Import Substitution in Electrical Engineering: Problems and First Results

Abstract

The research aims to analyze the economic results of the functioning of manufacturers of electrical engineering in the Russian Federation under sanctions. To assess the consequences of economic restrictions in the short run, the authors use the case of the company “Izolyator,” one of the world’s leading companies in high-voltage bushings production. The authors use general scientific methods, such as empirical research, economic analysis, synthesis, and modeling, to assess the impact of large-scale restrictions on the supply of equipment, materials, and transaction costs of adjustment to the restrictions. Since 2022, electrical equipment manufacturers in the Russian Federation have faced massive restrictions on the supply of materials and equipment that are used in the main technological process and are of key importance. Manufacturers are trying to adjust their manufacturing process to limit their losses and find new approaches to maintain cost efficiency and scale. The analysis carried out has identified the most vulnerable bottlenecks in the production-supply chain in the industry. It will help find affordable, cost-effective options for import substitution.