Problems and Risks of Digital Transformation in Russia

V. V. Moiseev

, A. P. Kochetkov

and V. I. Borisovsky

Belgorod State Technological University named after V. G. Shukhov, Kostyukova St, 46, Belgorod, Russia

Moscow state University named after Lomonosov, Moscow, Russia

Keywords: information technology, digital transformation, digital society, government bodies, risks.

Abstract: The use of information technology is of great importance for increasing the competitiveness of the economy

and increasing the efficiency of government bodies. Speaking about information technologies of public

administration, it should be understood that, first of all, we are talking about the informatization of all

administrative processes in government bodies of all levels, about informatization of interdepartmental

relationships, about the creation of computer systems capable of supporting all the functions of interaction of

these bodies with the population and business structures. The political course adopted in 2017 towards the

formation of a "digital society" presupposes the need for a fundamental understanding of the processes of

digital transformation of the economy, power communications and political relations in the context of global

challenges and domestic socio-cultural traditions, with the aim of their effective implementation into domestic

political practice. In the context of the global trend towards total digitalization of all socio-political relations,

it is necessary to develop specific mechanisms for effective public administration based on new technologies

in the interests of the entire Russian society. Today, the concept of "smart city" or smart city is also extremely

popular, the implementation of which is carried out not only in Russia, but also in many countries of the

world. Without rejecting the positive potential of Russia's digital transformation, we note a number of

problematic issues and risks associated with this concept.

1 INTRODUCTION

Modern society is characterized by a global process

of digitalization of social and economic relations.

Today, the future of the world community largely

depends on the new technological order in the

information space in all spheres of political,

economic, social and public activity. In this regard,

the role of law, the key mechanism for regulating

social relations, is sharply increasing. Practice has

shown that digital transformation and the information

society are developing so rapidly that the current

legislation is not able to adequately influence the

ongoing processes. Therefore, legal systems require

fundamental changes. First of all, it is necessary to

redefine such categories as law, offenses, legal

responsibility in relation to the new digital space.

The concept of "digital government" began to

form in political science as a result of the evolution of

the earlier model of "e-government", which gradually

exhausted its heuristic potential. The development of

the concept of "electronic government" began at the

turn of the XX-XXI centuries. in response to the

current challenges of the time associated with the

need to introduce innovative digital, intelligent

technologies into the system of political management

in order to improve its quality and efficiency through

the provision of public services in electronic form and

more efficient use of information flows in the

management system. Gradually, the main areas of

research were formed, including: electronic

government services; organization and political

management; infrastructure, integration and

interoperability; knowledge and information

management; Information Security; civil initiatives

and voting; mobility of services and operations;

archiving, electronic accounting and document

lifecycle management (Delcambre, 2005). From the

very beginning, research in the field of e-government

was interdisciplinary, combining political science,

public administration, communication, and

management. In political science, the initial focus of

e-government research was on the use of Internet

technologies in political governance for the purpose

of providing public services and developing

democracy. In this regard, the definition of e-

government, given by the American political scientist

Moiseev, V., Kochetkov, A. and Borisovsky, V.

Problems and Risks of Digital Transformation in Russia.

DOI: 10.5220/0010683700003169

In Proceedings of the International Scientiﬁc-Practical Conference "Ensuring the Stability and Security of Socio-Economic Systems: Overcoming the Threats of the Crisis Space" (SES 2021),

pages 88-94

ISBN: 978-989-758-546-3

D. West, is quite representative, as “the use of the

Internet and other digital means by public authorities

for the provision of public services and information,

as well as the implementation of democracy” (West,

2005

). In this regard, we note the monograph of the

famous English researchers from Cambridge A.

Brown, J. Fishenden and M. Thompson "Digital

Government" (Brown, 2014) as well as the collective

monograph of researchers from the University of

Granada (Spain), ed. prof. Laura Munyas and Pedro

Rodriguez Bolivara "International experience in the

development of electronic government" (Alcaide,

2018

The influence of socio-cultural traditions on

digitalization processes was especially vivid in China,

where the national mentality, geographic and

demographic characteristics became a serious brake

on the path of digital transformation of society. Many

researchers note that e-government technologies are

often used here to demonstrate the conformity of

reforms to world experience, and not as an effective

tool for reforms (Lovelock, 2013).

The share of

Russians with digital literacy has increased from 26%

in 2018 to 30% in 2020 (NAFI, 2020

). According to

the Foundation's data, public opinion 22% of

Russians have never used the Internet in their life

(NEWSru, 2020).

The analysis of user activity in social networks

suggests that in most cases Internet users prefer the

products of such giants as Google, Facebook,

YouTube, which indicates the dominance of

monopolies in the information services market. And

the hegemony of large companies is direct evidence

of the authoritarianism reigning in the field of

information policy. To protect your national

sovereignty, it is necessary to carry out the

sovereignty of the Internet. Therefore, in Russia, a

law on "sovereign Internet" was adopted and came

into force in November 2019 in Russia (RBC, 2021).

All this poses a serious problem about the formation

of an elite digital democracy, in which the elite will

have a special character. Its high status will be

determined not by the previous criteria - wealth,

education, closeness to power, but by access to

technologies and the availability of experience in

using them. The very selection of a certain group of

Internet users who are more ready than others to

participate in political life will become a problem for

real democracy. This netocratic elite is getting out of

the control of the citizens, because no one delegates

to it the authority to manage on the basis of

procedures recognized in society (Alcaide, 2018).

Therefore, the question arises: will digital democracy

be so democratic in general, based on the will and

activities of the most active Internet users?

It is also impossible to exclude falsification of the

results of sociological polls and voting by the state

apparatus. Bribery of certain social groups can be

very likely to create a false public opinion. Since not

all Russian citizens use the Internet, it is possible to

divide society into citizens who have information and

those who do not have access to it.

One cannot ignore the fact that the development

of digital democracy has not yet led to a significant

increase in the political activity of citizens. It is also

important to note that with broad access of citizens to

online electoral systems, users who have anti-state or

anti-constitutional opinions may become more active.

There is no guarantee that the majority of good

citizens will be active in online electronic

communication. Digital transformation has the

potential to lead to new forms of “abuse” of power,

such as the use of digital media to impose policy

decisions from the “top”, as digital democracy can be

used to maintain and exacerbate inequalities between

those who have access to the Internet and those who

have access to it. deprived.

Experts raised the issue of digitalization as a new

system of total surveillance of citizens based on an

analysis of their Internet activities and the dangers of

society “programming”. A particular danger of this

control system lies in its veiled nature: access to

algorithms that ensure the functioning of much-

needed recreational and communication services,

online banking systems, allows the state, business

structures and hackers to freely violate, for example,

the right to privacy.

In our country, there are also certain socio-cultural

barriers to digital transformation. Therefore, it is

necessary to take into account the influence of the

mentality and socio-cultural traditions, geographical

factors, the level of human capital development, and

the influence of subjective factors. It is especially

worth paying attention to the uneven economic and

demographic development of the regions on the scale

of our huge country: the different level of

digitalization in the field significantly complicates the

transition to a new model of "digital government",

increases political risks (Kochetkov, 2020).

The experience of modern modernization in

Russia convincingly demonstrates that the domestic

bureaucracy is quite conservative and is interested in

further preserving its state. The bureaucratic

resistance to reform is particularly pronounced in

remote regions, where innovation is mainly

approached formally in order to publicly demonstrate

the presence of new fashion trends, rather than using

Problems and Risks of Digital Transformation in Russia

innovation as an effective tool for transforming the

system of political governance.

In the context of assessing the political risks of the

digitalization of power, these are very alarming

signals: there are obvious contradictions between the

federal government, which seeks to form an open

government, and the regional government, which

essentially hinders this initiative. For example,

modern sociological studies in the regions of Russia

have shown that at present local authorities in Russia

do not strive for openness to citizens, bilateral

communications between the administration and civil

society are poorly developed, there is a low level of

public awareness of new programs and public

initiatives, electronic hearings and sociological

surveys are very rarely conducted.

It is also important to recall the negative aspects

of the digitalization of power in foreign countries,

especially in Singapore, where the lack of dialogue

with civil society has led to the formation of

information totalitarianism. It is important to take into

account these political risks of the development of

information totalitarianism when conducting a

national digital transformation (SecurityLab, 2017).

It should be emphasized that the domestic model

of "digital government" must necessarily include

control by civil society, active participation of

citizens in the decision-making process, and

mandatory electronic voting on key public issues. A

very important task on the path of digitalization of

Russian society is the formation of a modern level of

culture of digital communications and openness of the

authorities throughout the country.

Currently, the insufficiently qualified level of

both civil servants and citizens, and their often

negative attitude towards digital technologies, are

serious political risks and a brake on the path of

reform. As long as there is a significant layer of

people in Russian society who do not possess digital

technologies and are not able to use digital

technologies from beginning to end, it is impossible

to move to a new management model. That is why it

is important to launch digital technology training

programs in all regions of Russia today, so that

citizens can take advantage of the "digital society"

and "digital government"in the near future.

With digital transformation, it is important to pay

attention not only to the digitalization of power, but

also to the development of human capital, the level of

digital culture of the entire civil society. It is well

known that the effectiveness of management models

depends, first of all, on a person, and not on

technology. Any most modern technologies become

ineffective over time, and a person strives to develop,

to go forward to new heights, using and increasing his

knowledge, abilities and competencies

All this poses a serious problem about the

formation of an elite digital democracy, in which the

elite will have a special character. Its high status will

be determined not by the previous criteria - wealth,

education, closeness to power, but by access to

technologies and the availability of experience in

using them. The very selection of a certain group of

Internet users who are more ready than others to

participate in political life will become a problem for

real democracy. This non-theocratic elite is getting

out of the control of the citizens, because no one

delegates to it the authority to manage on the basis of

procedures recognized in society (Legal social

network 9111, 2019). Therefore, the question arises:

will digital democracy be so democratic in general,

based on the will and activities of the most active

Internet users, while the majority of the electorate is

passive? It is also impossible to exclude falsification

of the results of sociological polls and voting by the

state apparatus. Bribery of certain social groups can

be very likely to create a false public opinion. Since

not all Russian citizens use the Internet, it is possible

to divide society into citizens who have information

and those who do not have access to it.

Thus, today the problem of openness of the central

and regional authorities to dialogue with the public

has become very acute, and until we solve this

problem, the digital transformation of Russia will be

slowed down, and the risks of information distortion

will increase.

2 MATERIALS AND METHODS

In the article, the authors used analytical,

comparative, statistical and institutional methods of a

systematic approach to the study of this problem.

The authors made an attempt, on the basis of the

listed research methods, to reveal the true situation in

the digital transformation of Russian society, to

identify the main problems and risks associated with

these processes taking place in modern Russia.

The materials for the article were official

documents of the head of state and government of

Russia, statistical data, monographs and scientific

articles by leading Russian scientists.

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3 RESULTS AND DISCUSSION

Recently, the authors of this article got acquainted

with an interesting study of the American professor,

director of the Laboratory of Management at New

York University Beth Simone Novek, a former

adviser to US President Donald Trump (Novek,

2016). She argues that a smart state largely depends

on a smart population that actively uses digital

technologies both in the economy and in the social

sphere and in everyday life. At the same time, Simona

Novek argues that the digital transformation of socio-

economic processes will dramatically improve the

quality and standard of living of Americans. In

principle, almost everything is true, except, perhaps,

one most important factor: how the state will use the

achievements of digital civilization - for the good or

to the detriment of its citizens, or will it combine both,

implementing the "carrot and stick" policy. It is

obvious that information technologies can be used in

different ways: both for general prosperity and

development of civil society, and for total

surveillance of citizens, massive fines based on the

results of photo and video recording from cameras,

which are abundantly installed on the country's roads.

The attempts of the tax inspectorate to control the

bank accounts of citizens, violating bank secrecy, can

be viewed in the same vein. Not to mention the

actions of numerous special services and law

enforcement agencies, which, without court sanction,

are spying on Russians, ranking them as unreliable

people. In addition, if these days authorities are not

acting in good faith when they hack into our devices,

and the Internet allows us to fall prey to the onslaught

of targeted advertising, then how will we protect our

data in the future?

Face recognition using IT technologies and robots

based on powerful processors does not mean that we

will be constantly monitored, as in the case of drones

that are already used for video control? These and

other innovations related to digital transformation are

already being used by government agencies for total

surveillance of citizens: video surveillance cameras

are installed not only on highways, but also on city

streets, in supermarkets, at stadiums, and in other

places where citizens gather. It is known that digital

technologies make it possible to track citizens not

only in offices, but also in their homes and apartments

using webcams, smartphones, and other gadgets and

devices. These technologies allow the creation of data

about us without our permission, and we have no

control over it. All of this paints eerie comparisons

with Orwell's "Big Brother" and inevitably forces

more careful analysis and far-reaching conclusions.

In recent years, the number of citizens registered

in the Unified Identification and Authentication

System (ESIA) has significantly increased in Russia.

At the same time, unfortunately, the leakage of

personal data of Russians has become more frequent,

which fraudsters and other attackers use for criminal

purposes.

Whenever it comes to high digital technologies,

about their capabilities, ordinary Russians have

thoughts about hackers who hack e-mail, making

social networks not only business correspondence

and trade secrets, but also the personal lives of

citizens. They are capable, according to the US State

Department, of interfering in the presidential

elections, causing not only major damage to

companies. It is no coincidence that the political elite

of Russia on the eve of the elections to the State Duma

of the Russian Federation expresses concern about the

"Smart Voting", which was introduced and

successfully applied by opposition politician Alexei

Navalny during the elections of deputies to the

Moscow City Duma and in a number of other regional

legislative assemblies.

Can a hacker stop city infrastructure in the future?

In 2015, Caesar Cerrudo of IOActive Labs conducted

an ambitious experiment to show how smart cities are

vulnerable to hackers. Cerrudo scanned the sensors

used to control the movement. He found that their

level of protection was so low that they could be

manipulated, as a result of which the city could face

large transport problems, as a result of which even

fatal accidents could occur, and the operation of

ambulances, firefighters or police would be difficult

(Legal social network 9111, 2019). Sensys Networks,

which maintains these sensors, reacted to Cerrudo's

claims and accused him of exaggeration, but there

was enough information about such a potential hazard

for the authorities in Washington to decide to check

the safety of the traffic management system. It is good

that this vulnerability was discovered by a person

who was trying to help. If an intruder were in his

place, how could he use this information? In the

future, such issues will more and more often have to

be addressed by the authorities and state

administrations, as well as by security experts. A

smart city with a high level of connectivity increases

the likelihood that someone could manipulate an

entire infrastructure in the event that the proper level

of security is not provided.

Digitalization of financial services not only made

it easier for Russians to access their money in banks,

but also represents a certain field of criminal activity

for fraudsters. This conclusion is illustrated by the

following graph (CBR, 2019).

Problems and Risks of Digital Transformation in Russia

Figure 1: Unauthorized transactions using payment cards.

The above risks associated with the loss of money

of the population due to the criminal activities of

fraudsters using digital technologies are aggravated

by the low level of “anxiety” of Russian consumers

of banking services. Thus, according to opinion polls,

34 % of Russians in 2019 believe that there are no

risks when using digital financial services. This

conclusion is illustrated by the following diagram

(Institute of National Projects, 2020).

Figure 2: Public perception of the risks of using digital

financial services.

It follows from the graph that the greatest risks

and loss of money in 2015-2018 occurred due to

unauthorized financial transactions that were carried

out via the Internet and mobile devices. Thus, the

digitalization of financial services not only made it

easier for Russians to access their money in banks,

but also represents a certain field of criminal activity

for fraudsters. In this regard, banks need to decide

how to reduce the risks associated with the

digitalization of their financial services.

It is quite possible that behind the personification

of "smart cities" with universal computerization and

the power of IT technologies, there are quite prosaic

interests of developers of relevant technologies and

equipment such as HP, CISCO, IBM, promising to

solve all the problems of modern cities with their

help. While a lot has been said about predicting the

dangers of smart homes, it is also important to assess

the positive and negative aspects of smart cities,

especially focusing on the problems of their safety.

Smart city apps are already being used to improve

people's safety. The “city video surveillance system”

has reduced the number of car thefts in the city by 80

% since its introduction (Legal social network 9111,

2019).

Of course, facial recognition can make the world

a lot safer. There is one caveat, though. What

opportunities do we want to transfer into the hands of

the authorities? There are a number of nuances here.

There are political parties that want to tackle online

privacy, but many of them see encryption as a tool

that is more necessary for criminals than to make

people more secure against them. Is it worth

sacrificing the online privacy of millions of ordinary

people in order to be able to track the online activity

of criminals and terrorists? This question is very

difficult to answer. There are big risks here. Who

exactly will have access to the huge volume of digital

footprints of ordinary people with their daily lives

that will be generated in the future? How will they use

this data?

Billions of dollars are invested in smart city

projects and can distract from other important issues

worth pondering. For example, Indian Prime Minister

Narendra Modi allocated $ 18 billion to connect 250

thousand villages to the Internet, although they do not

even have clean drinking water and stable electricity

supply (Gazeta.ru, 2015). The Ministry of

Construction of Russia has developed the Smart City

standard, covering 180 Russian cities. The project is

estimated at 13 billion rubles (Zen.Yandex, 2019).

This case is similar to India: in Russia more than a

third of the regions still do not have gas supply, and

in some places there is no electricity either. The

reason is trivial - there is no money (MKRU, 2017).

Europe needs to invest 300 billion euros in its

telecommunications infrastructure by 2025 if it wants

to deploy a 5G network to accelerate economic

growth and harness the potential of the technology.

Such an assessment is contained in a study conducted

by the consulting firm BCG (IXBT.com, 2021). Are

there big risks? Governments of countries and public

organizations should carefully analyze everything in

order to understand what these technologies will

bring more: benefit or harm.

4 SUMMARY

The study allows us to draw the following

conclusions.

The study showed that in the presence of a number

of positive digital transformations, such as openness,

accessibility, transparency, convenience of

functioning of the entire system of digitalization of

public administration ", it is especially important for

SES 2021 - INTERNATIONAL SCIENTIFIC-PRACTICAL CONFERENCE "ENSURING THE STABILITY AND SECURITY OF

SOCIO - ECONOMIC SYSTEMS: OVERCOMING THE THREATS OF THE CRISIS SPACE"

the authorities and citizens to prevent the realization

of the prospect of turning civil society into an

automated community controlled by some powerful

subject. This problem can be solved by strengthening

and developing democratic institutions and tools for

their functioning, and above all, if there is effective

civic control and a high level of civic culture in

society. In this case, citizens will be able to influence

the system of digital management of social processes,

and digital transformation will be carried out in their

interests.

Over the 30 years of its existence, the smart city

has turned from a constituent element of various

discourses on management, technology, marketing,

business, environmental protection into an

independent discourse. This speaks of the need of the

modern world for a "smart" organization of urban

space in a constantly changing environment. At the

moment, there are many questions in the conversation

about “smart cities”. They relate to social, ethical or

moral values. At the same time, today the scientific

discourse about the smart city as a high-tech cities of

the future is in the paradigm of "sustainable

development", which includes the principles of the

socio-cultural approach. This shows that the

phenomenon is a socio-technical object. In an era of

rapid technological development, the scientific

community has seriously thought about the

consequences of technology implementation. There is

a rethinking of values, the role of technology in

human life, ways of further development of mankind.

All this forms the challenges that the “smart city” as

a socio-technical phenomenon must cope with in

order to prove its relevance and viability in the

modern scientific paradigm.

It is also necessary to complete the creation of a

regulatory framework for digital governance. For

example, to clearly define the legal significance of

digital documents and references in circulation that

can replace paper media. The procedure for

processing and executing citizens' applications on the

website of public services needs further

improvement, since responses to appeals are often

delayed.

Digital democracy, which develops with the

expansion of the activities of the "digital

government", is quite vulnerable to outside influence

in order to obtain information illegally. This danger

arises from the lack of sufficient data protection. How

cybersecurity will be ensured, which is mentioned,

for example, in the plans of the Moscow authorities,

is not yet clear. Digital transformation presupposes

the formation of a complex digital control system that

needs a high level of technological stability, which

guarantees against frequent failures, user-friendly

requirements for access to electronic services, which,

in general, does not exist in Russia yet.

Digital transformation will be developed and used

by people. This means that the state today is obliged

to change its attitude to the problems of the formation,

development and use of human capital. To pursue a

well-thought-out policy in relation to this key factor

in the socio-economic development of regions and the

country as a whole, so that in the near future, if not

catch up, then as close as possible to developed

countries, where the share of human capital in the

production of high-tech products reaches 70 %, while

in backward Russia - only 14 %.

Scientists from Moscow State University

(Leontyeva, 2021; Lyublinsky, 2020, Chaldaeva,

2020; Klimashevskaya, 2020). MADI (Moiseev,

2019), other Russian universities offer ways to

improve the human capital of the regions and the

country as a whole. The main thing now is that public

authorities and administrations not only listen to their

competent opinion, but also implement their

scientifically grounded recommendations, then the

risks associated with the digital transformation of

management, as well as the economy and social

sphere will be minimal.

ACKNOWLEDGEMENTS

The reported study was funded by RFBR, project

number 19-29-07024/20

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