DEVELOPMENT PROJECTS FOR MUNICIPALITIES IN THE MOSCOW REGION
  • Timeframe
  • Client
June – October 2018
Government of the Moscow Region & Skolkovo Moscow School of Management
In 2018, the Skolkovo Moscow School of Management launched a competition-based education programme titled Growth Territories: Development Projects for Municipalities in the Moscow Region. Over a five-month period, the programme convened a group of experts — including government and business leaders — to develop ideas for regional economic growth.
Novaya supported teams focused on Balashikha, Domodedovo, Kolomensky, Korolyov, Lukhovitsy, Ozyory, Reutov, Voskresensky, and Zaraysk. We helped them examine spatial and sociodemographic contexts — identifying potential problems, evaluating land resources, and assessing human capabilities. We also helped prioritise project proposals and predict their economic impacts.
Detailed sociodemographic analysis shed light on migration patterns and the capability of specific municipalities to attract skilled workers. The areas closest to Moscow (Balashikha, Reutov, Korolyov, and Domodedovo) draw educated migrants from throughout Russia. For every 1,000 population units, they acquire up to 30 new residents per year — over half of whom have postsecondary education. This trend is growing due to a boom in residential development: approximately 500,000 square metres of housing construction is curreunderway in Balashikha and Domodedovo alone. However, these areas offer few local employment opportunities for skilled workers. Their major enterprises tend to be of a closed, defence-oriented nature, and their locations — like much of Moscow’s southern, eastern, and north-eastern suburbs — are not prestigious for office real estate. Only Domodedovo shows signs of vitality in this sector (i.e. industrial-logistics and commercial complexes), due to the proximity of an international airport. Balashikha, Reutov, and Korolyov have notable potential for growth derived from small businesses (including microenterprises), which currently range from 35 to 50 per 1,000 residents. Yet they remain bedroom communities on the whole, with insufficient tax revenue to shoulder the colossal burden of commuter flows on transportation infrastructure.
Voskresensky and the Southern Cluster (Kolomensky, Lukhovitsy, Ozyory, and Zaraysk) have rich industrial legacies and natural resources but not much to offer young professionals. Wages there are 25% below the regional average, and educational institutions have not stimulated the development of a tertiary sector. Still, local economies and labour markets can be strengthened by re-establishing ties between major employers and higher education institutions, and by raising the area’s prestige through branding.

In light of municipal budgets, Novaya thoroughly evaluated the fiscal integrity of projects submitted during the programme’s first stage. Municipalities currently allocate substantial funds each year to physical infrastructure (e.g., roads, public amenities) but almost completely neglect to invest in tourism, cultural attractions, and historical sites — in particular, distinguished parks of the Soviet era.

Spatial analysis revealed weak internal connectivity in some municipalities. High-density sections of Balashikha and Korolyov — both of which expanded considerably due to administrative reforms — are divided in terms of transportation and resident perceptions. The city of Zheleznodorozhny is now part of the Balashikha territory, for example, but its residents are more likely to spend leisure time in Moscow than in Balashikha’s historic centre. And although municipalities in the Southern Cluster could be popular one-day tourist destinations, only Kolomensky’s administrative centre has convenient transit links to Moscow.

The Pekhorka Valley concept for Balashikha and Reutov expanded to incorporate not only development of the riverbank by introducing commercial attractions but also the establishment of authentic urban nuclei by revitalising industrial heritage. Light industry — a relatively new phenomenon in the Russian market — will anchor the updated territories. Its distinguishing features are proximity to consumers (Balashikha and Reutov have a combined population close to 600,000), little to no need for industrial buffer zones, and an orientation toward customisation rather than mass production.

Market analysis helped us identify the most dynamic forms of light industry in Russia and abroad, which informed our recommendations for placing enterprises in renovated industrial sites based on historically rooted specialisations, environmental conditions, transport accessibility, and required buffer zones. Our recommendations also drew upon “chains of cooperation” approaches to locating complementary enterprises — such as marketing, accounting, legal services, logistics, packaging, and advanced printing — within easily accessible proximity. Because the sites are near high-density residential areas, we recommended socio-cultural resources and food services as well.

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