Evaluating development prospects of smart cities: Cluster analysis of Kazakhstan’s regions

The analysis of the financial technologies introduction has proved that their application over-complicates the institutional structure of the global financial system. As a result, usual functional relationships cease to operate, new institutes and interdependencies appear, and systemic risks increase. In this context, the system instability increases, resulting in a transition to a new institutional status. The analysis of the financial technologies impact on the stability of financial system shows that the lack of institutional support for new financial technologies is the most important catalyst for the financial industry destabilization and the formation of financial bubbles in various market segments.
The ways to reduce the negative impact of financial technologies on the financial system stability (such as development of international prudential standards; revision of the licensing regime for financial companies; “regulatory sandboxes”, which test new technologies, business models and algorithms underlying the Fintech innovations; legal regulation of ownership of digital tokens; and clear definition of the blockchain technology in various areas of life, etc.) have been proposed.

The widespread use of information and communication technologies and subsequent transformations have led to the formation of a digital economy (DE). The European Union, as an international organization, has become the subject of building such an economy, striving to bring member countries closer in the field of digitalization.
The aim of this paper is to compare the DE development parameters of the EU countries based on cluster analysis and determine the most significant of them to solve the problems of bridging the digital divide between countries. For clustering, a feature DE vector of 20 indicators was created and the k-means algorithm and the Euclidean distance metric were used. For classification, the decision tree method was applied.
Three clusters of EU countries were identified by the level of DE development (leaders, followers and outsiders), which allowed assessing their positions relative to each other. Key parameters that determine countries’ positions in the general rating are identified. A parameter chart is generated to control the establishment of DE in the EU countries, which, in addition to key parameters, includes maximum, minimum and harmonic mean values of these parameters by cluster. This characterizes the landscape of DE development in the EU countries, assesses the digital divide and is the basis for decision-making in the area of bridging this divide.

The focus of the research is to develop recommendations of smart specialization (SS) for Ukrainian policymakers using European approaches. The authors revealed that the main SS projects are presented in such sectors as agri-food, industrial modernization and energy. More than 12 EU countries were the plot for conducted analysis of SS, as a result of which the level of activity of each country was determined. The creation of consortiums, including SMEs, associations, universities and other participants, disclosed the successful way of SS realization. The structure of SME’s innovative potential in Ukraine was identified underlining their main characteristic features like types of innovations and innovative activity, differentiation according to enterprise size, their regional distribution. The authors explored lack of innovations on regional and national level and significant territorial disparities, which could be eliminated through policy implementation of regional SS. The existing legislative norms for possibility of SS implementation in Ukraine were analyzed due to correspondence with the EU ones. The analysis provides the opportunity to consider them only as general framework documents without any action plans and sectoral prioritization at all. The weak points of these law documents are emphasized. As a result of research, the authors developed recommendations presented by direct action plan for Ukrainian policymakers, which include such activities as underlining key priorities (especially ICT applicability in every SS project) and their correspondence with the EU ones; eliminating regional imbalances by focusing on innovation development and reorientation of some regions according to SS priorities; respecting regional existing capacities; providing organizational mechanism for cooperation of stakeholders and financial mechanism for SS support through the EU structural funds.