Human Capital: Challenges for Russia

Vladimir Mau

Human Capital: 

Challenges for Russia

Russian Presidential Academy of the National 
Economy and Public Administration 

Publishing House Delo
Moscow · 

Vladimir Mau
Human Capital: Challenges for Russia. PANEPA

Abstract
The development human capital is now recognized as being the most 
important precondition of economic growth in modern times. It should 
be a priority in our socio-economic policy. However, recognition of 
this fact alone will not produce a qualitative leap in the development 
of education, healthcare and the pension system. We need fundamental 
changes in these sectors if they are to become capable of meeting the 
challenges of post-industrial society. This will mean individualization 
of the services provided, continuous delivery of these services (over the 
lifetime of an individual), privatization (an increase in the role of private 
funding), the internationalization of competition and implementation of 
the latest technologies in the delivery of services.

Key words: human capital; education; healthcare, pension system, socioeconomic policy. JEL: E24, G23, H75, I15, I18, I25, I28.

УДК 331.1
ББК 65.240
     М12

Мау, В.А.
Человеческий капитал: вызовы для России / В.А. Мау. — М. : 
Издательский дом «Дело» РАНХиГС, 2013. — 31 с. — (Научные 
доклады : экономика).

ISBN 978-5-5749-0783-0

ISBN 978-5-5749-0783-0                                                                   УДК 331.1
ББК 65.240

© ФГБОУ ВПО «Российская академия народного хозяйства и 
государственной службы при Президенте Российской Федерации», 
2013

М12

T    

The debate over national priorities that began when 
the Communist period of Russian history ended 
has now almost run its course. A consensus has 
been reached in our understanding of the crucial 
importance for the country of those sectors of the 
economy that are associated with the development 
of the individual (the development of human capital 
or of human potential).
This is a great step forward in our social 
awareness. For one thing, we do need widespread 
agreement as to what the key issues are for Russia’s 
economic development if we are to overcome the 
after-eff ects of the fundamental revolution that we 
experienced at the end of the twentieth century. A 
revolution shatters the value system of a society 
and it takes much longer to acquire new values than 
it does radically to deconstruct the old régime.
Secondly, and this deserves particular emphasis, 
the giving priority to human capital means that 
society acknowledges the post-industrial character 
of the challenges that it faces: in searching for a 
new model of development it looks not to the past 
but to the future. It is not so very long ago that 

V M



discussion of national priorities focussed on the key sectors of 
the economy of the last century: the aircraft industry, machine 
construction, ship-building, electricity, agriculture were given 
priority by Russian politicians and economists in policy for 
economic development and, what is most important, in budget 
expenditures. It was only in the mid-s that the élite began to 
address the issue of social capital. Education and healthcare were 
the fi rst to receive attention, followed by the pension system. 
Egor Gaidar was the fi rst to point out the crucial importance of 
these sectors for the future economic development of Russia (see 
Gaidar, ). The programme of «priority national projects» 
introduced by V. V. Putin and D. A. Medvedev in  endorsed 
these priorities.
Russia is not alone in facing this challenge. Creating an 
eff ective system for the development of the potential that is 
latent within the population is a problem that confronts all of 
the relatively developed countries. The challenges of the postindustrial era and demographic change have made for a «crisis of 
the „universal welfare state“ and forced many countries to accept 
the need for profound transformations in the social sphere. At 
a time when population ageing has become endemic and the 
demand for social services has continued to increase the need 
has arisen for a fundamentally new model of social support. In 
other words, Russia is facing not so much a crisis of the system 
of social services that was created during the Soviet period but 
a much deeper crisis of industrial society. This means that a 
new policy for the social services social must be sought not in 
the process of «catching up» in economic development but as 
a response to the general problematic that Russia, in common 
with other developed countries, is facing. The collapse of the 
Soviet Union should be understood as having been a crisis of 
the industrial system and of the welfare state that was a part of 
that system.
To date, no country has succeeded in developing a system 
that is capable of responding to contemporary challenges in 
the development of human capital. This means that the search 
for an optimal model of development need only to a minimal 
degree take into account eff orts that have been made elsewhere.