Promoting Investment and Innovation in Post-war Reconstruction to Ensure Sustainable Regional Development

Abstract

This article examines the theoretical and practical aspects of developing mechanisms to stimulate investment and innovation in enterprises within the context of Ukraine’s post-war economic recovery. It demonstrates the need to transition to an innovation-driven model of regional development as a key prerequisite for ensuring their long-term sustainability and competitiveness. The current state of investment support for the economy is analysed, revealing trends towards a reduction in capital investment, a decline in enterprises’ innovation activity, and an intensification of regional differentiation in terms of economic development. The essence of the mechanism for stimulating enterprises’ investment and innovation activities is revealed as a system of interrelated elements, comprising institutional, organisational, economic and motivational components. The role of macroeconomic and microeconomic factors in shaping the investment behaviour of economic entities is determined, in particular the influence of the investment climate, state regulation, the availability of financial resources, as well as social and environmental guidelines for business development.

Particular attention is paid to the analysis of structural imbalances in investment flows, notably the dominance of raw material industries and insufficient funding of high-tech sectors. It is demonstrated that limited resource availability and institutional barriers hinder the process of production modernisation and the introduction of innovations. Conceptual approaches to forming an effective innovation ecosystem at the regional level are proposed, in particular through the development of integrated innovation complexes that facilitate interaction between science, business and the state. The feasibility of using network models of innovation development and strengthening institutional coordination as conditions for improving the effectiveness of investment processes is substantiated.

The results obtained can be used in the development of post-war recovery strategies, the improvement of regional economic policy and the creation of instruments to support the innovative activities of enterprises.

Keywords: investment and innovation activity, strategic management, post-war recovery, sustainable regional development, innovation strategy, investment climate, innovation ecosystems