Modelling sustainable development of industrial systems

Abstract

This paper describes a methodological approach that has been developed by the authors for assessment and modelling of sustainable development of industrial systems. Based on experimental testing of this methodological approach applied to the Republic of Tatarstan as an exemplary region, the authors have determined the industry-specific trends in terms of sustainable development of industrial complexes, which are regarded as the dominant elements of the sustainable economic growth process with prevalence of the upstream and high-tech sectors of the economy, along with unstable industries represented by low-tech sectors, as well as the so-called economic growth reinforcing industries. For each identified industrial group, prospects of growth and development have been evaluated as well. In this study the authors have also developed the sustainable growth models involving the models of production functions relevant to definite industrial groups (clusters). The authors furthermore have identified the key factors that are instrumental in better functioning of such groups (clusters). In the course of the production functions modelling, a closer connection between the economic potential and human capital has been tracked, which is particularly exemplified by two out of the three clusters being under review in this paper, namely, in volatile sectors of the economy, as well as in the economic growth reinforcing industries, but with one exception, however, involving the cluster of the economic development dominant elements – the upstream sector of the economy. As such, based on the resulting data, this study sets out the proofs of the “growing heaviness” of the economic development process due to the capital-intensive elements of the upstream sector of the economy, as opposed to a more flexible factor – the human capital.