Automation and Robots: Overcoming Challenges for Russian Businesses
Reluctance of Businesses in Adopting Government-Backed Automation Technologies
In the ever-evolving world of technology, automation and robots are no longer distant concepts reserved for science fiction. The market for automated process control systems in Russia expanded by 50% last year, surpassing 124 billion rubles, with service robotics market participants raking in 32 billion rubles. Yet, despite this growth, Russia still trails behind other nations in terms of robotization.
While countries like the US and the EU boast around 117 and 129 robots per 10,000 workers respectively, Russia stands at just 19. With conservative forecasts predicting a decline of 3.7 million working-age individuals by 2046, businesses are left with little choice but to embrace the digital revolution, with robotics and automation being centerstage.
The Russian Automation Journey
Many major and medium-sized Russian companies recognize the need for automation, from industry leaders like "Kirovsky Zavod" to HoReCa and retail sectors. Success stories in select enterprises have set trends and influenced others to follow suit, adopting advanced technologies. However, the landscape of automation in Russia remains fragmented, with industrial and service robots primarily owned by companies proactive about transforming their operations and forward-thinking in their strategic vision.
Entrepreneurs often express reservations about automation due to perceived high costs, complex implementation processes, and a lack of understanding about its benefits. The current credit rates, combined with the need to import most robotic technology with the fluctuating ruble exchange rate, can deter those considering advanced solutions. Yet, with proper planning and a long-term approach, these obstacles can be manageable, enabling companies to gain a competitive edge within just a couple of years by reducing costs and increasing profits.
National Support for Robotization
In an effort to bridge the gap, the government aims to position Russia among the top 25 countries in terms of robot density by 2030, increasing from 19 machines per 10,000 workers to 194. To accomplish this, a separate national project, "Development of Industrial Robotics and Automation of Production," is set to receive 350 billion rubles over five years.
However, despite such government support programs, only 23% of Russian industrial enterprises and 33% of integrator companies have utilized state aid to implement robotics. This is not due to a lack of relevant national projects but rather a multitude of reasons ranging from insufficient awareness to fears of legal repercussions and even criminal cases.
Yet, there are success stories of constructive partnerships between certain government agencies and businesses. For instance, the Moscow branch of the Ministry of Industry and Trade has demonstrated effective cooperation on complex projects, serving as a model for increased collaboration moving forward.
Despite digitization efforts, entrepreneurs often face challenges navigating scattered information about existing subsidies, tax incentives, preferential loans, and their related conditions on government resources. The process of identifying suitable programs can take weeks, and applying involved preparing extensive documentation, significantly increasing the administrative burden on businesses.
Additionally, specific requirements for domestic machine origin, such as that established for preferential tax treatment, limit a company's ability to choose ready-made solutions. Simultaneously, reporting on results and achieving target indicators instills fear in companies, particularly when dealing with strict criteria and looming deadlines that can preserve the conditions and result in lawsuits demanding repayment.
Pioneering Innovation
Despite the challenges, the opportunities for state support cannot be overlooked. Without government assistance, achieving the targeted goals for a significant quality leap in the current conditions is impossible. To encourage businesses to seek help, program operators should streamline preliminary conditions, simplify selection criteria, align them with the real market situation, automate reporting procedures, and provide more flexible terms regarding project implementation timelines and target indicators.
Additionally, the quality of expertise provided to businesses should be improved. Perhaps centers of robotics at Innopolis could help achieve this. Separately, the state should focus on supporting robot consumers and integrator companies, which currently have a smaller set of assistance tools compared to producers. With extensive and flexible support for implementation, the construction of a robotic future may become a reality by the start of the next decade.
Editor's opinion may not reflect the author's viewpoint
Transforming the Landscape
To successfully implement automation, Russian businesses can consider the following strategies:
1. Investing in Technical and Human Capital
- Strategy: Enhance technical expertise by investing in employee training and hiring specialists with automation and AI skills.
2. Optimizing AI and Automation for Business
- Strategy: Ensure automation and AI solutions seamlessly integrate with existing processes, enhancing efficiency without disrupting operations.
3. Fostering Closer Collaboration
- Strategy: Encourage collaboration between government bodies and industry leaders to create supportive regulatory frameworks that facilitate automation technology adoption.
By addressing these challenges and capitalizing on government support, Russian businesses can effectively integrate automation to drive economic growth and competitiveness.
- In 2024, the Russian government aims to increase the number of industrial robots per 10,000 workers from 19 to 194, addressing the country's lag in robotization, as stated in the national project, "Development of Industrial Robotics and Automation of Production."
- As the service robotics market in Russia expands, new formulations and advancements in technology are expected to play a significant role in overcoming obstacles like high costs and complex implementation processes that currently foster entrepreneurs' reservations.
- Kirovsky Zavod, a major Russian company, has set a trend among select enterprises by adopting advanced technologies, demonstrating the potential for a more automated Russian business landscape.
- To capitalize on the government's support for robotization, program operators are encouraged to streamline preliminary conditions, simplify selection criteria, and provide more flexible terms regarding project implementation timelines and target indicators to encourage businesses to seek and effectively utilize resources.
