Institutional Environment Development of Innovative Economy of Russia: Problems and Solutions

Purpose: is to determine the impact of Russian digital platforms and ecosystems on the processes of innovative development and clustering of the economy of Russian regions. Methods: the research is based on the scientific concepts and models within the framework of the theories of cluster development and digital transformation of the economy, in particular, the model of development of territorial innovation clusters. The following methods of statistical research were used: summary and grouping of statistical information, sample observation, correlation analysis. Results: the attributive features of economic ecosystems are highlighted, which include innovation clusters, digital platforms and ecosystems. The theoretical approaches to defining a digital ecosystem are discussed, and the author provides definitions for the following concepts: digital platform, digital ecosystem, digital service, innovation cluster, industrial cluster, and innovative business networks. The features that characterize digital ecosystems are identified, and 12 Russian ecosystems are identified based on these features. Development models are systematized, classification criteria and types of digital platforms are clarified. The current trends in the development of digital platforms and ecosystems are considered, and the level of development of Russian ecosystems is assessed. The analysis of the use of digital platforms and other modern information technologies in Russian regions is carried out, the influence of the use of digital platforms on the processes of innovative development and clustering of subjects of innovative activity at the regional level is considered. Conclusions and Relevance: the development of innovative and hybrid (innovation-transactional) platforms within the Russian digital ecosystems, as well as their integration with innovation clusters, are considered as a factor in the digital transformation of the economy of Russian regions. The author's model of an innovative hypercluster, which is a type of innovation clusters developing on the basis of digital platforms, is proposed as a new organizational form of this integration. The features of the innovative hypercluster model are multi-industry specialization, the trans-regional nature of economic activity and the multicore structure of network interactions of participants.

B a c k g r o u n d. The issues of structural policy and systemic restructuring of the national economy, its innovative modernization are the issues of the future of Ukraine, a strong European state. The current practice of structural reforms in Ukraine shows that the qualitative characteristics of structural policy lag far behind European standards in this area. The purpose of the article was to systematically analyze the characteristics of structural policy and to identify and provide institutional recommendations for state participation in innovative economic development during the war and the period of post-war economic reconstruction in Ukraine. M e t h o d s. A set of empirical and theoretical research methods was used: methods of analysis, synthesis and generalization, which at the dialectical level allow to scientifically substantiate popular models of innovative development. A methodological analysis of theoretical doctrines was carried out to reveal the political and economic foundations of the study of structural transformations and structural policy. R e s u l t s. The features of the systematic approach to the study of patterns of innovative development and systemic restructuring of the national economy as a whole are revealed. This approach makes it possible to make fundamental clarifications of the institutional transformations of structural policy in the period of fundamental changes in the national economy. It is found that innovative development based on knowledge is the defining imperative of structural policy and determines the creation of "new" development institutions. The experience of economically developed countries shows that innovative development is a priority direction of structural policy. The author analyzes the conceptual interrelationships of the structural policy objectives, the systemic nature of the structural policy of innovative modernization, the institutional limitations of structural changes in the Ukrainian economy and the need to overcome the institutional "ineffective" structural policy. The features of the institution of structural policy as a factor in optimizing the state's participation in the innovative development of the economy are investigated. It is established that institutional theory is one of the most important components of the structural policy of innovative development of the modern economy. It is determined that digital platforms can become a key factor in structural changes that will ensure the innovative development of Ukraine's economy. C o n c l u s i o n s. The research results indicate the growing influence of systemic trends in the structural policy of innovative development and can be used to develop specific concepts, a special categorical apparatus, a high-quality institutional environment, forms and tools for strengthening the institutional concept of innovative modernization.

The really working effective mechanisms for the formation and development of innovative industrial clusters in various regions of the world have been investigated. The essential advantages and disadvantages of these mechanisms are analyzed. The national specificity of Ukraine in this matter has been taken into account. On this basis, an "ideal" cluster strategy for the innovative development of Ukraine at all levels of its economic system has been formulated. It has been proved that for the innovative development of the Ukrainian economy it is necessary to: develop a law on state participation in the process of innovative cluster industrial development of Ukraine; improving the procedure for the formation and implementation of the most important cluster innovation projects of state importance within the framework of national target programs for innovative cluster development; development of measures of state support for innovative cluster entrepreneurship; formation and implementation of cluster pilot projects for innovation in the regions. The strategy of innovative cluster industrial development of Ukraine should provide for the development and growth of human capital as one of its main priorities. The content of the strategy of innovative cluster industrial development of Ukraine is to conduct research and development aimed at creating scientific and technical innovations, their practical application in the production and sale of a product, as well as in the field of services carried out within innovative industrial clusters or their direct participation. This strategy is a part of the state development strategy, which includes the main goals, principles, directions and ways of the state's influence on the participants of innovation activity - through state support for the widespread creation and functioning of innovative industrial clusters. Solving the problem of structural restructuring and transition of the national economy of Ukraine to the sixth technological mode is possible only if the strategy of innovative cluster industrial development is implemented, based on using the potential of innovative industrial clusters to continuously update the technical base of production, improve its technological structure, generate and introduction of innovations that provide cost savings or create conditions for such savings. The main purpose of innovative cluster industrial development of Ukraine is to create (with the help of clusters) economic, legal, financial, organizational and other conditions that provide accelerated development and development of new competitive products and modern environmentally friendly, safe, energy and resource-saving technologies. basis - the transition of the country's economy to higher technological systems.

Рассмотрен процесс внедрения термина «экосистема» в экономическую науку, выделены основные признаки экономических экосистем. Обобщены теоретические подходы к сущностному содержанию двух наиболее распространённых в рамках цифровой экономики экосистем кластерного типа: цифровых платформ и цифровых экосистем. Систематизированы основные научные подходы к определению цифровых платформ, их ключевым функциям и составу участников. Представлены уточнённые критерии классификации и виды цифровых платформ в современных экономических условиях. В рамках исследования предлагается уточнённое определение цифровой экосистемы, выделены основные признаки цифровых экосистем. Интеграция кластеров, цифровых платформ и экосистем предлагается в качестве перспективного направления синхронизации процессов инновационного развития российских регионов. To date, balanced development of national digital platforms and ecosystems is a key factor in ensuring economic sustainability in the context of digital transformation. The two main trends fuelling the formation and further development of Russian ecosystems on the basis of digital platforms are the development/acquisition of platforms and services satisfying the groups of customer needs previously unmet by the company and the growing economic effects of closer integration and interconnection of digital platforms and services already existing within an ecosystem. The current global trends in the development of the platform economy give added importance to the theoretical and methodological work on the development of mechanisms for integrating digital platforms and ecosystems with industrial enterprises united into innovation clusters at the territorial level. The relevance of considering the economic essence of digital platforms and ecosystems as cluster-type economic systems along with studying their similarities with innovation clusters have determined the aim and objectives of the study. The aim of the study is to determine the economic essence of digital platforms and ecosystems, as well as the prospects of their integration with innovation clusters. The theoretical basis of the study is made up of scientific concepts and approaches within the theories of cluster development and digital transformation of the economy, in particular, the model of development of territorial innovation clusters, as well as contemporary research into the development processes of digital platforms and ecosystems. Conclusion. The formation and development of Russian digital platforms and ecosystems, as well as their integration with innovation clusters, are driven by the intensified global competition in digital markets, increasingly complex nature of innovation activity, and the need for enhanced alignment and synchronization in the development of regional innovation systems. We also consider the integration of innovation clusters, digital platforms and ecosystems as one of the promising areas of regional economic development within the new context. As a form of this integration, we propose the previously described model of the innovative hypercluster, a type of innovative multiclusters that develops on the basis of digital environments and platforms and is characterized by multi-industry specialization, transregional nature of economic activity, and multi-core structure of participants’ network interactions.

The role of the state management sector is essential for creating a favorable institutional environment for the innovative development of business entities. The state, thanks to the performance of its inherent functions, stimulates or discourages innovative activity, which is reflected in the pace of economic development and the speed of the transition of the national economy to a new technological system. Institutional provision and support of the GDR and innovative development of the national economy is the exclusive prerogative of the state, whose function includes creating conditions for a favorable investment climate, commercialization of innovations, and motivation of innovative product developers. Innovative development is a complex, multifaceted and dynamic category of economic science, which is the main prerequisite for ensuring the appropriate level of competitiveness of products and enterprises, integration of the domestic economy into the world, sustainable development of the national economy in conditions of worsening social contradictions and increasing man-made load on the ecological environment. The agrarian sphere is exclusively important for achieving the goals and objectives of sustainable development both in the national dimension of the economy of Ukraine and in the global world scale. According to the proposed author’s approach, the architecture of the institutional environment for increasing the innovative activity of agricultural enterprises is based on an organic combination of fundamental state institutions (legal, social, economic, ecological) with institutions whose action should be ensured by market mechanisms. Creation of stimulating prerequisites and financial support of the GDR is an indispensable factor in attracting investment flows to the national economy. The conducted research and practical experience of the functioning and development of the agar sphere made it possible to establish that the institutional support for innovative activity in this sphere is at the stage of development and improvement. The article examines the institutional foundations of the formation of a favorable environment for the introduction of innovations for enterprises in the agrarian sphere. Considerable weight is given to the issue of understanding the architecture of the institutional environment of agricultural enterprises

Some researchers call the modern stage of development of the world economy “the era of innovations". Studies show that economic and social progress is ensured through an innovative process - the process of producing new knowledge and practices. Thanks to new technologies, deep structural changes are taking place in the economic sectors, new industries are being formed, new jobs are being created. Globalization and the integration of the world economy have further exacerbated competition in the market for high-tech products. In these circumstances, innovative instruments remain the only possible source of increasing the competitiveness of national economies. The innovative way of development of the Russian economy is recognized as the main direction promoting restoration of volumes of production, the international competitiveness, a standard of living of the population, increase of efficiency of national economy, improvement of an ecological condition of a natural environment. Therefore, it is no coincidence that at this stage of development of Russia’s economic system, its main vector is to increase the effectiveness of the implementation of innovation policy. The special attention paid at present to the issues related to the implementation of innovation policy is caused by the active activity of the state, which aims to transfer the Russian economy to the innovative way of development by 2020. It is an undeniable fact that the innovative way of development of the country is the only way to overcome the global socio-economic crises that pose a threat to the sustainable development of the state, both in the present and in the future. This article is devoted to the problems of innovative development of our country.

Objective. To analyse the trends and opportunities for the development of information and communication technologies, digitalisation of the economy and the use of renewable energy sources as one of the main elements of the basis for innovative development of the national economy and society. Results. The article considers the essence of the concept of ?innovation?, analyses the trends in the development of information and communication and digital technologies, the level of use of renewable energy sources as a basis for the growth of economic security of the country and social development of society. Prospects for growth in the use of solar, wind, hydropower, thermal water, and biological energy resources are investigated. Scientific novelty. Many scientists have been and are still studying the problems of innovative development of the national economy and society. This research topic is extremely relevant, as it makes it possible to address energy and resource conservation issues and guides the state towards Ukraine's integration into the EU. The introduction of innovative, information, digital, production and other technologies opens the way to closer interstate cooperation in the development of renewable energy sources, which in the future will definitely have an impact not only on the country's energy security but also on improving the environmental situation. Given that renewable energy sources are inexhaustible and environmentally friendly, and that digitalisation of the economy is a tool for obtaining and transmitting information on the development of innovative technologies using non-fossil energy sources, they are together one of the main components of the basis for innovative development of the national economy and society. One of the most important areas of innovative development of the country's society and economy is the technical and technological development of the resource potential of renewable energy sources. In addressing the issue of energy independence, the state is focusing its efforts on obtaining energy from such sources as solar, wind, household and industrial waste, hydro- and geothermal energy, and biofuels and gas. Practical significance. The essence of the economic category ?innovation? is revealed and the relationship of this concept with the innovative development of the economy and society in Ukraine is established. The use of innovative information and communication technologies and digitalisation of the economy are analysed. An assessment of the innovative development of energy in Ukraine and the use of renewable energy sources is made, which indicates a gradual transition of the country's public economy to innovative ways of development. The use of non-fossil energy resources as a way out of the energy crisis, economic growth, and improvement of living standards is substantiated. Keywords: innovation, information and communication technologies, digitalisation, society, economy, renewable energy sources.

Modern trends of deep and dynamic transformational processes in all areas of economic life actualize the tasks of creative economic development and form problem areas, the study of which requires innovative approaches and solutions. In this aspect we are talking about the development of innovative clusters of the Russian economy. Rethinking the conditions of modern cluster programs implementation, in relation to the conditions of the present period of economic development, the direction of systematic formation of links between large corporations, small and medium business enterprises, the state and holders of creative potential becomes demanded. Taking into account the fact that the purpose of recovery and stabilization of Russian economy development in post-crisis period is the search for new impulses of economic development, the creative provision of innovation clusters is in the focus of attention. The authors substantiate the importance and legitimacy of the analysis of creative provision of innovation clusters, the implementation of which draws attention to its intellectual core, new technologies and new institutions as necessary conditions for adapting to increasing transformations. The aim of this research is to work out the ways of innovative development of Russian economy clusters relying on the creative potential. The novelty of the study is the theoretical and practical justification of the need for systemic filling of the innovation cluster of the economy with creative potential.KeywordsCreative potentialClustersInnovationRussian economyCorporationSystemsIndustriesIntellectual capital

The low level of innovative activity of Ukrainian enterprises is due to the presence of various obstacles that stand in the way of the innovative development of these enterprises. The purpose of the paper is to develop and use a toolkit for assessing the level of obstacles that stand in the way of innovative development of enterprises. Achieving the set goal requires solving the following main research tasks: clarifying the essence of the innovative development of companies, identifying its features and types; grouping of types and development of indicators for evaluating obstacles that stand in the way of innovative development of enterprises; use of the developed toolkit in assessing obstacles that arise when implementing innovative energy-saving technologies at enterprises. Methodology of the study is based on general research methods of analysis and synthesis, induction and deduction, observation and abstraction, which are used to develop and test the toolkit for assessing obstacles that stand in the way of innovative development of business entities. The results of the conducted research showed, in particular, that there are a significant number of obstacles that stand in the way of innovative development of enterprises. The specified obstacles can be divided into groups according to the following characteristics: the stage of implementation of innovative projects; the reason for the occurrence of obstacles; the place occupied by a certain barrier in the hierarchy of obstacles, etc. The analysis carried out based on the data of 165 Ukrainian enterprises – consumers of natural gas showed that among the obstacles on the way to the implementation of innovative technological changes aimed at saving natural gas, the high level of obstacles is due to the lack of necessary competencies among the company's personnel. Practical implications. The developed toolkit for assessing obstacles that stand in the way of innovative development of companies can be used by enterprises of all types of economic activity when planning measures to increase innovative activity. Value/originality.The proposed toolkit makes it possible to obtain an objective quantitative assessment of the level of barriers that stand in the way of innovative development of companies. This is due to the selection of all the main such barriers, the establishment of their sequence and the use of a indicators of the shares of innovative projects that have overcome the relevant stages.

Topicality. Today, in a highly competitive environment, ensuring the innovative development of the enterprise is becoming an increasingly important task. The modern economy and global development processes encourage businesses to innovate and develop their existing intellectual potential, which is an important source of continuous development and opportunities for companies to adapt to market demands. Creation, building and realization of intellectual potential is possible only in the long run, which indicates the relevance and necessity of the study of intellectual potential as an important component of innovative development of the enterprise. Aim and tasks. The aim of the article is to study the intellectual potential as a component of innovative development of the enterprise. To achieve this goal the following tasks were solved: the concept of innovative development of the enterprise and its components were considered; identified intellectual potential as an important component of innovative development of the enterprise; the main indicators of innovative development and activity of Ukrainian enterprises are analyzed. Research results. The concept and components of innovative development of the enterprise are considered in the article; identified an important component of innovative development of the enterprise - intellectual potential; the main indicators of innovative development and activity of Ukrainian enterprises are analyzed. The structure of the main components of innovative development of the enterprise is offered, the basic characteristics of intellectual potential are revealed, interrelation of intellectual and innovative potential is considered. Conclusion.. The level of the country's economy depends on the level of its innovative development, so the introduction of innovation potential in a market economy is one of the most powerful levers of competition and economic growth of enterprises. It is the innovative way of development that will stabilize and develop the activities of enterprises, provide Ukraine with a worthy place in the world and overcome the crisis. However, the innovative development of the state is impossible without sufficient intellectual potential, which in modern conditions is an important factor in ensuring innovative development in combination with effective and efficient financial, economic, legal mechanisms of the state. It can be said that for any country, education and innovation should become one of the most important areas of development in terms of long-term prospects of the country, its potential and competitiveness in today's world. Therefore, innovation development is not considered without the construction of a new innovative intellectual resource. An example for Ukraine can be Switzerland, which shows the best results among the world's leading countries in terms of economic openness and integration of human capital, or Sweden, which has a well-organized and efficient work of state institutions in implementing innovation, high level of staff skills. in the field of innovative technologies and processes, many universities and students that develop and implement innovations.

THE PURPOSE OF THE ARTICLE is to study the peculiarities of formation and stages of development of innovation clusters in the IT sphere under martial law, to identify possible obstacles faced by IT clusters during military conflicts, as well as ways to overcome them. RESEARCH METHODS. The following special and general scientific methods were used in the article: socio-economic analysis, scenario analysis, SWOT analysis, expert assessments, monitoring and evaluation of results, tabular and graphical, induction and deduction, etc. PRESENTING MAIN MATERIAL. The development of innovation clusters is one of the key drivers of economic growth in a globally competitive environment. Clusters bring together companies, research institutions and government agencies to jointly develop innovative solutions. Innovation clusters are important elements of the modern economy that stimulate technological progress and economic growth, which are formed on the basis of a concentration of interconnected enterprises, institutions and organisations that interact and support each other. Innovation clusters in the IT sector not only ensure technological progress but also create new economic opportunities. Economic, social, technological, and institutional factors are important factors in the formation and development of innovation clusters. In the context of martial law, when economic stability and access to resources become limited, innovation clusters must adapt to new challenges, ensuring not only development but also the sustainability and security of their members. The war started by Russia in 2022 and the introduction of martial law have dramatically changed the conditions for the development of IT clusters, where the main obstacles are security threats, displacement of personnel, limited access to finance, supply chain disruption, and reduced demand for IT services. Among the main factors influencing the process of forming innovation clusters in the IT sector, economic, social, technological and institutional factors were identified. The formation of innovation clusters in the IT sector includes the following stages: initiation and initial stage; infrastructure creation; development and consolidation; maturity stage and internationalisation. Thus, innovation clusters become a platform for developing products and solutions aimed at supporting government agencies and ensuring public safety. In particular, new approaches to data protection and communications are being developed in the IT sector, programmes are being created to coordinate humanitarian aid, and technologies for monitoring and forecasting crisis situations are being introduced. CONCLUSIONS. In the context of martial law, innovation clusters face numerous challenges, but at the same time they demonstrate significant adaptability and ability to innovate. The process of formation and stages of development of innovation clusters in the IT sector is characterised by the main steps from initiation to international expansion, and requires the integration of various elements, such as infrastructure, innovation culture and cooperation with educational institutions. The successful formation and development of innovation clusters is critical to stimulating technological progress and increasing competitiveness at the global level, where further research in this area can help identify new approaches and strategies to support and develop innovation ecosystems. The main strategies to ensure the sustainability and further development of IT clusters were identified as the introduction of remote work, diversification of financing, creation of backup infrastructures, search for new markets and close cooperation with government agencies. Thus, martial law can stimulate the development of innovations in certain areas, such as cybersecurity, communications and information security, and IT clusters that are able to adapt to new realities can become key elements of national security and resilience under martial law. KEYWORDS: innovation clusters; IT-sphere; formation and development; martial law; technological progress; integration; infrastructure; strategy; security; economic stability.

PurposeThis paper aims to study largely recent aspects of entrepreneurship and innovation in China. It synthesizes the research in the current special issue (SI) ofMultinational Business Review(MBR) on this topic. In addition, this paper differs from other work on this topic in examining entrepreneurship and innovation from a more global standpoint with relevant international effects.Design/methodology/approachThe paper provides an overview of the literature on entrepreneurship, innovation and key related topics such as firm and economic growth, as well as linking this research to related international works. It also summarizes the papers of the SI.FindingsThe authors’ analysis suggests that the study of entrepreneurship and innovation should be placed in the context of a country’s economic development and institutional environment as well as the firm internationalization trajectories and business models. In addition, the authors believe that a good understanding of economic growth in a transition economy like China (which is a key goal of China’s recent emphasis on innovation) is facilitated by understanding the comparative advantages and disadvantages of an economy with respect to the global innovation system.Originality/valueThe authors’ study explores the local-global and parent-subsidiary connectivity and co-evolution of firm strategies and the institutional environment in entrepreneurship and innovation in emerging and transition economies. The authors summarize and synthesize the papers in this SI to provide the results as well as some directions for future research in the domain of entrepreneurship, innovation and new venture creation, which is believed to be a key engine of economic growth in the coming years.

The article is devoted to the study of the problems of innovative development in the regions of the Russian Federation. The aim of this work was to determine the empirical relationship between the indicators of innovation activity, economic growth and the state of the institutional environment in the regions. For this purpose, the research methodology was formed and the analysis of the subjects of the Russian Federation was carried out with the establishment of current trends in innovative, institutional and economic development. The methodological basis of the study was the grouping method, the decision tree method, as well as economic and mathematical modeling for constructing production functions. In the course of the analysis, it was found that economic growth directly depends on the innovation and institutional factors. High values of these factors allow you to get GRP per capita at the level of 510 thousand rubles and above, with low values, this indicator is 180-200 thousand rubles. The rate of economic growth is also directly proportional to these factors. It is also revealed that, first; the quality of public institutions and business institutions determines the effectiveness of development and the growth of innovation indicators at the regional level. The most significant attribute for the classification of subjects by the level of innovative development is the innovation activity index. It defines the current classification by 36.7 %, the indices of socio-economic conditions and the quality of innovation policy by 26 %. Macroeconomic modeling of economic growth in the regions depending on the level of innovative development is carried out, and the prospects for using the innovative factor as a driver of economic growth are evaluated. It is established that for a significant number of regions of the Russian Federation, the innovative way of development is not relevant in the medium term. Only for 15 territorial subjects of the Russian Federation, economic growth is real, accompanied by the development of innovative activities. Based on the results of the simulation, proposals are formulated for the directions of economic development of the regions. The article is intended for specialists and experts in the field of theory and practice of innovative development

Purpose. The aim of the article is to generalize the trends of the transformation of the institutional environment of the innovative development of the national economy and the features of the institutional support for the development of innovations. Methodology of research. The theoretical and methodological basis of the research is: a systematic approach to the generalization of trends in the transformation of the institutional environment of innovative development; institutional approach to the substantiation of the elements of the regulatory influence of formal norms, oriented towards the development of innovations; structural and functional analysis – to determine the macroeconomic and microeconomic manifestation of post-industrial transformations on the institutional environment. Findings. It is emphasized that for the formation of an effective toolkit for innovative modernization of the national economy, it is important to take into account global factors of economic dynamics, their exogenous and endogenous manifestations. It was established that the modern vector of global transformations, which is already having an impact on the national economy, has become digital modernization, which radically changes the economic relationships of people and the fundamental role of economic resources. It is argued that digitalization generates effects that receive macroeconomic manifestation through the emergence and spread of new business strategies, changes in market conditions, and an increase in labour productivity. At the microeconomic level digitalization leads to a change in the structure and supply of goods production, their quality, logistics and sales conditions, and the interaction of manufacturers. Digital technologies contribute to the emergence of new institutions and institutes and influence existing ones by algorithmizing institutional influence and regulation, minimizing the impact of institutional traps and preventing the emergence of new ones, reducing the stability of existing routines, increasing or decreasing the effectiveness of institutions. Originality. It is substantiated that the post-industrial transformations of the economy and the institutional environment change the structural characteristics, but not the essential purpose of institutions and institutes in innovative development. The processes of digitalization and network interactions contribute to the standardization and algorithmization of institutes, the introduction of "digital institutes"; increase the efficiency of established institutes and institutions; create new dysfunctions due to the opportunistic behaviour of economic subjects; form an institutional "vacuum" due to the proliferation of digital technologies that have not yet become embedded in the institutional environment. In view of the task of innovative modernization of the public economy, in order to exclude the negative impact it is necessary to modernize the institutional environment itself to change the direction of the functional influence of regulatory norms and introduce organizational innovations that can improve the institutional structure. Practical value. The theoretical and methodological provisions of the study deepen the practical principles and tools of institutional regulation of innovative modernization of the national economy. Key words: modernization, innovative development, social economy, transformation, institutional regulation, institute, institution.

Global economic environment based on globalization processes caused a severe competition between the nations, and these nations launched various strategic approaches to increase their market shares in the global markets. The economic globalization process stimulates changes of technology environment that is not favor for the technology advanced nations to transfer their strategic technology areas toward developing and newly industrialized nations. Moreover, due to the change of external economic and technological environment national development strategies in all nations are also changing. In order to generate economic growth and gain a better position in severe competition between nations, the advanced nations have already established strong national and regional innovation systems The nations participating in the globalization processes actively tend to close free trade agreements (FTA) in order to intensify the movement of their production factors across the national borders as quick as possible. This new trend has cognized the importance of regions and regional competitiveness that are based on regional industries. In line with the new trend of global economies, building innovative local clusters has become one of the core strategies to develop the nations further. This frame shift has affected South Korea to a high extent because the nation cannot develop further without inventing its own core technology that costs a vast capital as well as takes a long time. This paper examines an attempt to restructure existing industrial complexes, turning them into innovative clusters at regional and local level. This contribution also tries to identify the tasks and strategies necessary to build locally embedded innovative clusters and how to best analyze these.