Investment Appeal and Research & Development Capacity of the Regions

Author Name(s): L.I. Arsentyeva, I.S. Bulnina, I.A. Kabasheva, A.G. Khairullina
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Abstract

The formation of regions’ investment appeal gives the opportunity to create the conditions for economic and social development of the territories and the state as a whole. This issue should be considered from several points. It is worth noting that each region has its own characteristics and a growth potential. It is evident that a number of territories could take participation in the competition for the opportunity to obtain investment funds. At the same time for the state’s economy there is a need of the development and maintenance of existing scientific, technological and industrial centers in the developed regions as drivers of an industrial and scientific and technological growth. There is a need for a system accounting of wide range of conditions and criteria within the region. The presented approach will not only determine perspective directions of investment, but also calculate the planned results and assess the synergies of investment programmes implementation in different areas.

Introduction

Investment appeal is a system of significant conditions and characteristics of the investment object. It is a dynamic characteristic which in certain periods fixes the results of the object’s development and changes. In the case of working out and application of the investment attractiveness development model one can predict the results of future events.

Investment appeal of the territory represents a criterion reflecting the difference of investment funds and capital outflows.

Formation of regions’ investment appeal makes it possible to create the conditions for economic and social development of the territories and the state as a whole. This issue should be considered from several points. The first point is from the position of the state. The creation of favorable conditions for attracting investment resources and their planning, target-oriented development is a fundamental basis of the economy development as a whole. Thus, the objective of regions’ investment appeal formation is determined. It is a comprehensive socio-economic development of the territory, with a possibility to enhance the regional scientific-technical and production reserve. Increasing the pace of manufacturing growth creates the conditions for a number of socio-economic indicators change which characterize territories development.

It is worth noting that each region has its own characteristics and a growth potential. It is evident that a number of the territories could enter into competition for the opportunity to obtain investment funds. On this basis, it becomes clear that the direct government regulation and public policy regarding individual territories could play a key role. The authors assume that in relative identity of development indicators and areas potential the support can be directed to the region, which should be sustained with the aim of overall alignment of the economic situation in the country. According to the authors the most striking example in the Russian Federation may serve a state support of the Crimea.

At the same time for the state’s economy there is a need for the development and maintenance of existing scientific, technological and industrial centers in the developed regions as drivers of industrial and scientific and technological growth. There is a need for a system accounting of conditions wide range and criteria within the region.

Conclusion

The authors suggest the approach given by Ustinova L.N. (2015) [3], its practical application is in assessing the capacity of a number of businesses and industries of the Russian Federation. In particular, there can be used the algorithm of assessing the effectiveness of the use of enterprises’ innovative potential using as the basis of the region’s innovation potential formation, which has an impact on the level of region’s investment appeal. The proposed algorithm consistently and systematically accounts the diagnostics of innovation potential, prediction of the priority investment direction to the elements of innovative potential, development and implementation of a strategy for innovation capacity building, direct evaluation of the results.

According to the authors, the next stage of regions’ investment appeal development must be the territorial programme of science and industry development. It is necessary to form the programme, defining the role and place of each enterprise, project in the overall structure of the regional development. It’s better to take into account the final results of enterprises’ economic activities in the form of goods and services, net income, but to form a regional picture on the directions which are developed in each organization. For example, the programme of technical and technological capacity creation of all enterprises can be the basis for the territorial programme of competitiveness, taking into account the specificity of local productions and applied scientific and technological base. Production and sales of new products, as part of the territorial programme are formed on the basis of existing productions. Thus, it is possible to create a complete picture of the prospective regional development in order to attract investment resources on a certain territory broken down by enterprises. The investor has an opportunity to assess not only the proposed project, production (as an object of investment), but also get a chance to assess the investment climate in the region.

In general, it will give the opportunity to form a model of regional development in order to attract investment resources and their effective management, which are targeted.

In conclusion it should be noted that determination of the level of region’s investment appeal is systemic and has a significant impact on the development of both the region and the state as a whole. It serves as the basis for decision-making on whether to invest. Existing methods of investment appeal evaluation of the territories should be complemented by mechanisms of synergy in the risk accounting. Additionally, it is important to identify and take into account the level of intellectual and human capital in the considered regions. Currently, there are techniques to assess the innovation potential of enterprises that have already included the above criteria. These techniques can be adapted to calculate the estimation parameters of regions’ investment appeal. Taking into account the current state of the economy, its innovative orientation one should take into account the level of innovation activity of enterprises, science and technology base and education system, upgrading courses, training and retraining of specialists.

References

  1. Investment appeal of the regions – 2014, Rating agency «Expert RА» (RAEX) (2014).
  2. Ustinova L.N., Ustinov A.E. Studying the impact of intellectual capital at industrial enterprises on their market capitalization. Asian Social Science; Vol. 10, No. 20; 2014.
  3. Ustinova L.N., “Improving the assessment of innovation potential using efficiency. Dissertation, 2014.
  4. Larionova N., Varlamova J. Correlation analysis of macroeconomic and banking system indicators // Procedia Economics and Finance 14 ( 2014 ) 359-366
  5. Larionova N., Varlamova J. Factors of Economic Innovative Development: Cross-Country Evidence // Mediterranean Journal of Social Sciences. Vol 5, No 18 (2014). – PP.349-354
  6. Larionova N., Varlamova J., Singatullina G. The Trends of Household Economic Behavior in Emerging Countries of Europe // Procedia Economics and Finance 15 (2014).-421-429

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