Active innovation activity is the key to achieving long-term social and economic development of the country and its regions, which will facilitate the introduction of new technologies and processes that increase productivity and reduce the cost of the economy and ensure the production of new or improved goods and services that are in demand in the market. The article considers the role of innovations in increasing the productive capacity of the economy of Ukrainian regions. Ukraine’s position in the rankings of the Global Innovation Index is assessed. The article analyzes the changes in Ukraine’s ranking across the subindices in the Bloomberg Innovation Index over the past seven years. The article aims to model the impact of innovation activity on the productive capacity of the economy of Ukrainian regions. The authors build a matrix of the level of productivity of innovation activity, which includes key parameters of innovation activity in the context of its six components. Based on the construction of a linear model of 14-factor multiple regression, the relationship between multifactor productivity and innovation activity of regions is assessed, in particular, the degree of influence of innovation activity of enterprises, technological efficiency of production, self-sufficiency in innovative developments, productivity of research and development, innovation cooperation and the level of financing of innovation activity on regional productivity is determined. The modeling results indicate an increase in the trends of the negative impact of innovation on multifactor productivity in 2021 compared to 2013. The article emphasizes that the intensification of innovation processes leads to an increase in the productive capacity of the regional economy up to a certain time, while not all innovation processes have a direct or significant impact on the growth of the multifactor productivity of Ukrainian regions, and some of the considered factors, on the contrary, have the opposite effect on its development since they lead to its reduction. Special attention is paid to the main points of the existing “innovation paradox and productivity”, the essence of which is that the economic development of regions is not always determined and depends on the intensification of innovation processes and the introduction of technological developments. The article shows that the main goal of innovation is to promote productivity growth, but productivity growth is not always observed in the most innovatively developed regions as the direct relationship between innovation and productivity is much more complex and unpredictable. These linkages are not necessarily direct and linear, and in some cases may even be negative, depending on the various constraints that hinder and limit innovation. 

productive capacity, economic capacity, regions, multifactor productivity, innovative activity, modeling, new technology, innovation paradox 

Productivity is an indicator of economic efficiency, the use of territorial resources, and the quality of life of the population. The stagnation of economic productivity reflected in the decline in annual growth rates of such partial indicators as labor and capital productivity has been a peculiar trend in Ukraine for many years. The article aims to analyze and systematize methodological approaches to the assessment of the productive capacity of economic sectors. The article analyzes, compares, and systematizes the methodological approaches to the assessment of the productive capacity of economic sectors. It is worth mentioning the lack of a single methodological approach to the assessment of the productive capacity of economic sectors. Moreover, each of the analyzed approaches involves a different set of indicators and analytical tools. Their main advantages and certain disadvantages are identified. In particular, the authors analyze the European and global experience in assessing the productive capacity of the economy. This methodology envisages the use of three areas of measurement of productive capacity, namely: structural-sectoral, spatial-sectoral, and innovation-sectoral. The main processes that American and European scholars focus on when studying economic productivity are highlighted. The article emphasizes the priority of certain factors in increasing the productivity of economic sectors: innovation and technology, capital, labor, foreign trade, etc. It presents the dynamics of Ukraine’s ratings by the level of innovation capacity in 2014-2021 and concludes that Ukraine lacks an active policy and breakthroughs in the promotion of innovation by the state and business. The list of determinants of the productive capacity of regions in the context of its structural-sectoral, spatial-sectoral, and innovation-sectoral dimensions is formed and the main directions of their assessment are determined. 

methodological approaches, productive capacity, structural proportions, reproductive processes, sectoral structure 

Development of Ukraine’s regions economy is characterized by the dynamics of external surrounding as well as the increase of its uncertainty level. Distinct anti-crisis structural policy of a region is the basis for solution of many regional economic and social systems’ problems. In the same time, the signed Agreement on association between Ukraine and EU is the strategic benchmark for structural reforms in the Ukraine’s economy. It defines the qualitatively new relations layout between Ukraine and countries-EU members on the principles of political association and economic integration. Starting with January 1, 2016 economic part of the Agreement comes into force. Therefore, the comprehensive free trade zone between Ukraine na EU stipulated by the Agreement will considerably move Ukraine’s economy closer to the economic system of European Union on the basis of mutual liberalization, primarily in terms of goods, capital and services movement increase, harmonization of approaches and principles the regional branch policies and economic and commercial activity management systems are built on. The article aims to research and analyze structural changes in the economy of Ukraine’s regions and to outline basic elements of structural changes in terms of signing the Agreement on association between Ukraine and EU and its successful implementation. The article estimates structural changes of regions’ economy in terms of signing the Agreement on association between Ukraine and EU. The major problems of regions’ economy structure development are outlined the ways of successful process of the Agreement provisions implementation are proposed, in particular structural reconstruction of regions’ industry and modernization of production on the basis of new technologies, change of proportions in economic activity types of regions, forming of optimal economy territorial structure, restructuring of agrarian sector of regions’ economy, increase of inter-production demand on the products of innovative and investment nature in regions, increase of innovative activity share of small enterprises in the regions, increase of regions’ investment activity and decrease of regional investment disproportions, etc. It is mentioned that in order to conduct positive structural transformations in the economy of Ukraine’s regions, including their adaptation to basic norms of EU functioning, the fundamental changes of economic development priorities of the country in terms of transition from raw materials orientation to innovative type of regions’ economy development are of utmost importance. The available resources (financial, material, organizational, human and humanitarian, etc) to conduct necessary transformations, their sources of origin and mobilization mechanisms should be distinctly defined. Also it should be taken into consideration that successful structural changes in the economy can take place only through significant increase of investment share (over 30% of GDP) due to activation of both internal private and foreign investment. In Ukraine in 2014 the share was less than 15%, testifying to the «wash out» of investment potential and economic renovation potential. In the same time, successfulness of economic measures implementation, stipulated by the Association Agreement, considerably depends on the quality of political authorities’ decisions, including the state apparatus efficiency and extirpation of corruption. On this the aspects will bring Ukrainian economy closer to basic norms of EU functioning. 

economy structure, regional structural policy, industry, investment, innovations, Agreement on association between Ukraine and EU, European integration processes