LOGO The role of industrial clusters in poverty reduction and growth prospects: present experiences and further developments Leonova Yuliya Postgraduate student Pacific National University, Department of Economy and management Khabarovsk, Russia E–mail: 10 th International meeting of the Society for the Social choice and Welfare July 2010, Moscow, Russia

More than 1,1 billion people had consumption levels below 1$ a day and 2,7 billion lived on less than 2$ a day More than 8 million people around the world die each year because they are too poor to stay alive

More than 11 million children living in poverty die before their fifth birthday every year More than 20,000 people perished yesterday of extreme poverty

… … a procedure of industry management including different methods connected with support and development of the network integration of enterprises into cluster. Cluster technologies … Cluster … … … a geographically proximate group of inter- connected companies and associated institutions in a particular field, linked by commonalities and complementarities. M. Porter

Cluster and poverty are related in three distinct ways Cluster features the cluster’s location, the types of firms within it, and the types of employment generated and their relationship to poverty. Cluster processes agglomeration gains, joint action, cluster institutions and social capital and poverty. Cluster dynamics Cluster’s growth, upgrading, and differentiation and poverty.

Group of indicators for estimation of efficiency of cluster technologies Indicators characterizing the growth rate of a cluster’s production and structural changes appeared as a result of formation of the cluster; 1 Indicators characterizing economic efficiency of the cluster formation; 2 Indices characterizing dynamics of social indicators in a region. These indices examine influence of cluster on living standards; 3 Indicators of the budgetary efficiency characterizing influence of a cluster on regional budget; 4 Indices characterizing dynamics of social indicators in a region; 5 Indices characterizing the development level of the human capital; 6 Indicators characterizing the development of related and supporting industries involved into cluster; 7 Indices characterizing inter-regional and international activity of cluster ; 8 Indicators characterizing efficiency of the resource provision of enterprises involved into cluster; 9 Ratings characterizing competitive ability of the enterprises involved into cluster ; 10

SWOT analysis of the Khabarovsky krai social and economic development StrengthsWeaknesses 1.Geographical location and economic status: proximity to market outlets of Pacific Rim and North-Eastern Asian countries; high transport and transit capacity due to relatively well-developed transportation network. 2.Abundance of diverse natural resources. 3.High land supply for economic development. 4.Diversified economic system. 5.Inward capital investment by national financial and industrial groups and international corporations. 6.High educational level of the Krai’s population. 7.Developed system of vocational education. 8.Political and social stability. 1.Drastically long distance to the most populated and economically developed regions of the European Russia. 2.Irrational use of natural resources. 3.Lack of territories for continuous development, which includes the majority of northern territories, lack of agricultural and arable lands, extreme climatic conditions on the most part of the region. 4.Relatively low competitiveness of manufacturing industry and agriculture, partially due to high power rates and transportation costs. 5.Underdevelopment of production, transport and social infrastructure. Opportunities Threats 1.Effective public policy for regional social and economic development to include: - special economic, social and financial incentives to economic and business development in the FEFD; - proactive approach to investment policy; - stimuli for economically active population to permanently settle in the region. 2. Organization of transport-and-industry development zones in the Russian Far East, including an industrial and service belt in the south, organization of a contact zone with neighboring economies of the North-Eastern Asia, and intensive development of аn economic area along the northern latitude with integrated industrial and transport zones. 3. Servicing of international transport and power corridors and infrastructural engineering projects. 1.The Krai may become a raw material appendage of developing north-eastern Asian states. 2.Demographic desertification of the territory due to natural population loss and outward migration. 3.Deterioration of manpower potential (ageing of skilled workers, outward migration of qualified personnel due to ever-widening gap in the living standards and life quality between the Russian Far East and European Russia). 4.Higher probability of ecological catastrophes and natural disasters, due to, among other reasons, progressive transborder pollution of the Amur River basin, forest fires, etc. 5.High crime rate, including economic crimes.

Structure of the integrated industrial copmlex based on application of cluster technologies Transport and communication Production and distribution of energy «Khabarovskenergo» Construction activity Production of cable- facilities Metallurgical production «Amurmetal» Textile and clothing manufacture Agriculture Production of technological equipments Production of metal-cutting lathes, casting, welding, flame-cutting, carrying and lifting equipments Repair, production of instruments and duplicate parts COMPLEX CENTRE Machine building «Komsomolsk-on-Amur aircraft industry association» public corp., «Amur shipbuilding factory» public corp., «Khabarovsk shipbuilding factory» public unitary enterprise Strengthening of ties between enterprises and development of interregional relationships Extraction of the mineral and raw material recourses ресурсов Administration of regional and municipal authorities Elaboration of cluster concept and implementation of cluster strategy for industrial development в Production of oil products «NK-Rosneft» public corp., «Gruppa «Aljyans» public corp., Khabarovsk and Komsomolsk-on-Amur oil- refining factories, public Mining operations «Artel of gold prospector «Amur» close corp., «Mnogovershinnoe» public corp., «Ohotskaya mining geological company» public corp. Timber processing and wood article production «Dallesprom» public corp. «Vanino-Tairiky» Co Ltd, «Rimbunan-Hidzhau» Co Business incubators, industrial parks, venture funds, centers of knowledge transferring, Pacific National University Specialized subcontracting and outsourcing centers Production of constructions for pipeline transportation Strengthening of ties between enterprises and development of interregional relationships Extraction of the mineral and raw material recourses ресурсов Elaboration of cluster concept and implementation of cluster strategy for industrial development

Pro-poor cluster development strategy Poverty targeting Poverty strategic support Recognizing cluster differences Training Cluster impact assessment Pro-poor partnerships Clustering Advantages

LOGO Leonova Yuliya E–mail: