Industrial Development Fund Research Articles

What helps improve outcomes of industrial policy in developing countries? Evidence from Russia

ABSTRACT In developing countries, implementing effective industrial policies faces challenges due to capacity and governance constraints, hindering accumulation of recognised success stories. This impedes our understanding of effective industrial policy tools in countries with accountability deficits. This article explores Russia’s Industrial Development Fund (IDF) support programmes, initiated since 2014, aimed at promoting import substitution through low-interest loans to industrial firms. These IDF programmes appeared to be more effective than most of Russia’s other industrial policy instruments. The article shows that they have resulted in statistically significant sales growth for supported businesses. It highlights institutional features contributing to programme effectiveness, ensuring the integrity of beneficiary selection and project support. It offers valuable insights for organisations implementing state support programmes in challenging governance conditions. Additionally, the recent emergence of more effective industrial policy tools like the IDF may partly explain Russia’s increased economic resilience against international sanctions imposed due to the war in Ukraine.

DEVELOPMENT OF THE DEFENCE INDUSTRY OF UKRAINE TO ENSURE NATIONAL SECURITY

The national defence industry concentrates on military, electronic, information and space technologies. In the near future, Ukraine's defence industry may become one of the most knowledge-intensive industrial sectors of the economy. Accordingly, the purpose of the study is to assess the capacity of Ukrainian defence enterprises to produce weapons and military equipment to ensure national security. The research aims not only to assess the problems of the defence industry under martial law but also to ensure the effective development of the defence industry sectors by identifying priority areas of funding.It was found that the current state of the Ukrainian defence industry does not meet the current realities of the time, especially in the context of Russia's full-scale invasion of Ukraine. The provision of equipment and weapons to military units is at a low level. It is found that the renewal of modern models of weapons and military equipment of the Armed Forces of Ukraine, before the full-scale invasion, was less than 1%, which in turn did not allow to compensate for the rate of ageing of existing weapons. The authors suggest ways to support the development of Ukraine's defence industry, in particular, through the creation of a Defence Industry Development Fund.The authors propose to create a Defence Industry Development Fund using public and private sources of funding not prohibited by the legislative framework of Ukraine, which will expand the capabilities of defence industry enterprises to produce weapons and military equipment. The creation of a system of multi-level continuous education in the defence industry and long-term conditions for the sustainable development of the defence industry's human resources will allow to engage in capacity building and reach a new level of support for the Armed Forces of Ukraine through the implementation of NATO standards.

РОБОТИЗАЦИЯ ПРОИЗВОДСТВА СЕЛЬСКОХОЗЯЙСТВЕННОЙ ТЕХНИКИ

Increasing labor productivity at agricultural engineering enterprises in modern conditions is impossible without the use of robots, which should replace human labor in technological operations with dangerous and harmful production processes. (Research purpose) The research purpose is evaluating the use of robotics by enterprises of the agricultural machinery industry in the production. (Materials and methods) Conducted an assessment of the use of robotics tools when visiting enterprises in the agricultural engineering industry. (Results and discussion) It has been established that for a sustainable presence and strengthening of their positions in the market, companies producing agricultural machinery are increasing the volume of research and development work on the designs and production technologies of modern machines. It was noted that an increase in labor productivity in modern conditions is impossible without the use of robots, which are designed to replace human labor at work with harmful and dangerous production factors in procurement, when cleaning blanks, with thermal and physical methods of surface treatment of products made of various materials, when painting, as well as in order to reduce defects. It was determined that the use of robotization tools by enterprises of the agricultural machinery industry does not exceed three percent of the total volume of technological operations performed. Robotics tools are used mainly in welding operations. Loading and unloading, replacement of working tools on numerically controlled machines, as well as many other technological operations remain practically not covered. (Conclusions) The conducted studies have shown that machine-building companies have large reserves for using robotics tools in performing technological operations in order to reduce production costs and increase labor productivity. As measures to support the introduction of robots into production, grants are allocated by the Russian Digital Economy and Skolkovo foundations, preferential loans through the industrial development Fund "Digitalization of Industry".

Current state and prospects for the development of the domestic pharmaceutical industry

The main stages of the development of the Russian medical and pharmaceutical industry in 2010 are presented in the context of the dominance of large foreign companies producing medicines and medical devices in the pharmaceutical market. This reflects the political and economic restrictive measures illegally taken against Russia by the European Union, the United States of America, and some other unfriendly countries and has influenced the dynamics of the development of the medical and pharmaceutical industry in our country. To harmonize approaches to the production and quality control of medicines, this paper presents the stages of large-scale reforms on the transition of the Russian pharmaceutical industry to standards of good manufacturing practice and the implementation of state programs aimed at modernizing the industrial segment of the pharmaceutical industry. As part of the improvement of the standardization system of medicines, the study also presents the characteristics of the XIII, XIV, and XV editions of the State Pharmacopoeia of the Russian Federation published during the study period, in the development of which employees of the Military Medical Academy named after S.M. Kirov participated. The role and purpose of the creation of the developed Pharmacopoeia of the Eurasian Economic Union, approved by the Board of the Eurasian Economic Commission, is also reflected in this paper. This article describes the phased implementation of federal target programs, state programs, and other strategic plans and measures of nonfinancial support from the state, which have significantly expanded competencies in the field of development and production of medicines and medical devices and increased their output during the period analyzed. The development of medicines and increasing their production volumes with the help of pharmaceutical clusters, which acted as the “locomotives” of the industry, and various projects in establishing the production of innovative medical products with the help of the Industrial Development Fund, which increased the investment attractiveness of these sectors of the national economic complex, played an important role. The results revealed the essence of the changes concerning the revival of the activities of industrial pharmacies, considering a personalized approach to the treatment of patients. The study also presents an assessment of the Pharmaceutical industry Development Strategy for the period up to 2030.

ПРЕДПОСЫЛКИ УСТОЙЧИВОСТИ И ЭФФЕКТИВНОСТИ РАЗВИТИЯ МАШИНОСТРОЕНИЯ В УСЛОВИЯХ САНКЦИОННОГО ДАВЛЕНИЯ

The article examines in detail the impact of sanctions pressure from Western countries on the state of the domestic industry as a whole and its separate branch - mechanical engineering. The purpose of the study was to analyze the current state of mechanical engineering in Russia in order to identify existing problems, determine optimal directions and formulate proposals for achieving sustainable economic development of the Russian Federation. The objectives of the study were: analysis of the current state of mechanical engineering; identification of problems of the efficiency of mechanical engineering development; determination of directions of development of the mechanical engineering industry in the Russian Federation; development of measures for import substitution in the mechanical engineering complex. The study used the methods of scientific knowledge: analysis and synthesis, monographic, methods of statistical and economic analysis, graphical method, system-structural and formal-logical methods. The information base was the data of Rosstat, the Industrial Development Fund and the Institute for Statistical Research and Economics of Knowledge, presented on the official website and scientific materials of domestic and foreign researchers. We identified the optimal directions for the development of the mechanical engineering industry of the Russian Federation: overcoming the technological gap and increasing demand for machinery and equipment manufactured in the Russian Federation; Innovation-oriented integration into import substitution processes; Creation of modern and progressive technologies in mechanical engineering; Digitalization of business processes and implementation of the Industry 4.0 production management technology; Establishment of cooperation with domestic and friendly foreign enterprises; Increasing the efficiency and competitiveness of mechanical engineering enterprises, etc. The following measures are proposed for import substitution in the mechanical engineering complex: Purchase of components in friendly countries; Cooperation with manufacturing enterprises; Preferential lending by industrial development institutes; Creation by executive authorities of a unified information and industrial system to solve logistics problems; Placement of production segments of the mechanical engineering industry; Stabilization of the domestic product market and Development of cooperative interaction between industries. It is recommended to focus mechanical engineering production on the implementation of priority projects, development projects, projects for the digitalization of industry and SPIC, financed by the FRP, which will allow bringing the enterprise to a modern level and improving the state of the industry as a whole. The directions of future research will be the mechanisms of technological development of the domestic mechanical engineering. The conducted research and its results can be applied by researchers and students in economic fields interested in the state of mechanical engineering in Russia.

Роль Фонда развития промышленности в области развития технологического суверенитета РФ

The relevance of this article is due to the fact that, in the context of the digital transformation of the economy and structural changes in the world order aimed at forming a multipolar world, an important factor in the competitiveness of any country is to ensure technological sovereignty. The aim of the article is to clarify the role of the Industrial Development Fund in ensuring Russia’s technological sovereignty and to develop ways to improve the efficiency of these processes. The research is based on the use of general and special scientific methods and techniques of scientific cognition: analogy, formalization, abstraction and logical analysis, decomposition and structural logical analysis. The article presents an analysis of the theoretical concepts of the essence of economic sovereignty, which is the state’s ability to provide itself with the production of all critical technologies and types of products on its own. The activities of the Industrial Development Fund of the Russian Federation aimed at concessional financing of projects in the field of import substitution, development of new high-tech products and other priority high-tech areas are analyzed. The role of the Industrial Development Fund of the Russian Federation in the process of ensuring technological sovereignty has been clarified. The article proves that, in the most difficult conditions of geopolitical pressure and anti-Russian sanctions of Western states, Russia faces the task of reaching a new level of technological and industrial development. In a short time, Russia will have to raise its own critical technologies to a new level in science, information technology, industry, transport, in the development of medicines and new materials and other areas important to the country in order to ensure technological sovereignty and independence. in the production of every critically important product for us. Achieving this goal is possible by increasing the efficiency of the Industrial Development Fund. The proposed methodology for assessing and monitoring the level of technological sovereignty will make it possible to identify low-effective areas of concessional financing and adjust the decisions made by the Fund. The main scientific result of this article is the development of an approach to the role of the Russian Industrial Development Fund, which consists in the formation and dissemination of innovations in the process of creating the effect necessary to ensure technological sovereignty in the digital economy by selecting the most promising investment technology projects and providing them with concessional financing.

Развитие промышленности и предпринимательства в текущих реалиях: взгляд бизнеса

The paper considers development of industry and entrepreneurship in the current conditions from the business perspective. Despite tough sanctions most companies rate their work as successful, noting effective business support programs (the work of the Industry Development Fund and the Russian Export Center in particular). The main challenges that need to be addressed include: rising producer prices and rates of natural monopolies, difficulties in attracting funding, high debt burden, poor quality of collateral, lack of guarantees and bonds, obstacles in international economic activity, lack of personnel. The author emphasizes the need to encourage private investment and strengthening cooperation between business and government. Adjustments to legislation is proposed, specifically tax regulation.

Развитие промышленности и предпринимательства в текущих реалиях: взгляд бизнеса

The paper considers development of industry and entrepreneurship in the current conditions from the business perspective. Despite tough sanctions most companies rate their work as successful, noting effective business support programs (the work of the Industry Development Fund and the Russian Export Center in particular). The main challenges that need to be addressed include: rising producer prices and rates of natural monopolies, difficulties in attracting funding, high debt burden, poor quality of collateral, lack of guarantees and bonds, obstacles in international economic activity, lack of personnel. The author emphasizes the need to encourage private investment and strengthening cooperation between business and government. Adjustments to legislation is proposed, specifically tax regulation.

Developing a Knowledge Strategy for Apiculture Industry Development and Advocacy Fund (AIDAF)

Developing a Knowledge Strategy for Apiculture Industry Development and Advocacy Fund (AIDAF)

Оценка эффектов применения проектных инструментов промышленной политики в регионах

Introduction. This study is devoted to the analysis of industrial policy project instruments implemented by the Russian Industrial Development Fund, from the standpoint of assessing their impact on the systemic results of the industrial development of Russian regions. Theoretical analysis. The industrial sector of the economy has historically played a key role in the socio-economic development of Russia. Given the backbone role of industry in the country’s economy, the issues of state support for industrial development are traditionally the most important on the agenda of the state’s economic policy. Established in 2014, over the past period, the Fund has demonstrated the flexibility and adaptability of its programs to changing conditions, has provided its customers with convenient tools for concessional lending for technological modernization projects, and, in general, has become the most popular instrument of industrial policy. At the same time, the question of the strategic effectiveness of the Fund’s activities as a systemic institution of industrial policy, solving not only local tasks of supporting modernization projects and creating new industries, but also the tasks of industrial development and growth in general, remains open. Empirical analysis. Given that the problem of industrial development is ultimately localized at the level of the constituent entities of the Russian Federation, in this study, based on the methods of regression analysis, an assessment has been made of the impact of the Fund’s activities on the development of the manufacturing sector in the regions of Russia. The work has assessed the impact of projects implemented within the framework of the Fund’s programs on the indicators of the production index and the volume of shipment of goods, services on their own in the manufacturing industry of the region by groups of constituent entities of the Russian Federation, depending on the level of the average annual cost of investment projects implemented with the participation of the Industrial Development Fund. Results. The analysis has showed that the Fund’s current tools have a positive effect on the systemic growth and development of industry only up to a certain level of intensity of their use in regions with an average and low level of industrial development. As for industrialized regions, the results obtained here from the standpoint of systemic effects of accelerated industrial development are not obvious.

Managing industrial growth: The role of development funds

The effective public project management in the economy and industry significantly contributes to the achievement of the country’s strategic development goals. The article explores the role of the Industrial Development Fund (IDF), which is a key tool of industrial policy, in the development of manufacturing industries in the Russian regions. Portfolio management theory and provisions of public project management constitute the methodological basis of the research. The methods of logical-structural, comparative and econometric analysis are used. The study’s empirical base covers data on the volume of funding provided by the IDF to regional borrowers to implement 924 projects between 2015 and 2021, as well as data aggregated according to the RF constituent entities on the volume of goods and services shipped by manufacturing enterprises in the same period. We assess whether the IDF project portfolio profile qualitatively and quantitatively complies with the strategic objectives of the manufacturing industry development in the regional context. The research results show that the composition of the project portfolio is partially aligned with the objectives of import substitution, digitalization and increasing labour productivity. Quantitative criteria for project selection are not synchronized with the composite indicators of the Strategy for the Development of the Manufacturing Sector for the period up to 2035. We have found that the implications of the IDF activities for the regions with low and medium level of industrial development were positive, while the industrialized regions experienced no effect on the volume of shipped goods and services in the manufacturing sector. The study concludes that the portfolio management methodology will enhance the performance of the IDF as an industrial policy tool due to more accurate consideration of sectoral and structural priorities, as well as spatial peculiarities of the industrial development of the Russian Federation.

HOW TO RAISE FINANCE BY RUSSIAN COMPANIES IN THE CURRENT SITUATION

In the context of an abnormally high key rate, the replenishing working capital and launching investment projects is an interesting task. The most relevant and effective financing solutions are considered in the article, including mezzanine financing, advances from buyers under long-term contracts, co-financing of projects by the Industrial Development Fund on favorable terms, investments in the capital of project companies by the International Fund of Technological Development and attracting capital from Russian private investment funds and investors. It is shown that for companies implementing investment projects and being in the growth phase, mezzanine financing can reduce the burden of paying interest on debt at the beginning of the growth and project implementation cycle. It is noted that advance payments from buyers under long-term contracts can be attracted to finance working capital and expand production capacity. For the implementation of new industrial and technological investment projects, financing can be attracted from the Industrial Development Fund, as well as from the International Fund of Technological Development. These funds stimulate the inflow of direct investments into the real sector of the Russian economy. In addition, opportunities for attracting private venture and strategic investments are relevant today

Evaluating the performance of the industrial development fund in the macro-region – the Ural Federal District

Subject. The article is devoted to the Industrial Development Fund and its program "Digitalization of Industry". The Fund has a significant impact on the technological transformation of industry and improvements in the efficiency of industrial production. Objectives. The aim is to analyze the economic efficiency of the Industrial Development Fund in the context of investment projects in the territory of subjects of the Ural Federal District. Methods. The study employs methods of theoretical analysis of issues related to effective functioning of the Industrial Development Fund. The analysis of obtained results rests on statistical processing of information. We applied structural-functional, comparative, economic, statistical, and integrated approaches to assess the effectiveness of investment projects of enterprises operating in the Ural Federal District that were supported by the Industrial Development Fund. Results. We considered the role of the Industrial Development Fund as an effective tool of industrial policy and improvement of labor productivity in industrial production, revealed actual aspects of the Fund's activities in subjects of the Ural Federal District. The paper defines promising areas for the Fund's development from the perspective of innovation and investment-driven development of industrial enterprises and introduction of technological innovations in production. Conclusions. Effective long-term industrial and investment policy of the State is implemented on the basis of formation and successful use of dedicated State funds for the development of industry.

Attracting investments from the industrial development fund in order to finance projects of existing production enterprises

Attracting investments from the industrial development fund in order to finance projects of existing production enterprises

Government support measures: an effective choice process

The article discusses issues related to the ability of industrial enterprises to navigate the existing range of government support measures and make their effective choice. The author proposes an algorithm that will allow enterprises, after analyzing their strategic goals, to identify projects that allow them to implement priority areas for a particular enterprise and select the most effective measures of state support. The algorithm has been tested on the basis of support measures provided by the industrial development fund, practices for the successful implementation of support measures at industrial enterprises are given.

Technological development of industrial regions: The ecosystem approach

Providing effective industrial management is a complex task that can be resolved through a qualitative analysis of the state of the controlled object. The article assesses the influence of the Industrial Development Fund as a key financial institution of the RF industrial policy on technological development of regional industrial ecosystems. The methodological basis of the study was the theory of industrial policy and ecosystems, as well the concept of a technological hierarchy; the methods applied are functional, logical-structural and comparative analysis. The empirical base includes 634 companies engaged in the processing sector of industrially developed regions (Sverdlovsk, Chelyabinsk, Samara, Yaroslavl, Nizhny Novgorod oblasts, Perm krai, and the Republics of Tatarstan and Bashkortostan). The research timeframe is from 2015 to 2019, which was due to the adoption of the Federal Law no. 488-FZ “On the industrial policy of the Russian Federation” of December 31, 2014. In contrast to the works based on the traditional sectoral approach, the object of analysis is industrial ecosystems structured in accordance with the hierarchy of system and component technologies. The dynamics of fixed-asset turnover for the studied period is used as a universal indicator of technological development of regional industrial ecosystems. In the study, we identify an industrial ecosystem having several cores, which are 3 system technologies and 17 corresponding component technologies. Having analyzed the technological focus of the projects supported by the Industrial Development Fund, we found that fixed-asset turnover has a positive trend in those regions enjoying system state support for technological development projects implemented by companies participating in the ecosystem. This confirms the hypothesis that the adjustment of instruments for the technological development of industrial policy should receive special attention, while taking into account the intensifying ecosystem effects in the industrial spheres of the economy.

Legal regulation of the tourism industry in the context of development of the economy of Industry 4.0

Problem setting. One of the current trends in the development of the global tourism industry is the development of Internet technologies, in other words, the modern development of tourism takes place in a digital economy. Tourism is an integral part of Ukraine’s economic development. It is significant that the current Law of Ukraine "On Tourism" [7], adopted in 1995. does not correspond to modern realities and requires comprehensive changes that would meet the interests and modern needs of society, take into account international experience, global trends in tourism and meet the demands of tourism entities. Analysis of recent research. Issues related to the legal regulation of tourism have been the subject of scientific research by such specialists as: N. Bagaeva, A. Gradinarova, T. Orlova, M. Semenova ect. At the same time, despite the interest of scientists in studying this issue, the legal aspects of the development of the tourism industry in the economic development of Industry 4.0 currently require detailed study. Given this, the aim of the article is to analyze the legal regulation of the tourism industry in the digital economy. Article’s main body. The article focuses on the consideration of the legal regulation of the tourism industry in the context of the development of the economy of industry 4.0. Analyzed the draft Law of Ukraine "On Amendments to the Law of Ukraine" On Tourism "and some other legislative acts on the basic principles of tourism development". Based on his analysis, it was proposed to create a Tourism Industry Development Fund as part of a special fund for local budgets. It was noted that in the context of digitalization, the creation of the Unified Tourism Register, as well as the portal of the Unified Tourism Register, is a positive step, however, the issue of data protection mechanisms that are provided by the subjects of tourism activities to the authorized government bodies and are entered into such a register while it needs improvement. Conclusions. Based on the above, we believe that the draft Law of Ukraine "On Amendments to the Law of Ukraine" On Tourism "and some other legislation on the basic principles of tourism development" needs to refine and revise its individual provisions in order to further comprehensive regulation of the tourism industry in the development of the digital economy.

Problems of state support for innovative projects (on the example of RUSNANO and FRP)

The reform of development institutions that is taking place in Russia makes it possible to improve their work, including in terms of expanding the tools of the mechanism of state financing of innovative projects. Today, in Russia, financing of innovative projects in the form of providing funds is mainly carried out by two development institutes - JSC «RUSNANO» and the federal state institution «Industrial Development Fund» (FRP). The first is in the form of contributions to the authorized capital, the second is in the form of loans. The conditions for providing funds can be considered as a compromise between two approaches-a bet on the free market and a focus on state intervention. On the one hand, there is an investment of public funds, on the other hand, the state is guided by the requirements of commercial efficiency, which reduces the effectiveness of state support for innovations.

ПРИОРИТЕТЫ ПРОМЫШЛЕННОЙ ПОЛИТИКИ РОССИИ В УСЛОВИЯХ ЦИФРОВИЗАЦИИ

The article discusses the issues of improving and developing systemic measures to support the digital transformation of the country’s industrial sector and the priorities of indust- rial policy at the stage of digital modernization. Based on the analysis of the instrument of special investment contracts (SPIC), implemented by the Industrial Development Fund (IDF), in order to activate the introduction of digital technologies into the production processes of industrial companies, measures are proposed to modify the measures of state support for the development of the industrial sector that are currently used. And, in particular, measures related to expanding the list of potential SPIC participants and increasing their validity period to 20–25 years. As well as measures for the legislative consolidation of guarantees of demand for products manufactured by SPIC participants in the framework of procurement for state and municipal needs, and identification of priority areas for the conc- lusion of such contracts, primarily related to the creation of high-tech, digital competencies. In addition, the need to develop an appropriate regulatory framework and new standards for the emerging digital industrial markets is substantiated. The importance of regional measures of industrial policy and support of investment activities in the field of digitalization of industrial production is considered. Further, analyzing the rather successful experience of implemen- ting regional industrial policy in the Sverdlovsk and Tyumen regions, it was concluded that there is an urgent need for a detailed revision of the entire set of measures of state support for industry in the context of digitalization, assessing the effectiveness of each measure for the presence of a correlation with both economic and technological social effects for the region, as well as the use and replication of the experience of leading regions in the field of digital industrial modernization.

Impact of the funding structure on R&D in cases of European Union and Russian Federation

Research background: Many contemporary empirical studies and theories of economic growth have revealed the dependence of innovative development of countries on the adequacy of funding for innovation. However, much of the empirical literature has discussed the issue of innovativeness without assessing the impact of the structure of funding sources on the success of the innovation process. Purpose of the article: The aim of this paper is to prove the hypothesis of the inefficiency of innovative systems in which the proportion of public investment is high compared to private investment. In Russia, the share of public R&D funding is 67%, and the EU average is 33%. Methods: Based on the empirical research, we have compared the EU Horizon 2020 program with Russian VEB Ventures programs, conversion and digitalization programs of the Industrial Development Fund and found out how the structure of funding sources for these programs affects the success of their implementation. Findings & Value added: The results of our research show that a large share of public funding is not the cause, but the result of low private innovation activity and a lack of private investment. Significant reasons for their shortage were identified: the economic feasibility of purchasing ready-made solutions on the global market instead of funding research; cheap labour; adverse business climate. Thus, a high share of public financing of innovations in a country can serve as an indicator of the existence of serious reasons for restraining innovative development.