Modernization of Economic Enterprises: Factors and Trends

Results of two case studies of modernization at two successful food-processing enterprises in Russia are discussed. Traditional factors of modernization, eg, technology-push & demand-pull, are described. A Russian-specific factor, that of unfavorable & unstable legal, social, financial, & economic environments, is also analyzed. Given these major factors, three main strategies of modernization of a enterprise in Russia are discussed: (1) compensatory modernization of near-term adaptation to the market through aiming at a mass market of cheap products, without any qualitative changes in the enterprise's functioning; (2) socially curtailed modernization of dated technologies employing low-skilled labor in order to keep unemployment rates low; (3) aggressive modernization of enterprises that aim at long- term economic growth & expansion, while trying to introduce their own, frequently close to illegal, rules of the game for the uncertain & unstable environments. 17 References. V. Oboronko