INSTITUTIONAL ASPECTS OF REGULATING INNOVATION DYNAMICS IN THE CONTEXT OF DIGITAL TRANSFORMATIONS

Abstract

The article is devoted to the study of the components and justification of institutional instruments for regulating innovation dynamics in the context of digitalisation. It has been established that the national economy has undergone fragmentary digitalisation with progress in the development of public digital services, digital identity, and the digitalisation of the banking and education sectors. It is argued that the further development of digital industries will depend on the comprehensiveness of telecommunications infrastructure modernisation processes, the introduction of effective digital security tools, and the spread of digital service inclusiveness at the regional level. Innovative reproduction requires optimisation of the existing resource potential of the national economy, effective basic and specialised institutions to stimulate technological modernisation of production, and ensuring the mobility of capital and resources. It is justified that the digitalisation of the institutional environment can ensure an increase in institutional efficiency, provided that institutions are adaptable, which is ensured by their exogenous dynamics (transformation, modernisation, modification) or endogenous properties (adaptation, selection, generation, exaptation). It has been established that the absence of signs of innovative reproduction in the national economy is due to its suboptimal structure; low innovation potential and effective demand for domestic innovations; low level of digitalisation of industry and technological development; limited financial resources of manufacturers; low innovation activity of commodity producers; institutional inefficiency of the state; shadowing of economic and management processes. It is argued that digitalisation optimises and increases the efficiency of institutions through the algorithmisation of institutional influences, their digitisation, minimisation of dysfunctional manifestations, greater transparency and regulation of influence on economic activity. It has been determined that digital technologies open up opportunities to enhance the functionality of institutions and organisations through their inherent characteristics (automation, informativeness, transparency), which reduces transaction costs and minimises or eliminates the impact of institutional dysfunctions.