High tech business in Russian regions: Role in economy, differentiation, main development determinants

Abstract

High tech entrepreneurship which in most countries is characterized by regional heterogeneity is playing an increasing role in the digital economy. The paper presents the results of the analysis of regional differentiation applied to the current state in Russian high-tech business. The research was conducted with the help of official government regional statistics and empirical data on high tech companies’ performance which are provided by SPARK data base. It was demonstrated that high tech companies could be found in most regions. However, their number and productivity indicators differ significantly. We suggest estimating high tech business contribution to the regional economy by using a special location quotation. The idea of this instrument is to compare a share of high-tech companies’ turnover in the gross regional product with the similar indicator calculated for the national economy level. It was found that in most cases contribution of the high-tech sector to the regional economy is rather modest. Five groups of regions were formed basing on the meanings of the location quotation. Regions with a high level of contribution were included in the first group. Blocks of factors demonstrating the level of regional socio-economic environment development were determined at the next step of the research in order to analyze the influence of these blocks on the high tech sector. Measurable characteristics of these factors were selected and compared with respect to the groups of regions which had previously been identified. The results of the analysis show that the state of high-tech entrepreneurship is highly influenced by the research and innovative potential of the region. Russian regions were presented from the perspective of the two dimension system: “High tech business location quotation — Russian Regional Innovative Index”. This presentation made it possible to identify 15 regions where an innovative potential helps to create and effectively develop high tech companies which make a significant contribution to the local economy.