Invest Foresight holds roundtable discussion on the future of Moscow’s economy

Moscow metropolitan area is likely to lose its innovative potential in the future. The Russian capital is a densely developed city; business owners might choose to leave Moscow to organize startups in other places, according to the participants of Moscow 2030: Future of Metropolitan Economy, a roundtable organized by the Invest Foresight business news website and the Technopolis Moscow special economic zone as part of the Engineering the Future Club project.

The metropolitan areas of million-plus cities supply 50% of the country’s GDP, said Tatyana Polidi, Executive Director of the Institute for Urban Economics.

“The economy of large metropolitan areas is usually dominated by the manufacturing industry, as well as the public sector. At the same time, industrial production in these areas is old and inert; industry is only being developed there to provide jobs to the local population. The economic sectors where innovations are concentrated – IT, finance and science – account for a meager 6-7% in big Russian cities,” the expert noted.

She underscored that Greater Moscow is the leader among other large metropolitan areas in Russia. The local government’s spending on the housing and utilities’ development amounts to RUR 15,000 ($230) per person per year.

“Transport investment is also much higher in Moscow, exceeding the budgets of all the million-plus cities in Russia combined,” Tatyana Polidi added. “Manufacturing accounts for 20% in Moscow’s economy, while in other big cities, it accounts for 30-40%. As a result, the share of IT and finance projects, as well as other intellectual services, is higher.”

However, Director of the Macroeconomic Research Center at the Russian Government’s Financial University Yevgeny Balatsky pointed out that in the next 10 years, Moscow is likely to lose its innovative potential.

“Moscow is a busy city with a high concentration of buildings. The population density in Moscow is three times higher than in Paris. It is a very difficult city to live in. And if it does not improve the urban environment, making people’s lives more comfortable, its innovative potential will decrease, as business leaders will organize startups elsewhere,” the expert concluded.

On Monday February 18, the Invest Foresight business magazine hosted a roundtable as part of the Engineering the Future Club project, devoted to the future of the city’s economy.

Engineering the Future Club is a program to organize a series of public roundtables where experts discuss the future of public institutions, business and technology. Following the roundtable, a program document will be prepared for the Moscow Department of Investment and Industrial Policy containing expert proposals on the city’s development.


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