Экономические науки / 13. Региональная экономика

Lukin E.V.

The Institute of Socio-Economic Development of Territories of the RAS, Russia

Interregional Industrial Cooperation: Problems and Prospects

The current trend of regions’ development is a process of integration of their socio-economic systems at all levels. It is caused primarily by the environmental factors: market fluctuations, competition and competitive advantageы. Inter-regional integration stimulates business development, providing opportunities for cooperation and more effective schemes of process organization, marketing and logistics.

In general, there are three areas to initiate agreements on inter-regional cooperation:

1) federal initiatives (public corporations and all-Russian associations and unions);

2) regional initiatives (regional associations and unions);

3) corporate initiatives (corporate units outside the region, outsourcing, subcontracting).

Establishment and functioning of the State Corporation «Rostehnoloogy» can be the most ambitious example of the first case. By the time of signing the presidential decree the list of companies totaled 426 enterprises from 45 regions with the following industries: engineering; metallurgical industry; science; aviation industry; ammunition industry; conventional arms industry; radio-electronic and management system industries; chemical and petrochemical industries and medical industry. For instance, GC «Russian Technologies» within the holding JSC «Scientific and Production Concern «Optical Systems and Technologies» has joined JSC «Vologda Optical and Mechanical Plant». It actively collaborates with other enterprises of the holding (JSC «LZOS», FSUE «Istok», JSC «MZ Sapphire», FSUE «Stelmach Research Institute «Polyus», CJSC «Information tasks solution»).

Another example of inter-regional cooperation at the federal level is the Association for economic interaction of the subjects of the North-West region of the Russian Federation. The founders of the Association are 11 subjects of the North-West of Russia. The Association creates favorable conditions for effective cooperation in matters of inter-regional integration and development of the North-West regions by combining physical, financial and intellectual resources.

The Union of Industrialists and Entrepreneurs (the UIE) and the Chamber of Commerce and Industry (the CCI) of the Vologda region generate the most important initiatives for inter-regional cooperation. At the moment the UIE and the CCI include 288 regional industrial enterprises and organizations. The UIE and the CCI of the Vologda region, as territorial units of the Russian Union of Industrialists and Entrepreneurs and the Chamber of Commerce and Industry of the Russian Federation, respectively, actively interact with the similar organizations of 82 subjects of the RF in eight federal districts.

The enterprises and organizations from different regions of Russia are the main proponents of inter-regional cooperation through outsourcing, subcontracting, franchising, joint ventures and clusters. For the regions’ the economy the joint organization of local industries and businesses is of high importance, as it involves a number of orders for enterprises  and combines  financial, scientific, technical, material and human resources.

This explains the fact that organizations and enterprises of Russian regions cooperate with each other. Only in the Vologda region in 2011 there were more than 500 such organizations. The main direction of joint investment projects is the industry (in 2005 – 88.9%, in 2011 – 93.1% of the investment was in fixed capital of joint inter-regional enterprises). The analysis of their key activity indicators for the period of 2005 – 2011 shows that development of such coproduction is not very successful. During the given period there was a negative dynamics of the key indicators of their activity. Thus, there significantly reduced the number of personnel (-31%), investment in fixed assets (-57%) and manufacturing (-16%). Only huge joint ventures functioned successfully. In 2011, they employed 8.5% of the region’s working population, concentrated 43.5% of the fixed assets and 58.2% of the production, and the pay level of employees was by 59% above the average.

Manufacturing industries took 10% in the structure of active joint ventures. Of the 51 co-manufacturing industries 16 enterprises engaged in food production of 16, 12 – machinery, 7 – pulp and paper production, 6 – metallurgy. The venture founders in other Russian regions organize joint production of processing of metal, wood and chemicals. Meanwhile, the most important area for the regions, a co-production of final products for the consumer, is almost never used. Thus, in 2011 63% of joint ventures turnover accounted for metallurgical production, 14% – for chemical production, 8% – for food production.

So joint ventures operate only in industries that do not produce final products. Thus the regional authorities are to take relevant measures to attract partners in consumer-oriented manufacturing.

References:

1. Lukin E.V. Inter-regional cooperation: current state and problems of development (the case of the Vologda Oblast) // Economic and social changes: facts, trends and outlook. – 2012. – № 6 (24). – P. 205 –217.

2. Uskova, T.V. Inter-regional cooperation as a factor of economic growth: preprint / T.V. Uskova, E.V. Lukin. – Vologda: ISEDT Academy of Sciences, 2013. – 76 p.