EKATERINA EGOROVA: SYSTEMS THINKING IN COUNTRY'S SUSTAINABLE DEVELOPMENT
SYSTEMS THINKING IN COUNTRY'S SUSTAINABLE DEVELOPMENT. INSUFFICIENT ATTENTION TO THE TOPIC AND ITS CONSEQUENCES: RUSSIA AS AN EXAMPLE.
Author: Ekaterina Egorova. Expert on circular economy and sustainable development. Founder of Moscow Circular.
In Ray Bradbury’s short story “A Sound of Thunder”, the main character travels back in time on a guided safari, steps on a butterfly, and upon coming back to his time, discovers that the results of the presidential elections are different. Instead of a good candidate, a dictator is in power. This story is science fiction, but it has an interesting reference to a question of systems thinking.
Everything is connected. Sometimes insignificant actions lead to profound changes in the system. On the contrary, actions that seem significant have little or no impact.
To understand how a complex system operates, it is not enough to divide it into parts and study them individually. Analysing the elements of the system helps to understand how they work. However, one can answer the question why the system works the way it does only through being knowledgeable about how parts of the system, including stakeholders, interact with each other. For example, if we experience chest pain, we go to a clinic to see a cardiologist who specialises in heart issues. The doctor not only examines the heart as a separate organ but also gives referrals to other specialists and prescribes tests. So the doctor tries to find out the true cause of the problem through seeking connections with the work of other body systems.
To understand what causes the existing problems in such a large system as a city, a separate country, or the whole world, one must not only understand the intricacies of the workings of a separate unit, industry, or part of society but also find out how these parts of the system interact with one another and influence each other.
The horrendous military conflict of 2022 between Russia and Ukraine makes us not only grieve the irreparable loss of people's lives, destroyed cities and broken futures, but also urges us to understand the true reasons behind it. To understand what we did wrong, where we failed, and evaluate what needs to be done to prevent a similar tragedy from happening in the future.
SUSTAINABILITY: FRAGMENTED APPROACH
Throughout the history of mankind, thinkers, experts, leaders, and ordinary people have been pondering what can be done to ensure a peaceful, prosperous, and happy life for all. In the 21st century, it became possible to approach this issue collectively and systematically at the level of interaction between countries. In 2015, 193 United Nations member countries, including Russia, agreed on and adopted seventeen interlinked sustainable development goals to achieve a better and more sustainable future for all. Each country had to develop its own internal strategies to implement the tasks that bring us closer to achieving these goals step by step
It sounds logical: to achieve an ambitious goal, it is best to eat the whale one bite at a time: divide a huge amount of work into smaller tasks and steps. Also, focusing and working on tasks in which you have strong expertise helps to pull resources together and achieve a result, as opposed to trying to keep up with everything, spreading oneself too thin, and ending up accomplishing nothing. This is what companies and corporations in Russia did. Fortunately, in the past couple of years they have started to pay more and more attention to the sustainable development agenda. Companies and organisations from the educational sector declared that fulfilling the sustainable development goal of providing access to quality education as their mission; environmental projects worked with goals on climate, soil, ocean health, and responsible consumption; human rights activists pursued goals dealing with rights of women and imprisoned, and fighting corruption; large corporations focused on innovation, infrastructure, and economic growth.
It is logical to choose specific goals and focus on achieving them, but it is vital not to forget that the goals are interconnected and inseparable. Sometimes companies chose goals that did not have anything to do with their core business and or reducing the negative impact that comes from it, but instead targeted activities that they thought were easier to deal with.
For example, some industrial enterprises did not try to make their production energy-efficient, but instead added educational initiatives to their strategy, or made repairs in some rural schools and believed that they had fulfilled their mission. At the same time, they continue to pollute the air that children from these schools breathe. It is necessary to understand the connections between various goals in order to achieve a sustainable and prosperous future. This awareness will help to build the relations with system participants and move towards a sustainable future faster.
From what I and my colleagues have witnessed, not fully comprehending the interwovenness of these goals has been apparent at expert conferences (for example, the ones on environmental issues), where topics containing attacks and pressure on activists were carefully avoided. Speakers who dealt with the issues of gender equality were asked to restrain themselves from telling stories of violence against women not to scare the employees. Instead, they were asked to focus on the economic benefits that company will get if it pursues its goal of achieving gender equality. Sustainability has become a trendy topic, which has been primarily perceived by companies as a good PR opportunity and access to easy money.
There has not always been an interest and competence to understand these goals, explore their interconnectedness, and rebuild the business processes in accordance with them. Sometimes even experts of a particular field of sustainable development do not fully comprehend the importance of understanding other goals that are outside of their professional competence. It's impossible to understand everything, but being aware of how the goals are connected benefits the success of the entire "campaign".
Since the deployment of Russian troops to Ukraine, gaps in understanding the importance of the systematic approach have become obvious. People in Russia are gloatingly waving goodbye to companies leaving the country without thinking about how this will affect, for example, investment, innovation, and economic growth. In expert chats on sustainable development on Telegram, messages calling to stop the madness in Ukraine are met with bewilderment from other chat participants. “What does this have to do with it? We are environmentalists."
To understand what this is all about and highlight the importance of the systematic approach to achieving a sustainable future, let us take a closer look at how sustainable development goals are interconnected. Using the example of Russia, we will examine what happens if we move towards sustainable development unevenly, leaving some “unpleasant” or difficult topics for later, or ignoring them altogether.
PEACE, JUSTICE, AND STRONG INSTITUTIONS
A country's economic success and the well-being of its citizens depend on how the institutions are organised. Institutions are, in fact, the established rules of the game by which the economic and political systems in the country play, as well as incentives for participants. The efficiency of the judicial system, elections, educational system, and protection of property rights depends on institutions.
According to the work of Daron Acemoğlu and James Robinson (Why nations fail: The Origins of Power, Prosperity, and Poverty, 2012), there are inclusive institutions that ensure the well-being of a large part of society; and extractive institutions that work only for the elite. Accountable and transparent institutions contribute to the development of democracy and have a positive impact on the economic well-being of the country as a whole, as well as on the distribution of benefits among the members of society.
When the rules are clear to everyone, it is possible to develop a strategy for moving towards the common goal without worrying that someone will play marked cards or suddenly turn the tables. For example, if entrepreneurs are confident they will receive fair protection in court in the case of non-fulfillment of an agreement with a supplier (even if the supplier is a close friend of a judge or local prosecutor), it will contribute to the development of entrepreneurship, as well as increase desire to invest in the country.
In 2020, Russia reported on the progress of implementing the sustainable development goals for the first time. Voluntary National Review (VNR) reports that human rights in the country are protected, freedom of speech is flourishing; corruption, or rather the amount of registered cases, is decreasing, and institutions are becoming more efficient due to launching of a one-stop-shop My Documents (RU: Мои Документы) that provides state and municipal services for individuals and businesses.
Along with the official review, the Coalition for Sustainable Development, consisting of the representatives of numerous NGOs, businesses, educational and research institutions, trade unions, journalists, civil activists, and public figures, decided to prepare a report on Russia’s progress on sustainable development goals. Their assessment on the progress of the goal of achieving peace, justice, and strong institutions is very different from the official version of the report. According to the Citizens Review experts, Russia has made the least progress on this goal.
The reviews by other organisations also do not share the optimism of the official report. For example, Transparency International, an international anti-corruption movement, published its Corruption Perceptions Index 2021. Russia ranked 136 out of 180, sharing the slot with Angola, Liberia, and Mali.
A high level of corruption is typical for countries where freedom of speech and expression of alternative opinions are limited, and where political and economic decisions are made by a small group of people who do not want to be accountable to society. Their primary goal is to satisfy their interests.
So, it seems that the framework goal that sets the rules of the game and determines the efficiency of reforms and innovations has received the least attention. The way institutions are organised influences the progress in implementation of all other goals on achieving a sustainable future. When implementing environmental goals, experts were faced with the question “Do you understand who benefits from the garbage / oil / industry here?”. Any goal that deals with respecting the rights of citizens requires the rule of law; fulfilling social tasks - a fair distribution of rights and resources.
According to the work of Jeremy Pope, co-founder of Transparency International, the country's system of national integrity rests on many components: free media, work of civil society, interest of the private sector, international cooperation, coordinated work of the legislative, executive and judicial branches, as well as accountability, transparency, and public values. If all parts work together, it ensures the rule of law, improves the quality of life, and contributes to sustainable development. However, if a few elements are missing, the system loses its balance. Pressure on non-profit organisations and civil society, destruction of free media, private companies and investors leaving the country, and termination of international relations destroys the stability of the system.
Violating the goal of maintaining peace and unleashing armed conflicts make it impossible to advance towards sustainable development goals as connections are broken, humanitarian and social catastrophes occur, and the previous progress is levelled out by the emerging problems. Moreover, war denies the value of human life that lies at the heart of the sustainable development goals. The idea of prosperity of each individual in harmony with the surrounding world is incompatible with war.
Inequality is not just a Russian but a global problem that has received more attention in the recent decades worldwide and during the last few years in Russia. Inequality refers to access to resources and opportunities for different groups of citizens. Inequality can be economic, political, gender, or inequality of opportunity.
A serious problem with economic inequality is that it leads to political inequality. There is an increasing number of the representatives of more well-off groups in the political system who lobby for their interests, which in turn contributes to a further increase in economic inequality.
According to the experts interviewed for this article, people from lower socio-economic backgrounds are far less motivated to get involved in politics and waste time on a system that doesn't work for them. People do not want to understand how the system works, go to the polls, or participate in local self-government. They lack the feeling that they can control the situation, influence decisions, and change things. If there is no sense of control and opportunity to make changes , civic apathy is strengthened in relation to other areas: feeling that there is nothing that can be done about reducing gender and educational inequality, the futility of upholding rights, and protecting the environment.
Moreover, people who do not expect justice from life are more willing to join the game of survival, where the strongest wins. Representatives of the wealthier strata have little idea how the less well-off live, and vice versa. It happens because these groups have less and less in common. There is a division into “us” and “them”. Alien and unfamiliar is perceived as a threat. An increased level of aggression and violence towards “strangers” are inalienable attributes of society with high levels of inequality.
In Russia, the aforementioned situation with inequality is even worse. People with lower income who have already suffered from economic and political inequality are not only excluded from the game, but mobilised for elections using measures of administrative influence to keep the system running. It results in a paradoxical situation: people the most affected by inequality of the system are its main supporters. The system is supported not only by the poorest segments of the population - pensioners and public sector employees, but also by those who are the direct beneficiaries of such unequal distribution - law enforcement agencies and officials.
In recent years, a new group has begun to emerge - the wealthier segments of the population, such as employees of commercial companies. They are also forced to participate in the elections and support the system. According to the report by The Movement for Defence of Voters' Rights Golos, 48% of employees of industrial enterprises faced illegal pressure from their employers during the election campaign of 2021. Such pressure violates the labour code. Employers force the staff to vote and even send proof of voting. Such violations are also common for employees in many other spheres - from state workers to employees of commercial companies.
Russia has one of the highest levels of income inequality . According to the Credit Suisse estimates, the wealthiest 1% of the population owns 58% of the country’s wealth; 10% owns 83% of the country’s wealth. Here, Russia surpassed even the United States, which also has a rather acute problem with inequality. Yet in the US, the top 1% owns only 35% of the country’s wealth.
The level of inequality in the distribution of income and wealth in Russia has increased significantly over the past 30 years since the collapse of the USSR.
Residents in million-plus cities, such as Moscow and Saint Petersburg, have the highest incomes. Individuals from other regions see how people in the capital live and want the same standard of living and consumption for themselves. Thus, they take loans. Due to the debt load, they are not ready to risk losing their jobs because of making a political statement, or expressing a disagreement with the actions of the leadership. Since 2018, the share of mandatory payments on consumer loans has increased from 7.5% to 8.4% of income, and the share of households with loans exceeds 40%.
The high level of political and economic inequality in Russia has not only affected many areas of life negatively, but also generated a demand for a more equitable structure of society and nostalgia for the Soviet past, which is remembered for a more equitable distribution of benefits. However, for young people the reference point is Scandinavian countries, not the USSR. Research shows this is especially true for young people who want to live in a more equal society.
The loss of faith in the ability to create change extends to consumer preferences. Only 8% (out of 37%) of Russian consumers who are more likely to choose goods and services from “responsible producers” are convinced that by doing so they contribute to positive changes. Around the world, on average, 29% of consumers believe that their purchases positively affect social and environmental changes. In Brazil, the figure is 55%, in India - 56%. In Russia, consumers are convinced that a single vote or ruble does not make a difference.
According to the World Bank report, Russia ranks 129 out of 190 in terms of gender equality, followed by Burundi and Uganda. Countries’ women's rights protection legislation was assessed when compiling the rating. In Russia, the situation is the worst when it comes to employment, wages and pensions, marriage and parenthood, as well as doing business. Such a low position in the rating indicates another societal problem: the permissibility of discrimination and violence against a certain group of citizens. Most of the time, women suffer at the hands of the closest people in their own homes. Between 2011 and 2019 in Russia, 66% of murdered women were victims of domestic violence. 53% of women were killed by their partners – here, Russia is the leader in this sad global statistic.
Violence against women is flourishing because of the impossibility of getting adequate protection from the police and court. In Russia, there is no law dealing with domestic violence, harassment in the workplace, and sexual violence at work.
The patriarchal way of life in society and established stereotypes welcome the desire to conquer women and justify psychological and physical violence when a woman's way to do things differs from the ideas of correctness and morality of a rapist. Society prefers not to interfere in family affairs and sees it as a closed, non-transparent system. Despite the already sad situation in regards to violence against women in Russia, in 2017 the so-called first beatings (when a man hits a woman for the first time) were decriminalized, and equated the efforts to combat domestic violence with interference in the family life and attack on “traditional values”.
Stereotypical beliefs are making their way back, justifying the rapist by blaming the victim: woman “is to blame”, she “provokes”, and “gets what she deserved”. She must endure everything so the children won't have to grow up without a father. Even today, the attitude “ Biting and scratching is folk’s wooing” exists. There is an unwillingness to “air one's dirty laundry in public” which only aggravates the situation. Even if a woman calls the authorities during family quarrels, police are reluctant to accept such calls. If they come, they usually talk “heart to heart” with a rapist in a stairwell, not even taking him to a police station. Poorly functioning institutions that, in theory, should protect citizens against threats to life and health, are the reason women do not seek help. They simply do not believe that things can be changed.
A feeling of permissiveness is strengthened by the fact that the abuser does not face any charges under the law, except for a small fine. Thus, the violence of one group of citizens towards another is legalised by the state. It also gives rise to tolerance for any kind of violence: if you can beat women, why can’t you beat children, engage in hazing in the army, mock migrants who feel powerless, or communicate authoritatively with subordinates. If violence can be used against a country's own citizens, children, wives, and relatives, then, unfortunately, there is nothing surprising in the horrifying reports of its manifestations towards “strangers”, especially in the situation of absolute impunity and approval from the state.
The futility of justly defending their rights reinforces the learned helplessness of women. One example is that women are afraid to protest or even give their contacts to human rights organisations when their sons are illegally sent to Ukraine to participate in hostilities. They think it will only make the situation worse. Accordingto Valentina Melnikova, executive secretary of the Union of Committees of Soldiers' Mothers of Russia, the current situation is very different from the first Chechen war of 1995-1996, when mothers actively spoke out and managed to save their children. They came and rescued their sons from the military units, even if they had to escape through a hole in the fence. In 2022, this is not the case.
The educational system in Russia has inherited the Soviet hierarchical approach to teacher-student and principal-teacher relationships. The director is authoritarian towards the teachers, who, in turn, apply this approach to their students. This trend is especially noticeable in the regions. In Moscow and other large cities, the situation is much better. A higher income, opportunity to travel and witness other approaches to education and upbringing, membership in different communities, and less tolerance for violence leads towards a new approach which shows respect to children's personalities. As a result, kids learn to see protection of human rights - both their own and the rights of others, regardless of status, nationality, and difference of opinion - as a value. Need for respecting children's rights and a different approach to education has inspired the developmentof private education in Russia.
The quality of education depends on the availability of information. Different sources of information help disseminate ideas, various opinions and views, and form critical thinking. These ideas may be economically beneficial, they may encourage innovation, but there is a chance that they will be contrary to the existing political order. In general, people who are capable of thinking are harder to manage. It is much easier when everyone thinks the same way and supports the unified policy of the party. Access to information and significant cultural background make xenophobic attitudes less likely to emerge. According to the Levada Centre study, nationalist sentiments are less common among those who follow online media and use Telegram to get information.
In Russia, the situation with freedom of speech and the availability of information has been systematically deteriorating. After the protests of 2011-2012, pressure on independent media grew, a law on foreign agents came into existence; blocking access to the websites and the Internet began. In 2020, Russia ranked 149 out of 180 in the Press Freedom Index. A law on educational activities has appeared which allowed the state to control the information that schoolchildren and students receive. The law essentially introduces censorship and limits the opportunities for students to obtain information from various sources.
Educational institutions have always been a place for broadcasting the ideas of the state. This is not always a bad thing. For example, the emergence of environmental education in schools' curricula is more of a positive thing. However, recently educational institutions within Russia have been used as a tool to «forge» loyal citizens. It seems that the state wants educated and enterprising people who do not claim political influence.
In the long run, this attitude is essentially Utopian: education inevitably shapes the attitude towards respect for rights and freedom of expression. Teachers who do not demonstrate their loyalty and defend their rights are forced out of the Russian educational system.
In addition, educational inequality in Russia persists due to territorial and social factors. Children from families with economic difficulties in a megapolis have more opportunities to access quality education than children from a remote village, where it is physically impossible to go to a museum or theatre. Educated and economically successful parents from remote locations do everything possible to ensure their children get access to cultural life. The rest are doomed to replenish the ranks of unskilled workers who do not have the opportunity for advancement.
According to the Teacher for Russia Charitable Foundation's annual report on educational inequality, 23% of children come from families whose incomes are below the subsistence level, two-thirds of children live in villages or small towns in Russia.
Because of the pandemic and distance learning, the issue of children’s limited access to Internet resources became especially noticeable. Some children had to climb hills to catch a mobile phone signal. Some had to wait for their parents to come home from work so that they could contact a teacher via WhatsApp with the single smartphone, the only one in a family. In schools, the quality of lessons also depends on the availability of technical equipment and infrastructure: whether the schools have access to the Internet, projectors, chemistry equipment, materials for biology classes, or even printers and paper. All this has a profound impact on the quality of education.
It is much more difficult for children from low-income families from remote parts of the country, and even their parents, to figure out what kind of education can be considered high-quality, and even more so to make a decision to study in another city or country. Due to the atomization of society, lack of communities, and insufficient communication between different segments of the population, there is no one children can turn to for advice and help with processing the huge amount of information needed for this or to decipher different admission methods. Sometimes it is easier to get a degree just for the sake of getting it. This decision affects future career opportunities of children, their well-being, and standard of living.
The quality of children’s education is influenced not only by the educational institutions but also by the cultural backgrounds of their parents. In a situation of inequality and poverty, which is especially acute in the regions, parents are busy looking for means of survival to feed their families. They do not have time for self-development. Educational institutions have the potential to become a place where teachers close the gaps in cultural development. For this, however, it is necessary to provide teachers with decent wages and comfortable conditions for creativity and free them from the authoritarian pressure from the leadership.
DECENT WORK AND ECONOMIC GROWTH
The prerequisite for sustainable economic growth is democratic and inclusive institutions. The word “sustainable” is vital here since economic growth can also occur in totalitarian countries. In that case, it happens due to the mobilisation of the economy with the help of administrative resources. Such growth tends to be unsustainable and is more prone to crises and shocks.
Despite the significantresults in terms of GDP growth, decrease in unemployment, and poverty in the 2000s, Russia has hit the ceiling of economic opportunities under the current regime and fell into the so-called “middle-income trap” - a situation when developing countries reach a certain level of economic development, but cannot grow into developed countries. To get out of the trap, it is necessary to make existing institutions more transparent and society-controlled to attract investments, develop innovations, and invest in human capital (through the educational system, among others). This will help modernise the labour market and production.
Instead of modernising the institutions, Russia opted for increasing control over the economy, financial flows, emergence of state corporations, and strengthening their role. The dependence of business and society on the state, as well as the dependence of the economy on oil prices, outdated production, low competition, high inflation, and corruption, as well as the events in Crimea in 2014, have contributed to the deterioration of the investment climate and the fall in real incomes of citizens. Under these conditions, and even more so when peaceful life is disrupted, foreign companies are not ready to invest in business development. This gives rise to unemployment, wage cuts, and an even greater drop in real incomes. In the context of a sharply reduced supply of jobs, the observance of workers' rights is negatively affected. Employees are afraid that upholding their rights can lead to conflicts with management that may result in threats of dismissal.
Another dimension of decent work is job security. When employers are forced to cut costs, they do so not only through wage cuts but also through spending less on environmental safety and labour protection measures. Now we see it happening in relaxation of environmental standards.
In crisis situations, the problem of gender discrimination manifests itself in the labor market. This is a worldwide problem. When resources are scarce, employers start cutting low-paid jobs that mostly give employment to women. In times of crisis, it is also more difficult for women to find work because of gender stereotypes (among other factors). Some employers consider women as less reliable candidates because they might go on maternity leave or at the wrong time, or have to look after a sick child.
This increases the unemployment rate among women and further widens the wage gap between female and male employees. In Russia, the difference in the salaries of women and men in the same positions is about 30% - the highest in Europe. In addition, one-third of the families in Russia are single-parent families, meaning a woman bringing up a child alone. The cut in already lower wages or even the loss of jobs put single-parent families in a difficult situation. The decrease in the income of women in intact families increases their financial dependence on partners, which in turn gives rise to domestic violence.
When the situation in the labour market is challenging, one of the ways out for employees (as they see it) is working in state-owned companies. Even though the salaries are lower, there is some sort of stability. In Russia, the state is the main employer which provides up to 40% of employment. Such a «choice without a choice» in favour of state-owned companies creates a dependent relationship. Russians are more afraid of losing their jobs than being detained at a rally or paying a fine. State-owned companies take advantage of this, even though it is illegal: for example, they require employees to attend pro-state rallies under the threat of dismissal or ask them to send proof of the “right” voting result in the elections.
Protecting one's rights alone is difficult and can cause conflicts with the management, so it is more logical to do this together by pulling resources and forming trade unions. Although trade unions in Russia exist, they take after the Soviet model: they are known as a government-controlled body that distributes holiday gifts and travel vouchers instead of protecting workers' rights. 83% of Russians are convinced that trade unions do not play a significant role. At the same time, 71% of citizens want to have efficient trade unions that would help protect workers' rights.
This is proof that difficult financial conditions and the lack of decent pay force people to accept any job is the army. In the current military conflict, most of the dead Russian soldiers are from poor regions: Dagestan (1st) and Buryatia (2nd), where the average salary is about twenty thousand rubles. The unemployment rate in Dagestan is more than 15% , while the average in Russia is around 4%. In addition, the republic tops a list of subsidized regions, which also includes Buryatia. Given the high level of unemployment, the opportunity to join the military in exchange for a good salary to feed the family is seen as one of the few ways out of poverty.
Usually GDP is used as a measure for economic well-being. However, a growing figure does not always mean an improvement in the well-being of citizens. It is not by coincidence the sustainable development goal is called “decent work AND economic growth”. A high level of growth can be achieved through the exploitation of workers. Therefore, it is important to pay attention not only to the indicator but also to how this growth is achieved. It is discussed globally whether permanent growth is possible. The discussion is gaining momentum due to the growing environmental problems from human activities. Perhaps this indicator will be replaced by another metric that would reflect the prosperity of the economy and the well-being of citizens.
INDUSTRIALIZATION, INNOVATION AND INFRASTRUCTURE
The President of Russia declared 2022-2031 the decade of science and technology. A decree was signed, and a special Coordinating Committee overseeing the main stages of the program was launched. That is, the state decided to take the development of innovations under its control.
In their book «Why nations fail. The origins of power, prosperity, and poverty» Daren Acemoğlu and James Robinson describe the peculiarities of the development of new technologies in the Roman period before the collapse of the empire. The state was in charge of their creation and distribution. The authors believe that the state support in itself is not bad. However, if extractive institutions operate in a country, the state begins to fear the side effects of economic and political consequences of technological development, and stops the real development of innovation from happening, as well as resists the unification of people for the sake of progress. Roman rulers were afraid of creative destruction - reconstruction of the economic system through innovation which dismantles an old structure and creates a new one.
According to Acemoğlu and Robinson, the fear of creative destruction is the main reason there has been no sustainable growth in people's level of life throughout history. Technological innovations bring prosperity to society, but they also lead to substituting the old way of life with a new one, as well as dismantling economic privileges and political influence of certain people. Sustainable economic growth requires technologies and new ways of production that professionals from younger generations can provide. While innovation can positively affect the economy, it threatens to take away funds and influence from those who work with the old technologies. It can also make many people involved in obsolete industries unemployed. This creates political instability and threatens the existing regime. In this case, the authorities will not contribute to the development of innovations and even try to resist them in every possible way.
According to Acemoğlu and Robinson, as soon as new people with fresh ideas make progress, they immediately begin to behave like everyone else: they want to have their niche, gain political weight, and start worrying that new people will invade their sphere of influence and force them out of the market. Therefore, institutions mustn't restrict the arrival of new people and technologies to please the interests of the existing actors. Otherwise, it will lead to slower economic growth and higher levels of inequality.
The emergence of a state with extractive institutions as one of the biggest employers hinders innovation. People are not interested in creating innovations when they think the state will be the only one who benefits from them and most likely not even credit the creators. One of the key success factors for progress in innovation is well-functioning economic institutions that can protect the interests of inventors and entrepreneurs, and guarantee property and intellectual property rights. A historical example of this is the Industrial Revolution in England when technological progress became possible precisely due to the reorganisation of political and economic institutions as a result of the Glorious Revolution (1688-1689).
In Russia, one example of the state's appropriation of an ideological rather than technological initiative is a civil action called Immortal Regiment (RU: Бессмертный полк) in memory of people who died in the Great Patriotic War. When this private initiative was supported by many citizens and it was clear that it had the potential to unite people, the government appropriated it. We also observed how successful technology companies gradually came under the vigilant supervision of the state: for example, Vkontakte or Yandex. News from the main page of Yandex is the main source of information for 41% of the country's population, and Vkontakte is the most popular social network in the country. A founder of one of the most successful tech banks in Russia, Oleg Tinkov, was forced to sell the bank's shares or a bargain price as he was threatened with the nationalisation of the bank. This happened because his view on the situation in Ukraine was different from the stance of the authorities.
It is impossible to create breakthrough innovations by force, or by hiring loyal experts. In 1945, the Candle problem experiment by psychologist Carl Dunker was published. In the experiment, participants were offered a candle, box of thumbtacks, box of matches, and table leaning against a wall. According to the task, it was necessary to figure out how to attach a lit candle to the wall in such a way that the wax does not drip to the surface of the table. Participants of the experiment had to use creative thinking to come up with a solution to a non-standard problem.
The continuation of the experiment and further research on the topic of motivation and creative thinking have been conducted by psychologist Sam Glucksberg and economist, professor of psychology and behavioural economics Dan Ariely. They confirm that financial rewards and pressure from the assessor do not contribute to the progress and curb creative potential. In the candle experiment further developed by Glucksberg in 1962, participants were divided into two groups. One group was asked to solve the problem without any time constraints. The others were told that they would receive $5 for being among the top 25% fastest solvers. It was also promised that those who would show the best results would receive 20$. The result of the experiment showed that it took the second group on average 3.5 minutes longer to solve the task. Although it would seem that the material incentive would motivate people to make decisions faster, the participants were so focused on the result that they could not think broadly and outside the box. Material rewards work well for mechanical tasks but hinder creativity. It is only understanding the meaning and value of one's work and the ability to think freely and critically that motivates one to look for non-standard approaches.
Innovations happen when there are new people with fresh ideas who create new solutions to the old problems. When expressing an alternative point of view on the existing order is discouraged and even threatens financial well-being, health, or freedom, people are afraid to do something unusual. They do not take risks, sit around quietly, and try not to stand out since “initiative is punishable”. It is impossible to develop an innovative spirit and create innovations if there is a fear of changing the current order.
AFFORDABLE AND CLEAN ENERGY
Switching to renewable and affordable energy sources and improving energy efficiency are among the most essential steps to address climate change, move to a circular economy, and change the current approach to production and consumption that leads to the degradation of ecosystems from human activities. Improving energy efficiency also contributes to modernization, innovation, and creation of new workplaces.
Russia is lagging in this goal as well. At the end of 2021, only 0.5% of electricity in Russia was generated by the Sun and wind, while the global average is 10%. Russia is the only major economy in the world where wind energy generation is just emerging. In 2021, about 1 GW of wind power plants are operating in the country, which constitutes 0.15% of the wind generation in the world. Wind energy accounts only for 0.4% of the capacity of the entire energy system and 0.13% of energy generation.
Not much has been done about improving energy efficiency. Russia ranks fourth in terms of energy consumption globally. At the same time, it is one of the most energy-wasting countries. The energy intensity of Russia's GDP is 46% higher than the global level. The plans to reduce energy intensity of GDP by 40% by 2020 had failed; the real decline was about 9%. Such low rates have a negative impact on the competitiveness of Russian goods and industry investment attractiveness.
In the last year or two, there have been some positive dynamics. State support programmes for the development of renewable energy sources has been extended until 2035 ; corporations have become actively interested in building their power plants using renewable energy sources and concluding direct contracts with renewable energy producers. Some companies have even been able to build solar power plants. Russia has announced its plans to achieve carbon neutrality by 2060. Although the statements so far were declarative and did not have a true desire for a real revision of the energy balance behind them, experts saw such statements as a sign of hope that real steps would be taken soon.
Why is Russia among the lagging countries, while even developing nations achieve much more significant results in the development of alternative energy and energy efficiency?
Russia's dependence on the oil and gas sector did not create any incentive to switch to alternative energy sources. Political and economic inequalities explain the lack of political will and corporate interest towards changes in the industry . Why would the industry's decision-makers and direct beneficiaries change something when everything is working and generating income the way it is? Moreover, it directly threatens the existing profit distribution and market power of the current actors. Fear of creative destruction has hindered the development of the alternative energy market in the country.
The key barriers to the competitive development of the renewable energy field in Russia are of administrative nature. For example, only companies that have localised their production have access to a state system that collects power fees from large wholesale electricity consumers and distributes funds among investors in renewable-energy power plants. In reality, companies find themselves in a situation where they can hardly make the decisions by themselves as to what to produce locally, and what to buy from other countries. The state decides for them. The decisions on what power plants to build - traditional ones that use fossil fuels or the ones that rely on renewable sources - are made on the administrative, not market level. Decision-makers are the beneficiaries of traditional energy, so it is not surprising that they are not interested in the development of new technologies. Accordingly, the smaller the market of renewable energy, the higher the prices and risks for investors, and the more expensive the equipment.
In terms of costs, renewable energy sources could soon compete with the traditional energy sector even in Russia. For example, according to the results of the last competitive selection of renewable energy facilities in 2021, wind energy should become cheaper than grid electricity: the cost of generating electricity at wind farms should be about 2 rubles per kWh by 2025. Also, by the middle of this decade, the cost of solar electricity production should be significantly reduced - to 4,3-6,4 rubles per kWh. In comparison, the average price for grid electricity in Russia is 3–4 rubles per kWh. The cost of renewable energy could be reduced even further if not for the redistribution scheme that favours the traditional energy sector.
Another administrative problem in the electric power industry in Russia is cross-subsidization, essentially tariff discrimination, when private individuals, regardless of income, pay electricity tariffs that are noticeably lower than the market price, while businesses pay a higher price. Cross-subsidization was introduced in Russia in the 1990s during a difficult economic period when the impoverished population could not pay for electricity. The costs then were evenly distributed to the businesses. In 2011, however, the representatives of large industries lobbied for tariff differentiation. As a result, companies that are directly connected to the Federal Grid Company - that is, the largest players - started to pay the minimum tariff. Now small and medium businesses subsidise the tariffs of the oligarchs for electricity, and also pay the highest tariff: 2-5 times more than large businesses.
Moreover, there are no incentives to get rid of the inefficient power plants and improve the energy efficiency of buildings and industries because the access to resources, as well as decision-making power are in the hands of a limited group of people who solely pursue their interests. The state does not dare to put an end to the cross-subsidization as this will boost the electricity prices and cause social tension. All this, together with the falling real incomes of the population, can lead to political instability and become a threat to the regime.
Why have some positive changes occurred in the last couple of years? In the case with the representative offices of international companies, it is due to the requirements from their head offices regarding transition to renewable energy. A motivation for the Russian companies was external: large clients and foreign investors began to demand the implementation of ESG standards, including the transition to renewable energy sources. This directly affected companies’ financial performance and access to foreign money. Introduction of the carbon border tax by the European Union also motivated companies to look for solutions. The new policy stipulates that the higher the amount of carbon emissions attributed to goods imported into the EU, the higher the tax. One of the possible options for reducing the tariff is the transition to renewable energy sources.
Transition to alternative energy sources is directly connected with international cooperation and partnerships in efforts to solve the problem of climate change. Globally, Russia ranks fourth in terms of CO2 emissions. It has global consequences since climate is something we all share. To solve climate change, partnerships between countries and dialogue are of vital importance.
Switching to renewable energy can lead to a more equitable economy due to a distributed network of energy producers. It can also remedy a situation of inequality when the key financial resources and power to make executive decisions are in the hands of a few players. Renewable energy development is highly dependent on technology, innovation, and qualified personnel. Investments in renewable energy imply long-term cooperation and a long payback period. Investors do not want to take risks if the prospects for the development of the industry and political and economic situation in the country are unclear.
RUSSIA AS PART OF THE GLOBAL SYSTEM
We have looked at the relationship between some sustainable development goals and stakeholders in Russia. However, it is worth remembering that Russia is a large and important part of the global system. The processes that are currently taking place in the country are also connected with the world system and reflect the processes and connections globally. The catastrophic events in which we find ourselves allow other countries to look at the situation as through a mirror, perhaps crooked, and try to track system connections and their consequences for each country and the world system as a whole.
Currently Russian society is facing another phenomenon - resentment towards the whole world and a sense of violated dignity. Why has an apolitical society that, as of recently, didn't seem to care about the infringement of its rights, suddenly begun to speak in geopolitical language, assess the power of the country, get offended by the decisions of political leaders, declare that the country is not respected enough, and think on a global scale?
Resentment is not a primary emotion. Normally, it is rage and anger that do not find an outlet. As children, we hold grudges against parents when we are angry with them, but we cannot express all our thoughts since we are not on an equal footing: we are afraid that there may be negative consequences. Being angry with ourselves for not achieving a desired result is taking responsibility for our actions. An offended child will rather blame others for his failures than admitting that it is their own fault.
A person is also a part of a system and social group. When there is a high level of apathy in the society, decision-making rights are transferred to the state as if it is an adult who knows what is best. This conditional “parent” is too strict and punishes those who express dissatisfaction. Replacing the interests of a particular person with geopolitical language multiplies the anger and powerlessness of millions of people in regards to the inequality that does not allow them to achieve the desired standard of living and satisfaction. These feelings are translated into the geopolitical language and show themselves as dissatisfaction with a lack of recognition of one's country by other countries in the world, search for an external enemy who is to blame for the troubles of the country and its people, country's inferiority complex, and resentment towards the whole world.
Also, it seems that now we are facing a phenomenon of group narcissism, when people exaggerate the importance of the group to which they belong. Group narcissism helps the group members feel significant and gives a sense of contentment and solidarity. It allows us to manipulate common values through external appeals. Social groups that live happier lives are less affected by this phenomenon.
The reasons behind this phenomenon are internal uncertainty in one's superiority and dissatisfaction with life. People see groups as extensions of themselves and demand recognition of their own greatness. According to a study by Agnieszka Golec de Zavala from the Goldsmiths' College, collective narcissism can cause hostility between countries. Collective narcissists actively advocate retaliation against other countries when they feel that their country is being insulted, or has been at some point in history.
HUMANITY AND SOLIDARITY
Sustainable development ideas ensure people’s well-being and prosperity in harmony with the surrounding world. The focus is on the individuals and their needs. There has been no such focus in the Russian development discourse in recent years. There are state interests, interests of specific industries, departments, institutions, common interests (as if people are a homogenous mass), “historical justice, and victory of some values over others. But it does not matter at all what happens to a particular individual: whether people’s life becomes better, whether they have more opportunities for realisation, whether they are happier, freer in thoughts and actions, and whether there is more empathy and love for themselves and others. In general, the life of an individual loses its value, and ideas become more important than people.
Russia is a fairly atomized society where everyone is used to living on their own and not trusting anyone. It is easy to make a person believe in their insignificance and uselessness if you convince them they are alone. In recent years, we have observed how civil society tried to overcome this atomization. Non-profit organisations that solve social and environmental problems have been launched; the number of projects dealing with human rights has increased. People united over specific issues that improved the quality of life of citizens. Uniting and achieving positive results is very inspiring, and it gives strength to continue the work, as well as confidence that we can create our own destiny and build the country we want to see.
Systems thinking is about assessing the consequences of the interaction of the elements of the system. By understanding what elements affect the system the most we can better plan for positive changes and take into account past mistakes.
It is essential to understand the elements of the system and their relationships with each other to introduce systems thinking into a country's development . Unrelated components, such as a pile of bricks, do not make a system and can only be viewed as the sum of individual parts. Meanwhile, a house built from these bricks is a system since the elements are part of this system and they influence each other. A human body is also a good example of a system: it is not enough to know how each organ works individually, but it is critical to understand the work of the organism as a whole. It is also true for social systems: analytical approach to the work of each individual institution is not enough; synthesis is also important - understanding the interconnectedness of the system actors. For this, several things are of critical importance: cross-sectoral interaction, involving stakeholders in system design; tracking the consequences of changes not only in the industry where these changes were introduced, but also in related sectors, as well as being able to troubleshoot quickly and make adjustments.
Our present is the result of past decisions, and the future is not an inevitability, but a result of our actions today. The better we understand how parts of society and people within this society influence each other, the more chances we have to build a sustainable and prosperous world for each person.
Experts who contributed to the article:
Elena Panfilova - Professor at the Free University, Moscow
Grigory Yudin - sociologist, philosopher, professor at the Moscow School of Social and Economic Sciences
Marina Mentusova — CEO of Gender Equality Management, co-founder of the “Women in White” movement
Yulia Ostrovskaya - Deputy Director of the Centre for Social and Labour Rights. Lawyer, politologist
Olga Miryasova - Senior Research Fellow at the Institute of Sociology of the Russian Academy of Sciences
Tatyana Lanshina - Director General of the association “Goal number seven”
Nelya Rahimova - founder of the Open School of Sustainable Development, coordinator of the Coalition for the Sustainable Development of the Country