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86 Elena VartanovaBroadly speaking, for contemporary Russia, the concept of the networksociety remains an intellectual hypothesis, but at the same time it has particularvalue in describing recent trends.THE INTERNET IN RUSSIA: FRAGMENTEDGLOBALIZATIONMajor driving forces behind the Russian transformation were “economicreforms,” an uneasy combination of privatization, liberalization, and decentralization.However, widespread expectations of economic growth of theearly 1990s have not been realized, and, compared to other former socialisteconomies of Eastern and Central Europe, and especially compared to thesocialist economy of China, the Russian economy looks weak and unsuccessful.The failure of the Russian transition has numerous explanations, and manyof them are significant for understanding the progress of the new economy andnetwork society in Russia. After a decade of change, the structure of theRussian economy has remained outdated and based on natural resource sectorswhich still play a decisive role in Russian exports; oil and gas account for overhalf of all exports. National industrial production felt by almost 60 percent.The magnitude of the decline in GDP is still unclear, but some sources approximateit at the level of 54 percent in the period 1990–2000 (Inozemtsev, 2000:266–8, 272–3). Poverty and economic inequality have divided Russian societyand produced political disappointment, moral depression, and social escapism.As a result, Russia has got the worst of all possible worlds – an enormousdecline in output and an enormous increase in inequality.While Russian financial and political elites have become increasinglyinvolved in the globalized economy and in their everyday practices have benefitedfrom progress in information technology and the global communicationrevolution, the national economy as a whole has been transformed from anindustrial giant into an oil and gas supplier. Domestic consumption and investmentsare not yet strong enough, and as a result many industries experience alack of finance to update their infrastructure and increase productivity. This isespecially true for hi-tech industries where the general difficulties of theRussian economy are most visible. A low level of technology, and lack ofproduction of competitive products and services for global markets, are oftenaccompanied by high educational and intellectual potential among employees.Therefore, the outcomes of the Russian transition are economically unbalanced,and scholars stress that the Russian economy is far from being a knowledge-basedor information economy, but continues to be an industrial andresource-based one (Castells and Kiselyova, 2001; Stiglitz, 2002).