Diversification of the economy. Diversification of the Russian economy

Diversification of the economy in general terms is a strategy designed to reduce risk by adding assets, products or services, as well as customers or markets to an already formed portfolio. For the first time the concept occurs in the body of the provisions of Judaism, in the Talmud. The described formula is a division of assets into three parts. One part is business, including buying or selling goods, the second part - liquid assets, for example, gold, the third part - funds concentrated in real estate. Perestroika can be called a competent distribution of valuable resources with such a perspective that the loss of one segment that generates profit does not affect the overall state of affairs. This definition is ideal for both the state level, and for investment, agriculture, any industry.

Narrow interpretation of diversification

Economic diversification is conventionally divided into the following areas:

• Banking. It implies the redistribution of loan capital between a significant number of clients. In some states there is a restriction on the provision of loans. A financial institution has no right to grant a loan in one hand if its size exceeds 10% of the bank's own capital.
• Investment. Provides for the inclusion in the portfolio of additional types of securities or similar, but differing in issuers in industries or companies.
• Production. This expansion of the range of products in the development of new production and production technologies.
• Diversification of business is defined as the conquest of new markets, the development of new industries.
• Agricultural. Defined as an extension of activities: active development of both livestock and vegetation.
• Conglomerate. This is an extension of the list of services and products within a single enterprise. At the same time, the list of products should not have any similarity with the existing nomenclature.
• Risks. This is the use of a wide range of tools for earning. At the investment level, this is the purchase of not only shares, but also bonds. At the business level, the development of a new policy, at the level of the economy, is the elimination of dependencies on the world price environment by fully ensuring the needs of the population by state forces.

A bit of history

The market economy was formed in stages. Each stage of development has its own individual characteristics, especially if we take into account the level of specialization and diversification in the aspect of antagonistic forms of building the production branch. For the first time the concept of "economic diversification" was manifested as the dominant economic category in the 50s of the 20th century. During this period, the efficiency of production in virtually all countries of the world fell significantly as a result of relative exhaustion of domestic sources. An active battle began between the states for the world market. The transformation of production became necessary as a result of bright prerequisites for a slowdown in the development of economic growth and under the influence of scientific and technological progress. Against the background of the fact that the purchase of innovative at that time technology and the introduction of new technologies in the activities of large industries did not yield results, diversification took the place of the most common form of concentration of capital. Enterprises and organizations that tried to expand their sphere of influence through income and increase the number of sources of income, achieved not only a high level of competitiveness, but also success.

Strategy and its role at the enterprise level

Concentrating exclusively on one direction from the side of management determines for business a wide range of advantages: organization, management and strategy. The drop in the return on capital, which was invested in production, leads to the need to use the strategy of reallocation of resources. Diversification of a firm or enterprise, acting as an instrument for eliminating the imbalance of reproduction and the logical distribution of resources, plays the role of an important coordinator of the direction of restructuring the entire economy as a whole, thereby establishing a variety of tasks and objectives for corporations. Redistribution has to do with the modification of the most essential elements of activity. This is the finished product, and the industry, and the sales market, and the place that the company occupies in a certain area. In an actively developing macro environment, the process serves as a kind of basis for achieving an entirely new level of market flexibility, both internal and external. The decision on whether to apply the diversification strategy or not, is made on the basis of forecasting the future. The true concept of the process is associated with the active development of the company, with the conquest of new spheres of its impact. If the enterprise continues to accumulate capital, the process of redistribution does not act as the main strategic goal.

Diversification of the economy

Diversification in the economic aspect means restructuring, which is aimed at the modernization and active development of a wide variety of industries. Reorganization for Russia is very actual, in the development of which the most significant role is played by only three sectors:

• Military.
• Industrial.
• Power.

As for tourism, agrarian segment, production of consumer goods, services, these directions are poorly developed. The critical percent of consumption-oriented goods is a consequence of the imbalance in the economic sector. This leads to the fact that Russia is strongly exposed to instability in terms of inflation. A high level of inflation leaves an imprint on the formation of high interest rates on loans. So, the mortgage and other types of financing of private and legal entities, are simply inaccessible for a sufficiently wide range of people. The structure of the economy, which today is characteristic of the country, serves as nothing but a brake on development. For the overall development of the state, it is extremely important to stimulate the development of totally unrelated sectors, in particular, automobile and tourism, agriculture and food production.

The Benefits of Restructuring

Diversification of the economy offers many advantages. The main one is the complete independence of the state of one economic sector from another. If difficulties arise within the same market, the decline in the entire economy of the state will not happen. The drawbacks of the process include the need to take into account the numerous differences between markets and the specifics of their service, between the fineness of the output of different types of products. Due to the fact that the Russian government did not expand the range of manufactured goods, did not master new types and types of production, did not change the types of products, that is, did not modernize production, today the economy of the country is in complete decline. The reason for the decline can be called the statistical state of investments, which were previously directed to the oil-producing and gas-extracting industries. In connection with the fall in oil prices, with the introduction of sanctions from the EU, Russia's budget is not replenished in the planned volume, and domestic production can not meet the country's needs. That is why at this stage of development the diversification of the Russian economy is extremely necessary, not only for prosperity, but also for the opportunity to survive the crisis. While the process is not activated, the world elite has a chance to influence the country by changing the world price environment, in particular, fuel.

Who needs to diversify the economy?

The objectives of diversification are ideally suited for those states whose development and prosperity are closely related to the export of minerals, with the sale of natural resources. Russia is one of the countries that needs a complete reorganization of the existing economy in accordance with a more efficient model. Countries such as Chile and Malaysia, Indonesia and many others can be a worthy example of successful modernization. It is worth paying attention to the multilevel procedure in the study of the question of what is the diversification of the economy. The definition leads to the fact that this task proves impossible for most countries of the world, which have been successfully surviving for several decades due to the extraction and sale of minerals. Despite the active statements of politicians and analysts, in the overwhelming majority of situations everything remains at the level of conversations.

Work for the future

The main feature of the process of economic restructuring is that a wide range of activities is carried out today, and the results are achieved with a significant time delay. In other words, diversification, examples of which are very problematic to find in history, is essentially a work for the future. The result of the activities carried out in the present tense will bear fruit for a long period of time. Active investment in various sectors of state activity, including in the sphere of services, in the tourism industry, in production, gives a good impetus for the active prosperity of private entrepreneurship. The ties between the sectors are actively beginning to be built up, the prerequisites for an active increase in the trade turnover within the international market will occur. This will all lead to an improvement in the standard of living of the population, to an increase in demand and the formation of proposals. The increase in domestic trade turnover in the country in tandem with the increase of material flow will raise the overall economic indicators of the state.

The subtleties of the Russian economy and the urgency of diversification

The development of the state with huge raw materials resources, in particular Russia, has its own characteristics. In the dominant number of situations, the rate of extraction of energy resources is much lower than population growth. Over time, the level of profitability per person per capita is gradually decreasing. It is worth noting that the extractive industries are not able to provide a sufficiently large number of jobs. This all leads not only to the formation of a social threat, but also negatively affects the standard of living. The risk of a crisis emerges as a result of an active rise in the unemployment rate. Russia, being a purchased exporter of natural resources, is almost completely dependent on the international price environment. Despite the use of agreements between countries on an acceptable level of commodity prices, there is a risk of a drastic change in the price policy. The risk was justified in the situation that developed in 2015. The fall in oil prices has led the economy of the Russian state into decline. The concept of diversification implies a competent redistribution of income from the raw materials industry between all other areas of the state's activities, otherwise the occurrence of the "Dutch disease" is possible.

What will save Russia?

For Russia, there are large volumes of resource extraction. The main problem is not only that the revenues from the industry go into the pockets of the privileged part of the country's population. Difficulties in the development of the state have to do with the direct connection between the volume of extraction of resources and the level of corruption. The most elementary option for obtaining a large capital is to assign income from the energy sector. When the formation of the dominant part of the budget is carried out at the expense of the taxes of companies in the extractive industries, the Russian leadership does not feel a great responsibility for other areas of activity because of their insignificant contribution to the economy. The state of affairs dictates the urgency of the restructuring. Diversification of business, industry, production, all industries will be the country's response to the dictates of the world market. The manifestation of political will and significant efforts can change the situation radically.

Technical moments of restructuring

Almost all types of diversification today will be relevant for Russia. This is due to a number of factors:

• In Russia, there is a sharp decline in the potential for business development.
• Opportunities for activities in a wide variety of industries, although there are, but they do not develop.
• The potential of the extractive industry can be successfully redistributed among other segments.
• The presence of a large number of resources in the mining direction.

For example, the diversification of the rural economy will allow the state not to feel dependent on the supply of products to the domestic market. No restrictions on imports from the EU countries will not be able to hit the economy. Despite the active actions aimed at modernizing the economy, with a detailed plan including, at the moment the authorities can not take any actual decisions. Perestroika is impossible without the active development of the domestic market and the availability of consumers' solvency. In order for the system to work, it is necessary first to raise the overall standard of living in the country: increase of salaries, payment of social benefits, provision of the population with jobs. Modernization should begin within the state, and not outside.