Scenarios of Region’s Development in the Conditions of the Digital Economy and Priorities of State and Corporate Management

Abstract

Purpose: The aim of the paper is to define scenarios for the development of regions of the North Caucasus Federal District of the Russian Federation in the conditions of the digital economy and to set priorities for state and corporate management of this process. Design/methodology/approach: In the scenario modeling of the development of regions of the North Caucasus Federal District of the Russian Federation in the conditions of the digital economy, the method of regression analysis and the simplex method of multi-objective optimization are used in this paper. Based on the noosphere approach to the study of economic systems, the dependence of the level of employment (social sphere indicator), GRP per capita (economic sphere indicator), and the share of innovative products (innovation sphere indicator) on the level of business digitalization in the regions under consideration is determined in this paper. Findings: The results of the study showed that digitalization has a generally beneficial effect on the regions of the North Caucasus Federal District of the Russian Federation, but is accompanied by inevitable negative effects and risks. As a result of systematic analysis of the consequences of the development of the digital economy in the studied regions, it has been proved that neither a strong deterrent to digital modernization of these regions nor their accelerated revolutionary transition to industry 4.0 is appropriate. We have recommended a scenario related to rapid but evolutionary digitalization, which would allow to achieve its clear advantages but prevent the crisis impact of the shortcomings on the regional economy. Originality/value: The analysis of the experience of the regions of the North Caucasus Federal District of the Russian Federation has shown that the digital economy can moderately promote employment, as well as significantly accelerate the innovative development of regions. Nevertheless, regardless of the scenario, digitalization leads to a decline in living standards. Therefore, social and crisis management is a key priority for the state and corporate governance of the region’s development in a digital economy. Attention should also be paid to cyber-security and ensuring a balanced regional economy.