05 July 2012

Russia Suffers Drain of Brains

A brain drain from Russia has been funneling its brightest minds to the West, while the nation’s embattled higher education system struggles to find its place in the post-Soviet world. _NYT
Russia's educational system has been losing ground for decades. Consequently, Russia's brain-drain is occurring at earlier and earlier ages and stages of the educational process.

Not only are the best Russian science and technology graduates being lured overseas, sometimes the recruiting takes place even before graduation.

And those students who stay behind in Russia are studying more superfluous subjects, rather than the much needed scientific and technological areas of concentration.
Comfortably settled under the gilt ceiling and surrounded by statues of tsarist-era heroes, the participants of the Strong Russia 2012 summit were in an amicable state of mind, at least until the deputy economics minister of the Kaliningrad region stood up.

Mikhail Gorodkov spoke about an issue that few in the room could ignore: the lack of specialists needed to support Russia's development.

"With the excess of economists and lawyers that we have right now, there will simply be nobody left in 10 years to add to gross production [in Russia]," Gorodkov said.

The issue, although not a novelty to the summit participants, is a sore one. While authorities are soliciting more local and foreign investment by positioning Russia as a technological leader, the quality of the country's working staff has steadily declined.

Eighty-six percent of companies in Russia experience a deficit of qualified personnel, according to a study by Antal Russia. The June 2012 poll was based on information gathered from 200 companies.

Technical specialists, qualified retail workers, engineers and IT staff are the hardest to find. This shortage of qualified workers is expected to worsen in 10 to 15 years as Russia's demographics show fewer people of working age.

Part of the problem is the current fashion among youth to train to be economists, lawyers and managers, said Viktor Sadovnichy, rector at Moscow State University.

There is such a surplus of these professions on the market now that the newly graduated professionals are having trouble finding jobs or are forced to settle for jobs that pay 10,000 to 12,000 rubles ($370), Sadovnichy said.

The results of the Unified State Exam are a good indication of the professions that graduates are choosing to study. The number of students who pass the physics exam, which is necessary to go on to study engineering, is currently only 2 percent of the number that the technology sector needs to function, Sadovnichy said._Moscow Times
Capital flight from Russia continues, although at a lower level since the price of oil has dropped.

Should the price of oil remain for long below break-even for the Russian government budget ($120 - $150 per barrel), Russia's problems will have just begun.

Vladimir Putin has big plans for Russia, but he will need to find a way to bring in greater profits to the one-trick-pony energy state. The global price of natural gas is likely to drop lower -- making it difficult for Gazprom to support unofficial state projects. And Putin needs for the price of oil (Brent) to exceed $120 a barrel in order to pay off cronies and to finance all the new weapons systems he wants to build.

Putin's best hope for the future is if US President Obama is re-elected, prolonging the extreme dysfunction and weakening of his greatest enemy nation. Because it is only a matter of time before Russia will have to confront China militarily. And when that happens, Putin does not want the US to be in any condition to take advantage.

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Blogger gwern said...

> "With the excess of economists and lawyers that we have right now, there will simply be nobody left in 10 years to add to gross production [in Russia]," Gorodkov said.

Why is supply and demand not operating in Russia to punish the economists & lawyers, and reward the technical specialists?

Thursday, 05 July, 2012  
Blogger Matt M said...

Gwern - Supply and Demand is working to reward the technical specialists. It just does not stop at the national border. They are leaving to fullfill international demand.

Friday, 06 July, 2012  
Blogger Clutch cargo cult said...

120 -150 breakeven, really? They aren't fracking or oil sanding but you know more than me. I am a buyer of nat gas at these levels.

Friday, 06 July, 2012  
Blogger sykes.1 said...

Proponents of STEM egregiously overestimate the economy's need for engineers and scientists in every country, including the US. At the graduate level, the US produces three to four times as many MS/PhD engineers and scientists as the US economy can absorb. Fortunately, the excess consists almost entirely of foreigners who go home. The number of mainland Chinese engineers and scientists we have educated is little short of amazing. The US functions as part of the Chinese education system, and we give it to them for free.

No doubt, Russia has the same problem. Their schools produce a local oversupply of STEM graduates, and the oversupply leaves. Russians are bright, and their technical education is excellent, so the market for them is good.

Saturday, 07 July, 2012  
Blogger al fin said...

CCC: $120 to $150 a barrel is breakeven for Russia only in the sense of balancing the government's budget -- not in terms of oil production.

Russia has neglected its oilfield infrastructure and is in need of massive outside investment in order to develop many difficult oil fields -- including perhaps the world's largest tight source rock deposit of crude. located in Western Siberia. They will need to be able to frack and drill horizontally to develop that massive oil field.

Russia has a bad habit of nationalising the assets of large outside oil & gas companies after they have developed a valuable asset inside Russia. Very third-worldish in that regard.

Sykes: Estimations of the need for engineers and scientists is quite tricky. If the US economy were not being held down and poisoned by absurdly stupid government economic, energy, and environmental policies and a stiflingly bloated bureacracy in all its agencies, there would be a much greater need for scienctists and technologists due to a much higher level of innovation and entrepreneurial startup activity.

Capitalism is absolutely frightening in its ability to generate massive levels of economic activity when it is relatively unfettered. In the attempt to tame, regulate, tax, and suck off the proceeds of capitalism, governments tend to grow too large and extortionate for their underlying economies' good.

Saturday, 07 July, 2012  
Blogger Unknown said...

So true about China. The Russians are fixated on the US now, but in their hearts, they know the real test will come from China over Siberian resources.
farmland investment

Saturday, 07 July, 2012  
Blogger Solutiq said...

It appears to be quite and informative one. I have read a few of the articles on your website now, It's really a great and useful piece of info.

Monday, 30 July, 2012  

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