METHODOLOGY FOR RANKING OLD INDUSTRIAL REGIONS IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT SECURITY

The problem of monitoring the current state of security of sustainable development of old industrial regions of Ukraine lies in the need for structural modernisation of the industrial sector, i.e. the transition from extensive exploitation of the resource potential of industrially developed areas in the past to intensive production based on technological progress. The term “old industrial region” should be understood to mean a territory that was once industrially developed but is now in decline or in decline due to a lack of capacity or the unwillingness of industry owners to invest in the modernisation of production facilities, a significant lag in the applied production technology from the modern news, a lack of adaptability to the sustainable changes in industrial markets, etc.

Solving the restructuring problems of (former) old industrial regions with smart specialization? Conceptual thoughts and evidence from the Ruhr

Abstract(Former) old industrial regions are a specific kind of lagging regions that suffer from long-term restructuring problems and deindustrialization. They are back in the focus of many researchers as well as media observers, because of the rise of populist parties in many of these regions in North America and Europe. Therefore, new policy options are discussed in the literature. In this paper, we critically discuss the effects of smart specialization as the most recent regional policy strategy in Europe on solving the restructuring problems and deindustrialization in (former) old industrial regions and we illustrate our analysis with a view on the Ruhr in Germany. Since smart specialization focuses on existing endogenous potential and entrepreneurial discovery processes from the region, vested interests in (former) old industrial regions might hinder necessary restructuring. Although potentially path transformation might be fostered in some cases, overall, smart specialization is certainly not a quick fix for solving long-term negative effects of restructuring and deindustrialization in (former) old industrial regions.

The Development of Old Industrial Regions of the Southern Federal District Under the Economy Digitalization: The Role of the Digital B2B Trade

The article substantiates the significance of technological (digital) modernization of enterprises in the old industrial regions of Russia that involves all stages of the production process organization, in order to give impetus to their development during transition to the new technological order. Such a transition should be performed taking into account the imperative of resolving the contradictions between traditional and innovative factors in the development of regional economies of this type, characterized by the susceptibility to innovations reproducing the imbalance of regional development. The analysis of indicators of the industrial sector development, the formation of the digital economy infrastructure and the innovative activity of enterprises in the Volgograd and Rostov regions made it possible to argue the interconnection between the low susceptibility to innovations and the insufficient degree of diversification and science intensity of manufactured products, the emergence of distortions in the regional exports’ structure. The use of the digital technology (as “general purpose technology”) is considered as an effective way to activate all factors in the development of all sectors of the economy of old industrial regions in Russia and provide a significant contribution to solving priority tasks of the Spatial Development Strategy of the Russian Federation until 2025 and their modernization in the context of the fourth industrial revolution. The author substantiates the necessity of the accelerated formation of the digital trade infrastructure in the B2B segment, including the increase in the number of domestic B2B marketplaces (specialized and universal ones) to enhance the business entities participation in domestic and foreign trade and reduce the level of differentiation of these regions’ technological and socio-economic development.

INSTITUTIONAL ASPECT OF BROWNFIELDS REVITALIZATION: THE CASE OF UKRAINE

The article investigates the institutional aspect of brownfields revitalization – areas or sites that are derelict, contaminated and in need of active measures before they can be effectively used again for social and economic development of the area. The method of expert survey was used as a tool to identify problematic issues of brownfields revitalization and test the hypothesis of the need for institutional support to ensure the modernization of the economy of old industrial regions. The general conclusion that can be drawn from the conducted research is that institutional measures for brownfields revitalization should be aimed at developing special institutions that would facilitate the revitalization of brownfields in order to modernize the economy of the regions. Namely, brownfields should be transformed into locations for innovation infrastructure and organizations to support small and medium enterprises; advantageous specialization of the region should be ensured by creating industrial sites that meet the current technological requirements, have modernized production facilities, specialize in the production of science-intensive products or waste recycling, and operate on principle of circular economy.

Indicators for Assessing Socio-Economic Development Strategies of a Region from the Point of View of Competitiveness, Sustainability, Security and Balanced Development

The article is devoted to the analysis of the content of strategies for social and economic development of southern old industrial regions (Volgograd, Rostov and Astrakhan regions) if the set of measures suggested in them correspond to the goals of providing competitiveness, stability, security and balance of the development of regional social and economic spheres in the medium and long term periods. The relevance of the research is due to the need to improve the efficiency of regulation of social and economic development of old industrial regions, which are seen as promising platforms for neo-industrial transformations. When identifying the criteria, the authors take into account the provisions: a) competitiveness of a region is ensured by the presence of effective development institutions that encourage exportoriented industrial production, its import-substituting constituent, innovative activity of enterprises and organizations, investment attractiveness of the territory; b) sustainability is founded on the methodological positions of sustainable development; c) security should be assessed on the basis of indicators of development of economic, financial and social sphere, reflecting the ability of the economy to function in order to achieve expanded reproduction: structural proportions in economic sectors; d) balanced development is understood as the functioning and development of the object, environmental, project and process subsystems of the region. The analysis of development strategies of old industrial regions of the South of Russia showed that their content, as well as the package of measures, were determined on the basis of the prevailing characteristics of social and economic development of these entities, as well as the management practices that have been developed, which influenced the choice of approaches to the development of regional strategies. While in Volgograd and Astrakhan regions a project-oriented approach prevails, allowing to specify a package of formed measures, in Rostov region the “challenge-reaction” approach dominates, reflecting to a lesser extent the specifics of the opportunities to use regional potential.

Accounting for innovative factors of economic growth in the production function of Cobb-Douglas (on the example of old industrial regions of Ukraine)

Based on the analysis of the quantitative assessment of the influence of the factors of innovative activity on the dynamics of economic development and the endogenous determination of its contribution to the economic growth of the country, it is revealed that in foreign researches it is identified with the concept of the influence of scientific and technological progress. However, the impact of innovative factors on economic growth is not considered separately. Attempts of such a definition in Ukrainian researches are limited to well-known approaches: methods of integral assessment, methods of expert assessments, the method of multipliers, econometric models. Most of the approaches considered are focused on defining the innovative impact on economic development, rather than on economic growth. The main tool for assessing the role and innovative contribution to economic growth is the aggregate supply function model, usually based on the Cobb-Douglas production function. The analysis of the approaches used revealed a number of comments on econometric approaches. In contrast to this, an approach is proposed based on the neoclassical production function of Cobb-Douglas with a constant return to scale in the form of J. Tinbergen, with technical progress neutral according to J. Hicks, decreasing marginal productivity of macrofactors with limited interchangeability, which provides a causal functional (and not a statistical) relationship between input and output variables; does not require long time series. It is characterized by dynamic coefficients of elasticity, capital utilization rate and taking into account the innovation factor in each separate period. The innovation factor includes: the gross domestic expenditures on research and development, the expenditures on innovation, general expenditures on education. To define the contribution of formal innovation factor in economic growth applied "method of Solow residual", which by taking the logarithm and obtaining logarithmic derivatives in the production function, provides a formalized information about the contribution of each factor to economic growth and allows to develop the necessary regulatory measures. The method has been tested at the level of the country and old industrial regions of Ukraine: Dnepropetrovsk, Zaporozhye and Kirovograd regions of the Dnieper economic region of Ukraine. The role, importance and influence of the main factors of economic growth along with innovative ones on the part of the aggregate supply are considered and the cost-effectiveness of innovative factors is estimated.

OLD INDUSTRIAL REGIONS OF UKRAINE: PROBLEMS AND TRENDS OF CONTEMPORARY DEVELOPMENT (ON THE CASES OF DONETSK AND LUHANSK OBLASTS)

Old industrial regions are the areas of concentration of numerous problems. Donetsk and Luhansk oblasts with their economic profile formed at the turn of the XIX-XX centuries belong to such type of territories. The main purpose of this study is the analysis of the development features, the search for the mechanisms to revitalise the regions of eastern Ukraine, especially after the beginning of the armed conflict in 2014. The development problems of the old industrial regions of Donbas are addressed in the article on the basis of in-depth statistical analysis and modern conceptual approaches to the reform of such territories. The study found that by the beginning of the armed conflict, the development path of Donetsk and Luhansk oblasts were typical of the old industrial regions. Due to the uneven extent of occupation of the economic potential, the regions of eastern Ukraine reacted differently to the events of 2014. Based on the analysis of the dynamics of macroeconomic indicators, the structure of the economy and investments, the article proves that currently Donetsk oblast has almost retained the main trends of previous development. However, the part of Luhansk oblast controlled by the government of Ukraine is gradually turning into an agro-industrial region and losing the features of the old industrial region. The recovery of the old industrial regions of Donbas should be based on real reindustrialization and post-industrialization, should include measures aimed at human capital development (change of mentality, overcoming paternalistic approaches, intensification of entrepreneurial activity) and the formation of a favourable business climate. The main tasks for Luhansk oblast now are overcoming regional disparities, logistical alienation of the northern districts and integration of the territory on new economic ties. The scientific novelty of the research lies in defining the features of the transformation of Donetsk and Luhansk oblasts economic landscape since the beginning of the armed conflict, substantiating the most relevant approaches to reforming the old industrial regions of Donbas.

Strategic Ways to Modernize the Old Industrial Regions of Ukraine from the Perspective of Sustainable Development

The article defines the sustainable development of the old industrial regions of Ukraine (Slobozhanskiy, Prydniprovskiy, Donetsk Economic Area) using the methodology for determining the criteria and quantifying the processes and stages of their industrial, post-industrial and neo-industrial modernization. In the course of the study, a methodological toolkit was used to assess the level and conditions of industrial, post-industrial and neo-industrial modernization of the economy based on taking into account the quantitative parameters of the ecological, economic and social components of sustainable development. The results of assessing the stages of modernization of the regions of Ukraine in 2005-2019. confirmed the industrial development of Donetsk (Donetsk and Lugansk regions) and Prydniprovskiy (Dnipropetrovsk, Zaporizhzhia and Kirovograd regions) Economic Area. According to the results of the assessment of post-industrial modernization, the Slobozhanskiy Economic Area (Poltava, Sumy and Kharkiv regions) received the highest index. This region is the undisputed leader in terms of indicators reflecting innovation in knowledge and knowledge transfer (the difference is tens of points in comparison with the corresponding indices of other regions). Assessment of the stage of neo-industrial modernization showed the existence of a negative trend that has developed in all economic regions – a steady decrease in funding for innovations in knowledge. As a result, the overall index of knowledge indicator groups showed no signs of growth, and even decreased in some areas. The Slobozhanskiy Economic Area became an optimistic exception. The development and implementation of a methodology for assessing modernization processes will increase the efficiency of management decision-making by state authorities, improve the quality of strategies and targeted comprehensive programs for socio-economic development. To ensure post-industrial and neo-industrial modernization of the economy based on sustainable development in the conditions of insufficient efficiency and effectiveness of the traditional instruments of state policy, it is necessary to form institutions of regional development. Analyzed the current state of the presence of regional development institutions in the areas of activity. It was determined that the institutional structure is heterogeneous, the regions are different in the quality of labor and natural resources, which actually determines the specialization of the regional economy, therefore, for them it is necessary to use differentiated support measures from the development institutions.

International-Public-Private Partnership to Achieve Sustainable Development Goals in the Old Industrial Regions of Ukraine

The development of public-private partnerships is identified as a key mechanism for attracting investment to achieve the Sustainable Development Goals, including Objective 9 “Sustainable Infrastructure, Promoting Comprehensive and Sustainable Industrialization and Innovation” and Objective 17 “Strengthening the Global Partnership for Sustainable Development and Enhancing It”. It is proposed to introduce into scientific circulation the concept of international-public-private partnership, taking into account the interests and funds of international organizations and international donors. The mutual coherence of the interests of the state and the private sector in the partnership is analyzed. Different variations of the interaction of institutional intermediaries through the prism of specific actors (state, business, civil society and international organization) are considered. The institutional support of international-public-private partnership to achieve the Sustainable Development Goals of the old industrial regions is analyzed. It is determined that in order to develop and support international-public-private partnership projects to achieve the Sustainable Development Goals in the old industrial regions it is necessary to create a single system for implementation and monitoring of international-public-private partnership projects taking into account all established institutions. The system of institutions for the development of international-public-private partnerships includes financial and non-financial institutions. It is proposed to establish the Center for International-Public-Private Partnership as an independent expert body, the purpose of which is to prepare, organize and support international-public-private partnership projects, as well as to provide support to public administration and business.