The Role of Industrial Production Localization in the Import Substitution Policy
The article is devoted to defining the role of localization of industrial production in the implementation of the import substitution policy. The methodological framework of the research consists of the system approach, methods of structural, object, functional, and statistical analysis, as well as the method of expert estimations. The article reviews the concept of “import substitution” and “localization”; it is concluded that the implementation of the import substitution policy is inextricably linked with the localization. It provides examples of successful localization policy in individual industries (automotive, pharmaceutical and railway engineering), proves its effectiveness in creating high-tech industries for industrial output. The mechanism of localization in the railway engineering sector, whose competitiveness is currently provided largely by imported technology, is discussed in the case of locomotive engineering and rolling stock manufacturing for high-speed operation. There is an example of successful implementation of the import substitution policy in the framework of catching up development of the Ural railway engineering cluster - including foreign technology in order to establish in Russia firstly assembly and later localized production of foreign technology based on domestic materials, components, and resources. It has been determined that basic conditions for localization are availability of capital, availability of technology, production capacity and availability of market. The paper examines the legal framework for promoting import substitution in Russia and its regions, presents an overview of legislatively mandated programs, concepts and development plans for import substitution in Russian constituent entities. The authors demonstrate that the implementation of the import substitution policy in the regions is based on creating and developing special economic zones, clusters, industrial and technology parks; however, regulatory documents in the regions do not pay enough attention to localization issues. It is concluded that Russia's import substitution based on localization is a platform for economic diversification and transition to production of high value added technological products. Separate research concepts are used for developing the Strategy of the Ural railway engineering cluster and the Sverdlovsk Oblast cluster for transport and logistics. The research results can be used in further research of the effectiveness of implementing the import substitution policy and economic modernization in Russia and its constituent entities, as well as by federal and regional authorities in drafting and adopting strategic documents of regional development and stimulating import substitution.