Import substitution is a strategic guideline for the implementation of the energy strategy. Basic research. Product for government order

06.01.2024

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 be able 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.

Sedenko Tatyana Yurievna, 4th year student, “Organization Management” REU named after. G.V. Plekhanov (Bryansk branch)

Nikonets Olesya Evgenievna,

Ph.D., Associate Professor, Scientific Advisor

Import substitution strategy in Russia

Abstract. The article discusses the problems of import substitution in the Russian Federation in connection with the introduction of sanctions measures. Key words: import substitution, industrialization of the economy, stabilization of the economy, investment attractiveness of industry, scientific and technical progress.

Modern changes taking place in the global geopolitical situation, the emergence of new sources of tension in the immediate vicinity of the territorial borders of the Russian Federation, the cooling and deterioration of relations with the leading players in world geopolitics and geo-economics put the problem of ensuring the country's national security at the forefront. The policy of import substitution, carried out both at the federal and regional levels, today is one of the structural components of the policy in the field of ensuring the national and economic security of Russia. Import substitution in Russia in 2015 is the main economic guideline of the state in the fight against sanctions with the West. Until recently, import substitution spontaneously and more or less successfully carried out in various sectors of the economy. In 2014, sanctions from Western countries and retaliatory steps taken by the Russian side led to the fact that the import substitution strategy became one of the priorities of the Russian government. How can business participate in the implementation of this strategy and what assistance is the state ready to provide to companies at this stage and in the future? Import substitution is the creation of conditions under which domestic producers can compete with foreign companies on fair market principles. We can identify ten main problems, the solution of which will contribute to the successful implementation of this strategy in Russia. However, it should be emphasized that total import substitution in our country today is impossible and ineffective, although in most sectors and spheres of the Russian economy it is an objective necessity. At the same time, attention should be paid to a number of key points. The first is that, despite the uncertainty of the results of the sanctions war in terms of consequences for its parties, it is still obvious that certain losses will be borne by all its participants. For Russia, the effect of sanctions is largely positive: the country has accelerated the creation of a national payment system, is striving to develop domestic industrial production, and is introducing retaliatory measures to support agricultural producers. However, one should not expect rapid economic growth solely due to the effect of sanctions, since other factors limiting growth are at work. These include the low level of industrial technology (the fourth technological structure predominates, while leading countries are already actively developing the sixth); against the backdrop of the almost complete absence of free production capacity in most industries, there is a high level of moral and physical depreciation of fixed production assets (according to various it is estimated to range from 50 to 80% and above, while the threshold value of economic security for this indicator is 42%), and the existing volumes of direct investment are not enough to radically change the situation. In addition, the positive effect of import substitution may become noticeable only in the medium and long term. In the short term, a slowdown and decline in the rate of economic growth in the country and its regions and, accordingly, a decrease in indicators characterizing the standard of living of the population becomes inevitable. Thus, one cannot expect a quick positive effect from import substitution. The second circumstance is that in the context of globalization and increasing interdependence between subjects of the world economy, by which today we mean not only countries, but also large TNCs, each country has its own niche in international division of labor, segments of the world market in which its products are competitive. The country imports all other goods in accordance with objective economic laws, which is nothing reprehensible, because why produce something yourself that is much cheaper to buy. In a global world, the need for import substitution can arise only if a country consciously chooses the path of autarky or, in other words, self-isolation, which can last for some time. However, sooner or later, depending on changes, including in the political situation, the country will objectively be forced to return to the world market. At the same time, world experience shows that protectionism usually does not lead to an increase in the competitiveness and quality of domestic production, but vice versa. The essence of a policy of protectionism based on import substitution is the industrialization of the economy through restrictions and/or discrimination of imports. As a rule, it is implemented through the artificial creation of tax, financial and currency incentives for the development of individual domestic producers or a number of sectors of the national economy in order to increase their competitiveness in the domestic market. The most important institution here is private property, based on protectionism. However, in many cases, protectionism, which limits competition from the world market, actually leads to demotivation of development for domestic producers: in the absence of competitors, enterprises are in no hurry to introduce innovations, and the only incentive for them is subsidies and other “handouts” from the state. Today in Russia there is a danger of such protectionism, since the policy of import substitution is dictated, in this case, not even by considerations of the development of “young” innovative industries, but by the need to protect the domestic market from a total shortage of goods in the context of the imposition of sanctions and a forced reduction in import flows. Currently, the Accounts Chamber has concluded that Russia may not be able to fully replace imports of embargoed products. Experts speak about this in the report prepared by the Accounts Chamber “On the federal budget for 2015 and for the planning period of 2016 and 2017.” Based on Rosstat data, experts primarily talk about the problem of import substitution of certain types of meat and dairy products. In particular, the level of free production capacity in the meat processing industry was about 34%. At the same time, imports accounted for almost 59% of the total volume of beef consumption in the country, the share of pork imported from abroad reached 31%, and poultry meat - 13%. In addition to the agro-industrial complex, import substitution appears to be fundamentally important in such industries as machine tool building, heavy engineering, including agricultural and food industry, radio electronics, light industry, medicine and pharmaceuticals. However, if we approach the issue of import substitution in more detail, it becomes clear that certain types of priority and critical types of products from the point of view of import substitution exist in almost every industry. Thus, even in the context of tightening sanctions, the country will not be able to completely replace imports with domestically produced products in the coming years. Third. The idea of import substitution has already undergone more or less successful practical testing in various countries of the world, whose experience can be regarded as more or less successful. Most often, this process followed the path of replacing imported food products, light industrial products and simple technological products. In particular, the import substitution strategy was developed in this direction in the countries of East Asia and Mexico, and Russia’s BRICS partners Brazil, India and China also followed this path. Subsequently, the development paths of the process of import substitution of these countries diverged. Modernization in Brazil took place in several stages. The current phase actually began with the first successful economic stabilization plan, adopted in 1994, and was based on reforms of financial, tax and foreign trade regulations, rather than on industrial policy or government regulation in “innovative” sectors. Taiwan has achieved significantly greater success by implementing a combined strategy of increasing the competitive advantages of domestic production or a strategy of export-oriented import substitution, which allows using the advantages of both ways. As a result, if in China and India 58% of GDP growth is achieved through export diversification, in Thailand – 1416%, in South Korea – 4245%, then in Taiwan import substitution provides 4345%, and an increase in exports (up to half of which are high-tech products) – 5557 % GDP growth. The experience of foreign countries shows that the greatest successes in implementing import substitution policies were achieved by the countries of East Asia, which relied on a combination of protectionism based on import substitution with product and geographic diversification of exports. The countries of Latin America, which implemented only an import substitution strategy, eventually faced a general deterioration in the economic situation, which resulted in increased inflation,

a decrease in savings and, as a consequence, a reduction in investment activity, a balance of payments deficit and an aggravation of problems of international currency liquidity. These countries have not been able to carry out structural restructuring of their economies and bring a sufficient number of locally produced goods even to domestic markets (not to mention foreign ones). Enterprises that relied entirely on government support measures failed to become competitive, and national governments that encouraged protectionism nurtured entire industries based not on real competitiveness, but on administrative resources. The profits received were used by such enterprises not for production development and modernization, but for lobbying their interests through the state in order to maintain the status quo. As a result, the budget policy of these countries turned out to be ineffective, and import substitution led not to growth, but to a decrease in the competitiveness of national industries. All of the above allows us to say that total import substitution in Russia is ineffective, and even impossible for objective reasons. However, in his speech in St. Petersburg, President V.V. Putin put a different meaning into the concept of import substitution in Russia. Today, import substitution must be combined with export diversification based on

creation and development of new businesses oriented to the global market and viable in global competition. Here, mechanisms of public-private partnership can play a significant role: young enterprises aimed in the future at the all-Russian market and external expansion can start with regional markets formed by the state due to the demand of authorities and state-owned companies. The basis for Russia’s import substitution policy today should not be based on the tasks of complete replacing imported goods with Russian analogues, but creating conditions for the diversification of domestic production and exports, entering the world market, which has a much higher potential for the growth of domestic companies, with competitive Russian-made products. The objectives of such a policy are:

conducting an analysis of the trade turnover of the country and its regions over the past 5 years, identifying

most critical for

the Russian market of imported goods, services, technologies and equipment in the context of individual industries and segments of the economy;

determination of the percentage of import dependence by industry, as well as by individual product groups, according to the Commodity Nomenclature of Foreign Economic Activity;

analysis of the production potential and scientific and technical potential of enterprises that produce products that compete with imports or substitute goods by region, assessment of the degree of utilization of their production capacities, the degree of wear and tear of their equipment, assessment of their financial and economic condition

developing a list of equipment and technologies necessary for regional manufacturers and assessing the economic feasibility of producing this equipment in the region (an alternative is purchasing in other regions of the Russian Federation or abroad in partner countries that do not apply sanctions against the Russian Federation);

preparation of technical specifications for the development and production of equipment subject to import substitution, through open discussion of these documents with consumers of products - regional enterprises;

conducting an analysis of the competitiveness of regional consumer products

commodity producers;

determining the list of consumer goods the needs for which Russia can satisfy by increasing its own production using existing reserves and measures aimed at developing enterprises in the region;

determining the list of consumer goods, the need for which can only be satisfied through imports from near and far abroad countries. For the Russian economy, it is necessary that import substitution becomes one of the important elements of economic policy and a tool for achieving the most important goal, namely achieving a positive balance of foreign trade goods and services. The correct solution to this problem will reduce imports, while maintaining a significant amount of foreign currency in Russia, reduce the cost of goods, support national producers, create new jobs, and contribute to the development of high-tech industry. It follows from this that the most important element of industrial policy should be import substitution, which will reduce the negative effect of economic sanctions. It is necessary to focus specifically on the production of products with high added value. Today, the key task is to increase the investment attractiveness of the industry, and above all, high-tech mechanical engineering. In the Russian Federation, all conditions exist for the intensive development of high-tech mechanical engineering - scientific and personnel potential, a highly developed communications network, and its own energy and raw material base. The development of mechanical engineering is a source of innovative development, as well as the economic growth of the country and the well-being of the population. The course towards innovative import substitution involves a transition to the production of high-tech and knowledge-intensive products by increasing the level of development of production, technology, education and professional training of the country's citizens. The main direction should be the organization of production of those products that are most in demand in Russia and have the highest added value. Undoubtedly, it is impossible to completely abandon foreign products, but it is necessary to renew and organize new production in Russia, think about the need and importance of an import substitution strategy. Implementation of the task will strengthen the economic security of the country, activate scientific and technical progress, as well as raise the level of education, increase demand for domestic goods, expand production capacity, maintain the volume of foreign currency within the country, improve the trade balance, increase the volume of foreign exchange reserves, the number of jobs, the standard of living of citizens of the Russian Federation, form national leaders in order to conquer the world market, reduce unemployment.

Links to sources 1. Nikonets O.E. Integration of regulatory systems of the Russian and global financial markets: theoretical and practical aspects / Bulletin of Bryansk State University. 2011. No. 3. P. 294296.2. Nikonets O.E. Venture business as the basis for innovative development of the Russian economy / Scientific and methodological electronic journal Concept. 2014. T. 20. P. 29412945.3. Accounts Chamber of the Russian Federation: the possibilities of import substitution are limited by production volumes [Electronic resource] URL: http://sitv.ru/arhiv/news/economics/72801/ (access date 07.25.2015).4 .Import substitution in Russia [Electronic resource] URL: http://newsruss.ru/doc/index.php/ (date accessed 07/25/2015).5.Zazhigalkin A.V.

About the standardization program in the field of import substitution [Electronic resource] URL: http://www.slideshare.net/ssuser200359/ss47856384 (accessed November 21, 2015).

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. – pp. 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"

METHODOLOGICAL APPROACHES TO IMPLEMENTATION OF IMPORT SUBSTITUTION STRATEGY IN RUSSIA

Annotation. The article substantiates the need to implement an import substitution strategy in Russia. Methodological approaches to the selection of options for implementing the import substitution strategy have been identified. The implementation of the strategy of export-oriented import substitution is presented as the most promising in modern Russian conditions.

Keywords. Import substitution, imports, economic sanctions, domestic production, industrial modernization, national security, economic security.

Tretyak V.V., Kruglova I.A., Sigova M.V.

THE METHODICAL APPROACHES TO THE REALIZATION OF IMPORT SUBSTITUTION IN RUSSIA

Abstract. In the article was grounded the necessity of implementation of import substitution strategy in Russia. The methodical approaches to the selection of options of the implementation of import substitution in Russia were defined. The strategy of export-oriented import substitution was presented as the most promising under the modern Russian conditions.

Keywords. Import substitution, import, economic sanctions, domestic production, modernization of industry, national security, economic security.

In the context of a sharp fall in the exchange rate of the ruble, which led to a decrease in import supplies and their rise in price in December 2013, Russia took a new government course towards a strategy of replacing imported technologies and imported products with domestically produced goods and technologies, which was officially announced by the Government of the Russian Federation in March 2014 of the year. Already in May 2014, the country's President V. Putin, speaking at the international economic forum in St. Petersburg, focused on the need to analyze the possibility of competitive import substitution in industry and agriculture. At the same time, the president noted that import substitution through industrial modernization and increased competition will help domestic producers regain their own market; the basis for import substitution should be internal sources of growth.

In turn, Prime Minister D. Medvedev, emphasizing the importance of import substitution in various sectors of the economy, called the development of import-substituting industries one of the policy priorities, emphasizing that by 2017, 80% of goods purchased by the state

GRNTI 82.33.17

Victoria Viktorovna Tretyak - Doctor of Economics, Professor, Professor of the Department of World Economy and Management of the International Banking Institute (St. Petersburg).

Irina Aleksandrovna Kruglova - Candidate of Economic Sciences, Candidate of Legal Sciences, Associate Professor of the Department of World Economy and Management of the International Banking Institute (St. Petersburg).

Maria Viktorovna Sigova - Doctor of Economics, Professor, Rector of the International Banking Institute (St. Petersburg).

GLOBALIZATION AND WORLD ECONOMIC PROCESSES

and state-owned companies must be of domestic production. The starting point for the intensification of the import substitution process in Russia can be considered the decree of President V. Putin of August 6, 2014 “On the application of certain special economic measures to ensure the security of the Russian Federation,” which introduced Russia’s response to foreign sanctions.

According to the Russian Ministry of Industry and Trade, the import dependence of the Russian economy in some industrial sectors is more than 80%, which creates a potential threat to the country's national security. For example, the share of imports in the machine tool industry exceeds 90%, heavy engineering - 60-80%, light industry - 70-90%, radio-electronic industry - 80-90%, pharmaceuticals and medical industry - 70-80%. Today, as a result of attempts to isolate the Russian economy from international trade channels through economic and political sanctions on the part of Western partners, the introduction of an embargo and the so-called retaliatory sanctions (self-embargo), a direct threat has arisen to the chain of reproduction, inhibition and actually stopping the economy in a number of sectors, and, accordingly, a threat to national security.

Based on this, the currently extremely high share of imports in various sectors of the Russian economy is an indisputable argument for Russia’s transition to an import substitution strategy. As the main element of state industrial policy, import substitution is aimed at replacing imports of industrial goods that are in demand in the domestic market with goods of national production and thus minimizing the negative effect of sanctions imposed on Russia by foreign partners. Opponents of the transition to an import substitution strategy in Russia argue that the creation of a closed economic system using predominantly internal capabilities inevitably takes the form of economic autarky.

Autarky contradicts the laws of development of the world economy, reduces its efficiency, and causes the subsequent economic backwardness of the country. To this it can be argued that at this stage Russia found itself in a state of need to implement an import substitution strategy involuntarily, due to external circumstances caused by the economic blockade and the introduction of economic sanctions against it. And in these circumstances, the implementation of the import substitution policy must be considered as a means of protection against external pressure.

However, it can be assumed that the harsh conditions in which Russian industry finds itself today will benefit its development and turn it into a sustainable platform for the national economy. This assumption is justified by the fact that the import substitution policy is based on creating a favorable environment for the growth of national industry, which presupposes active government support for domestic producers. However, the implementation of the import substitution strategy should not lead to a violation of the principles of international economic integration.

In addition, import substitution is a system-forming factor in ensuring national security, since it can ensure technological independence in critical areas, contribute to the formation of a positive trade balance, as well as the cultivation of national leaders to conquer the global market. In this regard, from the point of view of import substitution, the most relevant today are the products of industries that are subject to economic sanctions, as well as industries that are priority in terms of national security issues - high-tech machine tool products, oil and gas engineering products.

When developing an import substitution strategy, special attention should be paid to choosing the appropriate model. Taking into account today's Russian realities, as well as analyzing existing foreign experience, it is possible to use three options for implementing the import substitution strategy: internally oriented, externally oriented and mixed (see table). The strategy of internally oriented import substitution is aimed at developing import-substituting industries with the aim of developing only the domestic market. In this situation, enterprises replace used imported components with domestic analogues and sell the product on the domestic market. The disadvantages of this system include the fact that the use of internally oriented import substitution can lead to stagnation of innovation activity at the enterprise level, as well as to a lag in the national economy in the field of technological and scientific-technical cooperation.

Tretyak V.V., Kruglova I.A., Sigova M.V.

The application of the model of internally oriented import substitution has become a defining stage in the development of the so-called newly industrialized countries (NICs) of Latin America (Brazil, Argentina, Mexico, Chile, Paraguay, Uruguay). The internally oriented import substitution strategy played a stimulating role in creating a diversified national economy with the expansion of domestic production of essential goods. In order to protect its economy from expansion from North America in the 50-60s. XX century Latin American countries took a number of measures to reduce prices for domestically produced products, and the funds thus retained within the state were used to modernize industry.

Options for implementing the import substitution strategy

Import substitution strategy option Contents of the strategy Advantages

Strategy of internally oriented import substitution Development of import-substituting industries with the aim of developing only the domestic market In this situation, enterprises replace the used imported components with domestic analogues and sell the product on the domestic market

Externally oriented import substitution strategy Promotion of domestic products to the world market and replacement of imported components and parts in export products The implementation of this strategy encourages enterprises to carry out R&D in accordance with the requirements of foreign markets, which ultimately should lead to an increase in the competitiveness of domestic industries in the domestic market with subsequent entry to the foreign market

Mixed import substitution strategy Carrying out import-substituting activities both in the domestic and foreign markets in various proportions The possibility of rational distribution of the volume of resources necessary for the implementation of import substitution in domestic and foreign directions, the possibility of reducing the cost of both exported products and products oriented to domestic sales market

The strategy of internally oriented import substitution was carried out mainly at the first stage of industrialization of developing countries in Asia, Africa and Latin America and consisted of a gradual abandonment of imports of industrial products and supplying the domestic market with its own products. At first, such import substitution was carried out in the production of consumer goods, then it also covered the products of heavy industry. However, such import-substituting development as a whole turned out to be insufficiently effective. Thus, the countries of Latin America, which at one time implemented a strategy of internally oriented import substitution, eventually faced a general deterioration in the economic situation, which resulted in increased inflation, a decrease in savings and, as a result, a reduction in investment activity, a balance of payments deficit and an aggravation of problems of international currency liquidity.

These countries have not been able to carry out structural restructuring of their economies and bring a sufficient number of locally produced goods even to domestic markets (not to mention foreign ones). Enterprises that relied entirely on government support measures failed to become competitive, and national governments that encouraged protectionism nurtured entire industries based not on real competitiveness, but on administrative resources. The profits received were used by such enterprises not for production development and modernization, but for lobbying their interests through the state in order to maintain the status quo. As a result, the budget policy of these countries turned out to be ineffective, and import substitution led not to growth, but to a decrease in the competitiveness of national industries.

The strategy of internally oriented import substitution itself is a strategy of catching-up development, which involves a transition from the production of simple goods to knowledge-intensive and high-tech products with high added value. And this is impossible without an open economy, stimulation of technological modernization, increased labor productivity, efficiency and the creation of competitive products.

GLOBALIZATION AND WORLD ECONOMIC PROCESSES

As an alternative to this strategy, many countries began to use a strategy of externally oriented import substitution, which was based on the promotion of domestic products to the world market; it was planned to replace imported components and parts in export products. The implementation of this strategy encourages enterprises to carry out R&D in accordance with the requirements of foreign markets, which should ultimately lead to an increase in the competitiveness of domestic industries in the domestic market with subsequent entry into the foreign market. The task of effectively implementing the strategy of externally oriented import substitution is to identify the reserves of the national economy to form factors that support previously underdeveloped promising industries.

The countries of Western Europe and the USA first used the strategy of externally oriented import substitution in 1850 to support their own industry. However, this strategy received its greatest development in the middle of the 20th century. in developing countries, especially in the newly industrialized countries of Asia (Taiwan, South Korea, Malaysia, Thailand, Philippines). At the same time, East Asian states showed a trend of faster economic growth compared to industrialized countries, in full accordance with the predictions of convergence theory.

Subject to the choice of a mixed import substitution strategy, the enterprise carries out import-substituting activities both in the domestic and foreign markets in various proportions, which allows rational distribution of resources necessary for import substitution. However, the need to implement R&D and innovation in accordance with the requirements of foreign markets in the long term requires the constant investment of significant resources. An example of the implementation of a mixed import substitution strategy is the Indian economy. Certain features of this strategy are also characteristic of the Egyptian economy.

Rice. Structure and logic of constructing an import substitution strategy

Tretyak V.V., Kruglova I.A., Sigova M.V.

In modern Russian conditions, the implementation of a strategy of externally oriented import substitution seems to be the most promising. Russia needs a scientifically based national import substitution program, which includes three areas. The first direction is associated with the replacement of those groups of imported products, analogues of which are currently produced in the Russian Federation in insufficient quantities. This requires modernization of existing production facilities aimed at increasing production volumes. The second direction covers goods that are not yet produced in our country, but their production can be mastered in a short time. At this level, it is advisable to set goals for creating new modern import-substituting industries.

Finally, the third direction includes products and goods that are not produced in the Russian Federation, since their import substitution is economically unprofitable or impossible due to objective reasons. Such goods belong to the so-called critical imports, and the main task is to reduce the consumption of goods of this group, to study and apply the possibilities of indirect substitution. The structure and logic of constructing an import substitution strategy are presented in the figure.

It is important to note that in conditions of prolonged economic isolation, import substitution inevitably leads to the preservation of the backlog and a policy of catching up development. The final guideline for all import substitution measures should be the development of competitiveness of priority sectors and subsequent export of products to foreign markets, i.e. export-oriented (competitive) import substitution. At the same time, defining priorities for export-oriented import substitution and concentrating financial resources on the most promising areas becomes of fundamental importance.

The success of the implementation of the strategy of export-oriented import substitution lies in the plane of targeted joint actions of business and government to integrate domestic producers of goods and services into global value chains. Particular emphasis should be placed on relying on private initiative, actively supported by the state.

LITERATURE

1. Bodnar D. Export orientation as a means of increasing the competitiveness of domestic electronics // Electronic components. 2015. No. 4. P. 6-12.

2. Bodrunov S.D. Theory and practice of import substitution: lessons and problems. SPb.: INIR im. S.Yu. Witte, 2015. 171 p.

3. Vertakova Yu.V., Plotnikov V.A. Prospects for import substitution in high-tech industries // Analytical Bulletin of the Federation Council of the Federal Assembly of the Russian Federation. 2014. No. 27. P. 7-19.

4. Kolotyrin E.A. The role of import substitution in the modern economic strategy of Russia // Bulletin of the Saratov State Socio-Economic University. 2015. No. 3 (57). pp. 9-13.

5. Kostin K.B. The concept of ensuring energy security (in relation to solving the problem of import substitution in the Russian electric power industry) // News of the St. Petersburg State Economic University. 2015. No. 1 (91). pp. 32-43.

6. Kruglova I.A. Economic sanctions as a tool for regulating international economic relations // Scientific notes of the International Banking Institute. 2015. No. 11 (2). P. 155.

7. Krugman P.R., ObstfeldM. International economics: theory and policy. St. Petersburg: Peter, 2003. 832 p.

8. Mironova O.A. Import substitution: foreign experience and lessons for Russia // International scientific research journal. 2015. No. 7 (38). pp. 84-87.

9. Prolubnikov A.V., Plotnikov A.V. Directions for the transformation of state economic and industrial policy in the conditions of economic sanctions and the development of import substitution processes // Theory and practice of service: economics, social sphere, technology. 2015. No. 2 (24). pp. 45-50.

10. Fedoseeva G.A. Essence and development of the theory of import substitution // News of the St. Petersburg State Economic University. 2015. No. 3 (93). pp. 144-148.

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 integration of the country 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 an important 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 creating 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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7. Basina N. What takoe importozameshchenie i kakim emu byt" v Rossii. Available at: http://www.crn.ru/news/ detail.php?ID=93523

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