Innovation as a catalyst for regional economic growth: an ARDL analysis of Sverdlovsk region, Russia

Relevance. As interregional competition intensifies, state support for innovation in regional economies becomes increasingly important. To improve the effectiveness of such support, it is necessary to gain a better understanding of the link between innovation and economic development.Research Objective. The study aims to assess the impact of innovation activity on regional economic growth, focusing on the case of a large industrial region in Russia.Data and Methods. The analysis uses socio-economic data for Sverdlovsk region from 2000 to 2023 and applies an autoregressive distributed lag (ARDL) model to assess the relationship between innovation and economic performance. The study introduces an Innovation Activity Index, which incorporates several key components, such as the number of research personnel, internal RD expenditures, and other relevant indicators, for a more comprehensive evaluation.Results. The study traces the region’s innovation activity, revealing a general upward trend. However, while innovation clearly has a positively influence on economic growth in the short term, its effects over medium- and long-term periods are less obvious, likely due to structural factors in the regional economy.Conclusion. The study proposes recommendations to enhance regional innovation support within the "smart specialization" framework, including backing innovation projects, developing a sustainable innovation ecosystem, and investing in human capital.