in industry structure. When we take a closer look at the industry structure, three groups of industry sectors can be determined: basic, supporting, and infrastructure sectors.sectors are agriculture, mining, manufacturing, and software development-that is, those industries that produce goods that are traded globally and therefore often face real competition. Supporting sectors are the market sectors that either facilitate the distribution of goods (such as wholesale and retail trade), support production (for example, business services), or produce goods and services that can be traded only locally (construction, real estate, hospitality , etc.). Infrastructure sectors are non-market services and production, such as government services, education and health, utilities, transport, and communications 9 .to explore growth in the Russian economy between +2003 and +2009 according to sector groups, the analysis shows that growth was higher in those sectors with a greater intensity of competition (Figure 4). Productivity in supporting sectors (which are mostly market services) grew faster than in many basic sectors (where the government is the main proponent and owner) and in most infrastructure sectors (which are non-market services). In basic sectors-both manufacturing and resources-productivity grew moderately while employment declined. Infrastructure sectors did not grow in employment, while productivity grew slowly.
Figure 4: Productivity and employment growth; source: Global Competitiveness Report 2011-2012
, infrastructure productivity in Russia was three times lower than it was in OECD countries. In recent years, productivity growth has not been realized in Russian infrastructure sectors. Furthermore, the government share in total employment was constantly growing (Figure 5).
Figure 5: Productivity and employment in infrastructure sectors; Source: Global Competitiveness Report 2011-2012
transformation is not occurring in any infrastructure sector, and such fundamental change is essential for further development of these sectors.sectors were fast growing in both productivity and employment, with finance leading the growth (Figure 6). This sector has been, and is still, emerging and its growth fills an «empty space» and promotes the underdeveloped distribution function in the economy. The productivity gap in supporting sectors remains large (47 percent of the total gap) and further rapid growth is necessary for productivity improvements. More than half of this gap is determined by low productivity in the labor-intensive construction and real estate sectors. Productivity is gradually improving there but many problems still persist.basic producing sectors in Russia demonstrated some growth in productivity and decline in employment (Figure 8). Resource sectors raise productivity but do not create net new jobs. Among the manufacturing (including software) sectors, the best performing were computer activities, fabricated metal products, and rubber and plastic.
Figure 7: Employment and productivity in basic sectors; Source: Global Competitiveness Report 2011-2012
also grew rapidly in oil and gas refinery, metallurgy, coal mining, food processing, chemicals (except pharmaceuticals), tobacco, and pulp and paper. Most of these are characterized by intensive market competition.machinery, equipment, and transport equipment, both employment and productivity decreased. These sectors were the most seriously affected by the economic crisis of 2008-09. The government is the most important player in these industries.
Productivity gaps in machinery and equipment and transport equipment account for 40 percent of the total productivity gap between basic sectors in Russia and those of the OECD countries. Another 40 percent is the result of lower productivity in the oil and gas, mining and refinery, chemicals, and agriculture and food sectors.are different perspectives on the development of basic sectors. Some experts propose abandoning manufacturing and instead using natural resource rents for the development of sophisticated market services; others insist that industry development, especially manufacturing, should be the highest priority. Statistics and cross country analysis, however, show that the truth is somewhere in the middle: manufacturing still matters for economic development and countries create new jobs in competence-driven manufacturing.to statistics, as countries proceed to the next stages of development, per capita manufacturing value-added increases. This is proportional to per capita GDP. Although it is well known that the employment share in industry tends to decrease after some critical point, the employment decline is compensated by productivity gains. These gains include both an increase in productivity at the indi...
