Educational and Research Institute of Innovative Management Technologies (ERIT)

The Educational and Research Institute of Innovative Management Technologies of the Higher Educational Institution of the Ukoopspilka University of Economics and Trade was established on September 1, 2015, with the aim of developing and implementing innovative intelligent viable systems in public administration, local government, business and education.

The concept of the Institute of Innovative Management Technologies PUET

Modern society, the economy, and the state face unprecedented challenges: problems of innovation and technological renewal, conflict of civilizations, rising energy costs, and water shortages, among others.

This is primarily due to the fact that society, due to the growing complexity, which is largely a function of the information explosion, has outgrown the dynamic regulation capabilities inherent in its “blessed” structure. It is from this perspective that we need to look at all the crises unfolding around us, and it is from this position that we need to start looking into the future. The danger that threatens society today is that society may still refuse to study the systemic factors that determine the fate of humanity and will neglect the opportunities offered by cybernetics, which allow us to cope with these diverse but interdependent manifestations of the crisis today.

So far, on the one hand, all attempts by economic science to cover the holistic diversity of social realities without the use of cybernetics have proved to be absolutely impossible. On the other hand, the concept of diversity, which measures the number of different states of an economic system, has dissolved in the works of traditional economists. As a result, a simplified linear view of economic processes prevailed. Reduced concepts and simplified structures are not verifiable and do not allow us to determine the correctness of decisions in real life. Almost always there is an unrecognized (or unconscious) ghost of a simplified economy of “Robinson Crusoe” lurking somewhere in the shadows (S. Beer).

A clear understanding of the scheme of transition of Ukraine’s economy to a post-industrial level of development has not yet been developed. However, it is already clear that the driving force behind such a transformation should be the intelligentsia: economists and technocrats.

In this transition, institutional resources are in short supply. Today, however, science and education – these catalysts for moving into the future – are in a rather difficult financial situation, one might even say in oblivion, and have ceased to play an independent role. For this reason, the economy is not receptive to innovation, and people are not motivated to succeed through innovation. There is a complex humanitarian problem: against the backdrop of a declining culture, the population’s standard of living is steadily declining.

In a dynamically changing economy, in economic systems of different levels (from households to the economies of states and their associations), the management of economic processes faces challenges that have no historical analogues. Modern managers and executives are not able to adequately respond and quickly adapt to the constantly changing economic environment, which has already led to a number of large-scale financial crises since the beginning of this millennium. High rates of production growth, deepening specialization, a significant increase in the number of inter-economic relations and their complexity have led to a decrease in the effectiveness of traditional management methods and the need to attract new methods of managing complex economic systems to help managers.

Thus, it becomes important to find ways to solve key problems that require institutional solutions and the use of economic and mathematical modeling for situational assessment of macroeconomic instability and scenario forecasting of economic dynamics, research of economic growth potential and directions of economic restructuring, which should be defined as the concept of the ERI “Innovative Management Technologies” of PUET.

1. The processes of development of the scientific worldview, which have a significant impact on the natural sciences, are now being extended to economic research. Researchers of economics cannot remain indifferent to the change of methodologies in other fields of science and continue their developments, guided only by the previous criteria and benchmarks, imperfect methods and theories.
2. There is a need to develop a new paradigm of research in economics and management of economic systems, taking into account the processes of their development, the complexity of elements of economic systems and the links between them, the increasing diversity of responses, and the emergence of complex behaviors that reduce their predictability and controllability.

3. The reorientation of research on economic systems from stabilization processes to the study of self-organization, from stability to instability and non-equilibrium behavior, from continuity to jumps and catastrophes, from determinism to the study of uncertainties and a reasonable ratio of deterministic methods and statistical laws is consistent with the current directions of development of other, primarily natural sciences.

Theoretical research in this area is based on a synergistic approach, in which complex dynamic interrelationships of economic systems are considered in the process of their development and interaction. The essential novelty of these studies is a departure from the dominant view of the negative impact of destabilization on the processes of improvement and development of economic systems.

4. The increasing complexity of modern economic systems makes it impossible to apply optimal management methods, as optimal solutions become not only hypersensitive to initial conditions, but due to the avalanche-like increase in the number of variables and constraints cannot be determined by the researcher at all. This necessitates the development of a new approach to the study of economic systems, which will allow to move from optimal solutions to sustainable ones, from optimality as such to stability, and will help to build a system of incentives that bring economic systems to a stable state of equilibrium.

To ensure the effectiveness of such management by means of economic dynamics, an arsenal of state-of-the-art economic and mathematical methods has been developed to analyze stability, chaos, and disasters using neural networks and genetic algorithms.

The developed methods combine the capabilities of modern computing capacities of information technologies with the results of scientific and applied research in the field of management of economic systems at all levels at the current stage of development of the Ukrainian economy.

5. The complexity of the deterministic mechanism that determines the behavior of the economic system, especially if the system is chaotic, makes the use of statistical methods ineffective.

Therefore, the emphasis in research has been shifted to the methods of economic dynamics, which allow to build a control mechanism that simplifies the behavior of the economic system, reduces the amplitude of fluctuations and makes it possible to use forecasting methods even in the absence of comprehensive information about the mechanism of behavior formation, which in turn allows to quickly identify and effectively use the reserves of the economic system development, increase the efficiency and sustainability of its functioning.

6. Economic dynamics, in its broadest sense, studies the processes of development of economic systems, i.e. analyzes their internal capabilities and external conditions of functioning, on the basis of which organizational and functional mechanisms of sustainable management are developed.

Thus, the application of economic dynamics methods as a means of making economic systems sustainable in modern conditions becomes a necessary step towards stabilizing the state economy, all its spheres and ensuring growth in qualitative and quantitative terms.

7. The impact of an unstable market environment on the functioning of economic systems, as a rule, leads to a hypersensitive reaction to changes in external factors, in particular, the phenomenon of leverage. In an unstable external environment, a stable element in the cost structure of an enterprise means that even small changes in input parameters can lead to quite significant changes in the resulting indicators.

The amount of leverage characterizes the sensitivity of the company’s performance to various factors. When the change of factors is carried out reasonably and meaningfully by the management entity, it leads to a significant increase in the efficiency of functioning. On the other hand, if the management entities are the external environment factors, then in case of their unfavorable impact on the economic system, it may suffer significant losses.

In this regard, the assessment and forecasting of leverage, determination of its optimal value and management of leverage through targeted influence on the factors that form it becomes an urgent task for improving the efficiency of enterprises.

8. Unstable environmental conditions that act as disturbing factors on the functioning of economic systems make developments in the field of economic security modeling for the functioning of individual economic systems and in the regional context one of the priority areas of scientific research. This problem has recently become particularly relevant due to the processes of establishing new economic ties and Ukraine’s integration into the world economy.

Scientific research in the context of Ukraine’s economic security is aimed at studying and modeling the mechanisms of goal-setting of economic entities in terms of tax payment strategy, optimization of the tax burden and legalization of shadow capital. Theoretical developments aimed at modeling the state fiscal policy and the impact of tax rates and the structure of mandatory deductions are focused on studying the processes of business activity and preventing the formation of shadow capital. Their implementation significantly increases the efficiency of economic systems and ensures the legality of their status.

9. In the world practice, the concept of rating is widely used to assess the quality of enterprise management. Methods of economic dynamics for rating-based decision-making are aimed at suppressing fluctuations that arise in the management of economic systems by aggregating the initial information. Therefore, one of the areas of research is the theory of rating management, which synthesizes the concept of decision-making by potential users based on the use of ratings in the process of implementing management functions.
10. The development of market relations has caused an objective need for the formation of qualitatively new structures and management mechanisms. Under these conditions, the vast majority of large domestic industrial enterprises were unable to respond in a timely and adequate manner to changing external conditions of operation due to the underdevelopment of flexible, adaptive management tools. The lack of coherence and science-based approaches has led to the predominant use of spontaneous, highly specialized solutions that do not have sufficient potential to respond to external disturbances. Therefore, to ensure the sustainable functioning of the enterprise, it is necessary to introduce organizational changes, i.e. to build specific organizational mechanisms aimed at balancing the impact of external and internal factors

11. Optimization of the functions of the economic system, in addition to the implementation of the functions of the organizational aspect, should also be focused on the effective management of flows. The solution to this problem is based on the use of modern approaches to logistics, supply chain management and is consistent with the ideals of ecological economics, which have recently come to the forefront in planning the functioning of regional ecological and economic systems.
12. One of the most significant approaches to organizing transformations of organizational systems of enterprises is modeling of business process reengineering, which allows for effective reorganization of management systems in connection with the transition from outdated hierarchical structures to networked interfunctional structures built on the basis of modern information technologies.

The effective restructuring of business processes by removing redundant operations and replacing functional processes with cross-functional ones, in combination with modern information technologies as a means of implementing such transformations, allows for a significant increase in speed, productivity, service levels, quality and innovation.

13. A significant contribution to the improvement of economic system management mechanisms is the theory of modeling and synthesis of effective organizational structures based on the application of the Stafford Beer Viable Systems Model, which allows analyzing existing organizational structures in terms of functional completeness, modifying existing ones or synthesizing new organizational structures that meet the requirements for their viability and efficiency.

Thus, the results of the study of the problem of organizing the functioning and management of the modern economy at various levels, which is associated with the growth of production and, as a result, with the concentration of capital, the transition to corporate forms of organization of modern economic systems, the growth of globalization and integration processes, the emergence in recent decades of a social need to generalize the accumulated experience and formalize it in the form of structured knowledge available for study and adapted for use in teaching, determine the essence of the con

Partners of NIITU

Industrial enterprises

• Public Joint Stock Company “Azovstal Iron and Steel Works” (Mariupol);
• Limited Liability Company “Metinvest-Mariupol Repair and Mechanical Plant” (Mariupol);
• Public Joint Stock Company “Azovmash” (Mariupol);
• Public Joint Stock Company “Zaporizhstal” (Zaporizhzhia);
• Public Joint Stock Company “Motor Sich” (Zaporizhzhia).

Higher educational institutions

• National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute” (Kyiv);
• State Higher Educational Institution “University of Banking” (Kyiv);
• Kyiv National University of Construction and Architecture (Kyiv);
• State Higher Educational Institution “Priazovsky State Technical University” (Mariupol);
• Mariupol State University (Mariupol);
• Zaporizhzhia Institute of Economics and Information Technologies (Zaporizhzhia);
• State Higher Educational Institution “Zaporizhzhia National University” (Zaporizhzhia);
• Zaporizhzhia National Technical University (Zaporizhzhia);
• Zaporizhzhia Classical Private University (Zaporizhzhia);
• Odesa National Polytechnic University (Odesa).