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The Knowledge Economy and Digitalization: Assessing the Impact on Economic Growth of Russian Regions

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  • G. A. Untura

    (Institute of Economics and Industrial Engineering, Siberian Branch, Russian Academy of Sciences
    Novosibirsk National Research State University)

Abstract

— In the knowledge economy, information and communication technologies (ICT) have accelerated the digitalization of organizations, households, and management, which leads to the economic growth of countries and regions. Russia lags behind developed countries in investing in knowledge economy sectors and in the share of these sectors in GDP. Although ICT has been assigned a decisive role in the digitalization of regions, the digital divide and fragmentation of the knowledge economy at the mesolevel are holding back growth. The objective of the study is to assess how the economic growth of regions is impacted by the spending of developing the knowledge economy, including the ICT sector, and indices of digitalization of households and organizations. An econometric model of endogenous growth has been proposed and tested on the data from Rosstat and the HSE University. Indices of digitalization of households and organizations for 2017 were compiled for 80 regions. In the index of digitalization of households, the first five positions were occupied by Moscow oblast, the Republic of Tatarstan, Tyumen oblast, Moscow, and St. Petersburg; in the index of digitalization of organizations, Moscow, St. Petersburg, Leningrad oblast, Stavropol krai, and Tambov oblast; at the same time, many regions of Asian Russia and the North Caucasus lagged significantly behind. The hypothesis that ICT spending leads to an increase in GRP per capita growth rate by 1 percentage point and is complementary to the spillover of spending on higher education has been confirmed. Digitalization indices have positive but statistically insignificant regression coefficients. Spending on other sectors of the knowledge economy—science, higher education, and healthcare, which form human capital—were unable to significantly affect economic growth of regions in 2017, perhaps due to underfunding of their development (versus developed countries). The article concludes that in order to ensure the economic growth of Russian regions in the context of digital transformation, systemic actions are needed in managing all sectors of the knowledge economy and knowledge spillovers, a breakthrough in domestic science and ICT. The results obtained in the study can be useful in managing the knowledge economy in the context of digital transformation of Russian regions.

Suggested Citation

  • G. A. Untura, 2023. "The Knowledge Economy and Digitalization: Assessing the Impact on Economic Growth of Russian Regions," Regional Research of Russia, Springer, vol. 13(3), pages 397-406, September.
    • Handle: RePEc:spr:rrorus:v:13:y:2023:i:3:d:10.1134_s2079970523700909
    DOI: 10.1134/S2079970523700909
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    References listed on IDEAS

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