Internet diffusion and interregional digital divide in Russia: trends, factors, and the influence of the pandemic

Abstract

The demand for digital technologies has been growing due to a shift in the technological and economic paradigm. The need for online services has increased since the beginning of the COVID pandemic. There are significant disparities between Russian regions in the digital technology accessibility and the development of computer skills. In 2020, the Internet diffused rapidly in most regions, although previously, there had been a slowdown. As markets got saturated with digital services, the digital divide between Russian regions narrowed. Overall, the Internet use patterns are consistent with those of the spatial diffusion of innovations. Amongst the leaders, there are regions home to the largest agglomerations and northern territories of Russia, whereas those having a high proportion of rural population lag behind. Coastal and border regions (St. Petersburg, the Kaliningrad region, Karelia, Primorsky Krai, etc.) have better access to the Internet due to their proximity to the centres of technological innovations as well as the high intensity of external relations. Leading regions have an impact on their neighbours through spatial diffusion. Econometrically, access to the Internet depends on income, the average age and level of education, and its use depends on the business climate and Internet accessibility factors. Regional markets are gradually getting more saturated with digital services and technologies. The difference between regions in terms of access to the Internet is twofold, whereas, in terms of digital technology use, the gap is manifold. In many regions, the share of online commerce, which became the driver of economic development during the lockdown, is minimal. Based on the results of the study, several recommendations have been formulated.