According to one of the studies, by Strategy Partners, a Moscow management consultancy, Russia's average labor productivity is just 17% of the U.S. level. The amount varies by sector, from a low of 6% in machine building to a high of 22% in the natural resource industries. But the room for improvement is colossal everywhere. "If, in Russia, a mere 10% of workers had the same level of productivity as in the U.S., Russia's GDP would increase by one and a half times," notes Alexander Idrisov, managing partner of Strategy Partners. Similar conclusions have been reached by the U.S. consultancy McKinsey, which has also just published a report examining Russian productivity. McKinsey, which focused on six sectors, concluded that Russian productivity was around 26% of the U.S. level. That's an improvement on 10 years ago, when McKinsey estimated Russian productivity at 18% that of the U.S. But widespread inefficiencies remain. For example, it takes three times as many workers to produce a ton of steel in Russia as it does in the U.S. Outdated Technology Why is Russian productivity so low? "Why should it be high?" asks Boris Kuznetsov, chief researcher at the Higher School of Economics in Moscow. "Let's look at the history. Very few big enterprises were constructed in the last 20 years, so the technology is old. In China, you have very cheap labor and up-to-date technologies because they were imported recently." But though outdated technology is often a problem, many experts emphasize that it isn't the actual root of Russia's productivity woes. "It's a big myth that we have low productivity because we have old technology," says Idrisov from Strategy Partners. "In general, the major factor is very ineffective business processes and organization." Why Is Russia's Productivity So Low? - Businessweek Good luck on the PAK FA and other Russian Military Equpment, you are going to need it.