Diagnostics of weaknesses and strengths of a region’s socio-economic and innovative development: Methods and its application

Abstract

The article offers methodological tools to diagnose the weaknesses and strengths of a region’s socio-economic and innovative development. The topicality of the issue is determined by the need to define the priorities for the regional strategizing. The methods of analytical diagnostics, expert survey, SWOT and PEST analyses underlie the methodology of the study. The article applies the diagnostics tools to the economy of Lugansk People’s Republic and gives the results. The study characterizes the local factors of the regional economy affecting the level of the economic and innovative development in Lugansk People’s Republic. The article also gives the conclusions made from the analysis of the possible external impacts (opportunities and threats) in the COVID-19 pandemics in terms of social, economic, and innovative trends. For example, PEST analysis is used to calculate consolidated weighted indicators for the socio-economic and innovative development in Lugansk People’s Republic. A group of political factors is seen to have an adverse effect due to the Republic’s status as a breakaway region and a threat of military escalation. A lack of properly functioning banking and financing systems, flight and railway connections, low investment interest in the region’s economy show the most serious detrimental impact among other economic factors. A weighted indicator in the group of social factors is positive due to the following institutions: protection of health and labor, education, culture and sport. A negative weighted value for a technological component could be explained by an extensive physical and moral depreciation of the fixed assets, a low use of production capacities, a lack of local raw materials resources. Cross-sectional SWOT analysis makes the authors conclude about a significant impact of the weaknesses on the socio-economic and innovative development of a region, which should guide the development of priority measures in the public economic strategy. Further research is seen to be connected with the justification and development of the efficient strategy for the sustainable self-development of Lugansk People’s Republic.