Scientific and Technological Progress and its Role in Ensuring Inclusive Economic Growth of the Region (on the Example of the Republic of Tatarstan)

The era of globalization, which predetermined the intensification of economic growth through the integration of national and regional economic systems into the global value chain, has formed a number of externalities of both positive and negative order. At the same time, if the positive ones include, for example, the general growth of well–being and the intensification of economic dynamics in developed and developing countries, then the negative ones include, in some cases, trends in the sphere of increasing income inequality, insufficient rates of poverty reduction, which creates risks of social tension on the scale of individual macro-economies. and meso-level. In this regard, traditional approaches to the management of socio-economic systems are increasingly being criticized against the backdrop of unfolding discussions about the optimality and effectiveness of the orientation of public policy to a greater or dominant degree aimed at intensifying economic dynamics. Taking into account these trends and the growing criticism of the existing models of economic growth, a new area of research, called the Theory of Inclusive Economic Growth, has entered the scientific and expert space. Under it, according to the position formed in 2015 at the World Economic Forum, it is proposed to understand the need to achieve balanced development, involving a combination of economic growth with opportunities for prosperity and increasing the well-being of all segments of society and their integration into the system of non-discriminatory distribution of the final product ^{[1, 2, 3]}. In other words, the main goal of an inclusive model of economic growth It is an increase in the quality of life of the population, taking into account the reduction / localization of inequality in society against the background of the activation of the processes of economic dynamics.

It should be noted that despite the relatively new trend in the theory of economic thought devoted to inclusive economic growth, the international scientific community has generally formed an approach to the identification and meaningful interpretation of this category. At the same time, it is still not necessary to say that at the present moment a unified position has been formed on this issue. In a generalized form, as mentioned earlier, inclusive economic growth is understood as long-term economic growth in all its sectors and spheres in a strict combination of poverty reduction and employment growth for the vast majority of social and demographic groups of the population.

It is generally believed that the most important impulse that formed the activation of research processes in this direction and the increase in interest from the expert community was the growth of income inequality observed in many developed and developing countries against the background of increasing economic dynamics. The previous accents in the economic policy of the turn of the 90s, concentrated more on the growth of purely economic indicators (GDP growth, investment in fixed assets, etc.) began to go into clear dissonance with the position that economic growth is a necessary and sufficient condition for ensuring sustainable development and meeting the expectations of economic agents regarding improving the quality of life. It is no coincidence that in recent years a fairly large number of works have begun to appear aimed at substantiating the fact that inequality contributes to undermining economic growth, and therefore these processes should develop in a balanced track system. At the same time, researchers often, within the framework of their discussions on an inclusive development model, make a tilt towards increasing the dominance of the policy of ensuring social well-being relative to economic incentives ^{[4, 5, 6, 7]}. This approach, in our opinion, carries some risks and does not fully understand the philosophy of an inclusive model of economic growth, since the latter can be effective only if it does not undermine economic priorities and incentives. In other words, an indispensable condition for ensuring an inclusive development model is a harmonious combination of structural and institutional parameters of socio-economic growth that contribute to an increase in the quality of life of all social and demographic groups of the population in conditions of economic dynamism. With this in mind, the concept of inclusive development does not presuppose the placement of priority determinants. Each of them (economic, social, institutional, etc.) is important and significant and cannot be mutually exclusive within the framework of the concept of inclusive economic growth.

This paradigm of forming a model of socio-economic development is being actively implemented in the Russian Federation. Despite the obvious achievements in this area, there are some shortcomings that are somewhat discordant with some of the principles of the inclusive development model. This, for example, finds expression in the increasing inequality in income of the population against the background of the advancing dynamics of economic growth (with the exception of crisis periods, expressed in the cyclical decline of the economy and the aggravating aspects of the sanctions order), disproportionate growth rates of real incomes relative to GDP dynamics, etc. All this creates risks of sustainable development of social, and, consequently, the economic sphere, in view of which the principles of inclusive economic growth are now largely beginning to be absolutized both in the expert and scientific community.

The recognition, at the level of federal and regional government authorities, of stimulating the development of an inclusive economic growth model is largely due to the understanding that inequality in the socio-economic development of the subjects of the Russian Federation, the increasing processes of income concentration in large megacities and regions developed in financial, industrial, scientific and technological terms, the widening income gap between the poor and a rich population leads to negative social consequences (an increase in crime, poverty, deterioration of health, a decrease in social cohesion and solidarity in society, localization of opportunities for the realization of talents) and, as a result, a slowdown in labor productivity, structural "distortions" in the economy and a decrease in economic growth as a whole.

In solidarity with the approaches of Russian and foreign researchers ^[8-11], the most important factor determining the prospects and intensity of the transition of socio-economic systems to an inclusive development model is scientific and technological progress and the externalities generated by it. The transition of the world economy at the beginning of the tenth years of the XXI century to a new technological way of life significantly contributed to the transformation of economic relations, the emergence and development of new markets, the restructuring of processes taking place in labor markets, which could not but affect the models of social relations, the growth of the quality of life – the main indicator of inclusive development of socio-economic systems.

Taking into account the deep integration of the Russian economy into the system of the world division of labor, the ongoing processes associated with scientific and technological progress could not but affect the processes of perturbation in the national socio-economic system. Globalization and technological changes have predetermined the transition from an industrial type of development to a post-industrial one, associated with the active growth of the service sector, creative industries, and high-tech spheres of activity in contrast to the traditional dominance of the manufacturing sectors of the economy. The labor market, reacting accordingly, began to show an increased demand for highly qualified workers, as a result of which signs of increasing structural unemployment and increasing wage discrepancy processes between different spheres of economic activity began to appear more and more actively (Table 1, Figure 1). Expressed in terms of the theory of inclusive growth, signs of inequality in the process of creating and redistributing the final product began to increase as a result of the formed distortions in the labor market.

Table 1 – Average monthly nominal accrued wages of employees of organizations by type of economic activity, rubles (in current prices) ^[12]

Figure 1 – The ratio of the level of wages in high-tech sectors of the economy and production, industrial spheres of activity, thousand rubles. (developed according to ^[12])

The presented data (Table 1, Figure 1) quite clearly "highlight" the patterns in the field of changes in the demand for labor in various sectors of the national economy in the conditions of a change in the technological structure. Industrial spheres of economic activity (mining, manufacturing, electric power, etc.) are beginning to show clear signs of lagging behind in terms of wage growth. At the same time, the sectors of the economy that are largely associated with the demand for highly qualified professions (research and development, public administration, information and communication activities, etc.) show outpacing dynamics in the growth of average monthly wages. In addition, the areas related to creative activity also receive a significant boost in the growth of the indicator under consideration.

It is also important to note the fact that the processes of interregional and international labor migration under the pressure of ongoing technological changes largely contributed to the growth of imbalance and spatial inequality in the paradigm of an inclusive model of economic growth. The concentration of labor resources began to form in large agglomerations, where scientific and technological markets and the service sector, including creative ones, are most developed (Figure 2). As a result, a number of traditional industrial sectors of the economy began to experience a shortage of labor, as a consequence of the insufficient effect of job replacement due to the outflow of workers to more marginal sectors of the economy and regions of concentration of highly qualified personnel.

Figure 2 – The leading regions of the Russian Federation in terms of labor force growth for the period from 2005 to 2020, an increase in thousands of people (Calculated according to ^[13])

To a large extent, the increase in the number of workers in these regions of the Russian Federation is due to the high concentration of knowledge-intensive industries and the intensive build-up of scientific and technological potential as a result of a significant orientation of state policy in these subjects to new technological development tracks in accordance with the basic principles and key technologies of the sixth technological order.

It is important to note that scientific and technological progress shows its impact not only in terms of perturbations in the labor market, but also in many other areas. And in many ways, NTR is undoubtedly the most important driver of the creation and subsequent use of technologies that ensure the implementation of the main principle of inclusive economic development – the comprehensive involvement of all social and demographic groups in the process of creating, distributing and redistributing the gross final product. The clearest example of the formation of positive externalities from the point of view of building an inclusive model of economic growth is the process of digital transformation, which actively absorbs the system of economic relations at the present stage of their development. This process contributes not only to the formation of new trends in the organization of economic relations, but also largely ensures the smoothing of structural distortions in the development of the labor market, by ensuring the emergence of new professions, localization of administrative barriers, improving channels of access to all kinds of markets, including labor markets and, as a result, determine the key parameters of inclusive development of economic systems. In other words, it contributes to the growth of the quality of life and the inclusion of various segments of society in the processes of socio-economic development.

Relying on the opinion of a large number of modern researchers, it can be argued with a high degree of confidence that the digital transformation of the socio-economic environment is today, in the era of the transition of the world economy to the sixth technological order, the most important factor ensuring the competitiveness and sustainability of the development of national and regional economic systems ^[14-17].

This is due to a number of reasons, the most important of which should include a series of key externalities being formed:

Effect 1. Increased efficiency in the public sector as a result of:

- increasing the speed of data exchange and decision-making;

- increase in the efficiency of the OGV;

- expanding the range of public services by creating additional opportunities for their provision through electronic services and remote maintenance;

- reduction of transaction costs, expressed in labor costs of time and resources;

- the growth of the quality of services rendered as a result of the creation of large amounts of information in digital form and their ordering;

- development of tools for citizens' feedback with public authorities;

and others .

Effect 2. Increased efficiency in the corporate sector as a result of:

- increasing competitive advantages within the framework of the implementation of the concept of flexible organization of business processes, taking into account dynamically adjusting factors of the external and internal environment and the growth of dynamic capabilities due to the automation of actions;

- optimization of information collection and processing processes;

- increasing the efficiency of economic and management processes and, as a result, increasing economic marginality;

- strengthening trust between the corporate sector and consumers of their products/services due to an adapted policy towards customers by providing all kinds of electronic services;

- automation of business relations with partners based on the use of ICT (for example, SMART contracts), which leads to a reduction in transaction costs and minimization of opportunistic behaviors;

- expanding the range of markets and market opportunities by "erasing" administrative barriers and borders;

- increasing the speed of communication between manufacturers and accelerating the creation of opportunities for cluster organization of business processes;

- creating conditions that stimulate the corporate sector to intensify process and product innovations;

- the growth of opportunities to attract capital through the creation of various kinds of electronic services (crowdfunding platforms, ICO, etc.)

and others .

Effect 3. Increased household efficiency as a result of:

- reducing restrictions on access to the labor market as a result of the development of various electronic platforms that provide job search, the possibility of integration into the system of corporate and public procurement (differentiation and diversification of the base of potential employers), expansion of product sales markets for self-employed workers;

- labor productivity growth as a result of elimination/minimization of administrative barriers, reduction of operational costs, minimization of time costs in the implementation of business operations within the framework of the development of electronic services;

- development of a system of continuous professional development and growth of competitiveness of households within the framework of electronic access to educational platforms;

- development of a feedback system with public authorities and, as a result, improvement of the quality of public services provided;

and others .

Returning to the subject of this study – inclusive economic growth of the region, as well as guided by the above argument about the importance of scientific and technological progress in the formation of socio-economic dynamics, it seems appropriate to conduct a formalized analysis of the impact of STD on the parameters of the formation of inclusive economic growth in regional socio-economic systems.

Methodically, the solution of this problem is based on neoclassical economic theory, where the construction of production functions acts as a fundamental tool for modeling economic dynamics. Neoclassical approaches to the construction of production functions are based on two key factors that trigger economic dynamics and influence the creation of the final product: labor (L) and capital (K). At the same time, this approach evolved in the future and led to the development of improved approaches to the study of economic dynamics. The most important, in our opinion, modification of the classical Cobb-Douglas model is the J. Tinbergen model ^[18]. Its main difference is that a component evaluating innovation activity in the economy has been added to the number of production factors. A similar position in the construction of the economic growth model was held by the American scientist R. Solow, who uses a factor in the production function that evaluates the level of scientific and technological progress as the most important parameter that intensifies economic dynamics ^[19].

In our opinion, given the high level of significance and relevance of such a productive factor at the present stage of economic development as "Scientific and Technological development", it is extremely important to focus the research field in this particular perspective. At the same time, the key difference of the developed model will be that the endogenous factor of the production function will not be a traditional indicator assessing macroeconomic dynamics (GDP), but a parameter reflecting the inclusive economic growth of the region. In addition, the regional aspect of the study will also characterize the distinctive features of the simulated function.

Relying on the presented approach, this study attempts to modernize the Cobb-Douglas production function, where the resulting element will be a parameter that evaluates inclusive economic growth in the context of the studied regional group. In general , the simulated production function has the following:

Y = A * La * K?* Iyy (formula 1)

where,

Y – index of inclusive economic growth of the region (IIGRE (Index of inclusive growth of the region's economy));

L – labor's contribution to GDP growth, billion rubles;

K - capital contribution to GDP growth, billion rubles;

I - the contribution of NTR to the growth of GRP, billion rubles.

The coefficients ?, ?, ? are elasticity parameters that demonstrate how much percent the IIGRE index will grow if the corresponding factor increases by 1%.

Following the proposed research algorithm, the most important task of constructing the desired production function is the assessment of the IIGRE index, which characterizes the dynamics of the parameters of inclusive economic growth in the region. Methodically, this problem is solved based on the use of the author's modeling tools of the index under study based on the modernization of the methodological approach proposed by the World Economic Forum ^[20].

In a concentrated form, the assessment process was carried out within the framework of constructing time series characterizing the dynamics of various indicators that assess the quantitative and qualitative parameters of the inclusive development of the region's economy in three key areas ^[21] (Table 2).

Table 2 - List of indicators used in the formalized assessment of the IIGRE index value

In accordance with the methodology under consideration, each of the three studied subindexes is evaluated on a seven–point scale (formula 2) ^[22], where the value 1 is the minimum value of the analyzed indicator, 7 is the maximum.

              (2)

For indices whose increasing value leads to a negative effect on regional dynamics, formula 3 is used.

-              (3)

The arithmetic mean sum of the obtained subindexes determines the integral value of the inclusive economic growth index of the region (IIGRE).

The practical use of the considered methodological tools in relation to the object of research – the Republic of Tatarstan, allowed us to obtain integral estimates of the IIGRE index. In concentrated form, the results for the period from 2010 to 2021 are presented in Figure 3.

Figure 3 - Assessment of the IIGRE index in the Republic of Tatarstan

(calculated by the authors)

The data obtained made it possible to proceed to the construction of the production function in accordance with the proposed research algorithm, which assumes the use of an indicator evaluating inclusive economic growth as an endogenous parameter.

Further, on the example of the Republic of Tatarstan, the main sequence of iterative actions and the construction of a production function in accordance with the parameters embedded in the model is presented.

The factors used in the production function are pre-normalized in order to unify them and allow an adequate comparison of their significance among themselves.

The following statistical data and simulated indicative values were used as the initial base (Table 3):

Table 3 – Values of factors used in the construction of the production function for the Republic of Tatarstan (compiled according to EMISS ^[13]

* the index values are calculated by the authors according to ^[10]

** evaluation

At the first stage of calculations, the normalized data series (L, K, I) used, included as exogenous parameters in the constructed production function for the Republic of Tatarstan, were prologarithmed in order to transition to the linear form of the modeled function (Table 4).

Table 4 - Logarithmic values of exogenous factors of the production function

At the next stage, the logarithmic values obtained served as the basis for a regression analysis, where the exogenous factors studied were used as explanatory parameters, and the index of inclusive economic growth of the region was used as an explanatory one. The results obtained, estimating the statistical significance of the equation, indicate its high level (R2 = 0.86, parameters estimating P-values do not exceed the required level of 0.05, t-statistics correspond to the tabular value of the normal distribution) (Table 5).

Table 5 - Regression statistics

The resulting equation has the form:

Ln IIGRE = -0,157+0,144LnL+0,217LnK+0,192LnI    (4)

By converting the resulting equation from a logarithmic form into a power function, the following equation is constructed:

Y = 1,15*L0.144*K0,217*I0,192      (5)

The following key conclusion follows from the obtained model: the role of scientific and technological development as a productive factor in the system of organizing inclusive economic growth is comparable to traditional factors of production (labor, capital). Moreover, for the region considered here as an example, the Republic of Tatarstan, the value of this parameter (elasticity coefficient) is even slightly higher than such a factor as "The number of people employed in the economy". According to the results obtained, an increase in the I index characterizing scientific and technological progress by 1% leads to an increase in the IIGRE index of the region by 0.19%, which slightly exceeds the sensitivity parameter characteristic of factor L. This indicates a noticeable level of sensitivity of the inclusive economic growth model to the processes of STD activation.

The result obtained is quite explicable by the trends of the processes of diffusion of the Fourth Industrial Revolution (4PR) into the system of economic relations both at the global and national and regional levels. Considering that any industrial revolution generates a transformation in the labor market, as a rule in favor of reducing the demand for labor, the 4PR that began in the 21st century led to further changes and redistributions between productive factors. The role of suppliers of capital and scientific and technical products (both physical and intangible, cognitive) is beginning to acquire an almost comprehensive character against the background of the decline in the role of labor ^{[23, 24]}. This thesis fits quite logically into the result obtained, indicating the significant positions of the analyzed factor I (characterizing the processes of intensification in the region of scientific and technological progress). In other words, the NTR of the ecosystem of the region significantly determines the parameters and prospects for the formation and expansion of inclusive economic growth while reducing the importance of the factor of employment of the population.

It should be noted that in many respects the obtained conclusion correlates with traditional neoclassical models and functions constructed in the middle of the XX century by leading economists-scientists. So, for example, in his work "Contribution to the Theory of Economic Growth", Nobel laureate R. Solow ^[19] convincingly proved the need for the development of human capital and the knowledge economy as the most important factors ensuring economic growth. The scientist proved, within the framework of the implemented empirical assessments, on the example of the US economy of the 20th century, that more than 75% of the dynamics of economic growth in that historical period was provided by the NTP. Subsequently, these conclusions were developed, which was reflected in the emergence of the theory of endogenous economic growth, the founders of which are considered to be R. Lucas ^[25] and P. Romer ^[26]. Scientists also absolutely categorically prove the importance of scientific and technological progress in ensuring the growth of labor productivity and economic growth in general.

At the same time, the key difference of the production function proposed in this paper is the object of research, which is not economic growth in its traditional sense (increasing the dynamics of GDP), but inclusive. The desire to expand the research framework and adapt it to new trends and trends in science, which without any doubt should include the developing theory of inclusive development of socio-economic systems as the most promising in the post-industrial globalized economy, provides an opportunity to create and build new macroeconomic models that are most adapted to new realities and ongoing systemic transformations.

In conclusion, based on the results of the assessments, it should be noted that modern economic conditions, expressed in the growth of global competitiveness of economic relations, changes in the structure-forming productive factors under the pressure of technological shifts, predetermine the need to increase investments in the scientific and technological sector. As it has been demonstrated, it acts as the most important productive factor in the intensification of an inclusive model of economic growth. Undoubtedly, scientific and technological progress is not a panacea in the search for mechanisms to stimulate an inclusive model for the development of regional systems. At the same time, along with other important areas, such as administrative and institutional reforms, it is now becoming a number of priority areas and development mechanisms. In a special way, the role of this factor is actualized in the conditions of immersion into a new geopolitical reality with all its attributes of an acute phase of confrontation with a number of countries of the Western world, which determines the need to ensure technological sovereignty in order to intensify economic growth, improve the quality of life, social stability, which refers to the key components of an inclusive development model. The latter, in turn, proclaims the need to eliminate inequality and maximize the involvement of all social and demographic groups in the process of creating and distributing the final gross product, and, consequently, determines the sustainability of the development of socio-economic systems as a whole.

The present work should be considered as an attempt to develop meaningful support for the study of the concept of inclusive economic growth. Undoubtedly, it would not be true to assert that the estimates and conclusions obtained and the contour solutions proposed in it are non-controversial. Nevertheless, the methodological tools proposed here are able to somewhat expand the research models of inclusive economic growth and outline ways to solve topical issues in the field of ensuring the sustainable development of regional economic systems in the new reality.