Aspects of Reproduction of the Labor Potential of the Regional

Economy in the Conditions of Pandemic

Andrey S. Shevyakin

Department of Customs Affairs and World Economy, South West State University,

50 years of October st. 94, Kursk, Russian Federation

Keywords: Sustainable Development, Regional Economy, Labor Potential, Labor Resources.

Abstract: Labor potential is one of the most important factors of production in the modern regional economy. Conditions

of the period of restrictions of pandemic of COVID19 provides new terms of functioning for labor resources.

In spite of different factors of destructive influence, the role of labor potential increases with time. Difficulties

of the movement of migration flows formed new approaches for the methods of regional policy in the sphere

of labor potential. Labor resources is most perspective and effective factors of production in the conditions of

postindustrial society and economy new technologies.

1 INTRODUCTION

Economy is the most important sphere of society's

life. The standards of living for the population and the

conditions of its reproduction depend on the

effectiveness of economy’s functioning. The level of

demand and supply, labor efficiency, product

competitiveness and the conditions for foreign

economic activity can significantly influence for the

perspectives of the development of regional

economy.

Labor potential is one of the most important

factors of the development of the regional economy.

Insufficient level of provision of labor resources can

be a factor of restriction for the economic growth rate.

This trend is very actual for the Russian Federation,

especially in some regions at the base of the COVID-

19 pandemic.

The level of investment in the system of formation

of the labor potential was really low for the long-time

period.

Economic growth contributes to an increase of the

volume of production and the level of salaries,

creation of additional workplaces and attraction of

new investments, but the conditions of the global

pandemic also form a lot of contradictions which

hinder the economic activity and prospects of

economic development. In some cases, this also leads

https://orcid.org/0000-0003-2892-8612

to an aggravation of income distribution issues, which

provide to an increase of income differentiation and

the formation of social tension. Modern

contradictions require for a new approach in the

methodology of regional economic development:

synergy and multiplicativity, correlation between

various factors and cycles.

2 MATERIALS AND METHODS

The level of profitability of investment in the sphere

of human capital exceeds the average level in the

production sector in the conditions of development of

the national economy. It is also an important factor in

the innovative technological development of the

economy of the regions.

Modern society is characterized by different

levels of material, technical and socio-economic

development, which is especially important in the

context of the COVID-19 pandemic.

The deficit of labor resources continues to

increase in the conditions of restrictions due to

COVID-19. That’s why competition for human

resources between regions increases and determines

the formation of migration flows at the national and

international levels in the short term period.

368

Shevyakin, A.

Aspects of Reproduction of the Labor Potential of the Regional Economy in the Conditions of Pandemic.

DOI: 10.5220/0011120800003439

In Proceedings of the 2nd International Scientiﬁc and Practical Conference "COVID-19: Implementation of the Sustainable Development Goals" (RTCOV 2021), pages 368-372

ISBN: 978-989-758-617-0

Identification and research of factors of negative

influence for the system of reproduction of the labor

potential of regional economy is a priority task as the

base for the higher level of competitiveness of regions

due to their attractiveness for residents.

Special attention deserved for the features of

historical development, which determine the

difference in the level of labor productivity and

efficiency, as a result.

Different countries implement various strategies

against the pandemic of COVID-19. In general, the

processes of industrialization and economic activity

have slowed down significantly, but the most

dynamically developing sectors are IT and service

sphere.

3 RESULTS

Processes of migration play an increasingly important

role in the modern conditions of economic

development. This trend is determined by an

imbalance in the supply and demand of labor

resources and at the background of the inability to

support a sufficient volume of workplaces directly in

the regions where people live. In some cases, this

leads to the fact that more than 50% of the employed

may be labor migrants. It contributes not only to

interregional migration, but also to the movement of

the population in the regions from rural areas to the

cities. Thus, in the Russian Federation, since 2000

population of rural areas steady decreased at the base

of migration. The urban population of Russian

Federation for 1991-2018 in the aggregate increased

due to the migration factor for 10.4 million people,

but in rural areas an outflow was observed. There are

trends in the sphere of migration at the interregional

level: there is an influx of labor resources in the

Central, Southern and Northwestern Federal

Districts. At the same time, there is an outflow of

population in other federal districts, despite the active

state policy for the development of the Far East and

Siberia regions. In this regard, proposals for the

creation of new central cities in these regions may

face difficulties with settlers. The growth of mobility

of the population determines its ability to move,

which requires the most complete analysis of the

factors of influence for the system of reproduction of

labor resources in the regional economy (Kovarda

and Shevyakin, 2011).

Sharp introduction of the restrictions for the

movement of population due to the development of

the COVID-19 pandemic lead to the formation of a

shortage of labor resources in many regions. At the

same time, the economic downturn contributed the

growth of unemployment rate due to the quarantine

restrictions and the reduction of demand for goods

and services. All these factors are the significant

destructive trends which hinder the implementation

of the goals in the field of sustainable development of

territories. Modern trends in the sphere of

reproduction of labor resources and human capital are

based on the increasing role of the human factor, in

spite of the growth of the level of automation of many

processes. Modern situation requires higher socio-

economic efficiency and psychological stability

(Brown and Scott, 2012).

The set of factors of the destructive influence of

the COVID-19 pandemic for the sphere of formation

and use of labor potential is advisable to divide into

four main groups:

 low income;

 high level of unemployment;

 insufficient level of development of social

infrastructure;

 indicators of morbidity and mortality.

Set of factors hinder the formation of a system of

incentives for education and vocational training and

determine the imbalance of demand and supply in the

labor market in various regions and industries. Thus,

in some regions we can see the situation: sufficiently

large number of people remain unemployed, in spite

of the presence of even more vacancies (Migranova

and Toksanbaeva, 2014).

Different problems in the system of formation and

use of labor potential do not allow to fully realize

secondary vocational education, because there is

practically no differentiation between the level of

salaries for all types of education, with the exception

of higher education. The last years’ trend for growing

popularity for training in colleges and technical

schools is explained not by incentives to obtain

secondary vocational education, but for decrease of

the level of availability of higher education (Pavlov,

2010).

The modern crisis of reproduction of human

resources, first of all, consists in a reduction of the

volume of employable population, as well as an

increase in the average age. This is accompanied by

ongoing process of urbanization, which in some cases

leads to the depopulation of villages. Megacities have

a significant impact on the lifestyle and reproduction

characteristics of the population and increase the risk

of pandemics.

Ignorance of human nature creates many

problems, including the sphere of management. The

importance of research of human as a factor of

production is increasing due to the development of

Aspects of Reproduction of the Labor Potential of the Regional Economy in the Conditions of Pandemic

369

technology and the emergence of potential

competitors in the face of robots and artificial

intellect. It is important to determine the place and

role of a human in the modern economic system. Each

person has a large set of qualities, including honesty,

diligence, responsiveness and etc. Ignoring of

personal qualities and people’s needs leads to the

formation of tensions and conflicts, splits in the

collective and society, up to the development of such

negative phenomena as nationalism and fascism. An

important role in the formation of human capital

should be played not only by purely economic

approaches, but also by mechanisms of the formation

of moral qualities of the population. It will contribute

to make the society stronger at the base of norms of

humanity, and, in the end, may lead to an

improvement in the demographic situation.

The essence of human resources usually

considered in a narrow sense, which does not allow

us to take into account full complex of human

qualities, both in general and in individual, in

particular. Human qualities determine people’s

behavioral characteristics, propensity for certain

professions and effectiveness in various conditions

(Minakova, 2015).

Consideration and study of human qualities and

needs are also the most important factor of motivation

and increasing of the efficiency of labor activity. A

person and his behavioral characteristics are

influenced not only by his immediate qualities and

characteristics, but also by acquired environmental

factors: education, party membership, collective,

place of residence, origin and family. For example,

historical memory is an important factor, which can

have a significant impact on the behavioral type of an

individual person and the whole state (Minakova et

al., 2018).

A human is a very psychoemotional and

contradictory creature. Essentially a human is a social

creature, that is, adapted to work in a team. Modern

conditions of living and approaches for work are

focused on the formation of individualism, which has

a significant impact on the development of society

(Pavlov, 2010).

Living in the conditions of the constraints caused

by the global pandemic exacerbates different features

of the regional economy, forming imbalance of

sustainable development:

 there are a considerable number of hard-to-

reach territories and regions with higher level

of the cost of delivery of goods;

 regional economy often can has seasonal nature

in cases when the regional economy is focused

on agriculture, fishing, etc.;

 many regions use the shift method of providing

their own economy with labor resources;

 regions have a different level of development

and conditions of the macroeconomic

environment;

 regions differ in the structure of consumption;

 regional economies can be divided into export-

oriented and import-oriented;

 ethnic groups can be in the base of the

formation of the regional economy, which has

a certain influence on the peculiarities of

development;

 certain regions may be exposed to certain risks

(floods, droughts, fires, tsunamis, etc.), which

can have severe consequences and require

regular consideration in the plans

ofdevelopment;

 regions differ in the level of attractiveness for

labor resources;

 it is necessary to identify the regions with

natural and economic rent.

Socio-economic and institutional mechanisms of

reproduction and effective usage of labor potential in

the conditions of a market economy are primarily

focused on improving of the efficiency of usage of all

types of resources, including labor. The growth of the

efficiency of usage of labor resources contributes to

the aggravation of demographic problems, including

low fertility and aging of the population

(Rimashevskaya et al., 2013).

The effectiveness of sustainable development

processes is based on the regionalization of the

economy. It includes the processes of social labor

division, which increases the efficiency of the

economy and regional potential. At the same time, the

regionalization of the economy can also contribute to

the formation of a number of problems:

 some connections between different regions

may be interrupted;

 imbalances of new development features;

 there are needs for infrastructure and new

mechanisms of regulating the market and

overcoming contradictions.

4 DISCUSSION

The system of reproduction and use of the labor

potential of the regional economy is characterized by

a number of destructive trends at the modern stage of

development. These tendencies are determined by the

prevailing factors of negative influence and are

aggravated by the restrictions from the COVID-19

pandemic.

RTCOV 2021 - II International Scientiﬁc and Practical Conference " COVID-19: Implementation of the Sustainable Development Goals

(RTCOV )

370

A significant problem of modern society is a

sufficiently high level of poverty. Another negative

factor is the high level of income differentiation of the

population. A significant difference is observed

between the indicators of average and median wages,

which is confirmed by the level of the Ginny

coefficient in different regions. Finally, the

proportion of the traditional middle class is an

extremely low, but it is middle class should act the

main stabilizing role as a social group.

The main source of the labor resources in the

conditions of their deficit are migrants. But if during

2020-2021, the possibility of moving of labor

resources has become significantly more complicated

against the background of border closures and

quarantine conditions. There are also a lot of

additional potential global threats based not only on

new diseases, but also on environmental problems,

terrorism and geopolitical risks (Rimashevskaya et

al., 2013).

The sphere of the investments in the human

capital is quite specific, since it includes a number of

difficult-to-control factors and features, such as

motivation or value orientations. So, the complex of

mutual interests of employees and business is the

most important factor of high efficiency of the labor

potential of the organization. In turn, insufficient

motivation leads to the degradation of labor resources

and narrowed reproduction of the labor potential of

the regional economy.

The socio-economic problems determines

destructive trends in the system of reproduction of

labor potential. One of the main problems is the high

mortality rate, which is determined by the large

number of different diseases and injuries (Bessonova

et al., 2021).

Unemployment, as a socio-economic

phenomenon, provide a destructive influence for the

labor resources of the region, contributing for their

degradation or outflow to other territories. There are

a lot of different factors that contribute to the growth

of the level of unemployment in the regional

economy. In some cases, there may be an imbalance

of demand and supply in various professions and

fields of activity at the regional labor market, which

provides a deficit of personnel in some spheres and it

does not allow to overcome the high level of

unemployment in other sectors of economy.

Similarly, economic difficulties in various industries

lead to an increase of the level of unemployment in

the case when additional labor resources begin to be

released in some industries. The main reason of this

effect usually is the decreasing level of investment

attractiveness and outflow of capital. Finally it

provides staff reductions as a part of cost optimization

programs. One of the important problems

exacerbating the impact of unemployment is the

insufficient level of diversification of the region's

economy, which hinder for a effective distribution of

workplaces by different industries.

5 CONCLUSIONS

The analysis of the modern situation allows us to

identify the factors of degradation of labor potential

in the regional economy in the context of the COVID-

19 pandemic. Relatively high indicators of

unemployment in the conditions of the regional

economy, on the one hand, determine the low level of

competitiveness of the economy of the region, and on

the other hand, negatively affect the labor market,

aggravating the situation.

Regionalization of the economy makes it possible

to combine and use the potential of territories in the

most optimal way, forming self-sufficient territorial

structures. The disadvantage is the risk of reducing

interregional economic relations and the potential

opportunity for national independence for the richest

and most affluent regions. The inability to activate

migration processes in conditions of restrictions leads

to changes in the structure of the population of the

regions. Conditions of the labor market and the level

of availability of labor resources provide a direct

impact on many factors, including the level of

development of industry and production forces, as for

the degree of participation in the international labor

division and the level of social wellfare, the

development of education systems and dependence

from the federal center.

All these factors determine the formation and

maintenance of crisis trends in the economy of the

region, which reduce the demand for labor resources.

Difficult economic situation in the region determines

less favorable socio-economic conditions and level of

incomes in comparison with other territories. The

existing complex of negative impact factors reduces

the production potential of the labor resources of the

regional economy and contributes to the degradation

of human potential.

ACKNOWLEDGEMENTS

The publication is completed as part of the intra-

university grant under the South West State

Aspects of Reproduction of the Labor Potential of the Regional Economy in the Conditions of Pandemic

371

University development Program (priority-2030) No.

pr2030/2021-60

The publication was made as a part of the state

task for 2021 (No. 0851-2020-0034) on the topic:

"Conceptual foundations for ensuring economic

security in the Russian Federation in the context of

digitalization: contours of spatial transformations".

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