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Role of public policy in improving the investment attractiveness in industry

I. L. Vorotnikov (), K. P. Kolotyrin () and T. N. Malakhova ()

Russian Journal of Industrial Economics, 2017

Abstract: Material production is the basis for the economy. The result of the development of the sphere of material production will be largely depend on the directions of the state industrial policy, which should be formed at the federal level and should be brought to a logical understanding and practical implementation at the level of individual regions. In conditions of systemic economic crisis, whose consequences are already apparent to the national economy, industrial development requires new approaches to management of production and state involvement in the investment process. There was developed for this purpose and adopted for the implementation of state program named “Development of industry and improve its competitiveness†, which includes a complex of subprograms, directed at the development of various sectors of Russian industry, from the military-industrial complex to the food industry. There’s a program specified volumes of budget financing and targets that must be reached in each of these industries. However, in the first period (to 2016) of implementation of the program targets are not been met. At observance of full funding was not achieving the planned growth of industrial production and productivity in any industry. It discusses the possible reasons for the negative results. For example, the program does not stipulate the organizational and economic mechanisms and program-targeted tools that can be used to solve practical problems and to achieve the goals set out in the program. Also in the program there are no data on the sources and amounts of private investment. It is a sign of a compensatory nature to stimulate the development of domestic industry. Not only must indicate potential sources of private investment, but also indicate the mechanisms which they can be involved in the development of industrial production, because a private investor, in the first place, interested in guarantees of profit from investment. The government can provide this result through the establishment of a favorable investment climate. There can be used the same degree and market and administrative resources for these purposes. Combining them into a system creates incentives for investment activity in the sectors of domestic production.Â

Date: 2017
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DOI: 10.17073/2072-1633-2016-4-329-334

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Handle: RePEc:ach:journl:y:2017:id:562