THE KNOWLEDGE ECONOMY AND DIGITALIZATION: ASSESSING THEIR IMPACT ON ECONOMIC GROWTH OF RUSSIAN REGIONS
G.A. Untura1,2
1Institute of Economics and Industrial Engineering, Siberian Branch of the Russian Academy of Sciences, Novosibirsk, Russia
2Novosibirsk National Research State University, Novosibirsk, Russia
Keywords: digitalization, knowledge economy, science, education, healthcare, ICT, knowledge spillover, funding, index, model, region, Russia
Abstract
The digitalization of organizations, households, and management is accelerated by information and communication technology (ICT), which leads to the economic growth of countries and regions in the knowledge economy. Russia is inferior to developed countries in investing in the knowledge economy sectors and in how much these sectors contribute to GDP. Although ICT has a decisive role in the digitalization of regions, digital heterogeneity and fragmented knowledge economy at the mesolevel hold back the growth. This paper aims to assess how regional economic growth is impacted by expenditures for developing the knowledge economy, including the ICT sector, and the digitalization indices of households and organizations. We propose and test an econometric model of endogenous growth using data from Rosstat and the Higher School of Economics. Digitalization indices of households and organizations in 80 regions have been generated for 2017. The top five regions in terms of the highest household digitalization index are as follows: Moscow Oblast, the Republic of Tatarstan, Tyumen Oblast, Moscow, and St. Petersburg. The same ranking for the organization digitalization index would be Moscow, St. Petersburg, Leningrad Oblast, Stavropol Krai, and Tambov Oblast. Many Asian Russian and Transcaucasian regions lag significantly behind. We confirm a hypothesis that spending on ICT leads to an increase in GRP per capita by 1 p.p. and is complementary to the higher education spillover. Digitalization indices have positive but statistically insignificant regression coefficients. Expenditures in other knowledge economy sectors, such as science, higher education, and healthcare, which form human capital, were not able to affect regions’ economic growth meaningfully in 2017, possibly due to their “underfundedness" (compared to developed countries). The article concludes that there is a need for systematic actions in managing all knowledge economy sectors, knowledge spillovers, domestic science and ICT breakthroughs to ensure the economy of Russian regions grows under digitalization. Our findings may be useful for managing the knowledge economy in digitally transforming Russian regions.
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