Currently, the main source of socio-economic development is found in technological progress, the major share of achievements of which falls on industry. However, in this economic sector there are certain crisis phenomena, as expressed in the decline of industrial production, the decline in investment activity of enterprises, and lack of financial resources. For this reason, regions that specialize in industrial production are least resistant to various destabilizing geo-economic events. In the composition of constituent entities of the Russian Federation such regions include old industrial regions, the specific features of which are high proportion of industrial activities in the gross regional product and inertia in the matter of high-tech development. In such regions there is a small increase in GRP for the period from 2007 to 2015. The situation is the worst in the old industrial regions of the Northwestern Federal District characterized by the largest decline in the number of employed in the economy, high unemployment, slow growth of per capita real money income. In this regard, the aim of the research is to analyze the industrial sector of the economy of old industrial regions in the NWFD and determine the reserves for modernization to ensure sustainable pace of socio-economic development in the future. The study reveals that in the analyzed regions mechanical engineering as the most important for high-tech development industry is in the state of decline. In most cases industrial productions are not provided with a sufficient amount of investment capital, resulting in a high level of depreciation of fixed assets. It is determined that one of the sources of sustainable development of old industrial regions of the Northwestern Federal District may lie in modernization of the industrial sector of the economy. This process should be based on a concept for enhancing the development of high-tech industries. The implementation of this process is seen through the implementation of a number of important changes at the federal level. In particular, modernization can be promoted through increasing the absolute value of gross savings and streamlining their use in terms of accumulation of fixed capital. A crucial role is played by the rate of accumulation
Keywords
regional economy, manufacturing, modernization, investment, industry, old industrial regions, accumulation rate