Page 102 - Theoretical and Practical Interpretation of Investment Attractiveness

Now we will share comments on determining the investment potential of the regions
of the country.
Today, the territory's potential is assessed not only by the number of inhabitants, but
also by the value of its income, savings and acquired property, as well as by the intellectual
potential of the population. It is the intellectual potential of the population, its number, age
level, its income and the amount of production resources available in the region that determine
the production forces and develop the investment program of the region.
In the modern conditions of the development of global competition, the priority
directions and actions of the executive power should be aimed at the innovative development
of the economy, and the activation of innovative activities in the existing areas of scientific
potential.
Researching the source of innovative development is a complex problem that requires
the analysis and synthesis of the emerging innovative potential of the region, which, in turn,
reflects the potential of this development. In its place, the assessment of innovation potential
is becoming more and more important.
One of the popular and widespread methods of measuring innovation capacity is the
"Innovative Capacity Subindex of the Global Competitiveness Index" (GCI) calculated for
the Global Competitiveness Reports of the International Economic Forum. The Global
Competitiveness Index ("Growth Competitive Index" - "GCI") reflects the current level of
economic development and is aimed at determining the ability of the national economy to
achieve sustainable economic growth in short-term development. "GCI" is based on three
categories that influence economic growth in the short-term and long-term development of
countries: technology, public institutions and macroeconomic climate.
"GCI" aggregates more than 90 variables and is based on 9 indices, one of which is
innovation activity.
Two-thirds of the input comes from executive opinion surveys, and one-third comes
from published statistical sources. The collected data is summarized in three groups of sub-
indexes (sub-indexes):
- basic needs sub-index (public institutions, infrastructure, macroeconomics,
healthcare, primary education);
- efficiency-enhancing sub-indices (higher education and technical training, efficiency
of market mechanisms, technological training);
- modernization and innovation subindex (possibilities of implementation of
sophisticated and innovative strategy by entrepreneurs).
The Global Competitiveness Index divides the development of all countries based on
the level of GDP per capita into three main and two transition periods: the stage of resource-
based development (GDP per capita < 2000 USD), the stage of productivity growth (3000-
9000 per capita USD) and innovative development stage (GDP per capita > 17000 USD) 132 .
Depending on the specific stage of development, sub-indices are aggregated into a
composite index of global competitiveness (Table 3.1.2).

132 The Global Competitiveness Report 2008–2009. http://www.weforum.org/pdf/GCR08/GCR08.pdf
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