Solution of problems accumulated in Ukraine at the regional level requires introduction of new mechanisms of economic growth based on the effective use of resource potential, which promotes sustainable and balanced regional development and improves standards and quality of citizens’ life. In the opinion of domestic scientists, the category of “economic growth” is considered as sustainable, advanced development, reactivation of regional economy on the basis of intensive development and increase in gross regional product per capita. In a broad sense, “economic growth” is a constant increase in a well-being of citizens living in a country [1; 3]. The issue of low economic growth potential should be distinguished among many other economic issues of the region. Solution of this and other issues involves elaboration of various measures, both of economic, social and legislative nature. Such terms as “economic growth”, “economic development” and “resource potential” have become widespread in scientific research. According to the definition, the socio-economic content of “economic growth” category in the economic literature gives an idea of a relative change in the gross domestic product (GDP) for a certain period, as well as GDP per capita. Economic growth is a component of economic development. “Economic development” category means the transition from one stage of the economy to another, in which the new period insures not only increase in production of goods and provision of services that have already been produced/provided before, but also production of new goods and provision of services using new technologies in comparison with the previous period. “Resource potential” category includes a system of resources used in a complex way and involves the obligatory complementarity of specific resources in the process of social production (one increased resource in a system suggests simultaneous increase in another one). It consists not only of resources intended for consumption in a certain period, but also their insurance and other reserves. In addition, resource potential also determines the potential opportunity for their consumption in the process of social production. State regional policy on creation of mechanisms for stimulating economic growth requires taking into account specifics of sectoral and territorial structure of local business entities, developed institutional and legal environment, introduction of effective financial and investment leverage of economic activity stimulation, their systemic support at the level of local self-government, coordination of activities of all branches of public authority, determination of specific local capital accumulation conditions and functions of labour and employment market, as well as staffing of country’s economic sector. Sustainable social and economic development in the region is achieved through introduction of mechanisms for stimulating economic growth. These are organizational-managerial, financial-budgetary and investment, organizational-economic and information mechanisms, as well as mechanisms of infrastructure support, small and medium business stimulation, entrepreneurship activation, regional cooperation and stimulation of economic growth at the regional level. Modern market conditions promote the creation of mechanisms for stimulating economic growth at the regional level (including public-private partnership and cooperation), mechanisms for stimulating entrepreneurship and small and medium businesses, formation of cluster associations, etc. Mechanisms for stimulating economic growth involves creation of attractive investment climate in the region, generation and accumulation of financial resources (by using its own economic potential), advantage in solving socio-economic development issues, as well as innovative development of equipment, modern technologies and production organization. The main agents of implementing the stimulation of regional economic development are state and regional public authorities, regional and local representative government authorities, business entities, communities, non-governmental organizations, financial institutions, etc. Main methods affecting mechanisms for stimulating economic growth at the regional level are as follows: – Organizational methods (simplified procedure for establishing a business entity, simplified tax and statistical reporting, consulting and audit services, applied research, etc.); – Economic methods: a) of direct action (methods of subsidizing production development (creation of new jobs, corporate training and further education, certain areas of production diversification); b) of indirect action (methods of long-term lend lease, use of modern organizational forms of productive forces interaction; – Legal methods (special legally established regime of economic management in a certain territory, involving the use of certain privileges and preferences for a predetermined circle of participants or for a strictly defined territory, the conclusion of territorial agreements between strategy implementation participants, etc.). Further research areas are the development of methodological support for implementation of the strategy of forming economic growth mechanisms, among which organization of a controlled economic system, definition of region’s objectives, analysis of economic situation in the region and main trends of its development, forecasting (planning), regulation (different regulatory measures of direct and indirect order), control (provision of feedback) and others are of great importance.
Read full abstract
Apr 14, 2023
Mexsasai Indra + 1
Open Access
