Large cities of the Siberian Federal District: mutual influence of economic and demographic development

Nizamutdinov Marsel' Malikhovich PhD in Technical Science Head of the sector of Economic-Mathematical Modeling, Ufa Federal Research Center of the Russian Academy of Sciences 450054, Russia, respublika Bashkortostan, g. Ufa, Pr. Oktyabrya, 71 marsel_n@mail.ru Other publications by this author

Oreshnikov Vladimir Vladimirovich PhD in Economics Senior Scientific Associate, the sector of Economic-Mathematical Modeling, Ufa Federal Research Center of the Russian Academy of Sciences 450054, Russia, respublika Bashkortostan, g. Ufa, ul. Pr. Oktyabrya, 71 voresh@mail.ru Other publications by this author

Introduction

Today the urban development trends entirely determine the Russian economic growth. The modern cities are concentration of population, production and industrial capacities, financial flows, social and cultural facilities, and workforce. At the same time city’s economic development is connected with socio-demographic processes. Changes in demographic sphere parameters (age and gender structure, intensity of migration flows, reproductive behavior, etc.) are due to the influence heterogeneous factors, both social and economic.

Thus the potentials comparative analysis and estimation cites’ development prospects have actualized located in the same macro region. The research logic is to analyze trends and development prospects for the large cities and to estimate integral indicator and ranking cities based on its value. The Siberian Federal District (SFO) was chosen as the research object because the region characterized by the combination of such factors as the large areas and population concentration in different category cities.

1. Statement of the problem: urban development in the Siberian Federal District

The territory of the Siberian Federal District is 30.1% of the entire territory of the Russian Federation (5,145 thousand km²) and includes 12 regions. The population of the district exceeds 19.3 million people (13.2% population of Russia) and the urbanization level is about 72%. The Siberian Federal District is rich in natural resources: 85% of all-Russian reserves of lead and platinum, 80% of coal and molybdenum, 71% of nickel, 69% of copper, 44% of silver, 40% of gold ^[7].

Regarding the demographic situation, it should be noted that the total population of the Siberian Federal District has declined markedly over the past 10 years. At the same time the urban population is decreasing, but the cities’ proportion is growing up. More than 50% of the urban population lives in cities with a population over 100 thousand people, while in these cities there has also been a slight increase in the population. The largest population growth was observed in recent years in Norilsk, Tomsk and Ulan-Ude. At the same time it should be noted that during the same period the number of cities in the Siberian Federal District remained almost unchanged ^[9], but small structural changes took place according to their categories (Table 1).

Table 1

The urban residents number of the Siberian regions in 2005-2015

Source: Rosstat data.

The socio-economic development of the SFD cities in is uneven ^[5]. There was a decrease in population of up to 10% in 12 of the 25 cities with a population over 100 thousand people. At the same time both the number and the population of the cities with a population of up to 10 and more than 500 thousand people have been increased because the number of cities moved in this category that previously were in other categories.

Changes in the demographic parameters and the settlement system had the impact on the labor market and employment indicators ^{[1; 6]}. The number of people employed in the SFD economy has increased over 10 years. At the same time employees in large cities have decreased, their share also has slightly decreased. The largest share of employees in the total population was in such cities as Norilsk, Mezhdurechensk and Irkutsk. The reason for this is both demographic and economic factors. In particular, there is a positive growth rate of the average monthly wage in large cities of the Siberian Federal District. The real growth is noticeably lower than the nominal one. In the overwhelming majority of large cities in the Siberian Federal District, an increase in labor productivity was observed in the period under review.

The city’s economy development is significantly affected by the dynamics of assets ^{[8; 2]}. The Krasnoyarsk, Irkutsk, Kemerovo and Novosibirsk regions have the greatest significant influence on their total volume in the Siberian Federal District (60% of all assets of the Siberian Federal District). At the same time assets’ depreciation degree in the SFD is below the average Russian level. For large cities of the Siberian Federal District, an increase in the volume of investments in fixed assets per 1 employee is observed. Diverse cities are also heterogeneous according to other criteria. In particular, for the 8 of the 23 large cities the decrease in construction work volume is observed. For example, there is a decrease in retail trade turnover for all major cities in the Siberian Federal District.

As part of the study, a set of 12 most significant indicators was determined ^[11] which allows assessing both the economic potential of urban development and the socio-demographic trends that characterize them as a comfortable environment for living and the center of the population gravity. The analysis showed that during the study period there were significant changes in socio-economic development indicators for the overwhelming majority of large cities in the Siberian Federal District. Assessing the trends of their development, all cities could be divided into 3 groups: with excess of positive trends; with an equal ratio of positive and negative trends; with excess of negative trends.

Fig.1 - Development indicators trends for large cities of the Siberian Federal District in 2005-2015

The first group includes such cities as Kyzyl, Biysk, Irkutsk, Krasnoyarsk, Novosibirsk, Omsk, Barnaul, Abakan, Kemerovo, Leninsk-Kuznetsky, Tomsk. The second group includes such cities as Ulan-Ude, Angarsk, Novokuznetsk, Mezhdurechensk, Achinsk with an equal ratio of positive and negative trends. The third group includes Rubtsovsk, Chita, Bratsk, Prokopyevsk and Norilsk. These cities are characterized by an excess of negative trends over positive, decrease in the population and the assets value that indicates decrease in the cities productive potential.

2. Methods: evaluation the urban settlement prospects using the Zipf’s rule and integral index

The population is used as one of the cities’ importance indicator. In accordance with the “Zipf’s rule” (law of “Rank-Size”) the population of any city tends to be equal to the population of the largest city divided by the sequence number of the city in the ranked series ^[13]. In the course of the study, Zipf’s curves were constructed for large cities of the Siberian Federal District (Fig. 2).

The Zipf’s curve for large cities of the SFD in 2015 is above the ideal curve. That characterizes the cities’ uniform “saturation” on the territory. The line goes sharply upwards and looks like a straight line explains that the first 8 cities are much larger than the subsequent ones. The Zipf’s curves location is preserved with respect to the ideal curve. It indicates that in the last 10 years the laws have not changed fundamentally. If analyze logarithms for Zipf’s curves formula then we have revealed the tendency to increasing the amount of medium and small cities and their population. Thus, the rapid growth of million-plus cities is preserved. But at the same time share of the population living in smaller cities will slightly increase.

At the next step of the analysis, it seems appropriate to rank the cities of the Siberian Federal District with population more than 100 thousand people. The complex estimation requires some integral indicator covering various characteristics of the socio-economic infrastructure. In our opinion, the most important indicators are the following: population dynamics which vividly show the true preferences of people and objective factors of urban development; income level (welfare) of the population; housing affordability; natural and environmental conditions; transport infrastructure and others. We’ve used the technique presented in ^[12] to assess these characteristics.

The calculation shows that the leading position is occupied by Novosibirsk (Table 2) which is the third most populous city in the Russian Federation. The leading industries in Novosibirsk are energy, gas, water, metallurgy, metalworking, mechanical engineering. They account is above 94% of the total industrial production of the city. The city has an advantageous geographical position and it allows having the largest logistics complex in the Siberian region. The developed economy, favorable position and a high level of wages make this city attractive not only for business but also for the population.

Table 2

SFD cities attractiveness rating

Source: authors study

Also leading positions are occupied by Krasnoyarsk, Omsk and Irkutsk. There are the largest cities of the Siberian Federal District and have developed industry as the main locomotives. At the same time, there is a tendency of their growth not only from the point of view of the population (size, social security) but also of the economy (growth of industrial indicators).

Cities occupying the last places (Leninsk-Kuznetsky and Prokopyevsk) are characterized by a significant decrease in population, due to the influence of the negative factors (difficult environmental situation, high level of hazardous industries, high share of the population over 65 years). The main type of economic activity for them is the coal industry which determined their development in the status of single-industry towns. However, today there is a problem of depletion of mineral deposits, as well as the risk of labor resources shortage ^[10]. Thus, maintaining excessive dependence on enterprises engaged in the extraction and primary processing of coal is dangerous for the sustainable development of these cities.

It is necessary to take measures to diversify the economy and develop new innovative industries ^[3]. The most important areas in this area are the revitalization of small and medium-sized businesses, science, technology and innovation, the modernization of industries and development of cost-effective high-tech equipment and technologies. The transport infrastructure development, innovative and knowledge-intensive industries aimed at modernizing existing facilities will lead to an increase in the investment attractiveness of both individual cities and the region as a whole. It does also help solve the problem of diversification and intensification of economic development ^[4]. To achieve the objectives at the initial stage, it is necessary to attract large investments that are impossible without the joint efforts of the state and business.

Conclusion

The analysis revealed that cities play a crucial role in the Siberian Federal District development. The aggregated groups of large cities of the Siberian Federal District were identified by study the negative and positive changes in their socio-economic situation: with predominance of positive trends; with equal ratio of positive and negative trends; with a predominance of negative trends. The study of the mutual influence of economic and demographic factors shows that the growth of industrial production and the creation of new jobs is the condition for increasing the level of urban development and the way to increase the business environment competitiveness.

Zipf’s curves study allowed concluding about the cities uniform "saturation" on the territory of the SFD. At the same time the analysis outpaced growth in million-plus cities and some growth in cities with smaller population.

The ranking of cities by the integral attractiveness indicator, in general, confirmed the leading positions of the largest cities of the Siberian Federal District which are the capitals of the regions and are characterized by the high life quality, significant investments inflow. It was noted that the mutual influence of economic and demographic factors determines the overall development of the territory. In this regard, the demographic and economic policies of government should be interconnected.