Alexander Pilyasov, Nadezhda Zamyatina
Economic development of the Russian Arctic 2.0: major results from the three-year research project(Russian Foundation for Basic Research grant № 18-05-00600a «A new theory of the development ofthe Arctic and the North: a multi-scale interdisciplinary synthesis»)

Transformations of the North and the Arctic in Russia

1. Geographically the North isabsorbed by the Arctic
2. However, the Arctic is beingabsorbed by the North
conceptually: in 2020,
benefits for economic agents
operating in the Arctic wasintroduced. In other words,
the territory of the Arctic isreinterpreted as requiring
special attention, orsomething beyond the«norm»[Note: from the point of view of the ethics of supporting businesses,
especially small ones, this is certainly a useful action, because the Arctic
benefits compensate for the difficulties that the northern benefits create
for businesses. However, the ideal option for setting up a system ofbenefits is different: by agent, not by territory]АНО «Институт регионального консалтинга»Arctic most important economic development result: cities
followed by districts
Production, mln roubles, Jan-DecГород НоябрьскГород Новый УренгойГород МуравленкоГород ЛабытнангиГород ГубкинскийГород СалехардЯмальский муниципальный районШурышкарский муниципальный районТазовский муниципальный районПуровский муниципальный районПриуральский муниципальный районНадымский муниципальный районКрасноселькупский муниципальный район
02000004000002019

6000002018

2017

8000001000000

1200000

1400000

1600000

Comparison of three historical models of the Arctic development process
The scheme of mastering the The scheme of the development Corporatemodel of integrated plants (1930- of the Soviet departments (1960- Scheme(1990-2010s)
1950s) early industrial1980s) late industrial
postindustrial
The main areas of Магаданская область
development of the Мурманская область
Russian North and the Республика КомиArcticНорильский промрайонDevelopmentЧукотский автономный округНенецкий автономный округХанты-Мансийский автономный округСевер Ямало-Ненецкого автономного округа

Ямало-Ненецкий автономный округАрктика и центр Республики Саха-ЯкутияРеспублика Саха-ЯкутияШельф Печорского моряАрхангельская область
The nature of the All industrial development is pioneering, from Mainly industrial development from scratch, to Distinguishing between post-industrial ("smart")
scratch, to the layer of agro-industrial the layer of agricultural development of the and industrial (standard) development, including
development
development of the indigenous small-numbered indigenous small-numbered peoples of the from scratch and to the previously createdpeoples of the NorthNorth
industrial layer
Territorial development Finely dispersed settlement networkIntegral Linear-node frame "Sectional" transport Center-periphery networktransport network
network
Network of temporary seasonal roads and river
structures
trassasOil and gas, mining
Oil and gas, mining
Dominant
typeof Mining

development
Key Actor of Exploration Integral plant, maximum possible self-sufficiency Branch departments, trusts, central Resource corporationsCost savings and therefore
in energy, building materials and foodadministrations. Delivery of all the necessary reliance on temporary, seasonal life support andand the Principles of Its
nomenclature of material and technical, resettlement schemes. Localization of the spatial
Spatial Behavior
construction cargo and part of food from the contour of economic development
outsideKeymanagement Forced Labor Camp Administration Action Planinstitution

State program of development (development) Investment projectComparison of two different algorithms for the processof new (localized) economic development
Algorithm "from scratch"

ExampleMajor effectPath-dependency

Territorial structures

Algorithm "on the infrastructure of theprevious development"
Sabetta: Yamal LNG
Development of hydrocarbon resources inthe territories along the gas pipeline routeof the Komi Republic
Pioneer infrastructure development - The Jack London Effect: Past Economiceffects of localized clustering (integration Activity Affects Current Investmentof production, processing, energy, Decisions and Business Structure (TNCs)
transport)

Does not work

It is important in which economic era theinitial infrastructure framework fordevelopment was laid
Confined to winter roads, seasonal river Attachment to single-industry cities andand sea routes
districts - local bases of new development

«The essence of this effect isthat,during the boom phase ofresource extraction and accompanying
growth of the economy of the frontier
city, it ispossible to accumulate acritical volume of local population andlocal demand. When the volume oflocal demand surpassesthe criticalpoint (considering economies of scale),local production of certain goods andservices becomes more profitablethan
importing them. As a result, the local
economy becomes more diversified
and, consequently, more stable.»(Huskey Lee, 2017).

«In short, though many of its individuals
have lost, the world will have lost nothingby the Klondike. The new Klondike, theKlondike of the future, will present
remarkable contrasts with the Klondike ofthe past. Natural obstacles will be clearedaway or surmounted, primitive methods
abandoned, and hardship of toil and travel
reduced to the smallest possible
minimum. Exploration and transportation
will be systematized. There will be nowaste energy, no harum-scarum carrying
on of industry. The frontiersman will yield
to the laborer, the prospector to themining engineer, the dog-driver to theengine-driver, the trader and speculator to
the steady-going modern man of business;for these are the men in whose hands thedestiny of the Klondike will beentrusted.». (London Jack, 1900)

The power of new technologies: drilling in
Soviet times and today

Work comfort, contraction of the number of employees in the immediateproduction process,platform cut-out and alienationfrom the territory of deployment

Projects discovered in Soviet times but delayed due toheterogeneity of natural assets: VostochnoMessoyakhskoye fieldИнфографика https://mesng.ru/press-center/infografica/

Types of situations in the deployment of a resource
project in the Arctic
Resource project

New place of location

SpaceOld place of location

New activities

1. Greenfield: exploring new 3. Diversification of the local
space and new resources
production system throughnew types of mining activities

Old activities

2. New industrial areas. 4. Brownfield (old industrial
Mastering a new space of districts): a) greenfield insidefamiliar/
traditional brownfield b) innovative
resources
modernization

Inertia of old logistics solutions - Gazprom

The beginning of the development of the The beginning of the development of theYamburgskoye field. The first tractor-sled Kharasaveyskoye field. The first convoy
train.
January
1982 with construction and auxiliary
equipment. Marchhttps://gazovik.info/archives/23518
2019https://www.gazprom.ru/press/news/2019/march/article477111/
Almost 30 years later - the same scheme for the development of Gazprom's fields

Contrast of old and new: differences in logistic
schemes of Gazprom and NovaTEK

Feature of the current moment: the former, land, southern scheme of export ofhydrocarbons coexists with new, sea, "allowed" by climate change and new technologicalsolutions

«Corporate» areas of development areas…

And district effectSettlement system in the Arctic: how much stationary, how much temporary?

Temporarily

ConstantlyComparative analysis of patent activity: NovaTEK, Norilsk Nickel, Gazpromneft
161514121098654321763111434111221 101990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
16151412605450

121040

833

3130
520
2002

12004

22200622008

2112010

2012

2014

20412016

111012018

2020

033

29226430

20

101

103

101310612000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020АНО «Институт регионального консалтинга»Platform capitalism and Arctic development• Monopoly on information• Platform - digital infrastructure thatallows two actors to interact• Network effect: the moreparticipants, the greater the effect• Rising inequalityПрименительно к Арктике см.: Пилясов А.Н., Путилова Е.С. Периферийная инновационная система и ее место в процессе освоенияресурсов российской Арктики. В сб.: Российская Арктика сегодня. РФФИ. 2020; Пилясов А.Н., Путилова Е.С. Современный ресурсныйпроект Арктики для промышленной политики России: полюс роста национальной экономики или "собор в пустыне"? Север и рынок:формирование экономического порядка, 2020, том 3, с. 4-17

Theoretical considerations: combining different
dimensions of remoteness studies

Economic approach toremoteness(Huskey et all, 1992;
Berman, 2012, 2013)

Network-based
approachto peripherality(Copus, 2001,Herrschell, 2012)

Remoteness as an obstracle of“normal” economic development

Soviet schoolof the Far
North studies(Slavin,Kosmachev,etc.)

Anthropologicalapproach toremoteness(Ardener, 2007;Humphrey, 2014)

Remoteness as an “other”
world
No external center, no periphery:
opened horizons for innovations

Comparison of traditional and "platform" solutions for the development of Arctic resources
Indicator
Industrial relations

Traditional solutions
Platform solutions
Verticallyintegrated
production-processing-sales A network structure of autonomous production centers linkedstructure. Some or all of the service divisions are within into a single digital network. Cross-subsidization financiallythe company
binds business units to one another. Most of the service
divisions are outside the company (outsourcing to externalcontractors)

Logistics
Labor relations

Relationspresencewithterritory

Model of industrial development

Degree of social embeddedness

The southern overland route for the export of the Northern sea route for the export of natural resources along theextracted natural resource through pipelines, railways, NSR to European and Asian markets.
etc.
"Employment contract": permanent employment of "Sale and purchase contract": reliance on temporary contract
workers, the formation of workers at all levels from workers in low-skilled personnel (outsourcing of employees),
local personnel (the phenomenon of working the company's labor market for recruiting managementdynasties)
personnel, local personnel and company personnel for recruiting
middle managersof The division of the company is the city-forming The division of the company is a rotational production camp.
enterprise of the monotown. Strong ties with the local Weak interaction with the local community and poor use of its
community. Active use of local personnel, including the human resource potential. Corporate social responsibility
indigenous small-numbered peoples of the North
programs of the company within the framework of agreements
on social and economic partnership with the territory ofpresence
From scratch, creation of a hierarchical system of Reliance on the previously created infrastructure and settlement
external and internal bases and development routes network, a polycentric network of equivalent development(linear-nodal territorial framework), district (inter- bases, localized production clusters (TOP, SEZ, etc.)
district) TPKHighMinimumАНО «Институт регионального консалтинга»Marine logistics
management system
Captain (Gazprom Neft) is apowerful claim for thedevelopment of platform
capitalism in the ArcticПрименительно к Арктике см.: Пилясов А.Н., Путилова Е.С. Периферийнаяинновационная система и ее место в процессе освоения ресурсов российской Арктики. Всб.: Российская Арктика сегодня. РФФИ. 2020; Пилясов А.Н., Путилова Е.С.
Современный ресурсный проект Арктики для промышленной политики России: полюсроста национальной экономики или "собор в пустыне"? Север и рынок: формированиеэкономического порядка, 2020, том 3, с. 4-17

https://www.gazprom-neft.ru/press-center/sibneftonline/archive/2019-march/2628800/

АНО «Институт регионального консалтинга»«Platform capitalism in the Arctic and its social contradictions: the power ofmonopolies and inequality»
Platform solutions for the integrated
development of sparsely populated
and hard-to-reach areas (ПР КОТ)//Презентация В.И. Жигалова ФГУП«РФЯЦ-ВНИИЭФ»Profit centers in corporate headquarters, socialand environmental cost centers in mining
areasGrowing social inequality within Arctic
communitiesThe benefits of new projects arepoorly "spilled" into the regional and localeconomies.

Пилясов А.Н., Путилова Е.С. Периферийная инновационная система и ее место впроцессе освоения ресурсов российской Арктики. В сб.: Российская Арктикасегодня. РФФИ. 2020; Пилясов А.Н., Путилова Е.С. Современный ресурсный проектАрктики для промышленной политики России: полюс роста национальной экономики или"собор в пустыне"? Север и рынок: формирование экономического порядка, 2020, том 3, с.
4-17

Division of the municipal areas of the Arctic into rotational (growth poles) andnon-rotational (traditional) territories (2019)

Municipal district

The ratio of the average payroll Products and Private
Salary fund Average payroll % urbanization
number of employees of services
investments for
1 numberoforganizations (excluding SMEs) produced,
for 1 person employeet employees
ofand the population as of RUB bln
thousandhousandorganizations
01.01.2020)
rubles.
roubles. in (without small(averageyearbusiness)Thousa
Average across the Russian
2015-2019)nd. people
Arctic 37.9%RF 21.7%

women per 1000 Migration:P Migration
menercentage of :Internalinternal
share atentry(avera the exitge20152019)%

Districts – poles of growthПуровский

112,2

1359,03970,1

1242,158,060,9

949/993

27,3

37,6

Ямальский

194,1738,225746,6

1234,233,001048/1027

49,0

56,2

Тазовский

146,3

551,1

6325,51186,525,601039/986

34,4

40,9

Заполярный

82,6

332,13526

1154,215,739,0975/806

56,0

61,3

Надымский

63,2

383,4455,41488,240,888,01039/1061

15,118,3Districts of traditional specializationЧукотский

30,0

0,5

2,3973,7

1,20?

Аллаиховский37,0

0,8

0,9

838,8

1,0

77,01022/1130

77,5

78,5

Усть-Янский

31,4

3,3

17,5

844,3

2,2

55,41020/886

70,3

65,1

Булунский

38,8

7,9

143,4

1000,73,356,3901/1000

52,4

56,5

Мезенский

38,6

23,0

73,0

800,7

3,2

61,7

1094/910

81,2

79,4

Пилясов А.Н., Потураева А.В. Арктический фасад России: современное состояние, вызовы неравномерного развития и приоритетные мерыгосударственной политики// Вестник Санкт-Петербургского государственного университета. Серия наук о Земле. 2021.

Conclusions
1.

A new theory of economic development of the Russian Arctic is created as a result of a constructive synthesisof the achievements of the Soviet developmental school, the American school of the frontier, concepts andparadigms of modern regional science (growth poles, peripheral innovation system, regional clusters /industrial areas, etc.).

2.

The modern high-tech process of developing Arctic resources is based on a platform model of businessorganization, the key features of which are compactness, isolation, rotation, water logistics of projects for thedevelopment of the shelf and the Arctic coast.

3.

An analysis of new projects that are being deployed in the Russian Arctic revealed the presence of greenfieldprojects "from scratch" and brownfield projects on the foundation of the infrastructure created during theSoviet development. They fundamentally differ in the degree of spatial localization, "seawardness", andsocial rootedness. Within greenfield projects, post-industrial projects can be distinguished, which largely rely
on artificial intelligence technologies, and more traditional ones, based on a network of stationary
settlements and a southern overland scheme for the export of extracted resources.

4.

The realities of the modern development of the Arctic demonstrate, on the one hand, a previously
unattainable level of efficiency of intelligent production processes; on the other hand, there are numerous
social costs for the production area from new technological solutions. In this regard, the main direction ofstate policy should be a more active impact on the economic behavior of resource corporations in the Arctic,
ideally - the formation of state regulations for the behavior of public and private companies, which will spellout measures and mechanisms that compensate and neutralize the costs of social exclusion andextraterritoriality.