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TERRA ECONOMICUS

THE RISE OF METRICS

TERRA ECONOMICUS, , Vol. 16 (no. 4),

Metrics have become an increasingly important social institution. In particular, Neoliberal economic policy have emphasized the role of metrics. Such types of metrics as key performance indicators, rankings and various indices are used for improved economic coordination and motivation in the private and especially in the public sectors of the economy. In the context of Neoliberal economic policy, metrics complement, and sometimes replace, market coordination. The use of metrics is usually justified by the need for quantitative benchmarks both to promote competition and control it. Neoliberalism supports application of performance indicators, which do not expand opportunities, but guide the choice so the latter is constrained by a given framework, with the role of bureaucratic regulation strengthened. The use of metrics in ideology and economic policy results in a lock-in effect, supporting the concept of the institutional trap of metrics. The use of quantitative indicators could be attributed to the lack of priority of social and organizational values, and their role for coordination of repetitive social interactions. Two levels of metrics are suggested as including vertical and baseline ones. The applicability of metrics is limited by the scale of the activity they are intended to coordinate, and by the characteristics of the institutional environment. Baseline metrics are designed by experts who have explicit and implicit knowledge on the functioning of specific departments of an organization and specific production processes. In contrast, vertical metrics are designed by managers who neither possesses sufficient information and implicit knowledge, nor rooted in the profession. Higher education can be suggested as an example of widespread use of metrics for regulatory, incentive and monitoring purposes. To reduce negative effects for higher education, baseline metrics, which are complementary to professional values, are suggested to replace the vertical ones.

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THEORY OF INSTITUTIONAL DESIGN: FROM THE SEARCH FOR IDEAL INSTITUTIONS TO THE WORKS OF BLOMINGTON SCHOOL

TERRA ECONOMICUS, , Vol. 16 (no. 4),

The ongoing institutional reforms in Russia appeal (explicitly or implicitly) to certain theoretical grounds. Given the differences between them, it is possible to distinguish, however, the tendency to strive to build some ideal institutions, which are regarded as a strategic goal. In this regard, it is of interest to consider the Englishlanguage discourse in the field of institutional design and to identify the main directions in its development. The article focuses on the analysis of the theoretical ideas of Elinor Ostrom and her followers, scientists from the so-called Bloomington school. Their fundamental difference is the rejection of the statement about the existence of some ideal effective institutions. After examining the extensive empirical material and experience of reforms in many regions of the world (using the example of reforming public goods distribution institutions, or commons), Ostrom raised perhaps the most urgent question for institutional analysis that the institutional mechanisms that are often more effective local population during the process of social selforganization, and were not the result of the work of external managers. In the article, the main postulates and conclusions of the works of Elinor Ostrom are compared with another theoretical direction of studying the problems of institutional design. It is presented in the collective work «The Theory of Institutional Design» (1996) edited by Robert Goodin. It contains the works of authors who consider institutional design rather as a problem of the implementation of the first institutions in the institutional environment. The key point in the implementation of such strategies is the revision of a set of informal rules to bring them into line with the formal ones. This circumstance is the cornerstone of distinguishing such an approach with the legacy of Elinor Ostrom, who spoke of the need to pair formal and informal rules.

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INSTITUTIONAL DESIGN AND THEORY OF REFORMS IN RUSSIAN ECONOMIC DISCOURSE

TERRA ECONOMICUS, , Vol. 16 (no. 4),

The article presents the results of the analysis of publications of Russianspeaking researchers devoted to the institutional design issues. Steady and widely used in the work of English-speaking economists, representatives of institutional and neoinstitutional directions, the concept, however, is used in Russian as a rule in political science research, but not at the economic area. However, the analysis has shown that in the Russian-speaking scientific space one can find a vast layer of works in which there are points of contact between institutional, neoinstitutional theory and the theory of reforms. They develop recommendatory concepts for the selection of correct reform strategies, the implementation of which will minimize risks in the conduct of institutional reforms and maximize the possible positive effects from the introduction of new institutions. Part of the research examines the negative consequences of choosing wrong strategies for implementing reforms. This becomes the basis for several concepts, such as «institutional traps», the concept of «misuse of institutions» and institutional dissonances. All three concepts describe similar phenomena, the reason of which is the discrepancy of the institutions that are borrowed, which are implanted in the established institutional environment, provokes an increase in social costs or results in inefficient equilibrium. In conclusion, the concepts of second-best institutions and institutional corridors are considered as theoretical grounds for minimizing the negative effects of institutional design.

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PRINCIPLES AND PERSPECTIVES FOR A DIVERSIFIED RENEWAL IN THE SYSTEM OF MODERN POLITICAL ECONOMY

TERRA ECONOMICUS, , Vol. 16 (no. 4),

The article provides a systematic analysis of the main points of development of the economic theory of the 20th – early 21st centuries and highlighted such steps along the way as the two-component system, the three-section system, the four-section system, and the six-section system of political economy. On this basis, the author offers an original vision of the creative development of Karl Marx’s methodology in dialectical comparison with the methodology of dominant economic theory (economics), examines the causes and results of Marx’s transition from the plan of six books to the formation of the four volumes of Capital. The author sees the creative development of the methodology and theory of Marxist political economy in taking a step towards the creation of a renewed system of political-economic knowledge that includes the following five main components: ultra-micro economy, micro-economy, meso-economy, macro-economy, cosmic-economy. The ultra-micro-economics focuses on explaining labor and general production, as well as human nature as expressed in individual economic behaviors and economic activities. The micro-economics mainly explains the distribution, production, income and wealth of families; consumption, saving and investment; and population. The meso-economics deals mainly with the development, movement, organization, and division of labor of enterprises; with inter-industry relations; with the division of labor; with the organization and integration of the regional economy; and with the flow of production factors, trade relations, and balanced and non-balanced growth. The macro-economics deals mainly with decision and settlement in relation to national income; with general equilibrium between the product market and currency market; with the models of total demand and total supply and their relationship; with unemployment and inflation; with economic cycles and growth; and with macro-economic regulation. The cosmic-economics mainly explains the international division of labor; production, trade, finance, and resource and wealth distribution; globalization and regionalization; imbalances of economic development; the economic system.

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DETECTING THE LINKAGES BETWEEN CLUSTERS AND CIRCULAR ECONOMY

TERRA ECONOMICUS, , Vol. 16 (no. 4),

Clusters are more often viewed not only as one of the means for small and medium enterprises (SMEs) to achieve competitive advantage through clustering but also as link that enables to focus on resource efficiency challenges and setting up circular value chains. Climate change is at the top of the agenda recently which makes resource efficiency to come under discussion. This paper aims at analyzing circular economy and looking for possibilities to connect business and science so that innovative technologies and products are developed to increase SMEs’ resource efficiency through clusters and cluster organizations. Bibliometric literature analysis technique was chosen to qualify circular economy, resource efficiency and clusters, as well as to detect the evidence that clusters can be enablers of resource efficiency and circular economy between SMEs; indicators are introduced to detect these linkages. The findings suggest that the principles of circular economy can be detected between companies within a cluster and resource efficient actions may arise from close cooperation, knowledge transfer, innovative solutions and competitive advantages which are imparted by the cluster. This study needs to be continued to implicate these indicators to test how close cooperation and other advantages that companies can obtain from belonging to a cluster can affect their engagement in circular economy and resource efficiency. These benefits can be used in further development of circular value chains within a cluster.

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INNOVATION ACTIVITIES AND THE IMPACT OF INVESTMENT IN R&D ON ECONOMIC GROWTH: ASSESSMENT AND MODELLING

TERRA ECONOMICUS, , Vol. 16 (no. 4),

New approaches to the role of innovation activities in the context of contemporary challenges of economic growth, as well as the needs and possibilities to improve the assessment and modelling of the impact of investment into the research and development (R&D) on economic growth are presented in this publication. The main attention is focused on the processes of innovation activities and economic growth in the European Union, as well as on the goals that are formulated in the Strategy “Europe 2020” and in other documents of the European Union. The peculiarities of the application of various indicators and indices are disclosed, in particular, taking into account the needs for developing and substantiating economic policy decisions. New aspects of the application of various innovation indexes, such as Global Innovation Index, EU Innovation Scoreboard, Competitive Industrial Performance Index, Global Competitiveness Index, Knowledge Economy Index and Innovation Capacity Index, are presented. A new method of the assessment and modelling of the impact of the investment into the R & D on economic growth is proposed and described.

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INDUSTRIAL ENTERPRISES: ELECTRONIC VS. TRADITIONAL BUSINESS MODEL

TERRA ECONOMICUS, , Vol. 16 (no. 4),

The most important reasons for choosing a business format are access to resources (including technologies) and a response to market signals. If a company already exists, its possibilities for change depend on various stimulating and restrictive factors. The article discusses the features of the transformation of traditional industrial enterprises business models. The methodological basis of the study is the concept of business models. We also use a problem oriented approach that allows for the specifics of industrial enterprises. Based on the systematization of structural elements, we distinguish between four types of business models: traditional, technological, service and digital. There are two possible strategies for changing the traditional industrial enterprise: technological and service business models. Traditional industrial enterprises should move from scale effect maximization and material assets optimization to network effects and the development of technological systems. We examine the case of the Siemens AG that describes the transition from the traditional business model to the technological and service business model. The author looks at the motivational mechanisms for changing the business model of traditional industrial enterprises through the prism of the increasing returns phenomenon. We characterize the types of business models by different ways of achieving increasing returns. Our research also proves that the main peculiarity of the transition speed is technological standards, which can be achieved through the use of a platform business model and the creation of a digital shadow. The research results can serve as the basis for studying the costs and benefits from a traditional industrial enterprise’s transformation, as well as from the development of new industrial policy mechanisms.

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REGIONAL ASPECTS OF LABOR POTENTIAL ASSESSMENT IN MODERN RUSSIA

TERRA ECONOMICUS, , Vol. 16 (no. 4),

Our article focuses on the essence, characteristics, and the structure of the labor potential of the region as well as its role in socio-economic development, territorial and environmental characteristics of labor resources and mechanisms for the reproduction of labor potential. Our results are based on a conceptual and methodological review of foreign and domestic sources. Perspective directions of labor resources research manifest such common features as the assessment of migration risks, the influence of globalization factors, forecasting the dependence of labor productivity at the regional level on market factors, climatic conditions, insurance mechanisms, and other factors. We conclude that research activity directed at human resources of the regions and their qualitative and quantitative properties is extremely high. Moreover, we note a high level of interest of scientists to the problem of labor potential at the micro, meso and macro level in Russian Federation. Our paper pays special attention to the analysis of existing approaches to methods for assessing the labor potential of the region, as proposed by Russian researchers and applied in the Russian Federation. Moreover, it considers the features of the main methodological approaches, studies their classification, as well as the technology of evaluation depending on the research tasks and objectives. We describe the method used for measuring the labor potential of a region on the basis of the index method which allows us to take into account its specific conditions of its reproduction and use at the regional level, as well as to conduct reasonable comparative assessments. In addition, we present our own calculations carried out on the basis of the proposed method and employing the state and the level of development of labor potential in the North Caucasus and Southern Caucasus federal districts, as well as in the Russian Federation as a whole.

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WHY DO NOT PHD STUDENTS CHOOSE JOB IN UNIVERSITIES?

TERRA ECONOMICUS, , Vol. 16 (no. 4),

In recent years, data on the total number of research workers and degree-seeking candidates show sharp drop in Russia. The same trend characterizes the data on the number of students who completed and presented their dissertations, the average age of the researchers in Russia is growing at that. The new format of PhD studies, which implies the need to defend a thesis and inappropriate financial incentives, contribute to the outflow of potential young researchers to commercial and government organizations. This paper deals with unattractiveness of the academic labor market for PhD students. The authors present a comprehensive review of the issues of reproduction of human capital in higher education. Empirical evidence is based on the analysis of the opinions of 176 experts from 20 leading universities in the South of Russia, as well as on materials from a wide range of papers that examine the behavior of PhD students in academic and non-academic labor markets. Particular attention is paid to the motives for admission to PhD study programs, the reasons for decision-making by young researchers regarding their professional and personal development. The study of career strategies for PhD students emphasizes peculiarities of the development of the academic environment in regional and federal universities, as well as factors affecting the quality of study programs for highly qualified specialists. The authors put forward a hypothesis that an academic career is influenced by certain institutional norms that ensure the retention and development of young professionals in the internal and external academic labor market. Such norms include new motivating environment (grants for study, a differentiated approach to pay, infrastructure for research projects, etc.), regulation of barriers to entry into the field of research and teaching in higher education, development of institutions to strengthen interaction with the science supervisors, information institutions to search for vacancies for PhD students, institutes of professional mobility for young researchers.

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SOCIO-ECONOMIC LABOR RELATIONS AND PERSONNEL SECURITY IN MULTICULTURAL ENVIRONMENT

TERRA ECONOMICUS, , Vol. 16 (no. 4),

Personnel security is the process of preventing negative impacts on a countryʼs national security by reducing risks and preventing threats related to labor resources, their intellectual potential, and social and labor relations in general. Our research has shown that in recent years in Russia there is an increase in the number of external labor migrants, contributing to a change in the structure of labor resources, the emergence of new and deepening existing contradictions, the activation of social, interethnic, interfaith and criminal problems. In our study, we focused on the influence of factors of the emerging multicultural environment on the sphere of social, labor and economic relations, as their impact necessitates changes in the functioning of the traditional domestic institutions of the socio-economic system and the sphere of labor, creating the basis for the formation of the institutional model of social and labor relations in the country. There is a strengthening of negative institutions and relations, including: shadow forms of remuneration and employment, corruption, criminalization of business, ignoring legal norms in the labor market, interethnic conflicts, problems in relations with the local population, etc. Thus, the changes those taking place in the quantitative and qualitative composition of labor resources form the need to improve the institutional model of social and labor relations in the labor market in order to strengthen the personnel security of the country.

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GEO-ECONOMICS IN INTERDISCIPLINARY RESEARCH SYSTEM

TERRA ECONOMICUS, , Vol. 16 (no. 4),

Globalization and economic integration make it increasingly important to explore the issues that address emerging economic challenges within an interdisciplinary research framework, paying attention to geo-economic context. Economic concepts are therefore need to be revised. Since comparative advantage in international trade became a key factor in international economic relations, geoeconomics as a new form of scientific analysis have emerged. Being an important part of scientific discourse with great theoretical and practical implications, geoeconmics combines methodologies of economics, policy research, regional studies and economic geography. In-depth understanding and explanation of the ongoing transformations can be treated as referring to both practical and theoretical experiences, at that. Traditional economic concepts of competition, ownership, corporations gain renewed value when used within the methodological framework of geoeconomics. These concepts are rather seen as the determinants of relationships between national economies and global economic processes. Level of competitiveness of economically, technologically and innovatively developed countries significantly influences the features of a world economy. Ownership and corporate governance are increasingly treated as the regulatory institutions for the global economy.

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