Industrial Park as Tool of Diversifying Economy of Monotowns

The existing list of monotowns of Russia includes 342 residential areas. The Ministry of Economic Development, which has been supervising work with monotowns since December 2013, suggests using the term “monotowns” for urban settlements or urban districts, where more than 5 thousand people or more than 20 % of economically active population (with the total population of 3 thousand people or more) are employed at one enterprise. Such a classification will make it possible to emphasize the main problem of monotowns — strong dependence of town life on a single enterprise.

Nevertheless, monotowns greatly differ from each other both by the population number and the level of social and economic development. There are those that prosper and those that need urgent support of the state. The basic development models for disadvantaged towns and the ones with risks of social and economic situation worsening are controlled compression and industrial diversification. In the former case there is a decrease in the residential area of the city and optimization of utility infrastructure, which leads to a reduction in expenditure on supporting the life of the settlement. The social sphere provides for support in employment and resettlement of citizens; it is essential to maintain the existing life standards for those who stay.

Industrial diversification does not suit all monotowns — owing to a disadvantaged geographical location, including remote location from large sales markets, lack of resources. For other cities availability of infrastructure, energy resources, human capital makes it possible to start working on attracting investment. In this case the industrial park can help in improving the attractiveness of the town, as infrastructure availability is a key advantage in investors’ (particularly, foreign ones) choice of location sites.

This way was chosen for Lebedyan of Lipetsk Region (the industrial park “Kuznetskaya Sloboda” was created on the production areas of JSC “Stroymash” plant), Tutaev in Yaroslavl Region (the technopark “Master” was created in the former area of Tutaevsky Motor Plant), Gavrilov-Yam (the industrial park “Gavrilov-Yam” was built in the area of a linen factory).

Gavrilov-Yam and Tutaev are monotowns with a complex social and economic situation. However, on the whole, Yarosolavl Region is rather attractive for investment thanks to its proximity to the largest sales markets, availability of human resources and a number of successful investment projects. The activities of the region administration contribute to improving of investment attractiveness of the region.

The developed sites have already attracted residents. The decision of production location in Tutaev was made by the German company “SaarGummi Group”, whose planned investment in production of rubber sealing systems for lorries and cars amounted to about 630 million rubles. Production of metalwork in “Master” was organized by PSM LTD. (“Industrial Power Units”), the largest Russian company specializing in engineering and manufacturing of special equipment based on diesel engines, while the planned investment volume exceeded 130 million rubles. The tax revenues from the technopark to the local budget are expected to amount to about 20 million rubles annually by 2015.

Apart from brownfield projects based on the existing sites, greenfield projects are implemented in monotowns: for example, in the town of Sosensky, Kaluga Region, a site with infrastructure is developed. The residents of the site will be provided with workforce on account of the resources released after modernization of the township-forming enterprise. As a result, the town will not only attract investment and improve economic conditions but also retain highly qualified specialists.

However, despite their own efforts, most monotowns are in need of state support.