Five Crises of Human Capital: A Pathway to Achieving Socio-economic Parity with Developed Nations in Russia Today

Abstract

Purpose: This research aims to identify the necessary conditions and reforms for Russia to transition to an innovative development path and attain a socio-economic level comparable to that of developed countries. The research goal is achieved by analyzing the key macroeconomic drivers of scientific and technological development and evaluating public policy, budget priorities, and ongoing reforms from the past 30 years. The research also investigates the “five crises of human capital” and the loss of more than 57% of Russia’s scientific and technological potential. Using correlation and comparative analysis methods, the research analyzes the relationship between economic growth rates, high-tech production, and human capital. The research establishes that 96% of the dynamics of GDP growth are attributed to investments in technology transfer, the creation of comfortable conditions for attracting and retaining scientific and technological personnel in real sectors of the economy, and not investments in the “knowledge economy.” Moreover, the research emphasizes the possibility of a sixth “human capital crisis” and suggests policy and legislative changes necessary for innovative development comparable to developed countries. The author presents an insightful forecast for the necessary scientific and engineering professionals needed to achieve exponential GDP growth until 2040. Additionally, the author emphasizes the importance of policy and legislative changes toward innovative development comparable to developed nations.