Economics

M.Khussainova

Nursultan Nazarbaev Educational Foundation, Kazakhstan

Competitiveness of the region as economic category

Acquisition of economic independence by the regions causes necessity of revaluation of their situation and function in economic space. In connection with this a region presents a territory – organized economic system able to ensure competitiveness in market space. Region as an independent territory – organized economic system is becoming gradually not only a separate acting economic agent of national economy but also enters world competitive processes.

Key words: competitiveness, competitive regional economics, productive forces of the region, concentration and centralization of production and capital

I.Introduction: Nursultan Nazarbaev President of Kazakhstan determined priority direction of development entry into the number of 50 competitive states. Competitiveness of national economy to a considerable extent is conditioned by dissimilarity of economic space and interaction of regional economics, meanwhile the problem of economic competitiveness has essential peculiarities in regard to different regions of the country. Actuality of such research for the country is determined by such phenomena as scales of economy on the whole, complex branch and territorial structure of production, increase of ecological, social, political and spiritual factors of society development, increase of transaction expenses of accepting decisions in the management sphere.

II. Statement of problem: Competitiveness of national economy to a considerable extent is stipulated by heterogeneity(dissimilarity) of economic space and interaction of regional economics, at that problem of economic competitiveness has essential peculiarities conformably to different regions of the country. Therefore analysis of political economic basis of region competitiveness, determining of its advantages, criteria grounds of its growth are necessary.

III. Results: Competitiveness in broad understanding of this word presents by itself possibility to leave behind others in reaching defined aims. Competitiveness of the region as a category has been introduced into scientific phrase comparatively recently therefore as economic phenomenon refers to the number of undeveloped. A.Z. Selezneva’s point of view which gives the following definition: “competitiveness of the region - conditioned by economic, social, political and other factors of the region situation and its separate commodity producers in internal and external markets reflected via indicators, adequately characterizing such state and its dynamic”¹.

Competitiveness as economic phenomenon – this is a complicated, multilevel and contradictory process, bearing in itself both objective and subjective features of social relations. In this regard competitiveness of a regional system turns into dynamic never ceasing process of creative destruction, constant change, renewal and creation of the new in the structural characteristics of economic system, impulsing at the same time its evolutional development. At all in succession replaced historic stages competitiveness of economic systems enduring evolution process, stipulates objectively development of production forces and production relations, scientific- technical progress, growth of labour production, personification of financial capital accumulation, expansion of material and market infrastructure.

Under competitiveness of territory- organized economic system we understand, first of all, presence and realization of competitive potential of a given territory-organized economic system.

Meanwhile competitive potential is multi - aspect and is formed as diversity possibility characteristics of region’s participation in competitive relations both between regions and national competitive relations, interacting with countries of the world. Competitiveness of territory – organized economic systems in the above –mentioned meaning of the word is described by such characteristics as competitive advantages of the region in most different spheres and branches of economy and social sphere, conditions of the region existence in climate, geographical meaning of the word, availability of natural resources, intellectual level of population development.

Competitive advantages can be grouped according to two features: basic and ensuring. Natural raw material resources, labour resources and their classifications, scientific, managerial potential, production basis refer to the first. Business climate , managerial potential quality, workforce value, infrastructure refer to the second.

Acquisition by the regions of economic independence under market causes necessity of revaluation of the state and functions of each region in the coordinates’ system of economic space, in which one has to make a decision, ensuring conditions for stable development. Any decision, connected with interregional interaction, is estimated from the point of view of economic benefit and possibility to reach budget – financial stability as well as realization of strategic objectives of social-economic and ecological development of region.

All Kazakhstani sole proprietors whose interests are crossed forming competitive environment participate in a market space. The region which has the most reliable competitive positions ensuring favorable conditions for effective entrepreneurial and commercial activity wins in this environment. In this case the region assumes the first state in market space, which gives him possibility to gain maximum benefit for development of productive forces and territorial organization of economy.

Competition must become a factor, stimulating effective distribution and territorial organization of productive forces, perfection of economic structures of the region, expansion of assortment and growth of production and services quality in accordance with contemporary demands of national and international markets.

Realization of competitive potential ensures competitiveness of the region. Basic and ensuring features of competitiveness are distinguished.

The following are referred as basic:

- natural resources,

- level of technical and technological economy ensuring,

- level of development of the people intellect,

-other analogical characteristics.

The following refer to ensuring features ensuring:

- economical: economic mechanism, management of economy,

- political characteristics,

- social characteristics,

- institutional characteristic.

Institutional characteristic of the region competitiveness presents by itself a form of existence of interrelation of basic and ensuring features.

Thus, the following definition of the region competitiveness may be given – this is economic category, expressing interrelation of productive forces system of a definite territory and institutional form of progress of named processes, performing as synergetic effects of such interrelation.

Competitiveness of the region as an economic process is totality of complex, contradictory actions, on which many most different factors both objective and subjective characters: 1.factor conditions of production (raw materials, qualified personnel, material and market infrastructure); 2.common conditions of economy (development of branches of material production, ecological safety, decrepitude degree of the main funds and others); 3.factors of region basic branches production demand; 4.social conditions; 5.socio- cultural factors; 6.organization – legal conditions;7.political.

Besides competitive possibilities processes hampering formation of region competitiveness exist in real life. To such processes one may refer extreme conditions of the production, life securing of the population that are assembled in territory – organized economic systems of one and the same country; low level of goods and services production as implementation of a given region economic decay; remoteness of a definite region from economic centres of the country’s transport system imperfection; impossibility to ensure production and population with goods of their own production and because of this necessity to import, weak intellectual potential of some regions and low level of social security, out-of-date production facilities and low quality of production, high expenditures of production, cost of circulation, high ecological constituent, underdeveloped infrastructure.

At present in Kazakhstan competitiveness of regions is formed under the influence of contradictory conditions, influencing both positively and negatively this formation. Therefore conditions of forming region competitiveness can be divided into two groups: 1.influencing positively and 2.influencing negatively.

To the first group refer: growth of region production, inflow of investment, adoption of technological progress, conformity of the regional economy structure to the level of technological progress, degree of managing of the region economy, internal demand for the region production, external demand for the region production.

To the second group refer: unfair competition, negative image of territory-organized economic systems, expenditures of privatization, liberalization of prices , criminalization of regional economy, subsidy of territory – organized systems.

Common background of forming regions’ competitiveness is economy state on the whole. The most important condition of a region competitiveness formation is growth of production caused by new technologies, progressive equipment, personnel qualification development and etc. Modern approach to production estimation is that it represents the amount of product yield to the unit cost of implemented funds of production, which is universally recognized in world practice and economic theory. Analysis showed that this position stopped to be considered when forming competitiveness of territory-organized economic systems, therefore methods of expert estimation is used, which has its own shortcomings. Expert estimation has more personal (subjective) character and besides it is based on unauthentic data, therefore to speak about region competitiveness, relying on statistic data, as productivity, for estimation region competitiveness is very difficult, and unreal. In any case expert estimation nevertheless is indirect characteristics of production dynamics.

Abroad labour productivity growth is a state policy, since it is impossible without such policy to ensure competitiveness of the country and regions on the whole. Centers of production are established which, which consult companies on labour growth and other.

At present managers consider that growth of labour productivity is nearly equivalent to drop in expenses on work force – this gives only momentary results, and if to speak about long term results, that may be considered as competitiveness increase, then they are achieved by larger production in comparing with consumption.

In the region it must be produced more than consumed. Such approach is determining when defining level of the region competitiveness. In other words, the stress when forming the region competitiveness must move from lowering of expenses of production to work force, on establishing of this work force values. If the growth of region, country population life quality doesn’t take place, then we can’t speak about increase of their competitiveness.

One more condition of formation of region competitiveness is a social tension at a given territory-organized economic system. Though this is not economic but social condition it becomes apparent in economic processes and results, directly influences the degree of competitiveness development. The fact is that excessive enthusiasm by the growth of production in the companies, not having adequate return in growth of work force quality leads to labour intensiveness growth, strengthening of the reduction of working people for these companies, because of the automatic devices. Characteristics of the productivity – presence of definite expenses on its support means constant attention of authority structures of the region to support it and to the fact that labour productivity grows adequately to the labour life quality improvement. As long as productivity is characteristics of long term processes in economics, establishment of programmes on its increase and correlation of productivity and profitability may give idea about region competitiveness formation condition. Modern concept of region competitiveness formation may exist only as a complex use of possibilities and conditions of such formation. As a managerial system, formation of competitiveness presents such a system of values, at the entry of which there is totality of factors of region existence as such (production, social sphere, resources). Among socially-organized factors of formation of region competitiveness it is necessary to mark out not simply establishment of conditions of normal vital activity of people in this region, but also special conditions – expansion of executers’ responsibility on their working places, adequacy of the working places quality and work force quality and others. Formation of the region competitiveness is impossible without considering such condition as orientation of all factors of this process not on the short term but on the long term perspective, which can not be done without proper management.

Other main factor of forming region competitiveness is innovations. They ensure labour productivity growth and common technical and technological level. Innovations must be planned as a united region process. Directed to the market innovations may be successful only then when they generate by contemporary participants of economic processes, possessing all modern technical, organizational, economic knowledge in common. To form region competitiveness temporal factor is important. That is the speed of innovations realization, the speed of productivity growth ensuring. This speed is expressed in the fact how quickly they enter the market and how quickly they join with market processes.

IV. Conclusion: For science and practice of Kazakhstan understanding of

“ competitiveness” is new but a necessary factor of a further development of the economy. Economic essence of region competitiveness under the condition of interregional inequality is researched in this article. New theoretical approaches to regions’ analysis, placing of competitive forces, mechanism of regions’ interaction and regions positions in this interaction are used.

REFERENCES:

1. A.Z.Seleznev: “Competitive position and infrastructure of markets in Russia” M.: Lawyer, 1999, p.30

2. Michael E. Porter. Competitive advantage. Creating and sustaining superior Performance.- The Free Press, 1998

3. Michael E. Porter. Competitive strategy. Techniques for Analyzing Industries and Competitors.- The Free Press, 1998