Currently, the radio-electronic industry (REP) is one of the fastest growing industries in the world. The Russian segment of this industry has a significant innovative potential, allowing to develop many promising areas of development. The article substantiates the necessity of modernization of the Russian radio-electronic industry. The conceptual model of the industry transformation is formed on the basis of the system approach. The main areas of the industry development to be modernized in order to create long-term competitive advantages are identified. In the implementation of the modernization scenario for the subjects of REP requires an active, offensive strategy on the markets of civilian products. The article analyzes the features of the development and justification of the concept of modernization of REP not so much taking into account their economic efficiency in the short term, but to achieve the goals of sustainable development. The key objective of the modernization of the industry is to form the basic production of a new technological structure, capable of producing products corresponding to the best world standards. The practical significance of the work lies in the possible use of its results to detail the scientific and practical recommendations related to the modernization of REP. According to the results of the study, the presence of the developed conceptual model of transformation of the industry contributes to the streamlining of modernization processes.
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