Structural features of industrial growth policy

Abstract

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.