How to Identify Points of Non-Resource Economic Growth?

The existing ratings of regions are aimed at evaluating human capital, innovation potential and institutional conditions, but they pay less attention to high-tech business proper. The most authoritative ones are the NRU HSE rating of innovative development of constituent entities of the Russian Federation and the rating of innovative regions of the Association of Innovative Regions of Russia (AIRR). In general, methods used in both the ratings are based on the Regional Innovation Scoreboard (RIS) developed in the European Union.

However, it is believed that reproduction of foreign methods may fail to take into account all the specifics of the domestic statistics, while application of equal weighting to indicators which have a different effect on innovation output results in substantial distortions and averaging of estimates. In both the rating, indicators of form No.4: Innovation which Data are Subject to Review are used.1 The problem is that responsible persons lack competence and do not know how to evaluate correctly the novelty of products. Also, they may not be willing to fill in lengthy forms. With numerous indicators being used, ratings are difficult to verify and they fail to comply in full with relevant requirements set to strategic management instruments.
Estimates of the model of expertise application in production in Russian regions received by a group of experts of the RANEPA and the Gaidar Institute2 show that innovation output greatly depends on human capital, the exchange of expertise between regions and expenditures on R&D. It is noteworthy that financing of the R&D sector is less important for development of new technologies than availability of human capital, though in theoretical models, economic studies carried out abroad and business surveys of companies the factor of funds availability is rated the first.

In our view, it is necessary to develop and introduce a rating or indicator monitoring based on a better defined criteria of comparative assessment, that is, high-tech industries (pharmaceutical industry, aircraft industry, instrument-making industry and other) and knowledge-intensive (IT, financial services and other) sectors with a high share of R&D costs in revenues. One should not repeat the existing methods and assess the general level of innovative development, but take into account the prospects of development of the most promising import substitution industries of the economy, that is, the high-tech sector. With a new rating or monitoring system being introduced, it would be feasible to develop various measures of a regional policy in respect of the high-tech sector.

Similar efforts are being made by the RANRPA jointly with the Association of Innovative Regions of Russia (AIRR) under the auspices of the Interfax International Information Group and the RF Chamber of Commerce and Industry. The outputs of that work – the rating of high-tech business in Russia – were presented at the Gaidar Forum – 20173. Regions with sufficient resources and advantageous conditions for high-tech development were identified. So, regional authorities have got an instrument to assess the results of their policy in the field of high-tech development. What makes this rating unique is that no comparative figures are used in it for ranging regions. The rating does not imply ranging regions from “good” to “bad” or from “developed” to “developing”, but shows what share of Russian resources (and outputs) is concentrated in one or another region. The rating makes it possible to identify clusters of high-tech companies (Moscow, St. Petersburg, the Moscow Region, the Republic of Tatarstan, the Kaluga Region and other) in Russia and eventually make a conclusion in respect of potential points of non-resource economic growth.

Resources for development of high-tech technologies are distributed unevenly. Over 38.7% of all the resources is concentrated in Moscow, St. Petersburg and the Moscow Region. Note that over 67% of financial resources which can be used for investments in high-tech development is concentrated in Moscow.

As a result of high-tech development, three leading regions (Moscow, St. Petersburg and the Republic of Tatarstan) account for about 33%. It is to be noted that the AIRR regions ensure about 23% of high-tech output, though their share in the country’s GRP amounts to about 19%, that is, it can be asserted that these regions have an explicit high-tech specialization.

At the final stage, the output share of a region is correlated with its resource share. Based on correlation results, four groups of regions were identified (see Fig.).

• The first group includes 12 leading regions marked with black color on the map below. With 1% of resources utilized in those regions, over 1.5% of high-tech outputs were received on average there. It means that these regions are highly effective. They include large economies, such as the Samara Region, the Republic of Tatarstan, Bashkorstan, the Perm Territory, St. Petersburg and other. In these regions, one can find favorable conditions and effective outputs of high-tech development.
• The second group includes 25 regions. In these regions, over 1% of high-tech outputs (but less than 1.5%) was achieved with 1% of resources being utilized. Regions with large metropolitan areas and a prominent share of the manufacturing industry are in this group. Also, it includes a majority of the AIRR’s regions, for example, the Krasnoyarsk Territory, the Novosibirsk Region, the Ulyanovsk Region, the Irkutsk Region, the Kaluga Region and other. This group produces over one-third of high-tech products in Russia.
• The low efficiency group includes 28 regions. With 1% of resources being utilized in this group, less than 1% of outputs is obtained. Also, in this group there are regions with large cities: Moscow, the Moscow Region, the Rostov Region, the Khabarovsk Territory and other. Though the regions of this group account for over 45% of all the resources and nearly 40% of state support, they yield only one-third of all the outputs.
• Among 15 regions with the lowest correlation between outputs and conditions, regions with a low level of social and economic development prevail. They include republics of North Caucasus, the Republic of Altai, as well as northern mineral resource regions: the Khanty-Mansiisk Autonomous Region, the Magadan Region, the Nenets Autonomous Regiona and the Chukot Autonomous Region. These regions show very low outputs of high-tech development (6% of conditions and 2.5% of outputs with 8% of state support).

Thanks to that work, a comprehensive system was established to monitor a high-tech development in regions, so that guidelines for stimulating industries and handling import substitution issues in regions could be developed on the basis thereof.

Vera Barinova, PhD (Economics), Head of the Innovation Economy Department,
Stepan Zemtsov, Senior Researcher of the Innovation Economy Department
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1 I. Bortnik, V.Zinov,V. Kotsyubinsky and A. Sorokina. The Issues of Authenticity of Statistical Data on Innovation Activities in Russia // Innovations. 2013. №10 (180). 2013. pp. 10-–17.
2 Zemtsov S., Muradov A., Wade I., Barinova V. (2016) Determinants of Regional Innovation in Russia: Are People or Capital More Important? Foresight and STI Governance, vol. 10, nNo. 2, pp. 29–42. URL: https://foresight-journal.hse.ru/2016-10-2/185674818.html
3 Results of innovation activities in Regions were presented at the Gaidar Forum. URL: http://www.ranepa.ru/sobytiya/novosti/itogi-innovacionnoj-deyatelnosti-v-regionah-predstavili-na-gajdarovskom-forume
4 The Rating of Innovative Business in Russian Regions. URL: http://www.i-regions.org/images/files/presentations/RANEPA_26.12.pdf