A Niche-Based Approach to the Formation of Regional Investment Policy in Russia

Abstract

In Russia, sanctions-related constraints and the strategic goal of technological sovereignty have increased the need for evidence-based regional investment priorities. This study develops the methodological foundations of a niche-based approach to regional investment policy as an alternative to the traditional sectoral framework. The proposed methodology integrates three analytical dimensions: a demand-based dimension, which identifies market gaps through the analysis of interregional trade flows and procurement activity; an institutional dimension, which aligns investment priorities with national technological development objectives; and a competitive dimension, which evaluates niche occupancy and opportunities for interregional cooperation. The empirical analysis relies on a comprehensive examination of data on interregional trade (Rosstat BI Portal), foreign trade activity (Ural Customs Administration), and procurement activity (MARKER-Interfax system). Using Sverdlovsk Oblast as a case study, the results reveal a 3.2-fold excess of imports over exports, with the largest trade deficit concentrated in medium-technology industries, which account for 37 % of imports but only 18 % of exports. Applying the proposed selection criteria, 14 product categories characterized by unmet demand were identified and classified into a typology of investment niches according to technological intensity. The resulting typology comprises four groups: high-technology industries (pharmaceuticals, CNC machine tools, unmanned aerial vehicles, and batteries) as strategic priorities of industrial policy; medium-technology industries (tires and stainless-steel products) as drivers of technological value chains; low-technology industries (dairy products, particleboard, paper, and ceramics) as instruments of import substitution and food security; and infrastructure and logistics sectors (data centres and thermal greenhouse complexes) representing emerging business models. The findings can support regional authorities in designing investment strategies and assist investors in identifying promising investment opportunities.