Research on the Quality of Economic Development of Regional

Innovation Systems, Taking into Account Human Potential

Karina A. Nevmatulina

, Alexander A. Tsvyrko

and Natalya A. Azarova

Karaganda University of Economics Kazpotrebsoyuz, Karaganda, Kazakhstan

Central Russian Institute of Management, Eagle, Russian Federation

Department of World and National Economics, Voronezh State Forestry University named after G.F. Morozov, Voronezh,

Russian Federation

Keywords: Innovation, Regional Economy, Human Potential, Regional Innovation Systems.

Abstract: The high quality of the economic development of the region allows increasing the efficiency of public

production: for this, the cost of productive labor and means of production deceases per unit of regional income,

and economic development improvement, the role of scientific and technological progress of the quality of

products increases. These economic processes lead to an empowerment in the quality of life of the population,

as well as the effectiveness of social policy, and the environmental friendliness of the economic development

of the region. As a result, regional innovative economic systems must be significantly modernized. The

previous functioning type of extensive economic relations that developed through mining ultimately led to

negative environmental consequences. "The ability to achieve a new quality of economic development in the

regions is a major challenge. In order to solve it, it is necessary to overcome the high level of social

differentiation, insufficient life expectancy, and prevent excessive exploitation of the environmentally

friendly component of natural potential" (Management of innovative development of the region: monograph,

2008). That is why it is now a priority to find an alternative as well as more sustainable economic models that

should provide conditions for improving the well-being of the population in the region and, at the same time,

be sufficiently environmentally friendly. To solve this problem, it is necessary to give a clear quantitative

assessment of the quality of economic development of regional innovation systems, which will provide a

unified approach to the analysis of all indicators of the state of the region.

1 INTRODUCTION

Regional innovative economic systems are a dynamic

set, where both the resources of a given region and

the result of their use are of the most effective

importance for the country's economy. Therefore, the

issues of their quantitative measurement, determining

the quality of their development have not been

sufficiently studied. In particular, a single integrated

approach to how to assess the quality of economic

development of regional innovation systems has not

yet been developed, including the concept of a single

indicator for measuring it is controversial. This

situation gives rise to a dispute over the quality of the

development of the country's economy as a whole.



https://orcid.org/0000-0003-0839-9071

https://orcid.org/0000-0002-0240-7985

https://orcid.org/0000-0001-8244-8922

2 RESEARCH METHODOLOGY

The question of studying the concept of "regional

innovative economic systems" is a new one.

Therefore, the purpose of this work is to develop a

single indicator for assessing the quality of economic

development of regional innovative economic

systems, which will help to reveal the economic

content of this concept and develop the necessary

quantitative methodology.

An accurate understanding of the problems of

spatial and regional economic problems can be based

on basic economic facts:

1) This is the predominance of natural mining

regions;

Nevmatulina, K., Tsvyrko, A. and Azarova, N.

Research on the Quality of Economic Development of Regional Innovation Systems, Taking into Account Human Potential.

DOI: 10.5220/0010665500003223

In Proceedings of the 1st International Scientiﬁc Forum on Sustainable Development of Socio-economic Systems (WFSDS 2021), pages 165-171

ISBN: 978-989-758-597-5

165

2) This is the winning concentration in economic

development;

3) This is the role of costs for domestic and

external transport and communications.

A regional economy is a framework within which

the spatial nature of economic systems can be

understood. Determining the factors driving the

distribution of economic activity in space, and

recognizing that changing this distribution will have

important consequences for people and communities

- is the goal of the study. Therefore, today the most

pressing area of research on regional innovative

economic systems is the so-called synergy of closed-

loop economics. In conclusion, the quality of

economic development is determined by the

functioning of economic models that are based on the

principle of an innovative cycle, that is, continuous

innovative development, and not on the constantly

increasing extraction of natural resources.

Environmental degradation and ongoing climate

change demonstrate the need to dominate innovative

economic models that are sustainable over the long

term.

Thus, all the specifics of the regional economy

can be concluded in the following issues: "what?

where? why and how? ".

The first, "what?" refers to all types of economic

activity: not only to production enterprises in the

narrow sense of the word like farms and mines, but

also to other types of enterprises, households, as well

as private and public institutions. The question

"where?" refers to the location of one economic

activity in relation to another activity; "it includes

issues of proximity, concentration, variance, and

similarity or inconsistency of spatial structures, and it

can be discussed either broadly, for example, between

regions or at the meso-level, in terms of zones,

surroundings and sites". Questions "why? and how?"

belong to the competence of a scientist-economist.

The regional economy is a relatively young

branch of the economy. Until recently, most

economists ignored the question of "where?" finding

many problems that they could deal with without

giving their analysis any spatial dimension.

"Geographers lacked awareness of the specifics of

explanation in the categories of human behavior and

institutions to explain "why?" and resorted to simple

description and mapping. Urban planners were still

concerned about the physical and aesthetic aspects of

the idealized urban layout" (Zinovieva, Azarov,

Heavenly, 2021).

This minor situation has been largely corrected

over the past few decades. People who call

themselves different professional labels - economists,

geographers, environmentalists, city and regional

planners, regional scientists and urbanists - came

together to develop analytical tools and skills and

apply them to some of the most pressing problems of

that time.

"The study of theories of economic development

is connected with the combination of the concepts of

the "vicious circle of poverty" and the concept of

"sustainable development". This concept of the so-

called "vicious cycle of poverty" was applied in the

analysis of the development of the economies of low-

developed countries. According to this theory of

quasi-stable equilibrium, its author, H. Leibenstein,

revealed a relationship between the prospect of

population growth and a possible change in certain

economic conditions, which in turn ensures

fluctuations in the economy due to an improvement

or deterioration in per capita income "(Nureyev,

2000).

"This abstract theory focuses on the dangers

caused by the decline in per capita income in the

territory. Another view of the "vicious cycle of

poverty" theory is that this problem is caused by the

narrowness of the domestic market and insufficient

resources for innovation. The theory of the "vicious

circle of capital shortages" by R. Nurkes strongly

links the economic backwardness of the Territory

with specific institutional conditions, especially with

indicators such as the low qualification of the labor

force and the underdevelopment of secondary and

higher education systems in terms of the level of

vocational training "(Nureyev, 2000).

"As a result, a continuation of the theory of

"vicious circles of poverty" was such a concept that

gave the concept of the possibility of a transition to

self-supporting growth, authored by the scientist W.

Rostow. This concept was to justify the transition

from a single traditional society to an innovative

society of the Western type. In the concept of W.

Rostow, economic development synonymizes the

concept of a high growth rate" (Nureyev, 2000).

"In its interpretation, social and institutional

changes do not seriously affect the development of

the economy, and the indicator "the ratio of the level

of investment to the level of growth of GNP" comes

to the fore. In his opinion, a sufficiently large

injection of capital resources is necessary for the

successful modernization of the national economy.

As a result, self-sustaining growth will begin. It is not

possible to mobilize these resources on an absolutely

voluntary basis. The State must therefore ensure the

forced saving of the population. These savings are the

result of a special monetary and fiscal policy of the

State. The inefficiency of fiscal capital could be offset

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166

by the import of monetary capital. The term

"economic development" refers to profound

structural changes. These changes cover completely

all the main sectors of the national economy, which is

called the theory of "big push"(Nureyev, 2000).

The "theory" model with two deficits "was to

describe the relationship between the development of

the processes of internal accumulation of monetary

resources in the country and the reduction of sources

of external financing. The theory of the "two-deficit

model" explains "economic development" by

crowding out external sources of financing by

domestic ones. Replacement of imported goods with

domestic ones, which will be the basis for

overcoming external monetary and financial

dependence" (Nureyev, 2000).

"Therefore, the main disadvantage of these

concepts is that they focus on the use of a fairly

limited economic factor in developing countries -

capital. However, the error of these economic theories

was the failure to take into account the possibilities

given by the use of such a relatively excessive

resource in some territories as labor"(Nureyev, 2000).

The study of the concept of "economic

development" in the understanding of J. Schumpeter

(Shpaltakov, 2017), determines the ability to

implement such innovations in which the

entrepreneur will initiate this innovation.

Considering the economic theories of Keynesians,

whose research base was a change in the technical and

economic parameters of the economy. However, the

socio-economic prerequisites of these studies did not

affect.

Neoclassical theories of economic development

were based on an equilibrium combination of capital

accumulation and population growth trends. These

two indicators provided a combination of the

development of the two-component component of the

Territory's economy - agricultural and industrial

sectors. W. Lewis, A. Hirschman, S. Schatz, J. Fey

and G. Ranis, as founders of the theory of dualist

economics, assumed that urbanization of the

population, including the movement of labor

resources from agriculture to industry, ensures the

development of the economy as a whole. But the

quality of economic development in this theory was

not considered. Economist G. Murdal, who ensures

the humanization of economic growth in terms of

paying special attention to the means of solving social

problems, criticized the main theories of growth.

There was a distinction in the understanding of

economic growth and development. If economic

growth does not generate income growth for the

majority of the population, it contributes to instability

in the economy, technological stagnation, corruption

and bureaucracy. Leaving aside the economic

situation of the majority of the population, this

economic growth did not contribute to the qualitative

development of the population living in this territory.

By development, this researcher understood the

degree of satisfaction with the basic needs of the

majority of the population (Shpaltakov, 2017).

And after some time, the time has come for the

institutional approach to dominate the understanding

of economic development. This approach was

developed by T. Schultz, as a prominent

representative of the economic school, which founded

an understanding of investment in human capital.

"Human capital combines all the productive qualities

of workers, including the totality of knowledge,

skills, motivation and mental energy. By means of

preparation of the human capital for processes of

production, investments into expenses for education,

education, health care, prerequisites for his

functioning in an effective form" are created"

(Pavlova, 2011). This trend will, in the author's

opinion, ensure economic development.

At the same time, special importance is attached

to the formation of models of regional innovation

systems through the education system and the

accumulation of scientific and technical potential.

According to simplified models, the regional

innovation system includes: (a) organizations that

produce and use knowledge; b) participants ensuring

the activity of the former; c) a single sociocultural

space. "Thus, the basic idea of modern concepts is

that economic development should be accompanied

by the corresponding synergistic development of

social infrastructure, improvement of the quality of

life of the population, state of ecology, improvement

of the institutional basis of economic activity"

(Pavlova, 2011). This conditions the quality of

economic development of regional innovation

systems.

3 RESULTS OF THE STUDY

The essence of regional innovation systems is a

complex of organizations that provide the territory

with the production of new knowledge, new

professional experience, skills and skills. These

industries contribute to the financial, economic, legal

and information support of innovative processes in

the region. The innovative potential of economic

development is the basis of the regional innovation

system. With the standard method of assessing the

economic development of regional systems, it was

Research on the Quality of Economic Development of Regional Innovation Systems, Taking into Account Human Potential

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possible to determine only the level of development

of production. But taking into account international

trends in assessment, one can say that such an

assessment is insufficient. This is due to the

understanding that human capital will be the basis for

the economic development of regional innovation

systems. And "the development of such aspects as

education, health, the state of the environment, equal

opportunities in the economic sphere, personal

freedom and a culture of life provides the basis for

growth and further development" (Stroeva, 2021).

International organizations assess the level and

quality of life of the population of the economy in a

particular territory according to various indicators.

The competent use of statistical information allows

the calculation of many indicators characterizing

these processes. It is therefore necessary to assess the

quality of economic development of regional

innovation systems. The regional innovation system

is based on the national system, in terms of copying

its development trends as a subsystem element. To

equalize the economic situation of regions and

maximize their potential (economic, social and

environmental), this assessment is based on a specific

innovation strategy, unique opportunities and abilities

of each regional territory. To address "the problem of

such an assessment, it is necessary to identify and

limit the list of indicators. These indicators can be

seen as indicators of the innovative state of the region

based on the functioning of the regional innovation

infrastructure" (Pavlova, Pavlova, 2011).

"The integrated indicator of the functioning of the

regional innovation infrastructure should be a

multidimensional complex" (Stepanova, 2021),

which includes the following elements:

 Costs of high-tech health care in the region;

 Level of demographic growth (fall);

 average real incomes of the population in the

region;

 Environmental welfare costs;

 Level of environmental protection;

 Social component of economic well-being

(level of schools, universities, institutions of

secondary vocational education);

 Availability of business clusters for innovative

support of regional economic development.

"Some researchers are invited to assess the

following types of efficiency of the innovation

system: social, economic, environmental,

demographic; social and economic" (Zinovieva,

Azarov, Heavenly, 2021).

The proposed algorithm for assessing the

functioning of the regional innovation system

consists of a list of consecutive stages.



Figure 1: Algorithm for assessing the quality of economic

development of regional innovation systems.

"At each stage, a certain task has been identified

for solving, sources of information, ways of their

collection are established, reliability and reliability of

initial data are assessed, i.e. the task of collecting

reliable statistical data is solved" (Stroeva, 2021).

Table 1: Indicators of analysis of innovative potential of the

region.

Indicator

group

Type of indicators Source of

statistical

information

Level of

education of

the

population in

the region

Proportion of employees

with higher and secondary

education in the total

population of the region

Statistics

Innovation

and technical

components

Share of innovative

enterprises in the region

according to the balance

sheet

Statistics

Calculation

data

Financial

component

Share of technological

innovation costs in the

region

Statistics

Scientific

component

Proportion of researchers

performing research and

development in the region

Statistics

Environment

al component

Share of waste technology

development costs in the

region. Sum of specific

emissions and waste

eneration

Statistics

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By highlighting the main blocks of innovation

potential of the region, the main indicators for

analysis can be identified.

4 DISCUSSION OF RESULTS

"An index refers to a specific construct formed by a

combination of indicators. The process of

constructing an index is often one way to create a new

concept at the empirical level of knowledge or to

replace the inaccurate concept of the theoretical level

with a more accurate one. The construction of the

index can be considered as a way to obtain values of

a latent characteristic that is not directly measurable

using certain transformations of the values of the

observed characteristics (indicators)" (Pavlova,

Pavlova, 2011). "An index as a construct of indicators

is considered to be the empirical equivalent of its

corresponding concept. The purpose of introducing

indicators and indices is to assess the situation (state,

situation) in some areas of research, on the basis of

which a forecast of possible developments should be

given and recommendations to ensure the

achievement of the development goals of the systems

under consideration" (Stepanova, 2021). The

algorithm for constructing the index reflecting the

quality of economic development of regional

innovation systems takes into account the

methodology for calculating the "human

development index", which includes the arithmetic

mean of three private indices:

 "index of the scientific component, based on

the share of scientists performing scientific

research and development in the region"

(Carrot, 2020);

 The education index, measured as the

aggregate index of the proportion of employees

with higher and secondary education in the

total population of the region;

 Index of knowledge-intensive GDP per capita,

taking into account the share of innovative

enterprises in the total number of enterprises

and the share of costs of these enterprises for

technological innovations in the regional

economy;

 Eco-innovation index, which includes the cost

of developing waste management technologies

in the region and the sum of specific emissions

and waste generation.

The calculations use unified minimum and

maximum values of statistical indicators: from 0 and

up to 100%.

Each private index is calculated using the

formula:

minmax

min





(1)

"A number of Russian researchers note regional

innovation systems specific to the index, taking into

account human potential, such as the insufficient

reasoning of the accepted limits for changing baseline

indicators, and the almost free substitution of baseline

indicators. The proposed integral indicator should

include three blocks: economic, qualitative and

social, environmental. Private indicators are built on

the basis of block data, which in turn consist of

normalized values of individual indicators"

(Astakhin, Tretyakova, 2019). "When building a

consolidated index of the quality of economic

development of regional innovation systems, it is

necessary to proceed from the real possibility of

obtaining certain indicators necessary for

calculations. The statistical indicators included in the

index should meet the following requirements:

representativeness, according to which all the main

indicators of the information block under

consideration should be presented in this list;

information accessibility, according to which the

indicators involved in further analysis should be

available for their statistical registration" (Zinoveva,

Yakovlev, Pecherskaya, 2019).

"Therefore, they must be included in the

nomenclature of official statistical indicators, or

calculated from the values of the latter; Information

reliability, according to which the statistics and

private indicators used should adequately reflect the

state of the economic development dimension under

analysis. The method of rationing is based on the

determination of the "most favorable" and "least

favorable" values of each indicator according to the

totality of territories" (Bahur, Nebesnaya, Azarova,

2020). "The formula for rationing the values of

indicators that have a positive impact on the quality

of economic development of regional innovation

systems has the form" (Bahur, Nebesnaya, Azarova,

2020):

leastmost

leastfact

norm



  (2)

for indicators that have a negative effect, the

formula is transformed as follows:

leastmost

factmost

norm





 (3)

Research on the Quality of Economic Development of Regional Innovation Systems, Taking into Account Human Potential

169

where y

norm

is the normalized value of the

indicator;

fact

- actual value of the indicator;

most

- the most favorable value of the indicator;

least

- the least favorable value of the indicator.

"This approach allows the assessment procedure

to take into account the positive or negative impact of

a factor on the quality of economic development of

regional innovation systems, taking into account the

impact on human development, based on the meaning

or nature of the indicator related to it" (Yakovleva, et

al., 2018). It is proposed to calculate indicators for

each of the areas (educational, health, cultural and

social) according to the arithmetic average formula:





 (4)

where it is the development index j of the sphere.

"Further analysis and comparison of the obtained

integral assessments of the state of economic

development of regional innovation systems, their

graphical representation and interpretation are carried

out. The integral indicator for assessing the quality of

economic development of regional innovation

systems (I) is proposed to be calculated using the

geometric mean formula" (Yakovleva, et al., 2018):

321

III







 (5)

where ωj - weight coefficients, and their sum it is

equal to 1.

"The implementation of the proposed evaluation

system, taking into account the algorithm, will allow

the researcher to quantify the quality of economic

development of regional innovation systems, taking

into account the impact on the formation of human

potential, to conduct a comparative analysis in the

context of the subjects of the Russian Federation.

Complex approach ensures validity of study results"

(Yakovleva, et al., 2018).

5 CONCLUSION

In this regard, it is interesting to analyse innovative

economic systems in the following areas: as a channel

for technology diffusion, as a competitive

environment and as export opportunities.

There are three possible channels for technology

diffusion: import, direct investment and technology

trade. As for imports, the effect of increasing the

domestic technological level and productivity

through the import of high-quality foreign goods was

recorded. Direct investment can also increase

productivity in both the initial and subsequent stages

of the supply chain. In addition to the side effect

through the supply chain, also point to the side effect

of technologies in the same industry. The last is

technology trading. Trade in technology in the form

of licensing is considered particularly important for

innovation in the chemical and pharmaceutical fields.

It can also be said that technical guidance and training

of workers can help to accelerate the distribution of

these goods.

Competitive environment, innovative economic

systems as an export opportunity. Free trade is

believed to increase competition. It was pointed out

that the impact of competition on innovation was to

ensure discipline in companies and improve

efficiency, but it was also hypothesized that

investment in R & D would not be possible due to

reduced profits from competition. They are not

incompatible with each other, and there are

hypotheses and empirical studies that determine

which effect is better depending on the degree of

fierce competition and the level of technology. As a

management strategy, there are times when we

introduce inexpensive innovations to increase the

efficiency of companies and management in

conditions of competition and pressure, and there are

times when we carefully differentiate products

through innovation and avoid competition.

The third point is the relationship between export

and innovation. It is usually said that export

companies are more productive, but as for causation,

economic discussions until the early 2000s said that

high-performance companies would enter the import

market. However, recent empirical studies have

shown that, for example, the expansion of export

opportunities has increased the motivation for

innovation, which together leads to increased

productivity.

Finally, the linkage between trade and innovation

through the liberalization of economic systems is an

important issue. Free trade and the investment

environment are in themselves a framework for

promoting innovation, and it can be said that

interaction with a wider range of policy areas is also

important to be linked to real innovation. In this

regard, it is important to train absorption capacity in

a broad sense. This also means the ability to absorb

and learn technology, focusing on individuals, but

also includes broader policy contexts: stable

macroeconomics, market regulation.

WFSDS 2021 - INTERNATIONAL SCIENTIFIC FORUM ON SUSTAINABLE DEVELOPMENT OF SOCIO-ECONOMIC SYSTEMS

170

In practice, the quality of economic development

of regional innovation systems reflects many

indicators. Therefore, solving the problem of

quantifying these indicators allows us to determine

the prospects of this study.

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