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In this paper, we study the factors, motivations and barriers for productivity growth in Russia. The data is based on a survey of 700 companies of Russian basic non-resource industries. We find inter- and intra-industry divergence of companies by labor productivity level and discuss the evidence for further divergence. Revealed are the factors of high labor productivity level, among which are scale of business, investments into fixed assets and human capital, application of modern digital technologies, export activity and training of employees. The growth of labor productivity is positively associated with firm size, investment activity, digitalization and R&D spending. There is no positive and significant impact of innovation activities on productivity level and its dynamics, which may be a result of low innovation intensity and time lags in effects of innovation activities on revenue. The evidence suggests that innovative firms with positive dynamics of innovation performance are followers of foreign competitors. We find that firms with the leading and lagging levels of labor productivity have different strategies for human capital accumulation. Leading firms combine significant staff turnover with intensive professional development of existing staff, while lagging in productivity firms are not involved in staff turnover and investment in training. While leading in productivity firms compete for the best personnel, lagging firms compete for financial resources. In addition, leading companies find among the highest the risks that qualified personnel would be diverted, while the lagging companies find among the highest the risks of employees’ low motivation. Most of the leading in productivity firms are interested in continuous improvements of labor productivity, while among lagging in productivity firms this problem is important only for one fourth of them. Lack of internal motivation to improve their productivity may reflect failures in the corporate governance system. At the same time, the established model of relations with the state has a significant impact on the respective motivations of companies.

Although Russia and the Baltics have historically been economic partners, the economic relations between them are tense today. Nearly stagnating bilateral trade contributes little to the development of either side. The Baltics-Russian bilateral trade conducted within global value chains (GVC) and operations of multinational companies is much more resistant to geopolitical and economic shocks than traditional international trade. In particular, the accession of Estonia, Latvia, and Lithuania to the EU and NATO in 2004 and the introduction of reciprocal EU-Russia sanctions in 2014 did not curb GVC activities between Russia and the Baltics. The article discusses factors in the transformation of the Baltics-Russian GVCs amid COVID-19. The research aims to prove regionalisation as a viable prospect for the transformation of global value chains in Russia and the Baltics. In the medium term, regionalisation is possible as (1) part of global trends towards GVC transformation in the industries in which Russia and the Baltics traditionally specialise; (2) as a response to the long-term structural challenges faced by Russia and the Baltics in creating a new generation of internationally competitive firms; (3) as a result of companies tackling the effects of the pandemic against the background of historically stable relationships; (4) as a product of strong social contacts and soft power. GVC regionalisation will be driven by individual companies, regional (local) governments, and Russian-Baltic cross-border cooperation initiatives. Finally, repercussions for Russian and Baltic politics are discussed alongside GVC regionalisation benefits for all the parties involved.

Long-term scenarios predict that the BRICS countries can overtake the G7 countries in their contribution to the world economy, but, as follows from the analysis of multicomponent international indices, the same countries lag significantly behind the G7 countries in terms of preparedness for a technological future. In this regard, the growth prospects of the BRICS economies are largely determined by possible strategies of the countries to disseminate and use the Fourth Industrial Revolution (Industry 4.0) technologies. Analysis of TiVA OECD data revealed that BRICS was not very profitably integrated into global value chains — far from the final consumer abroad and relatively close to suppliers of raw materials and semi-finished products — which in the long term determines the limitations on increasing economic complexity. Analysis of the WITS World Bank data revealed that BRICS was relatively poorly involved in the processes of international exchange of products related to the technologies of Industry 4.0 — industrial robots, additive technologies, computer-aided-design and computer-aided-manufacturing technologies, and biotechnologies — and retained the position of net importers, with China making the greatest contribution to the dynamics of trade. Taking into account the general growth of global competition for technologies associated with Industry 4.0 and the continuing lag of BRICS in creating and using such technologies, the authors highlight the challenges for the industrial policy of the BRICS countries and discuss possible answers within the framework of industrial and trade policies. Challenges for BRICS include continued participation in global networks as countries serving the production and trade of new technologies; lagging behind in the level of development of the institutional environment and infrastructure for development of technologies; formation of limited “hotbeds” intensively using the Industry 4.0 technologies; and, thus, growth of spatial, inter- and intra-sectoral inequality.

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