Quantitative Assessment of the Impact of Innovations on the
Economic Efficiency of the Transport Industry in the Region
Alexander Grigorievich Kirenberg
1
, Alexey Viktorovich Medvedev
2
,
Evgeniya Viktorovna Prokopenko
1
, Alla Nikolaevna Solopova
2
and Viktor Vyacheslavovich Orlov
3
1
Kuzbass State Technical University Named After T. F. Gorbachev, Kemerovo, Russia
2
Kemerovo State University, Kemerovo, Russia
3
Ural State University of Railway Transport, Ekaterinburg, Russia
Keywords: Transport industry of the region, quantitative characteristics of the innovation project, information base,
mathematical modeling, optimization mathematical model, automated information system, transport,
economic efficiency assessment.
Abstract: The issues of assessing the economic efficiency of the functioning of the transport industry in the region are
considered on the basis of a system-analytical approach, including the use of optimization mathematical
models of socio-economic systems and application software packages oriented to their analysis. A meaningful
statement of the problem, a description of the quantitative characteristics used and the limitations of the
functioning of the transport industry of the region are given. The expediency of using the proposed tools is
emphasized, provided that the principle of their model, algorithmic and information technology balance is
fulfilled, which makes it possible to develop systems to support the adoption of investment, production and
financial decisions in the functioning of the regional transport industry. The algorithm of accounting for
innovations in its development projects is described. A model computational experiment was carried out to
quantify the impact of a specific innovative technology for the acquisition of a fleet of buses in the region on
economic efficiency indicators and the life cycle of a project for the development of the transport industry in
the region. The key strategic tasks aimed at managers of the mesoeconomical level, manufacturers, investors,
financiers and other project participants are identified, the solution of which makes it possible to justify the
adoption of optimal management actions for the effective development of the transport industry in the region.
1 INTRODUCTION
The problem of quantifying the impact of innovations
in various spheres of the economy remains
permanently relevant, primarily due to the complexity
of adequately solving the problems of planning and
forecasting the development of large, in particular,
regional socio-economic systems. The socio-
economic development of the regions is determined
by the effective use of the totality of their diverse
competitive advantages, including in the field of
innovations in the transport infrastructure of the
territories. The complexity of solving the problem of
assessing the impact of these innovations is
determined by the complexity of the issues of
modeling the complex development of these
territories in order to select from the model a set of
key factors that affect this assessment and have
reasonable, quantifiable values. Obviously, they need
to include innovative factors that should be taken into
account when modeling procedures for assessing the
impact of innovations, or at least they should be given
appropriate interpretations. In the transport industry,
various aggregated aspects of its development can be
attributed to innovation: new production and
management technologies, digitalization,
robotization, the use of artificial intelligence, and
others. In this paper, a universal technology for
evaluating innovations in development projects in the
transport industry is proposed.
When quantifying the efficiency and performance
indicators of the transport sector of the region's
economy, the issue of not only the availability of
mathematical models of the activities of economic
agents in the region, but also the availability of
appropriate methods and algorithms for their analysis,
allowing the development of automated information
systems and systems to support investment,
32
Kirenberg, A., Medvedev, A., Prokopenko, E., Solopova, A. and Orlov, V.
Quantitative Assessment of the Impact of Innovations on the Economic Efficiency of the Transport Industry in the Region.
DOI: 10.5220/0011576900003527
In Proceedings of the 1st International Scientific and Practical Conference on Transport: Logistics, Construction, Maintenance, Management (TLC2M 2022), pages 32-37
ISBN: 978-989-758-606-4
Copyright
c
 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

production and financial decisions on the
management of strategic parameters of socio-
economic systems and in particular, the economic
sectors of the region. Among the significant number
of publications on the topics of concepts, modeling
and the impact of innovations introduced in the
transport industry of the region, evaluating the
effectiveness of their functioning, testing models,
algorithms and software packages within the
framework of market economic mechanisms, we note
works (Makarov, 2015; Medvedev, 2020; Bassiac,
2021; Masoumeh, 2020; Galushko, 2020; Agureev,
2017; Shesterov, 2016; Zamanian, 2020) describing
general system-analytical aspects of the study of large
socio-economic systems (Makarov, 2015; Medvedev,
2020; Bassiac, 2021; Masoumeh, 2020), similar
aspects in the transport industry of regions at the
country level (Galushko, 2020), territories (Agureev,
2017; Shesterov, 2016), issues of marketing and
logistics of supplies (Zamanian, 2020) of products.
Most of the approaches used are based on the
widespread concept of sustainable development of
socio-economic systems, one of the significant
disadvantages of which is the orientation to
production functions of a certain class (convex up
elementary mathematical functions, usually irrational
Cobb-Douglas type functions, logarithmic, logistic
functions and their combinations), which, in our
opinion, does not always correspond to real business
processes in the modern economy. This work is based
on models of socio-economic systems free from these
shortcomings, methods and algorithms for their
analysis described in the monograph (Medvedev,
2020).
2 MATERIALS AND METHODS
The software and analytical tools used to describe the
functioning of innovations in the production sectors
of the region are based on a systematic approach,
which consists in using a set of optimization
mathematical models for analyzing the problem of
optimal distribution of flows arising during the
functioning of economic agents (Medvedev,
2020).These agents in the regional transport industry
include the manufacturer of the transport service, the
consumer of the service (the population, enterprises
of the region) and the management center with their
main economic roles (production, consumption of
products and tax collection, respectively). It should be
noted that the use of optimization mathematical
models makes it possible to find optimal volumes and
proportions of investments, production and financing
of the activities of industry organizations. In addition,
the solution obtained by the model will allow us to
identify the maximum of a certain economic quality
indicator – added to the investments made in projects
for the development of the transport industry – and,
thereby, the economic potential of this socio-
economic system. In turn, the knowledge of the
economic potential of the system justifies the
adoption of management decisions that motivate
economic agents to effective (according to one or
more criteria) activities, uses market mechanisms for
innovation.
The use of a systematic approach is also necessary
to create a comprehensive, balanced toolkit for
assessing the socio-economic efficiency of the
system, which includes, in addition to mathematical
models and algorithms for their analysis, also the
possibility of developing end-user-oriented systems –
managers of various territorial levels, investors,
entrepreneurs, financiers, economists, analysts -
systems to support the adoption of investment,
production and financial solutions by specialists –
theorists and practitioners of the subject area of
research.
Let's consider the following meaningful statement
of the task of describing the activities and assessing
the economic efficiency of the transport industry in
the region. Let a set of organizations related to the
production and sale of n types of transport services
(for example, railway, air, river, motor transport, and
others) function on some economic territory (it is
assumed to function). For the production of each type
of transport service by manufacturing enterprises, in
accordance with the principle of clean industries, it is
assumed to use (procurement, modernization, etc.) n
sets of production assets (SPA), which are understood
as a set of such tangible and intangible assets, without
which it is impossible to manufacture and sell the
corresponding products (transport services). The
production of each type of transport service is
characterized by its own conditions (labor and
material intensity, as expert-defined shares of total
production costs), as well as its management and
market environment (management system, a set of
training organizations, financing conditions,
inflation, planning horizon, etc.). Further, for
convenience, the project of production of the k-th
type of transport service in the industry will also be
called the k-th project of the industry.
It is assumed that during the functioning of the
transport industry in the region, from the relevant
transport enterprises, the budget of the region
receives tax flows collected by the governing bodies
of the territory, and maximizing the amount of such
Quantitative Assessment of the Impact of Innovations on the Economic Efficiency of the Transport Industry in the Region
33

flows is considered a criterion for the managerial
efficiency of the transport industry in this territory. As
a criterion of socio-economic efficiency of the
transport industry, the maximization of the value of
the total discounted profit flows of transport
enterprises and the wage fund of industry
professionals received at a given planning horizon is
considered. Let's define the efficiency of the
functioning of the transport industry in the region as
a solution to a three-criterion task - maximizing both
managerial and socio-economic efficiency of the
transport industry while achieving optimal (Pareto)
investment volumes in each of the n projects of the
industry, taking into account production and
technological (production capacity, technological
innovations), market (volume of demand for
products, its prices), and financial (solvency of
enterprises, maximum volumes of investments, loans
and subsidies) restrictions on the functioning of the
transport industry in the region.
In Table 1, in accordance with the mathematical
model (Kirenberg, 2021), the quantitative
characteristics of the activity of the transport industry
of the territory are reflected, which are necessary for
making an automated software package for solving
static and dynamic multi-criteria linear optimal
control problems described in (Medvedev, 2020,
Chapter 2).
Table 1: Quantitative characteristics of the transport industry.
Group of
characteristics
Characteristics
identificato
r
Measuring unit Conceptual meaning of the characteristic
Characteristics
of the SPA of
the k-th
direction of
development of
the transport
industry
n pieces the number of directions of the transport industry of the SPA region and
the corresponding types of products produced by cluster enterprises
c
k
monetary units
(m.u.)/SPA
the cost of SPA of the k-th type
T
k
economic
cycles (e.c.)
service life of SPA of the k-th type
V
k
units of
production
(u.p.) / SPA
SPA performance of the k-th type
δ
k
=
=P
k
V
k
/s
k
% return on funds (profitability) SPA of the k-th type
Characteristics
of the k-th
products of the
transport
industry and
features of its
production
P
k
m.u./u.p. the market price of a unit of production of the k-th type
q
k
m.u. demand for k-type products
β
k
%
the share of total costs Z
k
used to pay for labor in the production of k-th
products (labor intensity of production)
p
k
%
the share of total costs Z
k
used for the purchase of raw materials,
materials and other current costs consumed during one economic cycle
in the production of k-th products (material intensity of production)
Characteristics
of the external
environment,
financial
conditions of
the transport
industry
enterprises
T
0
e.c.
the term of the loan to finance current activities
r
0
% loan rate for financing current activities
Crmax m.u.
the maximum amount of the loan taken to finance current activities
Dotmax m.u. the maximum amount of subsidies to the manufacturer
I
max m.u. maximum investment amoun
t
α
1
,…,α
5
% rates of tax and non-tax expenses
Risks of
functioning of
transport
industry
enterprises
r
inf
% inflation risk (accounted for through the inflation rate)
r
inv
% the risk of the investor's claims (taken into account through the loan rate
and/or other forms of borrowing)
r=r
inf
+ r
inv
% general risk, taking into account the risks of inflation and the
requirements of the borrower of funds
Restrictions on
the functioning
of the transport
industry
PRODUCTION
The volume of production is not higher than the production capacity
The volume of production is not higher than the demand for products
INVESTMENT AND FINANCIAL
DS≥0 – the condition of solvency of industry enterprises on the planning horizon T
I
≤ Imax
–
the condition of limited investments by the maximum amount on the planning horizon
T
Cr ≤ Crmax
–
the condition of limited loans by the maximum amount on the planning horizon
T
Dot ≤ Dotmax – the condition of limited subsidies by the maximum amount on the planning horizon T
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It should be noted that most of the indicators given
in Table 1 that characterize the SPA and the products
of transport industry enterprises, the specifics of its
production and sale, production restrictions and the
surrounding market environment can be obtained by
analyzing market information from various sources
(official economic statistics websites, open analytics
publications, open enterprise reporting, etc.) or set by
experts. Examples of the description of the
conceptual meaning of the desired variables,
algorithms built on them and the laws of the
formation of income and expenditure flows,
limitations of functioning, formulated and
constructed relatively more general, compared with
the transport industry, socio-economic systems, can
be found in (Medvedev, 2020), and the use of the
approach on the example of the food industry of the
region – in (Fedulova, 2016).
The stated substantive formulation of the problem
allows us to obtain a quantitative assessment of the
economic and innovative potential of the transport
industry, as well as to interpret various features of the
functioning of the industry – marketing, transactional,
innovative, infrastructural, environmental, financial.
For example, accounting for marketing, transaction,
and environmental costs is possible in the model by
considering the corresponding cost flows
proportional to the volume of production of transport
services or in the discount rate. The innovative nature
of the products produced can be taken into account by
considering the following chain of reasoning. Let's
call the set T (c
k
,T
k
,V
k
,P
k
,q
k
,β
k
,p
k
) a traditional (old)
technology for the production of products of the k-th
type (or an analog of innovative products
corresponding to it in functionality, or an analog of
old products produced at innovative SPA, using
innovative marketing schemes, etc.), and a set of T
*
(c
k
*
,t
k
*
,V
k
*
, P
k
*
, q
k
*
, β
k
*
, p
k
*), where c
k
*
=γ
k
c
k
, T
k
*
=τ
k
T
k
, V
k
*
=v
k
V
k
, P
k
*
=π
k
P
k
, q
k
*
= σ
k
q
k
, β
k
*=φ
k
β
k
,
p
k
*=p
k
p
k
is an innovative (new) technology for the
production of the k-th type of products. Here the
coefficients γ
k
, τ
k
, v
k
, π
k
, σ
k
, φ
k
, p
k
are exogenously
(in particular, expertly) set values reflecting estimates
of changes in the numerical values of the
characteristics of SPA, products, features of
production and sale of products during the transition
to a "new" technology, which we will call
technological coefficients. Comparison of projects
for the development of the transport industry with
characteristics corresponding to the technologies T
and T
*
can help to identify the impact of production,
technological, marketing innovations on the
indicators of the development of the transport
industry by varying the coefficients γ
k
, τ
k
, ν
k
, π
k
, σ
k
,
φ
k
, ρ
k
and considering their various combinations. For
example, the inclusion in an innovative project of
technological innovations related to the use of
computers, robots and other elements of artificial
intelligence used in the new fleet of vehicles to
provide better services obviously affects the
improvement of consumer properties of the service
and, accordingly, the expansion of market share and
an increase in demand for the service. At the same
time, changes in such aggregated characteristics of
the road transport industry as the cost of SPA, the cost
estimate of demand, labor intensity, material intensity
and others are quantified. The creation or re-profiling
of infrastructure organizations such as specialized
educational institutions (technical schools) affects the
training of qualified personnel for the transport
industry, etc. At the same time, these changes, the
costs and benefits associated with them, can be taken
into account and evaluated (both expertly and with
the help of marketing analysis) through varying the
values of the coefficients γ
k
, τ
k
, ν
k
, π
k
, σ
k
, φ
k
, ρ
k
.
Quantitative characteristics of investment financing
of transport organizations are traditionally reflected
in the discount rate r
inv
, financing methods (lending,
subsidizing, etc.) – through the rates r
k
and r
0
, and
are also determined by the availability of own funds
of transport industry enterprises.
3 RESULTS AND DISCUSSION
The above approach to quantifying the impact of
innovations on the economic efficiency of the
transport industry in the region allows us to obtain
numerous numerical characteristics of its
development projects – optimal values of investment
volumes, production of services and financing,
comparison of various development scenarios by
varying technological coefficients. At the same time,
the life cycles of development, economic potential
(maximum value added to investments), optimal
moments of reinvestment in production facilities and
other key indicators of the efficiency of the transport
industry are identified without conducting real socio-
economic experiments.
To substantiate the above theses, let's consider a
model example describing the project of the
functioning of the transport industry in the region
with the following numerical values of industry
indicators: n=1; c
1
=10 Rbn; T
1
=10 years; V
1
=160
million passengers per year; P
1
=200 rubles; q
1
=36
ɌBn; β
1
=0.15; p
1
=0.6; T
0
=10 years; r
0
=0.15; α
1
=0.2; α
2
=0.02; α
3
=0.2; α
4
=0.3; α
5
=0; Cr
max
=0; Dot
Quantitative Assessment of the Impact of Innovations on the Economic Efficiency of the Transport Industry in the Region
35

max
=5 Rbn; I
max
=10 Rbn; r
inf
=0.1; r
inv
=0.2. The
numerical values given can characterize the following
features of the functioning of the transport industry in
the region: in comparison with the existing system of
providing passenger transportation services. It is
planned to purchase passenger vehicles (buses) from
the manufacturer in the amount of 10 Rbn to provide
intracity and intercity transportation. At the same
time, the average price of the service is 200 R/person
with the number of passengers transported 160
million people per year. The share of wages in the
industry is 15% of total production costs, and material
costs are 40% (including fuels and lubricants, repairs
and spare parts) of total production costs (Federal
State Statistics Service, https://kemerovostat.gks.ru/;
11,12 Kiselyov, 2011). The industry operates under
conditions of full-fledged taxation (average rates of
taxes on value added, property, profit, deductions to
social funds, etc.). Investments in the project are
carried out with state support, the maximum amount
of subsidies is 5 Rbn and the maximum amount is 5
Rbn of private investments at 20% per annum, the
inflation rate is 10%. It is also supposed to be possible
to credit current project financing costs at a rate of
15% per annum for 5 years. Let the innovative
technology of production of passenger motor
transport services in the region be described by the
following set of values of technological parameters γ
1
=1.5, τ 1=1, v
1
=1, π 1=1, σ
1
=1, φ
1
=0.7, p
1
=0.9.
This technology can describe the following aspects of
innovation and technological transformations. The
acquired innovative fleet of vehicles is estimated at a
cost of 50% more than the existing one, due to the use
of new computer technologies and artificial
intelligence elements on it. At the same time, due to
the use of more advanced engines and fuel, the
material consumption (the average cost of fuel,
repairs and spare parts) is reduced by 10%, and the
complexity of maintenance – by 30%. The remaining
innovative effects can mutually compensate for each
other. For example, to manage an innovative set of
vehicles, fewer professionals are required, but more
highly qualified, which requires their training and
increased wages. The capacity of vehicles may be
slightly lower than the available funds, which, on the
other hand, makes it possible to increase the comfort
and, consequently, the average cost of the price of the
service provided. In this regard, the coefficients τ
1
,
v1
1
, π
1
, σ
1
are equal to one, which means that they
are unchanged compared to similar characteristics of
the "old" technology. It is necessary to assess the
comparative economic effect of the application of the
new technology, in terms of its impact on the life
cycle of the described project, the optimal values of
the volume of its investment, production and
financing. To answer this question, on the basis of an
optimization two-criteria mathematical model
(Kirenberg, 2021), we will carry out a computational
experiment using automated tools described in
(Medvedev, 2020,, Chapter 2).
The figure shows the dependencies of the added
value J of the project on the planning horizon T for
various variants of the implementation of innovative
technology according to the technological parameters
γ
1
, φ
1
, p
1
. In Figure 1 , the graphs shown correspond
to the following scenarios: basic (1) – γ
1
=1, φ
1
=1, p
1
=1; (2) – γ
1
=1.5, φ
1
=1, p
1
=1; (3) – γ
1
=1.5, φ
1
=0.7,
p
1
=1; (4) – γ
1
=1.5, φ
1
=0.7, p
1
=0.9; (5) – γ
1
=1.5, φ
1
=0.7, p
1
=1. Moreover, scenario (2) corresponds to
the case of non-repayment of the project on the entire
Figure 1: Dependencies of the added value of the project on the planning horizon T (life cycles).
TLC2M 2022 - INTERNATIONAL SCIENTIFIC AND PRACTICAL CONFERENCE TLC2M TRANSPORT: LOGISTICS,
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36

planning horizon. The graphs presented in the figure
allow us to determine the optimal parameters of the
life cycles of an innovative project in the transport
industry under various scenarios of their
implementation. These parameters include the
maximum potential of the project (schedule
extremes), payback periods PP, optimal periods T
R
of
reinvestment planning. A comparative analysis of the
above graphs allows us to visually assess the impact
of an innovative project on the economic efficiency
and life cycle of the production of passenger
transportation services. Note that the use of the
described tools makes it possible to make sound
investment, production and financial decisions not
only in the case of the production of one type of
transport service described above, but also when
considering options for the functioning of the
transport industry focused on the provision of n>1
types (groups) of services, for example, railway, air,
river transport and other types of transport services.
4 CONCLUSIONS
The paper presents a system-analytical concept that
allows for an automated quantitative assessment of
the economic efficiency of projects (including
innovative ones) for the development of the transport
industry in the region, without conducting expensive
marketing experiments. In the proposed formulation,
the key tasks of substantiating and making optimal
decisions by managers of the mesoeconomical level,
manufacturers, investors, financiers and other
participants in projects for the development of the
transport industry of the region related to:
• determination of optimal volumes and
proportions of production of various types of
products (services);
• determination of the tax potential of
production (the amount of tax and non-tax fees
collected by management structures);
• justification for investors of the
optimal volume of investment costs, as well as the
investment attractiveness of the industry in the
territory;
• identification of the economic
potential of innovation, taking into account the
optimal volume of investments in the transport
industry, the production of transport services and,
thereby, the justification of its development
strategy.
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