Managing industrial growth: The role of development funds

The effective public project management in the economy and industry significantly contributes to the achievement of the country’s strategic development goals. The article explores the role of the Industrial Development Fund (IDF), which is a key tool of industrial policy, in the development of manufacturing industries in the Russian regions. Portfolio management theory and provisions of public project management constitute the methodological basis of the research. The methods of logical-structural, comparative and econometric analysis are used. The study’s empirical base covers data on the volume of funding provided by the IDF to regional borrowers to implement 924 projects between 2015 and 2021, as well as data aggregated according to the RF constituent entities on the volume of goods and services shipped by manufacturing enterprises in the same period. We assess whether the IDF project portfolio profile qualitatively and quantitatively complies with the strategic objectives of the manufacturing industry development in the regional context. The research results show that the composition of the project portfolio is partially aligned with the objectives of import substitution, digitalization and increasing labour productivity. Quantitative criteria for project selection are not synchronized with the composite indicators of the Strategy for the Development of the Manufacturing Sector for the period up to 2035. We have found that the implications of the IDF activities for the regions with low and medium level of industrial development were positive, while the industrialized regions experienced no effect on the volume of shipped goods and services in the manufacturing sector. The study concludes that the portfolio management methodology will enhance the performance of the IDF as an industrial policy tool due to more accurate consideration of sectoral and structural priorities, as well as spatial peculiarities of the industrial development of the Russian Federation.