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President of Russia Vladimir Putin: Good afternoon, colleagues.

Exactly one year ago, here in Veliky Novgorod, with the participation of leading universities and companies, we discussed in detail a project aimed at implementing advanced engineering schools, one of which is already operating at Novgorod University. It is training specialists, including for the Intelligent Electronics – Valdai innovative centre. Its residents – high-tech companies – are developing their projects in the region and creating new jobs.

I would like to express my gratitude to Governor Andrei Nikitin and his team for this systematic and thorough approach. Opportunities are being created for local residents, for young people to learn advanced skills, to work in promising sectors, and to earn decent wages. In turn, businesses can now hire trained and highly skilled professionals and rely on them as they work to expand companies, industries, and the country’s economy as a whole.

In fact, using professional language, this is what the creation of a modern labour market is all about. This extended State Council Presidium meeting is dedicated to this issue. Regional leaders – I welcome all of you, colleagues – as well as representatives from the Government and business associations are attending.

I would like to emphasise at the beginning that our meeting is taking place amid record-low unemployment numbers. This is one of the most important benchmarks in describing the effectiveness of our economic policy and its social dimensions. At the same time, it shows that economic growth may face shortages of labour resources. Well, we are aware of what “may face” means. It is already facing this issue, and we must take this into account and respond with a long-term perspective in mind.

Importantly, the declining unemployment rate is of a system-wide and structural nature and is partly the result of our consistent efforts in a number of areas.

First of all, new jobs are being created and distance working formats are being developed through investment projects and the overall development of the territories in the Russian regions that have a long record of high unemployment, which includes a number of regions in Siberia, the Far East and the North Caucasus Federal District.

Evidently, there is still a shortage of jobs in certain cities and towns, and even entire metropolises. In addition, special attention should be paid to the regions with low-quality employment where people appear to be employed, technically, yet their wages and incomes are grossly lagging behind the country’s average.

I would like to ask Ms Golikova to review each of these cases at the interdepartmental working group on restoring the labour market and to come up with appropriate support measures.

Furthermore, the Government is already implementing a special programme which has already brought about an incremental but consecutive decrease in youth unemployment which is, as you know, higher than overall unemployment rates in the country.

Extra effort must be applied in this area because, according to all forecasts – which are positive – in the coming years and for over a decade, the number of young people in our country will be growing. Thus, tentative assessments and analyses forecast that the country will have 8.3 million people aged 20–24 by 2030 whereas in 2035 that number will reach 9.7 million, which is 2.4 million more than today. (Addressing Tatyana Golikova.) Is that right, Ms Golikova? This is correct.

This is, of course, a landmark result of our efforts in demography policy– we have been doing everything we can in recent years, and we continue to do so now.

Now you and I must multiply our efforts, and create all the conditions for young people to have a successful career start. I will definitely return to this subject in terms of vocational education.

In general, I would like to note that measures to develop the labour market should continue to support our steps in demography; all these things are, no doubt, interconnected.

For this purpose, we are already implementing programmes to improve the qualifications of women who are on maternity leave, and starting next year, 2024, if a woman goes to work, the family will continue to receive a child allowance for children up to the age of 18 months. We have discussed this in the Government for a long time, the decision has been made, and I hope that all this will work as we hope. The allowance benefit for caring for disabled children will also be maintained if the parents or guardians who provide such care are employed on a part-time basis.

I will speak separately about such an important issue as support for veterans of the special military operation, including in improving their skills, in getting a new profession, in finding a job, in organising their own business. All of this is part of the special state foundation, Defenders of the Fatherland. I visited the Novgorod branch office of the foundation today and saw how it worked. I expect that the foundation branches are all active in all regions of Russia and that they will increase the pace of this work; it is a very important area.

I would like to emphasise that we need to do everything possible to ensure that our heroes – in the full sense, they are heroes, our men who are fighting on the front lines – feel that they are needed, that they can work, that they can provide for their loved ones, their families, and that they can create families. There are a lot of young people there. The family members of the comrades we have lost should receive the same full support. Once again, I ask the regional leaders to keep all these issues under their personal control. Colleagues, I have emphasised this many times. I see your efforts, and they are yielding results, and I ask you to keep up this standard.

Colleagues,

I have given full details on supporting people who encounter problems with job searching. I would certainly like to hear your opinions, ideas and suggestions on the issue – how we can help people regardless of their age and some other circumstances related to their previous training.

Speaking at the St Petersburg Economic Forum I already said about our system-wide task which is to transition to a high-wage economy within the current decade. This is a major benchmark for Russian companies and, obviously, for the authorities at each level when they draft economic and social policy measures.

What is the current situation like with the wage level and wages overall? In June, they grew by 10.5 percent in real terms.

This is good, and we must uphold this trend and make it sustainable, and to do that, the state must help people of all ages become more professional, qualified, and therefore more competitive in the labour market. This is about creating real opportunities for people to enrich their knowledge base and gradually update their skills and competencies. Our entire system of education and, of course, upbringing should be aimed at this.

First of all, the plans in place must continue to be carried out in a systematic and consistent way. I mean programmes for school construction, renovation and equipping, promoting continuing education as well as improving the quality of facilities, equipment and resources at colleges, vocational schools and universities.

I have just met with young people who work at colleges. They were very modest although they are champions of our new competition, High Technology Championship, which holds a special place in this sphere. One of the issues is, of course, the living conditions. It is understandable.

I would also add that new approaches should be applied more aggressively in secondary and higher vocational education, namely, obtaining several qualifications within one course of study and even changing majors and specialties during the course of training.

I reiterate that we have introduced such improvements for the benefit of our young people so as to make them prepared for a career as best as possible and for them to have more opportunities to fulfil their potential both in different industries and in different regions of our country.

Let me emphasise that improvement efforts should be stepped up in all areas of education and professional training. For the results to be all encompassing, we must be clearly aware of which specialists our economy and companies will need in the short term – today, of course, and in the coming years. We must definitely factor in the emerging trends in technology and industry development.

With that in mind, every year, we will draft a five-year forecast of demand for personnel and professionals for all sectors of the economy. And of course, without input from our colleagues working in the real sector of the economy, in businesses and industry, we will have difficulty resolving this task. It must be a cooperative effort.

I am asking business executives, regional authorities and the Government to engage in this work – to create a modern and convenient mechanism that will allow us to draft such a forecast, by region, by industry, and by profession, and, which is very important, taking into account the national projects, infrastructure programmes and the prospects for the development of cities and entire territories, and also the investment plans of state corporations and private companies.

The first forecast must be released already next year, and we will use it to determine the parameters for personnel training for secondary and higher vocational education institutions. This planning must begin as early as the 2025/2026 academic year. In doing so, the results of the national ranking of educational institutions must be taken into account, primarily with graduate employment in mind.

I would like all our colleagues to hear me, especially the heads of our universities, colleges and vocational schools – the efficiency of your work will be largely judged by how much your graduates are needed by Russian businesses, companies and organisations. If a young person is unable to find a job while there is a personnel shortage in the country, a number of absolutely reasonable questions arise: does the economy need the specialists and competencies you are providing, and how well did schools and their teaching staff perform? And how well and fully were their graduates prepared for their future professions?

That is why heads of universities and colleges must have a gut feeling, as they say, about changes in the labour market, and promptly respond to them without waiting for a signal from above. You must work directly with those for whom you work, and establish concrete relationships with employers to this end, right in your own city and region.

We also expect Russian businesses to boost investments in promoting skills and competences of their future workers, managers, leaders and staff. We certainly realise that this process is ongoing, it is being organised. What we need is to constantly give it the attention it deserves.

As to the currently employed, an effective mechanism must be created with trilateral commitments of the employer, the worker and authorities in the student contract. Let me remind you that tuition will be paid for by the company so that the graduate will later carry out more highly skilled work which also means a higher wage. I want to stress that this mechanism is designed to help people acquire new skills and even professions throughout their entire life as the global onrush of technology demands.

Colleagues,

Raising people’s skills is a crucial factor in creating the economy and raising wage levels. Labour productivity growth must be treated as equally significant – it is a common truth and a basic condition.

First is increasing the investment activities of Russian businesses and further growing investments in capital assets. Let me remark, in passing, that investment growth continued in the second quarter to reach 12.6 percent year-on-year. This is a good number.

This positive trend must be supported by all means. To do that, all the instruments designed to support investment must be effective. I draw the Government’s attention to that, as well as the attention of our colleagues in the regions of the Russian Federation.

Second is streamlining industrial processes through the introduction of lean manufacturing technologies. There are big opportunities in this area.

Let me share a telling example with you. In five years, the total increment in added value for more than 4,000 businesses taking part in the Labour Efficiency national project was 306 billion rubles. Despite that, they did not have to recruit more people to achieve this result. All they had to do was to make better use of the human and technological assets at their disposal. This is how our colleagues delivered on this objective.

We need to make maximum use of these approaches across the economy and the social sphere, and have already set forth and issued the corresponding instructions for specific sectors. But let us be honest, not all of them have benefited from meaningful efforts along these lines. In this context, our colleagues in the Government must be more proactive and strive to achieve concrete results. We all understand that a lot has yet to be done in this regard, but as I have already said, there are positive examples which can serve as a model.

Third, we need to increase the level of automation by upgrading the equipment we use and making sure that it delivers better performance indicators, while also introducing robotics in manufacturing and the services sector, and using unmanned surface and air transport. Importantly, it must rely on Russian technology.

In addition to this, we need to make wider use of new technology, including AI-powered solutions. Let me reiterate that they must play a key role in transforming the labour market within the next decade.

For this reason, we need to place a bigger emphasis on studying information technology and artificial intelligence in our educational programmes and develop new educational formats such as the School 21 project, which was launched the other day in Veliky Novgorod. We have just visited it.

Colleagues.

Practical steps in all the areas I outlined must be an integral part of our economic policy; and of course, the regions, the federal centre, and businesses must act together here, as I have said.

I have been informed that Government officials and members of employers’ associations held a workshop these past two days to discuss specific initiatives submitted by the State Council commissions. I would like to ask you to share a detailed insight into these undertakings. This is where we will begin.

Mr Nikitin, go ahead, please.

<… >

Vladimir Putin: I would like to thank you for the time and effort you have invested in this, for sitting down together and brainstorming this issue of high importance for Russia’s economic and social development. It was very productive and very important.

Personnel is one of the key elements of the country's development. We talk about it year after year. And this is especially important for us today, because, as we can see, these outside restrictions imposed on us after 2014 as well as the new ones imposed now actually stimulate development. Yes, they might have slowed us down in certain aspects, and forced us to postpone action on our earlier decisions, as we say, to move them to the right on our schedule, to a later date. Nevertheless, new competencies and opportunities are emerging. And well-trained personnel is of the essence here.

All of the above is also complicated by another problem, a demographic problem. You are all well aware of this. But here, too, there are certain solutions that we cannot use effectively without modern production means and innovative technologies. If we use them, we may not need such a large labour force. I mean, we will definitely not need it, as it will be compensated by modern technology, robotics, artificial intelligence, the use of big data, and so on.

This might seem like a tangle of issues – the demographic challenge, modern technologies as a potential solution to labour shortages, and outside restrictions that hamper our progress and development – but this is the kind of a Gordian knot we do not need to cut. We really can untie it quite effectively and elegantly. We can do this, but we need to keep this issue under review at all times – I mean personnel training.

Thank you very much for your work, especially Mr Nikitin, who led this group at the State Council, and all our colleagues who contributed to it.

Thank you.