Alexander Zhukov's speech:

Good afternoon, colleagues,

All of the issues the organisers of this conference suggested for discussion today are certainly important.

Our task today is to modernise the economy through innovation. We also need to reconsider our priorities in social and labour policies, which should be different than they were during the recession period.

In looking at social and labour relations in the context of economic modernisation, we must consider the following priorities for the next few years to create growth points for innovation.

Labour legislation

The existing laws aren't dogmatic. The government regularly amends them and will continue to do so.

There are issues here that need to be addressed, such as improving the practice of individual and collective labour contracts and agreements, legalising innovative forms of employment, delineating labour regulation in the services and information sectors (these sectors are expected to employ growing numbers of people in the post-crisis period), and other issues pertaining to the improvement of Russian labour laws.

This work is already underway. For example, to take full account of all the details of the work of employees who do their job outside their employer's premises, the government has drafted a bill amending the Labour Code. It is currently being considered by the Russian Trilateral Commission on the Regulation of Social and Labour Relations.

Another bill has been drafted, aimed at giving young people, people with disabilities, working mothers, and other unprivileged social groups easier access to the labour market.

To further improve the legislation, the government is working to introduce the best international practices in Russia, which involves the ratification of the key conventions of the International Labour Organisation.

In 2010, Russia ratified four ILO conventions:

No 135 "Protection and Facilities to be Afforded to Workers' Representatives in the Undertaking"

No 154 "The Promotion of Collective Bargaining"

No 132 "On Holidays with Pay"

No 187 "On Occupational Safety and Health."

This work continues this year.

As we know, the Russian Union of Industrialists and Entrepreneurs has drafted proposals on the development of a new Labour Code. These proposals are quite interesting; however, since their agenda for modernising the labour legislation directly affects the interests of millions of Russians, these proposals require thorough consideration and discussion, primarily by the Trilateral Commission.

Modernising the occupational safety system

The main challenge here is to transition from accident response to accident prevention. We need to pursue a set of proactive policies aimed at preserving the health of the workforce.

We have already taken a few steps toward this goal.

A whole package of occupational safety acts is in the works; we have approved standards for personal protective equipment that should be provided to every worker in all primary industries, and we took some steps to improve healthcare in cases of occupational disease.

In 2011, we will prepare a set of measures aimed at improving workers' health. These include proactive measures to diagnose occupational diseases in a timely manner and gradually reduce the number of jobs that involve occupational hazards.

We will also develop legislation on occupational risk management and introduce this practice in businesses. The new practice will include early identification of risks and health hazards for each job and timely action to reduce or eliminate such risks. The government has already drafted a relevant bill and discussed it with its social partners.

We plan to build a system of occupational safety standards and include the practice of safe operation skills in professional training with the help of modern teaching technologies. We will develop a set of training sessions and consultations, primarily for small- and medium-sized businesses.

Making the labour market more flexible and balancing its structure

To attain our long- and medium-term development goals, we will make the necessary adjustments to the government's employment policy, shifting its focus to modernisation-oriented measures, the renewal of the country's industrial potential, workforce development and the improvement of workforce quality, and the development of labour market institutions and efficiency.

A rapidly developing economy requires a modern workforce. To achieve this, we plan to organise large-scale professional training and retraining systems that will produce highly qualified professionals and help implement the innovative projects that require them.

We will also develop retraining programmes for workers facing lay-offs. They will be able to do on-site training at companies using advanced technology where they can acquire new professional skills and experience.

We will also include in these programmes the staffs of companies that are being restructured and modernised as part of investment programmes.

Retraining and work training programmes for women in hazardous occupations will eventually allow them to quit these hazardous jobs in favour of other employment.

We will continue our efforts to ease pressure on narrow labour markets in single-industry towns through comprehensive investment projects aimed at diversifying and modernising local economies.

I would like to inform you that this year, the government plans to draft a state programme to promote general employment. It will include active employment support policies, measures to increase occupational labour mobility, improvement of the welfare system for the unemployed, and improved regulations for hiring foreign staff.

In 2013, we will start working on a projection of the country's labour resources for the next three years. The government will adopt the necessary regulatory acts in the first half of this year.

To enhance economic development, we need to build competitive education systems capable of training a highly qualified workforce for an innovation-based economy. It is especially important to provide the post-crisis economy with qualified personnel, as well as to adapt their knowledge and skills to changing standards.

Therefore, this is another important priority of the government labour policy. Let me talk about it in more detail.

The main obstacles hampering the qualitative improvement of the workforce are being widely discussed by experts; some of them are also very obvious:

1. There is virtually no system for shaping and applying modern standards and training technologies in each individual profession.

2. No long- or medium-term forecasts are being made with regard to sectors of employment, occupations, and qualifications with which forward-looking training and retraining programmes in new technologies could be developed.

3. There is no proper balance between professional and vocational training. At present, the initial vocational training system accounts for 10.3% of students, technical colleges for 20.6%, and universities for 69.1%, whereas the economy demands a ratio of 80% workers to only 20% university graduates.

The majority of the available workforce in Russia has obsolete knowledge and skills, which seriously inhibits economic modernisation.

We are making efforts to modernise the education system through a national priority project.

One of the most important policies under this project was aimed at improving the higher education system and included financial support for federal universities and national research universities.

The Immanuel Kant Baltic Federal University has been established, in addition to the seven federal universities previously established (the Siberian, Southern, Urals, Northern, Kazan, Northeastern, and Far-Eastern Universities).

The government granted "national research university" status to 15 additional institutions (12 in 2009).

Such universities not only offer high-quality educational programmes but are also engaged in fundamental research. This gives students the opportunity to combine theoretical knowledge with experimental research skills and to achieve commercial targets in high-tech sectors.

The total amount of federal funds invested in the development of the country's leading universities in 2010-2012 is 69 billion roubles.

Consequently, one can already say that a chain of leading universities, which are meant to become the mainstay of a new and cost-effective national higher education system, has been established in this country.

Work to approve and enact 287 federal education standards in the sphere of higher education was mostly completed in 2010.

This year, federal higher education establishments will enrol students in programmes in twelve career areas designed to meet five priority aspects of Russian economic modernisation and technological development.

The relevant measures will affect at least 249,000 students at 134 universities. Education programmes that train specialists in areas of priority modernisation will receive 15% more allocations, or 11,000 roubles per student, on average, for those studying at federal expense. Consequently, 81,000 roubles will be spent per student.

Moreover, the federal budget has allocated eight billion roubles for expanding the innovation infrastructure of universities, including two billion roubles in 2011 and three billion roubles in 2012.

We have established the relevant procedure and terms for the allocation of federal budget subsidies towards joint innovation projects at universities and enterprises, as well as the volume of subsidies, in order to facilitate more cost-effective cooperation between higher educational institutions and the business community.

It was further decided to furnish state support for the expansion of innovation infrastructure at federal higher education institutions, including technology parks, innovation and technological centres, technology transfer centres, and other facilities.

At the same time, an innovation nucleus is being formed inside the higher education system itself, as well as infrastructure for the joint implementation of high-tech projects by educational establishments and the business community.

Furthermore, I would like to note that we have virtually completed the task of approving and enacting federal education standards applicable to basic and advanced vocational education, including 234 standards for college and 295 standards for initial vocational training.

The fundamental measures for the development of basic and advanced vocational education we plan to put into effect within the framework of comprehensive regional programmes.

Notably, we also intend to monitor measures to raise the prestige of industrial careers under the aforementioned programmes.

The federal targeted programme for the expansion of education in 2011-2015 allocates over four billion roubles to these programmes. Of this sum, almost 800 million roubles will be allocated in 2011.

We will directly support the modernisation of basic and advanced vocational education institutions, introducing up-to-date curricula and technologies and encourage their cooperation with universities within higher education clusters.

Over the time that the priority national project was underway, a total of 341 innovation-based education programmes submitted by 320 government institutions of basic and advanced vocational training received support over the past few years. These programmes received about 18 billion roubles in federal allocations or were co-financed from extra-budgetary corporate assets, regional budgets, and the assets of employers.

A total of 300 resource centres boasting expensive and unique educational resources with regard to one or more expanded career-training clusters have been established over the past three years. Over a million people studied under basic vocational education programmes in 2009-2010.

The government plans to continue such work in the future.

At the same time, we expect the business community to assume a more active stance on personnel training. For instance, numerous investors from Germany, France, and other nations operate in the Kaluga Region. Notably, employers such as Volkswagen and Peugeot-Citroen have teamed up with regional authorities to establish a centre for training workers and specialists to work at the automotive enterprises that subsequently employ them.

Over 5,000 people have been trained to date and currently work at plants in Kaluga and Moscow. Thus, the creation of a regional centre facilitated the renewal of an entire network of vocational training schools.

I believe that we, along with the business community, should utilise such approaches when implementing investment projects in any sphere of economic activity. In effect, we should assess workforce demand in advance and train workers prior to commissioning enterprises.