Regional convergence and innovative management

Economic Annals-ХХI: Volume 139, Issue 3-4(1), Pages: 74-77

Citation information:
Pashkevych, M., & Papizh, Y. (2014). Regional convergence and innovative management. Economic Annals-XXI, 3-4(1), 74-77. https://ea21journal.world/index.php/ea-v139-19/

Maryna Pashkevych
D.Sc. (Economics),
Associate Professor,
Head of Department of Accounting and Auditing,
National Mining University
19 Karl Marx Ave, Dnipropetrovsk, 49005, Ukraine
pashkevichms@rambler.ru

Yuliya Papizh
PhD (Economics),
Associate Professor,
National Mining University
19 Karl Marx Ave, Dnipropetrovsk, 49005, Ukraine
yulija-18@yandex.ua

Regional convergence and innovative management

Abstract. Introduction. The lack of territorial economic and social cohesion demonstrates a strong influence on the growth rate of any national economy. It can be explained by permanent allocation of resources from developed regions towards underdeveloped areas. As a result, underdeveloped areas are not forced to enhance their economy since donated money are used to maintain basic life services; and developed regions meet economic slowdown since money needed for the long-run development are transferred. Therefore, there is an issue of how to provide the regional convergence effectively and efficiently without harmful impact on the national economy. The purpose of the research is to outline 5 types of strategies that can be taken by the government in order to provide regional convergence. The offered framework is be helpful in order to classify governmental decisions with respect to regulation of regional economy and forecast consequences and further implications of varying regional strategy. Also, the studies pursue the objective to describe the problem preventing regional growth based on innovations and offer alternative solution of its handling. As it refers to the first step of critical thinking approach, obtained results regarding innovative regional development and growth allow the view on the problem of regional convergence to be shifted towards new methods of facilitating spatial cohesion.

Results. Instruments of providing regional convergence are to be distinguished according to the ideological foundation underlying their development: optimistic or pessimistic. According to optimistic ideological foundation, the purpose of regional convergence can be achieved. According to pessimistic ideological foundation of regional convergence, overcoming territorial disproportions in economic and social development is impossible. Instruments for regional convergence have different scope. As usual, mechanisms are aimed at total regional convergence. It is offered in the article to concentrate on dotty convergence right across the territorial skeleton of the country. Instruments implemented to make regions convergent allow static indexes (indicators or ratios of regional system development) to be converged instead of dynamic parameters of transformational processes. Design of mechanisms for regional convergence depends on what exact indicators have been chosen to assess convergence efficiency. It is appropriate to pay attention to convergence of innovation development right across the regions of Ukraine since the innovation model of economic growth has been recognized as prospective. Convergence mechanisms can be direct and indirect. They imply direct funding for those industries that were selected by the government to be basic in regional development. Stimulating mechanisms facilitate and support special conditions to activate those processes within the regions that are required for regional convergence being achieved. In considering innovations as a key driver of the economy, it was offered the concept of innovations privatization in Ukraine. It implies benefits for the central government if it delegates the right of possession and disposal of intellectual property and the results of its implementation to the local authorities even if research projects were funded by the government.

Conclusion. In Ukraine, the innovative activity system is suffering an excessive centralization, and thus, prevents business from collaborating with research institutions to develop and market innovations. The theoretical results obtained due to the critical thinking approach documents the hypothesis of dotty convergence existing in the sense that at a particular point of time previously selected dots of territorial skeleton should be fixed at the same steady state level of growth and development. Other dots may experience slumps in their growth and development; however, it does not have a harmful impact on the national economy. Over the time these dots should be changed.

Keywords: Regional Development; Dotty Convergence; Innovative Management; Spatial Depression; Spatial Disproportions

JEL Classification: M31; O13; Q13

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Received 13.02.2014