Digital Diversification of Industry in Russia

Abstract

Despite the general increase in the number of studies devoted to digital transformation in Russia, its forms in domestic business are poorly represented in the scientific literature. A search in the Scientific Electronic Library showed that there are currently no published works with the keyword “digital diversification”, although this term is used in English-language scientific works by foreign authors. The aim of this study is to classify the Russian industrial enterprises strategies on subsidiary IT company’s creation. The authors examined the digital diversification strategies, specifically, the establishment of subsidiaries in the ICT sector by 332 Russian enterprises across 19 industrial sectors. Research results show that state support for the ICT industry has fostered the popularity of this strategy in the overwhelming majority (84 %) of the sectors studied, and that the strategy of creating subsidiary IT companies exhibits clear sector-specific characteristics. Based on the business tasks addressed by these subsidiaries, the authors identified three distinct types: IT infrastructure operators, digital competence centers and digital product owners. An IT infrastructure operator is a subsidiary that functions as an internal provider of IT services to its parent company (infrastructure administration, cybersecurity management and so on). A digital competence center, by contrast, steers the parent company’s digital transformation, initiating requisite changes in information systems, business processes, corporate culture, and staff digital skills. Finally, a digital product owner develops and supplies a digital product to support the parent company’s core operations and, where external demand exists, commercializes it in the wider market. The research allowed drawing several conclusions from the analysis concerning the trend of digital diversification among Russian industrial enterprises and the factors that enhance it.