Human Capital and Knowledge-Intensive Industries Location: Evidence from Soviet Legacy in Russia

Abstract

Do human capital endowments trump location for knowledge-intensive industries? This article takes advantage of a natural experiment created by the end of the Soviet planned economy in 1991, which had geographically distributed R&D manpower according to planned needs as opposed to a distribution determined by a market economy. It examines the extent to which the planned economy created a path-dependence in the location of post-Soviet human-capital intensive production. The study finds that regions with more R&D personnel in 1991 did better in the development of modern market-oriented knowledge-intensive business services, like engineering and IT. Several explanations are offered for this path-dependence, with an emphasis on human capital externalities being the most plausible.

Following the Old Road: Organizational Imprinting and the Regional Development of Russia

“…On the other hand, there are multiple examples of urban regional centers in Russia that have successfully diversified their industrial structure to new sectors (Ivanov, 2016; Lin & Ivanov, 2017; Savelyev, 2013; World Bank, 2012) and developed their local business environments. The ability to escape the negative outcomes of regional imprinting seems to correlate positively with efficient local educational institutions (Agasisti, Egorov, Zichenko, & Leshukov, 2020) and knowledge endowments (Crescenzi & Jaax, 2017; Ivanov, 2016).…”

“…On the other hand, there are multiple examples of urban regional centers in Russia that have successfully diversified their industrial structure to new sectors (Ivanov, 2016; Lin & Ivanov, 2017; Savelyev, 2013; World Bank, 2012) and developed their local business environments. The ability to escape the negative outcomes of regional imprinting seems to correlate positively with efficient local educational institutions (Agasisti, Egorov, Zichenko, & Leshukov, 2020) and knowledge endowments (Crescenzi & Jaax, 2017; Ivanov, 2016). The level of regional autonomy in sustaining these agglomerations is likely to determine their success since subordination to authoritarian control will primarily maintain only those business models which do not fundamentally challenge imprinted cultural-cognitive institutions (McCarthy et al, 2014).…”

Drivers for innovation in KIBS: evidence from Russia

“…The average collaborative problem solving score in Russia in 2015 was only 473 of 1000, while it equals 500 in OECD countries (PISA, 2018). Moreover, due to the uneven distribution of R&D personnel during the soviet period, those Russian regions being with a higher level of such specialists in early 1990s, are still more successful in terms of technological development in KIBS like informational technology, architecture and engineering (Ivanov, 2016).…”

Exploring the Role of Socio-Cultural Factors on the Development of Human Capital in Multi-Ethnic Regions

“…Therefore, the purpose of this paper is as follows: First, as studies on the impact of culture on economic growth and development continue to increase in number [23,24], we aim to explore how cultural practices can foster or inhibit economic growth and human capital development at the regional level, particularly in multi-cultural regions. In addition, despite an increase in studies on human capital development in post-soviet countries [25,26], there remains a significant research gap on research specific to the ethnic minorities of these countries. For example, in Russia, ethnic minority groups include the Indigenous Nenets peoples of the Arctic, and the Tartar peoples popular within the Republics of Tatarstan and Bashkortostan, among others.…”