Modelling Economic Growth Based on Factors of Innovation Production Potential Development

The present research is devoted to the main points of industrialization, its possible types and typical structural changes in the production process. To reveal its features we have identified parameters to compare industrialization and de-industrialization processes. According to this fact the industrialization is construed as a managed process of structural transformation of the Russian economy that suggests the movement of resources from mining industry to manufacturing one. This attitude to the process under consideration has revealed two main types of industrialization: the first one is characterised by the growth of industrial production share in GDP, and the second type suggests the increase of production manufacturability when the share of industrial sector in GDP does not change even if it decreases in the total amount of GDP. The revealed types of industrialization demand the specification of their implementation conditions in terms of the current Russian economy to solve all scopes of strategic tasks, such as the development of industrial production on a new technological basis and the increase of import substitution rate. For this purpose using the Minsky frame model we have presented a two sectoral model of economy as an aggregate of consumer and manufacturing sectors. Analytical accurate correlation between salary and labour productivity has been determined on this basis for different industrial growth regimes. The suggested theoretical model demonstrates that salary change rate in the manufacturing sector of production means may increase labour productivity rate in this sector to provide economic growth. Different regimes of economic system dynamics depending on the correlation between salary and labour productivity rates in consumer and production sectors have been determined. They confirm that the compliance of outpacing changes of labour productivity relative to salary is not compulsory to provide economic growth in the country. Moreover, according to the theoretical model it may limit the economic industrial growth. Besides, we have analytically revealed that when salary growth rate in the consumer sector outpaces the labour production growth rates it will lead to a regime when labour productivity growth rate in manufacturing sector must be higher than salary growth rate there. The conclusions we have made may be used as a foundation for the development of strategic priorities to provide security in the field of scientific and technical and technological development of the country. Meanwhile, the development of a complex macroeconomic policy considering the impact of institutional factors will be significant in the current trends of the Russian economy development. This policy will make conditions for further industrialization and the increase of industrial security of the country. Keywords structural policy, industrial growth, manufacturing sector, consumer sector, wages, labor productivity, two sectoral H. Minsky model. Acknowledgements The article has been prepared within the framework of the public order entitled “Macroeconomic and industrial policy of growth: Institutional, structural and technological changes” (№ 0163-2018-0002) of Market Economy Institute of the Russian Academy of Sciences and within the public order of the Centre of Institutes of social and economic development of the Institute of Economics of the Russian Academy of Sciences.

Subject. This article discusses the development of digital technologies and their impact on workforce productivity and economic growth in Russia. Objectives. The article aims to assess the impact of digital technologies on labor productivity and economic growth in Russia. Methods. For the study, I used regression estimation using the two-stage least squares method. Expenditures on information and communication technologies (ICT) and investments in assets for the acquisition of ICT equipment were used as baseline variables. The Rosstat, Bank of Russia, World Bank, and the International Data Corporation data have been considered. Results. The article presents the results of an assessment of the impact of ICT development on labor productivity and economic growth in Russia. Conclusions and Relevance. The article establishes the positive impact of growth in spending and investment in ICT on labor productivity and economic growth in Russia. The hypothesis of a positive impact of ICT infrastructure development on these indicators is not confirmed. The results of the study can be used by market participants and public authorities when making decisions on investing in the ICT sector.

This paper looks into issues related to achieving sustainable economic growth in Russia, with a focus on some of the key requirements that must be met in this regard in the context of economic policy. Its main purpose is to identify some of the key components of economic growth that can help design an effective economic policy aimed at stimulating economic growth. The principal methods employed by the authors include analysis and synthesis, scholarly abstraction, and mathematical modeling. The paper examines some of the major competing strategies for development in Russia. Despite the multiplicity of ideas on the subject, these growth strategies are predicated on the consideration that jumpstarting the economy requires greater investment. Indeed, this is a crucial condition – but that is not enough. Based on an analysis of fundamental economic identities and the economic situation in Russia, the authors formulate a set of key requirements for economic policy on stimulating economic growth. It is suggested that a possible basis for economic growth in Russia is mainly boosts in labor productivity. With that said, the government must maintain a balance in terms of the dynamics of investment and wages, with a focus on advanced growth in pay relative to labor productivity. In this context, it is worth noting that the dynamics of growth in pay is among the key components of economic growth. In this regard, the authors are of the view that growth in pay must be viewed as a key factor in economic growth – not a consequence thereof. Unfortunately, there is a myth in the economic literature that growth in pay is a consequence of economic growth and growth in labor productivity. The findings from the research reported in this paper could be used by Russia’s government authorities in designing their economic policy aimed at stimulating economic growth.

Subject. After the recent papers of leading economists on the Russian economy, the Author examines the influence of external factors of 2014-2016 on the merchandise export structure quality and on the Russian economic growth through the prism of the “Dutch decease” impact. Purpose. The research was focused on clarification whether the export structure quality improves or if the Russian economic growth model is becoming more sustainable after the mentioned events. Methods. The official data were subject to statistical processing in order to use some research methods designed by the author. There are new aggregation schemes for goods and destinations of foreign trade and the estimation of the financial attractiveness gradient of industries for investors. The application of the proposed methods makes it possible to derive qualitative indicators of non-commodity export and to assess its impact on the Russian economic growth. Results. The author shows that the qualitative estimations obtained by mainstream researchers could be greatly distorted without taking into account of some important commodity market features. So, the main result of this study is the initial hypothesis confirmation that the 2014 events pushed Russia’s exports towards improving the quality of its structure within the framework of specified definitions. Based on these results and some other publications, the author concludes that the Russian economy has the prerequisites for a transition to quality economic growth. The quantitative assessment of the transition to a new model of economic growth will require some further research on the topic.

Actual problems that hinder economic growth of the Russian Federation and the factors that stimulate achievement of progressive development of the Russian economy are studied. The purpose of the research is to determine the factors that determine economic growth of Russia and to choose the optimal model and conditions that are to be provided by the state for increase of the country’s economic potential. The directions of the national economic policy are determined that are aimed at optimal usage of the country’s resources – primarily, natural – for transition from extensive to intensive model of economic growth. The performed analysis of the factors of economic growth is based on the methodology of theoretical studies: formalization, abstracting, and idealization. The substantiated model of economic growth is based on the usage of import substitution of products in the internal market of the state and growth of export of non-resource spheres’ products. Characteristics of the innovational potential of Russia are given. Forecast of perspective of innovational development of Russia is provided. As a result of the research, the directions and initial measures of state support that allow ensuring economic growth of Russia in the mid-term are determined.

The article presents the study of the specific features of the Russian economic growth in 1998–2017. The study objective is to substantiate the growth and decline mechanism in business activity in the Russian economy. This mechanism is determined by the gap in the growth rates of wages and labor productivity in the open economy. Four hypotheses have been formulated: 1) significant cause and effect relationship between exchange rate and economic growth in Russia; 2) wage growth outrunning productivity has a depressing effect on the profitability of the commercial sector; 3) significant differences between the Russian economic growth in 1998–2009 and in 2009–2017, determined by the connection between the excess of the domestic interest rate over the world rate and investments; 4) substantial connection between the domestic interest rate and investment in 1998–2009 which disappeared in 2009–2017. The theoretical analysis and the hypotheses have been based on neoclassical synthesis models. Statistical testing of the hypotheses has been carried out by means of statistical and correlation analysis and methods of econometric analysis of time series. A problem related to wage growth outrunning labor productivity has been identified. Probable significant changes in the Russian growth model in 2018–2020 have been forecasted. They will be caused by the infrastructure development and housing construction. The major conclusion of the study is that there will be a positive effect of the ruble depreciation on labor productivity in the medium term. However, it will be over by the end of 2019 and beginning of 2020. Domestic currency strengthening and outrunning wage growth with the slowing labor productivity reduce the profitability of the commercial sector and put brakes on the economic growth.

This paper deals with the problem of economic growth and spatial development in Russia. It follows a theoretical framework of economic geography in terms of factors of the first and the second nature. According to economic geography, natural resource endowment, transportation costs, distance to markets and population distribution among other factors produce strong influence on economic performance of countries and regions. Using data for Russian regions, we test the effect of these factors on the level of economic development in Russian regions during 2000-2012, when they achieved high rates of growth. Our results support earlier theoretical and empirical findings in several aspects. First, we observe a positive effect of trade on economic growth in Russian regions during the period under review. Second, the first nature factors included as a distance to two main trading partners, Berlin and Beijing, were significant determinants of improvements in the levels of economic development across Russian regions. This work differs from others by the fact that we control for natural resource endowment in order to minimize the resource rent effect on regional economic growth in Russia.

The purpose of the research is to determine the conditions for a new model of economic growth in Russia. The subject is the economic structure of the Russian economy. The research methodology is structure analysis, the pair correlation method. The result of the application of these methods is the determination of the sensitivity of the contribution to the growth rate of the components of Russia's GDP to macroeconomic instruments, as well as the degree of their influence on GDP over the considered time interval. Using the pair correlation method, it was found that inflation did not significantly slow down the economic growth of Russia in the period 2001-2018, the increase in the money supply M2 stimulated growth, as well as lower portage rates. It is also shown that structural policy is an indispensable way of creating a new growth model in Russia, and reduced only to palliative measures in the form of institutional changes, creating an environment for business and the like, without changing sectoral economic proportions, it will not ensure the creation of economic growth of a new quality. One way to rectify sectoral interactions is to reduce risk in manufacturing sectors and equalize returns between the transaction, raw materials and manufacturing sectors of the Russian economy.

The presented study determines the prerequisites for accelerating economic growth and improving the quality of socio-economic development by modernizing approaches to the regulation of the labor market and reproduction of labor potential.Aim. The study aims to identify problems in ensuring economic growth in Russia by the workforce and to propose approaches to solving these problems.Tasks. The authors characterize the current rate and prospects of changes in economic growth in Russia; describe the problems of ensuring economic growth from the perspective of a factorial approach (through the example of the labor factor); analyze the causes of labor market imbalance and inefficient provision of workforce for the economy; propose recommendations on improving the process of ensuring economic growth by the workforce at the current stage of development of the Russian economy.Methods. This study applies methods of institutional, structural, and statistical analysis to the processes of economic growth and socio-economic development. A factorial approach to the description of economic growth is used during the analysis of this phenomenon. Its rate is determined by the quantity and quality of (resource) production factors. The labor factor is thoroughly analyzed. The problems of ensuring economic growth in Russia by the workforce are examined from the perspective of the systems approach using methodological techniques of variant and situation analysis.Results. The study substantiates the opinion that the modern Russian economy has stalled in a state of near-zero growth, mostly due to the low efficiency of the implemented socio-economic policy. It is therefore necessary to increase the rate of economic growth. The authors use the factorial approach (through the example of the labor factor) to examine the sufficiency of resourcing of economic growth with production factors. It is shown that, in light of the recent pension reform, workforce in modern Russia is sufficient and even superfluous. The key qualitative problems in the operation of the labor market are comprehensively analyzed, including the structural and quantitative discrepancy between specialist training in the educational system and labor requirements; overeducation of the population (people perform work that requires lower qualification than their actual level of education and/or professional training). This study shows the specificity of these problems and provides recommendations on solving them, which requires revising approaches to the development and implementation of the state economic policy.Conclusions. Russia has the resource capabilities (in terms of workforce) to intensify economic growth and make a breakthrough in socio-economic development. Analysis of the existing problems in this field shows that these issues can be solved. However, this requires a focused, systematic effort spearheaded by the government, which is impossible without improving the implemented state economic policy.

The study of economic growth factors is of greatest interest in modern economic science. The level of economic development is the key to solving social problems and improving the quality of life of the population. This study examines the impact of capital accumulation on economic growth. The author uses a neoclassical approach to the analysis of economic growth factors. Capital accumulation in the main sectors of the economy – mining, manufacturing, agriculture – is considered as a factor indicator. The main hypothesis of the study is that currently, the accumulation of fixed capital in important sectors of the Russian economy is not enough to significantly increase labor productivity and subsequent economic growth. This requires not only a qualitative, but also a quantitative assessment of the capital accumulation factor. Based on the results of the study, conclusions of practical importance were drawn. Firstly, an increase in capital per 1 worker by 1% leads to an increase in labor productivity by more than 1%, that is, the growth in labor productivity outpaces the growth in capital per 1 worker. Consequently, the capital-labor ratio can be considered as an important factor of economic growth. Secondly, a negative factor should be considered the lag in the pace of production renewal from the pace of withdrawal of fixed assets in industry and agriculture in some regions of Russia, which dictates the need to implement special programs in certain regions of Russia to intensify the development of manufacturing and agriculture. Thirdly, increasing the rate of capital growth per 1 worker for higher growth of labor productivity is advisable only in the manufacturing industry and agriculture, which is associated with the currently lower rates of capital growth per 1 worker in these industries compared to the mining industry.

The article examines structural policy as a tool for developing a new economic growth model in Russia. The author considers the conditions of economic growth based on increased investment. The purpose of the article is to determine the current characteristics of the Russian economy structural dynamics by the components of GDP and basic sectors. The basic sectors of the current investment structure have been assessed — processing sector and transactional and raw materials sector — and the directions for further development have been specified. The research methodology consists of: structural analysis of GDP and sectoral dynamics; the received and applied “structural formula” of assessing the contribution of the system elements to economic growth; formulated simple optimization models and a numerical optimization method (gradient projection method). The method of empirical and statistical estimates has also been used. Optimization models have made it possible to demonstrate the solution to the problem of distributing investments between the sectors with a target function for maximum profit and minimum risk. The analysis of growth and the conditions for economic growth obtained by the model-analytical method — in terms of the rate of change in oil prices and the exchange rate — allowed us to empirically show periods of growth and recession in the economy. They depend on the growth rate of oil prices and the devaluation of the rouble. This approach, with further use of econometric models linking macroparameters, will make it possible to evaluate the effect of changes in structural parameters on economic growth. The overall result of the study is as follows: the intensification of investments is insufficient to organize the investment model of economic growth in Russia. The stimulation of gross consumption and a change in the structure of investments are required. It is necessary to reduce the gap between the sectors by risk mitigation. External factors affecting the economic growth in Russia (oil prices, currency inflows) must be eliminated by changing the structure, including the sensitivity increase of its elements to macroeconomic policy instruments, and differentiating sectoral policy measures considering the positive impact on the contribution of GDP components and sectors of money growth and inflation.

The paper considers models of economic growth and the possibility of modifying a suitable model to find the potential for economic growth for the economy of society. The world global economy is studied, presented in terms of societies of the world, in monetary terms and the growth potential of gross domestic product in relation to capital, labor, technological progress, population and other macroeconomic indicators that affect it. Theoretical and methodological significance lies in the description of a fundamentally new method of modeling, which can be used to assess the potential of economic development, proving the dynamics of the coefficients of elasticity of production factors, and proving the hypothesis of declining economic growth. The developed model effectively estimates the potential for economic growth for any country and can be used as a basis for forecasting indicators of potential capital intensity of production and potential gross domestic product. Regarding the practical significance of the obtained results, it should be noted that all changes and numerical values are supported by real data and are a consequence of economic, political or social phenomena in the economy of the country under consideration. In the further research it is possible to develop this model, adding to it new variables which influence economic growth, to update methodology of finding of coefficients as a result of actions of economic agents, instead of only their exogenous influence on economy. The work has three main sections. The first section contains theoretical aspects of estimating the evolutionary economy in the one-dimensional case, it describes the basic theoretical information about the Solow model and other neoclassical and endogenous models of economic growth. The second section describes the possibilities of the Solow model for estimating economic growth potential and theoretical aspects and derives the mathematical basis for estimating economic growth potential. Also in this section describes the implementation of the mathematical base. The third section comments on the results of modeling, based on which detailed conclusions are formed, which summarize the economic, mathematical, analytical and technical work. The simulation results well illustrate the degree of use of economic potential, as well as the impact of capital, technological progress, investment, natural population movement on the efficiency of the economy in terms of many countries. The developed software (as a product of the digital economy) can be used to further improve the model, taking into account more factors.

The relevance of the study is due to the fact that given the exhaustion of extensive sources of economic growth in Russia, there is no alternative to increasing labor productivity. The purpose of the article is to explore the dynamics of theoretical approaches to measuring labor productivity, assess the practical results of ensuring its growth at various stages of the Russian economy, and suggest ways to overcome the current unfavorable situation with its increase and use. The scientific novelty of the research consists in the systematic comprehensive assessment of the results of labor productivity growth in the modern Russian economy in comparison with the USSR and other countries of the world in stages over a long period, as well as in the assessment of the ambiguous results of the corresponding Russian national project "Labor Productivity and Employment Support" from the standpoint of its continuation. The methods of the study are statistical and comparative analysis, a systemic approach, comparative logic, systematization, graphical presentation of data, etc. The study found that labor productivity in Russia as a potential source of intensive economic growth is underutilized, unstable in dynamics, and subject to the influence of a set of multidirectional factors. The values of labor productivity indicators vary, as they depend on the choice of methods used. The authors concluded that the state task of significantly increasing labor productivity remains highly relevant for Russia. Studying previous, largely positive, experience is a mandatory stage in developing new projects and strategies. It is also important to explore the impact of global processes on Russia's economic dynamics. The national project "Labor Productivity and Employment Support" can be assessed as the first step towards solving the problem in modern conditions. It should be continued taking into account the identified shortcomings, increasing funding, and using new technologies.

The paper considers the problem of organizing a new model of economic growth in Russia with an assessment of structural transformation. Economic growth in 2023–2024 showed an increase in the contribution to the dynamics of the investment expenditure component, which creates a good prerequisite for changing the model of structural dynamics of GDP growth. At the same time, the economic structure is subject to minor transformation, or there is none. The issue of the relationship between the growth rate and structural changes can be considered unresolved either in theory or in practice. The purpose of the study is to conduct a structural analysis of economic growth in Russia in the period 2000–2023 with the identification of basic changes in the structure of sectors, GDP components, in order to update unresolved problems of theoretical and applied purpose and outline an approach to their resolution within the framework of the relationship between growth and structure. The methodology of the study is based on the modern theory of economic growth and structural dynamics, elements of structural, regression and empirical analysis. The information base of the article is Rosstat data. The result of the work can be considered the provisions confirmed during the analysis that economic growth in Russia was not determined by structural changes in the economic base – the sectors of means of production and consumer goods, as well as the transaction, manufacturing and raw materials sectors. Growth was slowed down by the dominance of the financial sector, a disproportionate increase in investment in financial assets relative to a similar indicator in non-financial assets. The structural dynamics of GDP also confirms that the investment model of growth emerged only in 2023, since gross accumulation in this year provided the greatest contribution to the growth rate relative to other components of the gross product. The general conclusion is that the conditions for fixing the investment growth model, with the dominance of the transaction sector and the compressed development of the means of production, with the implementation of a rigid monetary policy – may not be preserved, may not develop, since there are no planned measures for structural policy that are designed to influence the established proportions and dynamics of the elements of the system. These aspects should form the prospect for planning and solving unresolved state problems.

The goal of this article is to develop an institutional approach to the development of education in the social and investment model of economic growth in developing countries by the example of Russia. The hypothetical and deductive principles and regression analysis are used in this research. The research results show that the social and investment model of economic growth is being implemented in the countries of the CIS and Russia, and—as of now—the development of education slows down economic growth, instead of accelerating it. To solve this problem, we offer an institutional approach to the development of education in the social and investment model of Russia's economic growth. The new approach allows for a flexible selection of measures of management depending on the needs of education's development: development of only current, only future, or all workforce. The developed approach is based on the institution of the legal framework's adaptability to digital business models. Since workforce and skills play a key supporting role in digital business, the development of the institution of legal framework's adaptability to digital business models will stimulate the development of higher education and will ensure Russia's transition to the social and investment model of economic growth. For the practical application of the new approach, we develop an optimization model of institutional management in the interests of the development of education and transition to the social and investment model of economic growth in Russia. The model has shown that an increase in the possibility of the legal framework's adaptability to digital business models up to 100 points with a stable level of development of other institutions allows increasing skills of the current workforce by 44.05% and the future workforce by 20.96%.