By OECD standards Russia’s economy is overall still relatively backward, exhibiting low productivity and per capita incomes, high inflation, extreme inequality, poor outcomes as regards health and the environment and low access to and use of information and communication technologies. Across a range of macroeconomic and social indicators there has been clear improvement in recent years, however, and in general, Russia is already within the range of OECD countries, not an outlier. Moreover, in some respects Russia exhibits relative strengths, such as its negative net public debt and high tertiary education enrolment rates. As regards structural policies, progress towards OECD standards and practices can generally be discerned, although gaps remain large in some areas, and the government’s priorities for modernising the economy are for the most part well placed. The main potential pitfall in the drive for modernisation is overemphasising high-tech activities and especially in using public resources to encourage them. Modernisation should be a broad agenda linking many areas: better education, health, public administration and environmental policies are all part of creating a favourable climate for innovation, and a better business climate is also vital.