The Impact of Innovation Activity on the Standard of Living in Russian Regions

This study empirically investigates the impact of corporate innovation activity on the standard of living across Russian regions from 2017 to 2023. Utilizing panel data from 85 federal subjects and employing fixed effects models, the research analyzes the relationship between key innovation indicators and consumer expenditures per capita. The findings reveal a dualistic nature of innovation's influence. A positive, albeit weak, effect is observed from the volume of innovative goods and services. Conversely, a higher level of innovation activity among organizations correlates negatively with living standards in the short term. This adverse effect is attributed to rising structural unemployment, growing inequality, and inflationary pressures associated with the process of technological adoption and "creative destruction." The study concludes that while innovation is crucial for long-term growth, its benefits are not automatic. Policymakers must complement innovation incentives with robust social accompaniment measures, including labor market interventions, retraining programs, and inclusive infrastructure development, to mitigate transitional costs and ensure that technological progress translates into tangible improvements in population wellbeing