Industrial Development in the South of Russia in Conditions of COVID-19 Crisis

Abstract

The coronavirus pandemic caused significant damage to the economy of the regions. The comprehension of the impact of pandemic on industrial development of the territory is the goal of many scientific studies. The purpose of this article is to identify trends in the development of certain industrial sectors in the South of Russia and to suggest managerial measures arising from the experience of the COVID-19 pandemic. The study was founded on monitoring data from the Federal Service for State Statistics of Russia. The object of the research was the old industrial regions in the South of Russia. During the study, it was determined that at the beginning of the pandemic, the economy of the regions under analysis was characterized by a low potential for innovative development and a low level of return on assets. With a high demand for digital technologies, they have become most widespread in the automation of internal business processes of enterprises. The impact of the COVID-19 crisis on individual sectors of industry turned out to be multidirectional. The most affected industrial sector was oil production. The economic growth was demonstrated by enterprises of agricultural engineering, metallurgy and a number of others. It is shown that the recovery of industrial production is complicated by a low level of development of its material and technical basis; high import dependence of production on components, raw materials, spare parts; high competition from foreign market players; shortage of human capital. It is concluded that industrial ecosystem structures are the drivers of economic growth in the conditions of the pandemic. Management recommendations which are aimed at the development of industrial ecosystems are provided. They are focused on the environmental component of industrial production, development of cooperative business interactions to maintain the sustainability of the supply chain, digitalization of business processes with the simultaneous development of smart competencies of personnel, import substitution production and focus on the domestic market.

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