Financial Strategy of Creating “Smart” Regions in Russia’s Digital Economy

Abstract

Purpose: The purpose of this paper is to develop a financial strategy of creating “smart” regions in Russia’s digital economy. Design/Methodology/Approach: Experience of financing of creation of smart regions in Russia’s digital economy is studied with the help of case study, which allows determining the specifics of this process. The balance of state and corporate budgets, direct foreign investments, and the level of digitalization are analyzed. The research objects are regions of the Central Federal District of the Russian Federation – the reasons is that creation of the first (pilot) smart regions is expected in this federal district. The research is conducted as of 2020. Findings: It is determined that there are two strategic problems of financing of smart regions’ creation in modern Russia. The first problem is using direct financing, which is rather limited. The second problem is wide digitalization, which sets high requirements to financial provision of smart cities and which reduces the effectiveness of placement of financial resources, causing high burden for the state budget. Originality/Value: In order to solve the determine problems, a perspective financial strategy of creation of smart regions in Russia’s digital economy is developed. Its advantages include diversification of the sources of financing, which allows overcoming the deficit of financial resources and the hierarchical approach to digitalization, which reduces the general need for financing of this process and increases its investment attractiveness and effectiveness of financial resources’ placement.