Russian President Dmitry Medvedev in his annual state of the nation address called on the country to modernise more quickly.
Mr Medvedev stressed the need for change.He told his country, which was hit hard by the global financial crisis, that it is time to stop living off past achievements and modernise.
Before an audience of government and church leaders, including his predecessor and current Prime Minister Vladimir Putin, Mr Medvedev outlined where he believes Russia has fallen behind - and what it needs to do to get ahead.
He says Russia has been too reliant on raw materials exports and should develop a smarter economy.
Mr Medvedev says infrastructure and key areas that the country was once renowned for, such as scientific research, need to be improved.
He also referred to corruption, saying intolerance of this must become part of Russian culture.
Mr Medvedev says Russia needs to modernise based on democratic principles so it can become a society of free, intelligent and responsible people.
ABC Online has contributed to the report.
The United States has imposed new sanctions against the Nord Stream 2 gas pipeline project, which still remains under construction