid to defining: import substitution targets; the procedure for selection and incentive measures for enterprises and organizations participating in the implementation of plans; federal executive authorities responsible for the implementation of these plans.

Various experts are optimistic about the impact of the import substitution program. Thus, the Ministry of Industry and Trade believes that if a well-thought-out policy of import substitution is successfully implemented, by 2020 it is possible to reduce import dependence in various industries from 70...90% to 50...60%, and in a number of industries - to reach lower levels. The Ministry of Industry and Trade has set the task of reducing (by 2020) the share of imports in the manufacturing industry as a whole from 51 to 39% Ministry of Industry and Trade of the Russian Federation [Electronic resource] Access mode: http://minpromtorg.gov.ru..

The import substitution program will allow Russian enterprises to generate additional production volumes worth over 30 billion rubles. annually (starting from 2015), says the head of the Ministry of Industry and Trade D.V. Manturov. According to specialists of the All-Russian Popular Front, as a result of replacing imported components and materials with domestic ones, it is possible to ensure economic growth in Russia in the next 8 years by 5...7% annually. Economists suggest that with the intensification of import substitution processes, an increase in industrial production in the Russian Federation by 10...15% or more is possible in the next 5...7 years.

According to calculations by the State Council working group, the volume of replacement should be at least 4 trillion. rub., implementation time - 2-3 years. During this time, at least a million jobs will be created, and additional tax revenues to budgets of all levels will amount to about 500 billion rubles. As stated by the governor of the Belgorod region and head of the working group of the State Council, E. Savchenko: “...by implementing the import substitution program, we will make an economic breakthrough, which previously would have taken many years.”

President of the Russian Federation V.V. Putin named the production of software, radio-electronic and power equipment, the textile industry and food production among the priority industries in which import substitution is possible in the first place.

According to the results of an analysis conducted by the Ministry of Industry and Trade in June 2014, the most promising from the point of view of import substitution are:

Machine tool industry (share of imports in consumption, according to various estimates, more than 90%),

Heavy engineering (60…80%),

Light industry (70...90%),

Electronics industry (80...90%),

Pharmaceutical, medical industry (70...80%),

Mechanical engineering for the food industry (60...80%) Ministry of Industry and Trade of the Russian Federation [Electronic resource] Access mode: http://minpromtorg.gov.ru..

As S. Tsyb notes, import substitution in these and other industries is possible only if there is free production capacity and competitive enterprises that can offer high-quality modern products at market prices: “In the long term, reducing import dependence is possible only through innovation, stimulating investment and creating new production."

Particular emphasis is placed on the sphere of military-industrial production, where the task of complete import substitution is set.

According to another Deputy Minister of Industry and Trade, Yu. Slyusar, “... when talking about import substitution, we mean total import substitution exclusively in the defense industry. The task has been set to completely produce everything related to defense and security on Russian territory, and we will certainly accomplish this task. As for civilian products and dual-use technologies, here we are talking about import substitution from the point of view of increasing the share of Russian enterprises in the market.”

It is obvious that achieving the goals of import substitution will require significant efforts and investments, changes in the work of many enterprises and organizations.

The difficult political situation in the world in recent years has led to the fact that we are increasingly hearing such a word as import substitution. This is the term that appeared in our everyday speech in connection with a certain list of sanctions imposed against our country by the United States and the European Union. We will not discuss how legal and effective these actions were. Today our article is devoted specifically to the topic of import substitution in Russia.

Meaning of the term

According to economic theory, import substitution is the replacement of imported goods with services and goods of domestic producers. This process is accompanied by the emergence of new jobs and an influx of funds received from taxes into the state treasury.

History of import substitution in Russia

The country first started talking about import substitution in 1998. Due to the collapse of the USSR, the connections between the industry base and production were completely destroyed in the country. Until 1998, Russia was still somehow coping with industrial problems and trying to raise the economy to its previous level. But the collapse of the ruble exchange rate led to completely unexpected results. Import substitution in Russia during this period led to a boom in the economy due to the absence of foreign competitors and increased consumer interest in domestic goods.

At the beginning of the twenty-first century, import substitution was already the active support of the state, which was received by large companies engaged in nanotechnology, mechanical engineering and nuclear energy. Such a program allowed the industry to develop as much as possible, and the profit received as a result of the work was redirected as support to other enterprises that had previously been deprived of government assistance and subsidies.

Two years ago, many Western countries introduced a series of sanctions against our state; in response, Russia declared a food embargo, which greatly stimulated agriculture. At the moment, the import substitution program has proven to be the most effective in this area. Last year, a record minimum of foreign-made food was imported into the country. We can say that our state fully provides itself with all necessary food products. This has significantly worsened the economies of countries that support anti-Russian sanctions.

Import substitution program in Russia

Russia has been thinking about import substitution for a long time, but the imposed sanctions forced economists to quickly take measures to preserve the state’s food independence.

As a result, an import substitution program was created; it includes a number of measures until 2020. Perhaps in the future the government will consider extending this program and will develop a number of measures to introduce its ideas into agriculture and industry.

The program itself does not imply a number of measures and steps; it only determines the directions and areas of import substitution in Russia. The goal of this process is to create a competitive production in Russia that meets all the needs of the country and is aimed at new markets. This program also involves the introduction of innovative technologies and a complete change in outdated approaches to production processes.

The program limits the time frame and highlights the stages of implementation of all points. We have already passed the first stage, it lasted from 2012 to 2015. At the moment, import substitution is a new round of the program, from 2016 to 2020.

The text of the document also indicates the price of this process - ten trillion rubles. But the end result of this expensive activity will take Russia to a completely new level of economic development.

The importance of import substitution in Russia

It is difficult to overestimate the importance of the state policy in the field of replacing imported goods with Russian ones. After all, import substitution is not only about new jobs and independence from foreign suppliers. In general, we can say with confidence that thanks to import substitution, a new round of economic development has begun in the country. First of all, agriculture provides its consumers with high quality products that meet quality standards. But such growth requires the parallel development of many related industries, which, in turn, stimulates industry and small business. As a result, the population receives new jobs, and industrialists receive innovative technologies that provide great opportunities for further business development.

Import substitution strategy

In the context of import substitution, there are several strategies that make it possible to translate all points of the government program into reality. In general, analysts distinguish two main categories:

basic;
specific.

The basic strategy includes several points:

price leadership - businesses must create products and provide services that can successfully compete on price and attract consumers looking for products in the low price category;
work under government orders - such a strategy is suitable for large companies that have all the prerequisites for participating in a tender for the production of certain goods;
cooperation with foreign partners - successful cooperation with foreign companies in certain areas contributes to the growth of production capacity and the rapid introduction of innovation.

Specific import substitution strategies are not always suitable for small companies and require a wide customer base and the ability to work in constantly changing conditions.

In which areas is import substitution most important?

First of all, for the Russian economy, import substitution is the implementation of a program to fill the market with domestically produced products. Therefore, the importance of this industry is in the first place for the government. No less important are the fields of mechanical engineering and information technology. At the moment, the import substitution program in these areas is being carried out very successfully and promises good economic growth in the coming years. Let's look at each industry in more detail.

Agriculture

We will not repeat how import substitution in this area is a priority for the state. By the end of the program, Russia should provide itself with 90% of basic food products. In addition, it must export many products to foreign markets.

The list of main products includes:

salt;
sugar;
fish;
corn;
potato;
milk products;
meat products.

Despite the fact that the state is taking a set of measures to support farming, there are a lot of problems in this area. Of course, the import substitution program is in effect, but still the stages of its implementation in agriculture look a little blurry.

Mechanical engineering

In this area, import substitution began more than ten years ago. The government actively supported domestic automobile concerns, which led to a powerful flow of investment into the industry from foreign partners. The import substitution policy has already borne fruit - production capacities are constantly expanding, new factories are being opened thanks to investments, and innovative work methods are being introduced. In addition, it has become profitable for the manufacturer to invest in scientific development and research.

Information Technology

This area is the most difficult for import substitution in Russia. We are significantly behind Western companies in developing our own software. More than 90% of all our equipment operates on a foreign development platform. Even Russian banks are serviced by a foreign payment system. Some analysts argue that Russian information companies will not have the opportunity to gain a significant market share in the coming years. But there is still a similar point in the state’s plans.

It is worth noting that such large-scale tasks have not previously been set for the Russian manufacturer. After all, the Russian defense industry fully provides itself with software that has a high level of quality and compares favorably with foreign analogues.

The import substitution program in the field of information technology has set a number of tasks for domestic companies, the solution of which will be the implementation of all points of this program.

Summarizing all of the above, I would like to note that in Russia import substitution is an already launched process that has brought a number of fruits, regardless of the assessment of experts. Let's hope that economists and analysts were not mistaken in their forecasts, and efforts to saturate the Russian market with domestic goods will be crowned with stunning success.

In the context of a growing economic crisis and devaluation of the ruble, Russian companies have less and less incentive to think about development, and more and more about optimizing their activities.

At the same time, the relevance of two promising areas is increasing: import substitution and export development. Export development still remains too difficult a task for most of our companies. But import substitution is a much clearer task. Let's talk about her.

The choice of a specific import substitution strategy depends on which opportunities of the current economic situation are priority for your company:

Ruble devaluation and rising prices for imported goods
State support for Russian manufacturers: preferences in government orders, etc.
Reduced presence of foreign companies in the market (due to sanctions and counter-sanctions, etc.)
Growing interest of foreign companies in localizing production in Russia

Two groups of import substitution strategies can be distinguished:

Basic strategies that any company can use (price leadership, government-ordered products, localization partnerships)
Specific strategies that suit companies of a certain type or industry (increasing the level of processing, from distributors to manufacturers, etc.)

In practice, these strategies are used regardless of import substitution - but in the current situation, the potential for their use has increased significantly.

Price leadership

This import substitution strategy is basic and, it would seem, does not require much effort in the context of the devaluation of the ruble and rising import prices. In practice, everything is not so simple:

Typically, manufacturers of high-quality products that can compete with imports have already had their production capacities fully loaded, so without investing in new capacities, they simply have nothing to replace imports with. And this usually means expensive loans, expensive imported equipment and time.
Our manufacturers, repairmen and operators are in no hurry to replace imported components with domestic ones of insufficient quality. For rational reasons, due to the risks of loss of quality of finished products and delays in delivery (after rejection). In the end, it may not be cheap.

Experience of the Interskol company during the crisis of 2008-09. shows that you need to be able to quickly increase production volumes, while maintaining the price difference with rising import prices.

It was precisely the active increase in prices by the majority of Russian companies during that period that did not allow them to maintain the necessary parity with foreign competitors for any long time. And imports quickly returned to their positions.

First of all, this strategy is suitable for companies that are able to quickly and effectively increase the volume of production of competitive products.

Product for government order

This is the second most popular import substitution strategy now, which consists of replacing foreign suppliers under government orders. Typically, successful implementation of this strategy requires the availability of the required product, business connections and the ability to work on government orders.

Most companies are eager to take advantage of this opportunity. But they should consider two significant risks:

There are many people willing, not everyone will be able to get contracts, even after spending a lot of effort on preparation
It happens that fulfilling the terms of government contracts leads to losses for companies (remember the example of Mostovik).

There is successful experience in implementing this strategy in pharmaceuticals.

How great the potential of this strategy is is not entirely clear, since the authorities have not yet fully decided on the composition and size of preferences for Russian companies. And the total volume of government orders in the current period has begun to decline.

This strategy is most suitable for companies from industries with a large share of government orders.

Localization partnership

It is obvious that the devaluation of the ruble, coupled with the wishes of the Russian authorities, are serious incentives for foreign manufacturers exporting products to Russia to localize production. And this is an excellent opportunity for domestic companies. It seems that little is required: to meet the standard requirements of the foreign partner and not to raise the price.

But an example from our practice shows that only a few companies meet these requirements (especially in terms of experience in working with international technical standards and certification in three key ISO systems).

This strategy is most interesting for progressive industry companies.

A variant of the localization strategy for imported products, such as copying “without demand,” is also gaining popularity. It does not have a long-term perspective, but situationally it can be very effective.

Increasing recycling levels

This strategy is suitable mainly for companies that produce raw materials, parts and components rather than final products. They are implementing projects for the development of products of the next stage, thereby displacing imports. Critical to the strategy are the significant volume of imports of the products being developed and the absence of large competitive projects.

Successful experience in implementing this strategy has been accumulated in the timber processing, petrochemical and food industries, and the construction materials industry.

From distributors to manufacturers

This strategy consists of creating our own or joint production of distributed foreign products in Russia. To implement it, it is important to have an established customer base and good knowledge of the product.

There are still few examples of the implementation of this strategy in Russia, but distributors and importers have more and more reasons to think about it. For example, consultants from the ALT company, together with the customer, developed a strategy for transition from the model of a distributor of imported goods to the model of a manufacturer for the company AquaArt, a large distributor of sanitary ware. The strategy was successfully implemented.

Please note that you do not always need to create your own production; you can try to place orders with specialized Russian manufacturers.

This strategy is most interesting for strong specialized distributors.

Import substitution in the food market

The choice of a specific import substitution strategy for your company depends on the specifics of the industry and business, key competencies and market position.

But first of all, you need to answer two main questions: is there a sufficient volume of imports to replace them with your products, and are you ready to invest in such a project (in the development of new products, expansion of production, etc.).