Economic stability of regions: the impact of digitalization on labor productivity dynamics

Abstract

The relevance of this study is determined by the need to enhance the economic stability of regions amid the digital transformation of the economy and increasing macroeconomic uncertainty. For industrial regions of the Republic of Kazakhstan, analyzing the factors contributing to the sustainable growth of labor productivity—as a key indicator of resource utilization efficiency and long-term development—is of particular importance. Despite the active implementation of digital technologies, the impact of digitalization on labor productivity dynamics at the regional level remains insufficiently studied and requires a comprehensive quantitative analysis. The aim of the study is to assess the impact of digitalization on the economic stability of a region through the analysis of labor productivity dynamics, using Karaganda Region as a case study. The study employs methods of economic and statistical analysis, correlation analysis by levels and growth rates, and regression modeling, taking into account the lagged effects of digitalization. The results indicate that labor productivity growth in the region is characterized by relatively high stability compared to investment and digital activity, which show significant volatility. Correlation analysis by levels revealed a strong positive relationship between labor productivity, ICT expenditures, and investment in fixed capital, while growth rate analysis confirmed the absence of an immediate effect of digitalization and the presence of a time lag. Econometric modeling demonstrated that the impact of digitalization on labor productivity is indirect and depends on investment activity and macroeconomic conditions. It is concluded that, during the analyzed period, the economic stability of Karaganda Region is primarily formed through the sustainable growth of labor productivity, whereas digitalization and investments require a more consistent and systematic approach to transform their potential into a stable long-term effect. The obtained results can be utilized in the development of regional digital and investment policy.