Authors : L.S. Tarasevich, D.Y. Miropolsky and E.D. Bunin
Abstract: In the study on the basis of the two-sector model of the economic system the correlation between the growth of the innovative activities in the economy and enhancement of the market or administrative coordination is investigated. The two-sector model includes the basic and pioneer sectors. The basic sector produces the essential products and is characterized by exceedance of results over the expenditures. The pioneer sector applies the new products; therefore, the results are lower than the costs. Innovations are performed in the pioneer sector of the economy. It is proved that under otherwise equal conditions intensification of the innovative activities is accompanied by enhancement of the administrative coordination and slackening of the market one. This correlation is determined by changes in the structural proportion between the basic and pioneer sectors of the economy in favor of the pioneer one. This relates to the fact that in any economy there is redeployment of resources from the basic to the pioneer sector. However if the share of the pioneer sector is large the redeployment range is enhanced and can not be covered by the market transactions. In its turn, the specified structural proportion depends on a number of parameters. The study analyzes the impact of such structural parameters as the specific efficiency of the basic sector, scope of the basic sector, specific efficiency of the pioneer sector, scope of the pioneer sector, rates of the performance growth in the pioneer sector. It is concluded that transition of Russia to the innovation development will result in enhancement of administrative coordination in its economy. However, activation of the innovative activity is followed by enhancement of administrative coordination only under otherwise equal conditions. In the study factors that are countervailing this trend are specified.
L.S. Tarasevich, D.Y. Miropolsky and E.D. Bunin, 2015. Innovations and Administrative Coordination in the Economic System. The Social Sciences, 10: 796-805.