Putin, who enjoys widespread popularity in Russia, will step down after eight years in office following the March 2 presidential elections.
Admitting that Russia had so far failed to get rid of an 'inert' dependence on natural resources, Putin described innovative development as the only alternative to dependence on natural resources.
"The strategy of innovative development...relies on human potential and the effective use of knowledge and individual skills," Putin said.
He also urged the use of the experience and resources accumulated over the past eight years to launch Russia into a brand new stage of development.
The president also called for a reduction in the state-controlled sector of the economy and for more private investment incentives.
He also said Russia should increase its labor productivity four-fold by 2020.
"A four-fold growth, at least, in this indicator should be reached in core sectors within 12 years," the president said at a session of the State Council.
The Russian leader also said that Russia's GDP could double by late 2009 from the year 2000, provided its annual growth is kept within 7-8%.
According to Russia's Statistics Service, the country's GDP growth reached 8.1% last year.
