CC BY
3DOI: 10.29141/2658-5081-2022-23-2-4 EDN: NXXLGJ JEL classification: R11, R12, R13, R58
Evgeny G. Animitsa Ural State University of Economics, Ekaterinburg, Russia
Natalya V. Novikova Ural State University of Economics, Ekaterinburg, Russia
Trends in economic dynamics of Russia's classic old industrial region: The case of the Sverdlovsk oblast
Abstract. The scientific paradigm of studying old industrial regions is of interdisciplinary nature, which is due to their complexity and uniqueness. The research aims to generalise about and systematise the scientific heritage concerning the factors behind and conditions of emergence, formation and transformation of old industrial regions, as well as peculiarities of their economic structure and dynamics. Methodologically, the research relies on the economic and social geography (principles underlying the typology of settlements), and regional science (regional economics and an economic genetic approach to regions). The study applies methods of formalisation, systematisation, time series analysis, bibliometric and content analysis and examines the data of Russia's Federal State Statistics Service (Rosstat) and the Ministry of Economics and Territorial Development of the Sverdlovsk oblast. As a result, the paper substantiates the sustainability and resilience of the regional economy of Sverdlovsk oblast, a typical representative of Russia's old industrial regions, in conditions of global external challenges; reveals the main factor behind the sustainability and resilience of the old industrial region; interprets the 'genetic code' of the Sverdlovsk oblast characterised by a historically emerged industrial specialisation; justifies the prospects for the new modernisation, which will strengthen and refine the revealed 'genetic code' to ensure the economic dynamism of the old industrial region under the new sanctions-induced challenges. The authors specifically point to an increasing significance of the Sverdlovsk oblast in conditions of the current crisis, since only this region in Russia retained the official status of the "supporting edge of the state".
Keywords: region; old industrial region; region's 'genetic code'; regional resilience; new industrial modernisation; sanctions.
For citation: Animitsa E. G., Novikova N. V. (2022). Trends in economic dynamics of Russia's classic old industrial region: The case of the Sverdlovsk oblast. Journal of New Economy, vol. 23, no. 2, pp. 64-79. DOI: 10.29141/2658-5081-2022-23-2-4. EDN: NXXLGJ.
Article info: received January 27, 2022; received in revised form February 28, 2022; accepted March 14, 2022
Introduction
The study of economic dynamics and structural transformations of the old industrial regions is the subject of many Russian [Pereleshina, 1975; Kim, Timoshenko, 1996; Granberg et al., 1998; Baburin, 2010; Sorokina, Latov, 2018] and foreign [Perroux, 1961; Haggett, 1965; Myrdal, 1972; Carney, Hudson, Lewis, 1980; Steiner, 1985; Birch, Mackinnon, Cumbers, 2010; Koutsky, Slach, Boruta, 2011; Dogruel, 2013; Lorber, 2014; Hu, Hassink, 2017] scientific research.
This direction in regional economics is quite relevant for the Russian reality. In particular, Granberg called Russia's most important feature the fact that on its territory there are regions of "almost all types: old industrial and agricultural regions with a wide industrial profile, diversified and with a single-industry economy, export-oriented and regions with a relatively closed economy, etc." [Granberg, 2004, p. 22].
Contributions made by the representatives of the Ural school of thought are especially noteworthy. Their interest in this issue is due to the fact that all the territories of the Urals are vivid examples of old industrial regions [Suslov et al., 2012; Tatarkin, Romanova, 2013; Tatarkin et al., 2013; Romanova, Akberdina, Bryantseva, 2013; Makarova, Korovin, 2014; Bakanov, 2015; Silin, Animitsa, Novikova, 2019].
The purpose of the article is to substantiate the economic development of the Sverdlovsk oblast as a classic old industrial region of Russia. To attain the stated purpose, a number of objectives are to be accomplished.
First, it is essential to validate the sustainability and resilience of the regional economy of the Sverdlovsk oblast, a typical representative of Russia's old industrial regions, in conditions of new difficulties, global external challenges and threats: during the first wave of the coronavirus pandemic, the emergence of the green economy in the leading countries of the world, the beginning of a new raw material supercycle, deglobalisation, etc. Recently, unprecedented sanctions risks have been added to the challenges mentioned above, due to the beginning of a special military operation in the territory of Ukraine.
Second, it is necessary to reveal the main factor behind the sustainability and resilience of the old industrial region, which allows it to survive under the new extremely difficult conditions.
Third, we should interpret the 'genetic code' of old industrial region, the core of which, hypothetically, is the industrial specialisation of the economy, which has formed over more than three hundred years of historical development.
The final objective is to justify the prospects for the new industrial modernisation, which will strengthen and refine the revealed 'genetic code' to ensure the economic dynamism of the old industrial region under the new challenges posed by sanctions.
The new reality and the New Normal, in which the whole world has found itself since February 24, 2022, have increased the importance of achieving high dynamics in the economic development of old industrial regions.
The theoretical basis for the study of the old industrial region
According to one interpretation, an old industrial region, is "a depressed territory with a stage-by-stage backwardness of the industrial structure, which was associated with the difficulty of replacing obsolete depressive industries (coal mining, steel and textile production) with modern, fast-growing ones (electronics, chemistry, etc.)" [Bakanov, 2015, p. 161].
Scientists argue that the telling signs of the depressed state of the economy in the such territories, are a decline in the importance of the dominant traditional industries at the rates faster than the national ones; the downward level of business activity; high unemployment rates; increased migration of the population, etc. [Alekseev et al., 1992; Mordvinova, 2020].
The territory of an old industrial region typically concentrates a variety of interconnected and interdependent enterprises of the extractive and manufacturing industries with the dominance of mechanical engineering, material and energy-intensive heavy industries. Here we particularly imply metal and chemical industries. Since the first industrial revolution, these two have been successfully developing for more than 100 years, and received special support during the years of Stalinist industrialisation. However, in the new economic conditions they are suffering a noticeable decline [Pereleshina, 1975; Kim, Timoshenko, 1996; Granberg et al., 1998].
These characteristics of old industrial regions are complemented by a special combination of ratios between industries, intra-industry and inter-industry production and technological links, as well as an extremely high sectoral and territorial concentration of production.
A similar understanding of the old industrial region is found in foreign economic literature. The classic formations of this type, in particular, those that emerged in Manchester (Great Britain), the Ruhr (Germany), Lille (France), shaped the empirical and conceptual basis of the theory of the old industrial regions' development [Carney, Hudson, Lewis, 1980; Steiner, 1985; Lorber, 2014].
Our investigations of the three-hundred-year dynamics of industrial production within the boundaries of the Ural macroregion [Silin, Animitsa, Novikova, 2019] confirmed the conclusions of Baburin that "in the context of the current systemic crisis in the country, which began in the 1990s, the old industrial territories suffered the most. The national economy of Russia 'holds on', dropping the production of the latest cycles and clinging to mining and primary processing industries oriented to world markets, i.e., the country is rapidly returning to the catch-up development model typical of peripheral classic regions" [Baburin, 2010, p. 137].
In line with the traditions of the Ural school of thought and considering the institutional theory, theories of modernisation, industrial society and regional development, as
well as the cyclic-wave methodology, Animitsa, Silin, Novikova established patterns and trends in the industrial production of the old industrial region, which proved to be stable over a three-hundred-year period. Specifically, large cycles of industrialisation (protoindustrialisation; industrialisation; de-industrialisation) were identified in economic dynamics [Silin, Animitsa, Novikova, 2019].
Scientists substantiated that cyclical fluctuations in the economic dynamics of an old industrial region are due to the presence of the mining genotype identified by Animitsa while studying the phenomenon of Kondratieff cycles in the development of industry of the Ural macroregion [Animitsa, 2013]. The influence of this genotype is associated with the specificities of evolution of the industrial technological methods of production, as well as the peculiarities of the modernisation of the Ural economy.
There is every reason to believe that the scientific prerequisites for the formation of economic genetics were laid down in the 20th century by Kondratieff, who made important conclusions for our study: "The main sections of nomographic economic theory are statics, dynamics and genetics ... The modern methodology of economic science identifies and seeks to state only the concepts of economic statics and dynamics, without knowing economic genetics" [1991, p. 275].
Somewhat earlier, at the end of the 19th century, Veblen in his work The theory of the leisure class [Veblen, 1899] argued that genetic studies of the economy contribute to determining the paths of development of society. Recognising the importance of economic genetics can also be traced in the publications of scholars working within the tide of evolutionary economics. For instance, the fundamental study of Nelson and Winter An evolutionary theory of economic change actively uses the concepts and logic of studying the process, which are distinctive features of natural science disciplines, primarily biology [Nelson, Winter, 1982].
Under the term 'genetic code of a territory' scientific works understand the system of hereditary memory, which determines the specificity and predisposition of a region to various internal processes caused by endogenous and exogenous factors of economic practice. With regard to research in the field of regional economics, it is important to infer that "the choice of a solution to ensure the economic growth of a region should be based on specific economic conditions: the level of its technological and economic development, the material and cultural quality of life of the population, socio-political factors, etc., which stimulate or inhibit this process" [Silin, Animitsa, Novikova, 2019, p. 78].
Researchers have identified institutional, production, social codes of regions. Within the scope of the study of the Sverdlovsk oblast as a typical old industrial region, production codes are of the greatest interest, which are "production technologies and capacities typical of the economy of a specific territory that determine the production platform and technological features of its real sector" [Andreeva, Karkh, Myslyakova, 2017, p. 735].
The Sverdlovsk oblast as a textbook example of an old industrial region in Russia
By the mid-1970s, the Urals had become a typical old highly industrial region of the country, and at the beginning of the 20th century, it entered the phase of late industrial development. Based on dynamic and structural indicators, the article presents the development of the Sverdlovsk oblast as a classic old industrial region of Russia and proves the importance of the regional genetic code formed over three hundred years in ensuring the sustainability and resilience of the regional economy.
The oblast has a central location, and is situated in the depths of the Eurasian continent at the junction of two parts of the world, Europe and Asia, within the Ural mountain range (the Northern and Middle Urals), as well as the East European and West Siberian plains. In the west, it borders on the Perm krai, in the south - on the Republic of Bashkortostan, the Chelyabinsk and Kurgan oblasts, in the northwest - on the Republic of Komi, in the northeast - on the Khanty-Mansi Autonomous Okrug, in the east - on the Tyumen oblast.
The Sverdlovsk oblast is part of the Ural Federal District and historically the core of the Ural economic region. Favourable economic and geographical position, rich natural resources, a powerful diversified industrial complex, high scientific, technical, human and cultural potential contribute to the strengthening of its position as one of Russia's largest economically developed industrial regions. As of 2020, the region was ranked in the top ten regions of the Russian Federation in terms of major socioeconomic indicators (Table 1).
Table 1. Ranking of the Sverdlovsk oblast among the subjects of the Russian Federation, 2020
Indicator Rank
Total gross regional product 9
Shipped goods of own production in industry (OKVED1 sections C + D + E) 7
Retail turnover 5
Turnover of wholesale trade 4
Paid services to the population 5
Commissioning of residential buildings 9
Source: The main information about the region. The Sverdlovsk oblast. http://orv.gov.ru/regions/de-tails/50.
In 2016-2019, the Sverdlovsk oblast did not demonstrate any pronounced trends in its economic development. During this period, GRP grew steadily. In 2019, the GRP index equalled to 106.8 % (compared to 2015). From 2016 to 2019, the GRP index averaged
1 Russian Classification of Economic Activities.
about 101.7 %, which practically corresponds to the value at the level of the Russian Federation (101.8 %).
The region makes a significant contribution to the total GRP of the Russian Federation, which is about 3 %. In terms of GRP, at the end of 2019 its economy is the ninth among the constituent entities of the Russian Federation, GRP per capita is 586,468 rubles. In 20162019, the structure of the economy has undergone minor changes: the share of production increased from 41.1 to 45.4 %, mainly due to the outstripping growth of manufacturing industries, while the share of the services sector decreased from 58.9 to 54.6 %, respectively.
The structure of GRP by sectors is as follows: primary sector amounts to 4.5 %, secondary, including construction, occupies 40.9 %, tertiary takes 54.6 % (2019). In the Sverdlovsk oblast, agriculture makes up 2.4 % of GRP, while industry accounts for more than one third of GRP. The economic specialisation of the region is ferrous and non-ferrous metal industries, mechanical engineering.
The region retains the status of one of the investment-attractive entities of the Russian Federation, in which a multi-level system of state support for investment activities has been formed and is constantly developing.
During 2016-2020, 1,801 billion rubles of investments in fixed assets were attracted to the region's economy. In recent years, the regional investment policy has been transformed, and became more differentiated and active. Thus, new institutions emerge that are able to quickly influence the placement of funds sphere, and provide investors with services on a 'one-stop-shop' basis (for example, the Investment Promotion Agency of the Sverdlovsk region), strategic planning documents are developed that are focused on handling problems and issues specific for investment processes (for example, the Investment Strategy of the Sverdlovsk oblast). The results of such activities are often substantially separated from the period of their implementation. This is due to the fact that the processes associated with attracting and securing investors in the territory are quite extended in time.
The elaboration of a special economic zone of the industrial production type "Titanium Valley" and territories of advanced social and economic development in the urban districts of Krasnoturinsk, Verkhnyaya Tura, Lesnoy, Novouralsk continues. Property support for investors is provided by nine business incubators, five technology parks, seven private industrial parks, and two industrial parks with state participation.
The Sverdlovsk oblast is one of ten main regions, which account for about 50 % of industrial production in Russia. Industrial production occupies a leading position in the economy of the Sverdlovsk region, delivering up to 39 % of the total GRP of the region (according to data for 2019). At the end of 2020, industrial enterprises manufactured 77.9 % of the total volume of shipped products of large and medium-sized organisations, generated 75.2 % of profits, employed 28.3 % of the working population.
In 2016-2019, the share of industry increased from 34.3 to 39 %, which is largely due to the accelerated pace of industrial production compared to other sectors of the economy. The volume of shipped industrial products in 2020 amounted to 2,490.5 billion rubles, which is 22 billion rubles more than in 2019. The industrial production index in 2020 was 102 % compared to 103.4 % in 2019 (Table 2).
Table 2. The most important indicators of the industrial production development
in the Sverdlovsk oblast, 2016-2020
Indicator 2016 2017 2018 2019 2020
Shipped industrial products, billion rubles 1,892.8 2,097.4 2,359.7 2,468.5 2,490.5
Share of industrial production in GRP, % 34.3 35.8 38.8 39.0 n. a.
Industrial production index, % to the previous year 100.6 106.5 100.0 103.4 102.0
Output (volume of shipped products per employee), thousand rubles n. a. 4,869.0 56,055.2 5,909.3 6,025.3
Note: n. a. means note available
In the structure of industry, the largest share is occupied by manufacturing (83 % in 2020). From 2017 to 2020 its share decreased by 1.4 percentage points, the share of electricity, gas and steam supply - by 0.1 percentage points, while the share of mining and the share of water supply increased by 0.7 percentage points each. In manufacturing, a high share is taken up by metal industries and mechanical engineering (in 2020 - 58.7 and 20.5 %, respectively).
Table 3 shows the structure of employment in the region's economy by type of economic activity.
Table 3. Average annual number of employees of organisations by type of economic activity, thousand people
Type of economic activity 2016 2017 2018 2019 2020
Mining, including: 28.2 22.3 27.8 27.6 27.6
mining of metal ores 17.8 11.7 17.7 17.5 17.0
mining of other minerals 10.1 10.3 9.5 9.4 9.7
Manufacturing, including: 320.7 344.4 320.3 318.6 315.4
food production 22.0 18.3 21.9 21.3 19.7
beverage production 2.7 2.7 2.4 2.4 2.4
production of textiles 0.8 0.8 0.6 0.6 1.1
production of wearing apparel 2.9 2.8 2.4 2.5 2.5
production of leather and leather products 0.2 0.3 0.3 0.6 0.6
woodworking and production of items made of wood and cork, except furniture, production of items made of straw and plaiting materials 7.4 6.1 7.3 6.9 6.9
Table 3 (concluded)
Type of economic activity 2016 2017 2018 2019 2020
production of paper and paper items 2.1 2.7 1.8 1.9 1.9
printing and copying of information-carrying mediums 2.3 2.4 1.9 2.1 2.1
production of chemicals and chemical articles 8.2 15.7 13.6 14.0 13.6
production of medicines and materials used for medical purposes 2.0 2.2 2.0 2.0 2.1
production of rubber and plastic items 6.8 6.7 7.6 6.9 7.5
production of other non-metallic mineral goods 24.3 23.3 22.7 22.8 23.5
metal production 85.7 106.2 83.6 82.5 81.0
production of finished metal products, except for machinery and equipment 50.6 37.4 38.6 38.4 36.1
production of computers, electronic and optical items 16.2 20.9 16.0 16.8 16.3
production of electrical equipment 10.5 10.3 9.1 9.7 9.8
production of machinery and equipment not included in other groups 24.4 22.4 21.7 20.9 22.0
production of motor vehicles, trailers and semi-trailers 1.0 1.2 1.1 0.9 0.8
production of other vehicles and equipment 28.2 38.6 39.3 39.8 39.5
production of furniture 2.7 2.8 3.7 3.6 2.9
production of other finished products 1.8 1.7 1.9 1.9 2.5
repair and installation of machinery and equipment 17.0 18.9 19.8 19.1 19.5
Supply of electricity, gas and steam; air conditioning, including: 53.4 46.3 51.9 50.0 49.2
production, transmission and distribution of electricity n. a. 21.2 25.0 24.4 24.0
production, transmission and distribution of steam and hot water, air conditioning n. a. 20.0 22.3 21.0 20.7
Water supply; water disposal, organisation of waste collection and disposal, activities to eliminate pollution, in- 23.5 17.7 20.9 21.5 21.2
cluding:
withdrawal, treatment and distribution of water 8.9 7.0 9.1 8.8 8.5
collection, processing and disposal of waste; processing of secondary raw materials 5.7 6.1 5.6 6.5 6.3
Source: Sverdlovsk oblast in 2016-2020. Statistical digest. Ekaterinburg: Rosstat regional office of Sverdlovsk and Kurgan Regions (Sverdlovskstat), 2021. 218 p.
In the territorial structure of the region, several zones of industrial production concentration are distinguished.
The most significant among them is the Ekaterinburg agglomeration with municipalities (urban districts of Pervouralsk, Revda, Degtyarsk, Zarechny, Verkhneye Dubrovo, Reftinsky, Verkhnyaya Pyshma, Sredneuralsk; Polevskoy, Sysertsky, Aramilsky, Beloyar-sky, Asbestovsky, Malyshevsky, Berezovsky urban districts; municipality Uralsky village). "The industry of the Ekaterinburg agglomeration is represented mainly by mechanical
and instrument engineering, metal industries, the production of building materials, and chemical industries. Defence enterprises prevail in the mechanical engineering industry. The region has developed heavy engineering: production of equipment for the energy, mining and chemical industries"1. This location amasses about 50 % of the total population living in the Sverdlovsk region, more than 55 % of the manufacturing industries and more than 60 % of the total investment in fixed assets.
The second largest is the Gornozavodskaya agglomeration with the center in the city of Nizhny Tagil (the city of Nizhny Tagil; Gornouralsky, Verkhnesaldinsky, Kushvin-sky, Kirovgradsky, Nevyansky, Novouralsky, Svobodny urban districts; urban districts of Verkhny Tura, Krasnouralsk, Nizhnyaya Salda, Verkhny Tagil, Verkh-Neyvinsky), providing 20 % of industrial output. The specialisation of this zone is the metal industries, mechanical engineering, and timber industry.
The third largest zone is the 'northern cluster of cities' (urban districts of Karpinsk and Krasnoturinsk; Severouralsky, Volchansky, Serov urban districts), concentrating 10 % of industrial production with the domination of non-ferrous metal industry.
The fourth zone of high industrial activity is the city of Kamensk-Uralsky, as well as individual municipalities of the Eastern Administrative District (municipalities of the cities of Irbit and Alapaevsk; Artemovsky, Kamyshlovsky, Tavdinsky, Talitsky, Turinsky, Tugulymsky urban districts) [Kokovikhin et al., 2017]. Their specialisation is non-ferrous metal industries, tube rolling, as well as timber processing.
Twelve industrial parks are at the early stages of formation in the territory of the Sverdlovsk oblast. Another essential element for ensuring industrial growth is the Titanium Valley Special Economic Zone.
Economic sustainability of an old industrial region during the first wave
of the coronavirus pandemic
To prove the sustainability and resilience of the regional economy of the Sverdlovsk oblast we use statistical data relevant for the first wave of the coronavirus pandemic.
The spread of COVID-19 has had a tremendous impact on the global economy in general and the Russian economy in particular. At present, it is possible to provide the first reasonable estimates of the ongoing economic changes in the territories of the old industrial regions, of which the Sverdlovsk oblast is a prominent representative, since some official statistics have already been accumulated for the country and individual territories.
The study used statistical data of the Rosstat regional office of Sverdlovsk and Kurgan regions for the period from January to December 2020 (Table 4, Figure). Its comparison with data for the same period of 2019 allows drawing the first empirically grounded conclusions.
1 On approval of the Strategy of industrial and innovative development of the Sverdlovsk oblast for the period up to 2035. https://mpr.midural.ru/UPL0AD/2019/07/383-PP.pdf. (In Russ.)
Table 4. Dynamics of the most important economic indicators of the Sverdlovsk oblast in 2020 during the first wave of the Coronavirus pandemic
(January - December), % to the corresponding month of 2019
Indicator lanuary February March April May lune July August September October November December 2020
Industrial production index 100.2 112.9 100.5 106.5 93.5 101.0 90.2 95.6 99.0 103.8 105.8 108.0 102.0
Production index for the types of activities "Mining of minerals" 98.6 105.9 101.6 101.1 101.7 99.6 107.7 97.7 103.4 96.0 101.1 96.0 103.2
Production index for the types of activities "Manufacturing" 102.8 115.3 101.1 107.5 91.5 101.3 89.6 95.5 98.6 104.6 106.2 108.0 102.2
Production index for the types of activities "Supply of electricity, gas and steam; air conditioning" 88.8 103.1 100.2 112.2 111.9 102.0 86.1 94.0 97.0 95.2 102.1 108.5 99.9
Index of the physical volume of work performed by the type of activity "Construction" 123.6 103.9 89.6 104.0 99.9 114.2 93.7 107.3 121.9 92.9 112.5 57.7 97.1
Retail trade turnover (in comparable prices) 101.2 103.4 103.1 84.2 83.7 87.4 90.9 90.9 89.2 88.8 85.1 81.6 90.4
Turnover of retail trade in food products (in comparable prices) 102.5 103.4 101.7 92.2 91.9 92.6 95.0 89.3 87.7 86.9 83.4 80.7 91.9
Turnover of retail trade in non-food products (in comparable prices) 100.1 103.4 104.5 76.4 75.7 82.4 87.1 92.4 90.6 90.5 86.7 82.4 89.1
Volume of paid services to the population (in comparable prices) 103.3 101.1 100.5 54.9 55.8 56.7 60.9 73.7 83.4 83.5 83.1 91.2 78.9
Source: Information for monitoring the socioeconomic situation of the constituent entities of the Russian Federation, https://rosstat.gov.ru/folder/11109/docu-ment/13259.
Note: Indicators that have decreased compared to 2019 are highlighted in colour.
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Dynamics of the key economic indices of the Sverdlovsk oblast for the period from January to December 2020, % to the corresponding month of 2019
The main inference from the results of the comparative analysis is the confirmation of our hypothesis that the genetic code of the Sverdlovsk oblast, formed over more than three centuries as an old industrial region, the core of which is the industrial specialisation of the economy, has created a 'rainy day fund', which allows resisting global challenges and threats.
Thus, our earlier findings were sustained: "The Sverdlovsk oblast, like other regions of the Urals, is characterised by a special structure of the economy, in which the industries of specialisation are the manufacturing industry, with a high share of the defence industry, metal production, mechanical engineering with the dominance of large enterprises.
Large manufacturing enterprises of the Sverdlovsk oblast were able to withstand the pandemic. Systemically important enterprises practically did not suspend their operation" [Novikova, 2020].
The sustainability of the regional industry is testified by the following: in 2020, the industrial production index was lower than the same indicator in 2019 for only four months (May, July, August, September). The data for eight months of 2020 showed growth.
At the end of 2020, this index, according to the Rosstat regional office of Sverdlovsk and Kurgan regions, amounted to 102.0 % compared to the same period in 2019. In the leading industry of the region - metal production - it was equal to 101.7 %.
However, not all sectors of the region's economy turned out to be as stable in the new economic reality. Precisely, the retail trade turnover in comparable prices at the end of 2020 decreased by 9.6 % compared to 2019. The drop in the non-food trade segment was especially noticeable being more than 10 %. An even more difficult situation has
developed in the sector of providing paid services to the population: in 2020 their volume decreased by 21.1 % compared to 2019.
In our opinion, the major reasons for this situation were, firstly, "the suspension of the activities of a number of organisations in the retail trade and the service sector in connection with the measures introduced to overcome the spread of coronavirus infection; secondly, the fall in incomes of the population of the region; thirdly, changing consumer preferences, focusing on a cheaper segment of goods, searching for substitute goods" [Novikova, 2020].
The marked increase in the number of unemployed people in the region is alarming. Thus, in April 2020, compared to March, it increased by 19.2 thousand people and reached 114.3 thousand people. Growth continued in May 2020, as a result, another 23.4 thousand people were added to the number of unemployed and its total value was 137.7 thousand people.
Conclusion
To bring the paper to a close, let us outline the prospects for changing the economic situation in the Sverdlovsk oblast, given that the Urals, being an old industrial region, can be structurally adjusted more easily than peripheral, lagging regions [Novikova, 2018; Silin, Animitsa, Novikova, 2019].
We believe it is appropriate at this stage of the economic development of Russia and its old industrial regions to consider not just the modernisation of the economy, but a new industrial modernisation. Leading economists emphasise: 'The essence of the modernisation of the Russian economy lies in the renewal of its industry on a qualitatively new technological basis' [Bodrunov, Grinberg, Sorokin, 2013, p. 20].
Our conclusions from the previous studies also become increasingly relevant: "... In the innovative economy, countries with a developed industrial potential, primarily with modern mechanical and instrument engineering, are the leading countries. Scientists point out that today it should be not only about modernising the economy, but also about implementing high-tech modernisation, restoring on a new technological basis those industries, the loss of which is fraught with a rapid lagging behind the leading countries and consolidating the regime of dependent industrial and technological development" [Silin, Animitsa, Novikova, 2019, p. 277].
One of the key issues concerning the future of the Urals is the choice of strategic directions, structural changes that will activate the processes of the new industrialisation in the space of the Ural macroregion.
Technical and technological shifts resulting from the introduction of the achievements of the third and fourth industrial revolutions interactively with new socioeconomic and demographic trends (ongoing urbanisation, the growth of urban
agglomerations, population aging, digital competence of young people, etc.) cause noticeable changes in the development of industrialisation, alter the trajectory of the economic movement in the space of the region. They transform the existing production image of the Ural macroregion and create the new one, corresponding to the realities of the 21st century.
The risks of the development of old industrial regions, including the Urals and the Sverdlovsk oblast, associated with the coronavirus pandemic, the emergence of the green economy in the leading countries of the world, the beginning of a new raw material supercycle, deglobalisation1, were topped up by sanctions risks caused by the special military operation2. In the new reality, in which the whole world has found itself, the development of old industrial regions has grown in importance, the major factor of which is the state interest.
According to Sergey Glazyev, in the current situation, "it is necessary to expand the production of domestic aircraft. Russia has factories for this, built back in Soviet times. There are our own models that we can fully assemble from domestic components: Tu-204/214, Tu-334, Il-96"3. The creation of special refinancing instruments in all industrial and technological areas will allow the Russian economy to ensure GDP growth of 8 % per year, and by expanding import substitution, increase this value to 10 % per year4.
The listed guidelines are drivers for the development of the Sverdlovsk oblast, the Ural macroregion, and represent new impulses for the dynamics of the old industrial regions of Russia.
References
Alekseev V. V., Zubkov K. I., Kilin A. P., Shirogorov V. V. (1992). Foreign experience of crisis regional policy. Ekaterinburg: Nauka Publ., Ural branch. 96 p. (In Russ.)
Animitsa E. G. (2013). Phenomenon of Kondratieff waves and cycles in the development of the industry of the Ural microregion. In: Modernisation and innovation processes in the socioeconomic development of regions and cities. Book 1. Ekaterinburg: Ural State University of Economics, pp. 11-50. (In Russ.)
1 See for more details: Forecast of the socioeconomic development of the Sverdlovsk oblast for the long term until 2036: Decree of the Government of the Sverdlovsk oblast dated February 10, 2022 no. 80-PP. Official Internet portal of legal information. http://publication.pravo.gov.ru/Document/View/6600202202140021. (In Russ.)
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4 Ibid
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Information about the authors
Evgeny G. Animitsa, Dr. Sc. (Geography), Prof., Chief Adviser of the University Administration, Prof. of Regional, Municipal Economics and Governance Dept., Ural State University of Economics, 62/45 8 Marta/Narodnoy Voli St., Ekaterinburg, 620144, Russia Phone: +7 (343) 283-12-48, e-mail: animieg@usue.ru
Natalya V. Novikova, Dr. Sc. (Econ.), Associate Prof., Prof. of Regional, Municipal Economics and Governance Dept., Ural State University of Economics, 62/45 8 Marta/Narodnoy Voli St., Ekaterinburg, 620144, Russia
Phone: +7 (343) 283-10-76, e-mail: novikova@usue.ru
© Animitsa E. G., Novikova N. V., 2022
