Economic growth in an old industrial region: problems and ways of intensification

The article substantiates the necessity of intensification and improving the quality of regional economic growth. On the basis of comparison of GDP dynamics it is proved that this issue is of special relevance for the old industrial regions. The authors consider the system of factors that promote the intensification of economic growth in the region. New quality of growth is expressed in increasing the efficiency of their involvement in the process of social production. Further, on the materials of the Vologda Oblast as a typical representative of old industrial regions, the authors consider the dynamics (2000-2014) of the indicators for the volume of production per unit of raw material, capital-output ratio and the return on invested capital and productivity in its economy. The authors have found out that the volume of production per unit of raw material for the period under consideration reduced by 21.4%. Reduction in the volume of production per unit of raw material in the economy, judging by balance sheet ratios, is due to the reduction in the value added, which in turn is due to the growth of resource consumption, i.e. the share of intermediate consumption in production output. The cost of production in 2000-2014 rose from 50 to 56%. It is established that a key factor in reducing the intensity of production and improving its cost efficiency is the renewal of fixed capital. The authors analyze the main indicators of investment process in the region, registered the fall of the output-capital ratio and capital productivity in the renewal of fixed assets. It is concluded that such situation is possible only when investments are allocated not for the purchase of new equipment but for major repairs of the old equipment. The paper reveals the main reasons for the lack of funds for accumulation: their excessive withdrawal from the regional reproduction process associated with capital flight and the increase in final consumption that is not sufficiently secured by the growth of domestic industrial production. It is shown that one of the key sources of investment in developed countries - allocation for depreciation - in the economy of the Vologda Oblast is not commonly used (only about 20% in the total investment). The dynamics of labor productivity in the Vologda Oblast is considered as an integrated expression of production intensification in the economy; it is established that it is more than 20% less than the Russian average. As the basic directions of intensification and improving the quality of economic growth, based on this analysis, the authors highlight the following: promotion of efficiency of use of material, capital, financial and human resources, diversification of the regional economy and business activity. The novelty of the present research consists in the fact that it substantiates the set of measures for improvement of economic policy in the old industrial regions, aimed at creating conditions for modernization processes in the economy and ensuring its sustainability.