Criteria for determining the structural changes priorities in the economy

Abstract

The article aims to identify scientifically reliable criteria for determining priority sectoral directions of structural policy in Ukraine, to reveal key issues of domestic industries’ compliance withthese criteria, and to outline the ways to eliminate structural deformations in the economy of Ukraine. The methodological basis of the article relies on the joint application of a set of common scientific methods (analysis, synthesis, induction, deduction) as well as mathematical methods of economic research based on the concepts of economic complexity, product space and opportunity gains. This allows to discover new growth opportunities for Ukraine based on its industrial capabilities, technological potential and foreign trade diversity. Three steps to carry out drastic structural transformation of Ukrainian economy are suggested: reduction of energy intensity; development of highly productive industries that have kept their production and export potential; innovative and technological modernization of economy. The first two steps represent the intermediate goals of structural policy, while the third one reflects the strategic goal of domestic economy transformation. For each step, the main criteria are substantiated to identify the most promising economic sectors to focus structural policy on. The article presents a comprehensive look into defining sectoral priorities of economic transformation policy based on available opportunities (resource, capital, technological, human facilities, etc.) and potential of different industries to accelerate economic growth. The concepts of economic complexity, product space and opportunity gains enabled identification of specific product groups that can act as drivers of productivity growth under effective and balanced governmental support. The results of investigation can be used to develop strategic inter-sectoral program of economic restructuring in Ukraine.