Digital Transformation and its Impact on the Socio-Economic Development of Russian Regions

Abstract

The modern world economy is transforming into the digital economy. Digital transformation can be a driver of socio-economic and technological development of various states and regions. As shown by the experience of developed countries, digital transformation contributes to the creation of new business opportunities, emergence of new markets and niches, and consequently affects regional socio-economic development. However, this process is uneven across countries, leading to significant differences between regions. Additionally, the connection between digital transformation and regional sustainable development should be considered. The paper presents the authors’ perspective on digital transformation and analyses the impact of digital transformation on the socio-economic development of Russian regions in terms of sustainable development priorities. The research aims to develop and verify a multilevel multiple regression model, which illustrates regional digital transformation through integral indicators and describes its impact on regional sustainable development. In particular, the study examined the integral indicator of digital transformation and integral indicator of sustainable development, revealing a correlation between them for Russian regions. The regions were clustered according these indicators. Panel data econometric models for different clusters showed that such factors as digital labour and digital capital greatly influence socio-economic indicators of Russian regions. The direct correlation between the share of manufacturing in gross regional product and regional digital transformation was established. The calculation of integral indicators for all Russian regions identified significant spatial heterogeneity of Russian regions in terms of their sustainable development and digital transformation. At the same time, an increase in the share of manufacturing share in gross regional product causes a decrease in regional sustainable development.