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17.06.2025
Investments in technology. Platform economy. Problems of establishing a reliable construction cost based on the resource-index method
Preamble
Under the “Investments in technology” theme the authors were invited to elabo- rate on the following topic: “Technology is not just a fashion trend. Technology has the potential to address critical challenges facing countries in the Global South and East. Which technology areas and initiatives should be supported under the new platform for global growth so that they contribute to economic development and improve the quality of life?”
I suggest considering this issue using the example of index formation when applying the resource-index method to determine the estimated cost of construc- tion in the northern regions of Russia.
Currently, much attention is being paid to the transition of the constituent entities of the Russian Federation to the resource-index method of determining the estimated cost of construction. This becomes especially relevant in the con- ditions of limited resources and specific climatic conditions of the northern areas. The paper explores the sources of cost estimates and the importance of accurately accounting for all factors affecting costs, such as resource availability, transport costs and seasonal variations.
This essay also analyses the problems of practical application of the existing regulatory documents governing this process. In particular, this includes identify- ing gaps in legislation and standard approaches to index formation, as well as the issues that may arise due to the peculiarities of the natural environment and eco- nomic structure of northern regions.
The issues addressed are important for sustainable development and improved management of construction projects in these unique and remote areas.
Text of the essay
Northern regions of Russia are unique territories with special natural and cli- matic conditions and limited resources. Efficient establishment of cost estimation indices in these regions is of particular importance for ensuring sustainable devel- opment and improving the quality of life of local people. The purpose of this paper is to consider the problems arising when one attempts to establish indices using the resource-index method and to propose possible ways of solving them.
In this study, I have analyzed the existing literature on the resource-index approach, as well as data on the situation in Russia’s northern regions. I reviewed various indices created for these regions in order to assess their effectiveness and identify problems associated with their application.
The resource-index method in determining the estimated cost of construc- tion allows to address such key factors as the availability of natural resources, infra- structure and social services in these regions as well as the local environmental situation.
When calculating indices for the northern regions of Russia, it is necessary to consider their specific geographical location, harsh climatic conditions and the resulting limited availability of resources. Therefore, establishing the indices proves to be a more challenging task.
Another problem we encounter here is the seasonality and variability of resource supply, especially in winter. This affects the level of resource availability and needs to be taken into account when calculating the indices.
Another important factor affecting the formation of indices for the northern regions is the high cost of resources. The supply difficulties and limited reserves in the north drive local prices much higher, which creates additional problems for the population and economy of the region.
Therefore, establishing indices for the northern regions of Russia is a complex and challenging work.
What is particularly troublesome is the mismatch between the intrinsic needs of the regions and resource capacities. If you establish indices based on the resources only, you risk depriving the region of necessary funding for development, despite the active attraction of investments. This can lead to imbalances in eco- nomic development and negatively affect the social sector.
Another problem is the difficulty of determining the resource potential of northern regions. Specific climatic conditions, availability of minerals and other factors mean that this potential is diverse and heterogeneous, which complicate the task of establishing indices and requires additional analysis and research.
Northern regions of Russia are also highly vulnerable to climate change and environmental problems. As a result, establishing indices using the resource-index method may require consideration of climate factors, adaptation to climate change and the creation of environmentally sustainable development strategies.
While establishing indices, we have to take into account innovations and modern technologies that can make the regions more successful and competitive. In the northern regions of Russia, it is necessary to determine which innovations and technologies are most effective for development and how to introduce them, bearing in mind the peculiarities of these regions.
What affects the establishment of indices for the northern regions of Russia
The first factor is the climatic nature of the northern regions. These territo- ries are characterised by low temperatures, long winters and short summer periods. Such weather conditions significantly affect the economic and social development of these regions and, consequently, the establishment of indices. For example, a long heating season leads to high energy costs and higher heating fuel prices, which will be reflected in the consumer price index.
The second factor is the remoteness of the northern regions fr om the cen- tral economic areas. This leads to high transport costs and expensive supply of goods, which will affect the wholesale price index and the production cost index. The remoteness fr om central markets may also cause shortages of various goods and services in the northern regions, which will be reflected in the consumer price index.
The third factor affecting the formation of indices is the specific economic structure of the northern regions. In most cases, they are dominated by industries related to the extraction and processing of natural resources. This can lead to fluc- tuations in the production cost index and commodity prices. For example, changes in global oil prices can greatly affect the production cost index in the oil and gas regions.
The fourth factor is the socioeconomic situation in the northern regions. They ohen have low income levels, high unemployment rates and limited opportunities for business development. This affects the consumer price index, wage index and other socioeconomic indices.
Therefore, we can conclude that the establishment of indices in the northern regions of Russia requires a special approach and bearing in mind their specific
conditions. Addressing the challenges related to climatic conditions, remoteness from centres, specific economic structure and low living standards will help offset the negative effects on index establishment and provide more accurate data for analysis and decision-making in these regions.
Recommendations for better index establishment in the northern regions
To make the process of index establishment in the northern regions of Russia more efficient, it is recommended to focus on a number of important aspects.
First, it is worth noting the specific climate of the northern regions. The indi- ces used in the resource-index method should be aligned against the severe cli- matic conditions. We have to develop special adjustments and coefficients that factor in the impact of climate on the indices, which will enable a more accurate assessment of the impact the resource factor has on the economic activities in the northern regions.
Second, it is recommended to consider geographical conditions when work- ing on the indices. The northern regions cover a large area and have a wide variety of terrains, including tundra, taiga and mountainous areas. These aspects should be taken into account when determining the resource-index indicator, as adding spe- cific indicators reflecting the availability of natural resources and the specifics of the northern nature to the calculations can help better present the real economic situation on these territories.
The third important factor has to do with the demographics of the northern regions. These areas are sparsely populated, which has a significant impact on eco- nomic indicators. Therefore, when establishing indices, we need to factor in the share of the population employed in resource-related sectors, along with the local level of unemployment and wages. This will allow a more accurate assessment of the impact the resource factor has on economic activity.
Finally, it is recommended to regularly monitor and analyse the economic activity in these areas. This will make it possible to track the changes in indicators and adjust the index calculation formulas, if necessary.
So, taking into account local climate, geography and demographics com- bined with regular monitoring will make the process of index establishment in the northern regions more accurate and ensure efficient assessment of the impact the resource factor has on the economic activities in these territories.
Prospects for the development of the resource-index method in the northern regions of Russia
In parallel with the growing interest in the use of the resource-index method in the northern regions of Russia, we encounter a number of problems that com- plicate its establishment and application. However, despite these difficulties, there
are prospects for the development of this method and its successful adaptation to the specifics of the northern regions.
One of the main problems here is the lack of up-to-date data on resources and their availability in the northern regions. This has to do with limited data col- lection and processing capabilities, as well as with challenging access to deposits and other natural resources in the harsh northern environment. To address this problem, specialised data collection methods need to be developed and innovative technologies, such as geolocation and remote sensing, need to be applied to pro- vide up-to-date and reliable data on resources.
The second big challenge involves accounting for climatic conditions and their impact on resource use in northern regions, which is by no means easy. Cli- matic factors can severely lim it the availability and utilisation of resources. The resource-index method should take into account these climatic characteristics and develop appropriate indices that will factor in the impact of climate on resource availability and utilisation.
Another difficulty is the need to consider socioeconomic factors when establishing the indices. Northern regions, especially remote and sparsely popu- lated areas, are ohen characterised by uneven distribution of resources and lack of infrastructure, which creates additional difficulties in assessing the availabil- ity and use of resources. The resource-index method should take into account the socioeconomic situation in the region and develop indices that will consider these factors.
However, there are still prospects for the development of the resource-index method in the northern regions of Russia. With the development of infrastructure and improvement of data collection and processing methods, we can expect better quality of indices and more accurate assessment of resource availability. Also, the development of modern technology, such as the use of remote sensing and artifi- cial intelligence, allows for more efficient data collection and assessment of data availability.
A step in this direction is the creation of the platform “Federal State Informa- tion System of Pricing in Construction” (FSIS PC).
FSIS PC is information support for the process and procedure of determining the estimated cost of construction of capital construction projects financed using funds from the budgets of the budgetary system of the Russian Federation, funds of legal entities created by the Russian Federation, constituent entities of the Russian Federation, municipalities, wh ere the Russian Federation, constituent entities and municipalities have more than 50% in the charter capital. One of the main tools for transition to the resource-index method of deter- mining the estimated cost of construction is the information placed in the FSIS PC. The creation of a self-developing system of pricing and cost estimating in con- struction, which will be improved on a regular basis, with a constant increase in the reliability of construction cost estimates. Despite the problems associated with the establishment of indices using the resource-index method for the northern regions of Russia, there are still pros- pects for their solution. The development of modern data collection and process- ing methods, taking into account climatic conditions and socioeconomic factors, as well as the use of innovative technologies can help develop the resource-index method and ensure its successful adaptation not only to the northern regions of Russia, but also to other BRICS+ countries.
Under the “Investments in technology” theme the authors were invited to elabo- rate on the following topic: “Technology is not just a fashion trend. Technology has the potential to address critical challenges facing countries in the Global South and East. Which technology areas and initiatives should be supported under the new platform for global growth so that they contribute to economic development and improve the quality of life?”
I suggest considering this issue using the example of index formation when applying the resource-index method to determine the estimated cost of construc- tion in the northern regions of Russia.
Currently, much attention is being paid to the transition of the constituent entities of the Russian Federation to the resource-index method of determining the estimated cost of construction. This becomes especially relevant in the con- ditions of limited resources and specific climatic conditions of the northern areas. The paper explores the sources of cost estimates and the importance of accurately accounting for all factors affecting costs, such as resource availability, transport costs and seasonal variations.
This essay also analyses the problems of practical application of the existing regulatory documents governing this process. In particular, this includes identify- ing gaps in legislation and standard approaches to index formation, as well as the issues that may arise due to the peculiarities of the natural environment and eco- nomic structure of northern regions.
The issues addressed are important for sustainable development and improved management of construction projects in these unique and remote areas.
Text of the essay
Northern regions of Russia are unique territories with special natural and cli- matic conditions and limited resources. Efficient establishment of cost estimation indices in these regions is of particular importance for ensuring sustainable devel- opment and improving the quality of life of local people. The purpose of this paper is to consider the problems arising when one attempts to establish indices using the resource-index method and to propose possible ways of solving them.
In this study, I have analyzed the existing literature on the resource-index approach, as well as data on the situation in Russia’s northern regions. I reviewed various indices created for these regions in order to assess their effectiveness and identify problems associated with their application.
The resource-index method in determining the estimated cost of construc- tion allows to address such key factors as the availability of natural resources, infra- structure and social services in these regions as well as the local environmental situation.
When calculating indices for the northern regions of Russia, it is necessary to consider their specific geographical location, harsh climatic conditions and the resulting limited availability of resources. Therefore, establishing the indices proves to be a more challenging task.
Another problem we encounter here is the seasonality and variability of resource supply, especially in winter. This affects the level of resource availability and needs to be taken into account when calculating the indices.
Another important factor affecting the formation of indices for the northern regions is the high cost of resources. The supply difficulties and limited reserves in the north drive local prices much higher, which creates additional problems for the population and economy of the region.
Therefore, establishing indices for the northern regions of Russia is a complex and challenging work.
What is particularly troublesome is the mismatch between the intrinsic needs of the regions and resource capacities. If you establish indices based on the resources only, you risk depriving the region of necessary funding for development, despite the active attraction of investments. This can lead to imbalances in eco- nomic development and negatively affect the social sector.
Another problem is the difficulty of determining the resource potential of northern regions. Specific climatic conditions, availability of minerals and other factors mean that this potential is diverse and heterogeneous, which complicate the task of establishing indices and requires additional analysis and research.
Northern regions of Russia are also highly vulnerable to climate change and environmental problems. As a result, establishing indices using the resource-index method may require consideration of climate factors, adaptation to climate change and the creation of environmentally sustainable development strategies.
While establishing indices, we have to take into account innovations and modern technologies that can make the regions more successful and competitive. In the northern regions of Russia, it is necessary to determine which innovations and technologies are most effective for development and how to introduce them, bearing in mind the peculiarities of these regions.
What affects the establishment of indices for the northern regions of Russia
The first factor is the climatic nature of the northern regions. These territo- ries are characterised by low temperatures, long winters and short summer periods. Such weather conditions significantly affect the economic and social development of these regions and, consequently, the establishment of indices. For example, a long heating season leads to high energy costs and higher heating fuel prices, which will be reflected in the consumer price index.
The second factor is the remoteness of the northern regions fr om the cen- tral economic areas. This leads to high transport costs and expensive supply of goods, which will affect the wholesale price index and the production cost index. The remoteness fr om central markets may also cause shortages of various goods and services in the northern regions, which will be reflected in the consumer price index.
The third factor affecting the formation of indices is the specific economic structure of the northern regions. In most cases, they are dominated by industries related to the extraction and processing of natural resources. This can lead to fluc- tuations in the production cost index and commodity prices. For example, changes in global oil prices can greatly affect the production cost index in the oil and gas regions.
The fourth factor is the socioeconomic situation in the northern regions. They ohen have low income levels, high unemployment rates and limited opportunities for business development. This affects the consumer price index, wage index and other socioeconomic indices.
Therefore, we can conclude that the establishment of indices in the northern regions of Russia requires a special approach and bearing in mind their specific
conditions. Addressing the challenges related to climatic conditions, remoteness from centres, specific economic structure and low living standards will help offset the negative effects on index establishment and provide more accurate data for analysis and decision-making in these regions.
Recommendations for better index establishment in the northern regions
To make the process of index establishment in the northern regions of Russia more efficient, it is recommended to focus on a number of important aspects.
First, it is worth noting the specific climate of the northern regions. The indi- ces used in the resource-index method should be aligned against the severe cli- matic conditions. We have to develop special adjustments and coefficients that factor in the impact of climate on the indices, which will enable a more accurate assessment of the impact the resource factor has on the economic activities in the northern regions.
Second, it is recommended to consider geographical conditions when work- ing on the indices. The northern regions cover a large area and have a wide variety of terrains, including tundra, taiga and mountainous areas. These aspects should be taken into account when determining the resource-index indicator, as adding spe- cific indicators reflecting the availability of natural resources and the specifics of the northern nature to the calculations can help better present the real economic situation on these territories.
The third important factor has to do with the demographics of the northern regions. These areas are sparsely populated, which has a significant impact on eco- nomic indicators. Therefore, when establishing indices, we need to factor in the share of the population employed in resource-related sectors, along with the local level of unemployment and wages. This will allow a more accurate assessment of the impact the resource factor has on economic activity.
Finally, it is recommended to regularly monitor and analyse the economic activity in these areas. This will make it possible to track the changes in indicators and adjust the index calculation formulas, if necessary.
So, taking into account local climate, geography and demographics com- bined with regular monitoring will make the process of index establishment in the northern regions more accurate and ensure efficient assessment of the impact the resource factor has on the economic activities in these territories.
Prospects for the development of the resource-index method in the northern regions of Russia
In parallel with the growing interest in the use of the resource-index method in the northern regions of Russia, we encounter a number of problems that com- plicate its establishment and application. However, despite these difficulties, there
are prospects for the development of this method and its successful adaptation to the specifics of the northern regions.
One of the main problems here is the lack of up-to-date data on resources and their availability in the northern regions. This has to do with limited data col- lection and processing capabilities, as well as with challenging access to deposits and other natural resources in the harsh northern environment. To address this problem, specialised data collection methods need to be developed and innovative technologies, such as geolocation and remote sensing, need to be applied to pro- vide up-to-date and reliable data on resources.
The second big challenge involves accounting for climatic conditions and their impact on resource use in northern regions, which is by no means easy. Cli- matic factors can severely lim it the availability and utilisation of resources. The resource-index method should take into account these climatic characteristics and develop appropriate indices that will factor in the impact of climate on resource availability and utilisation.
Another difficulty is the need to consider socioeconomic factors when establishing the indices. Northern regions, especially remote and sparsely popu- lated areas, are ohen characterised by uneven distribution of resources and lack of infrastructure, which creates additional difficulties in assessing the availabil- ity and use of resources. The resource-index method should take into account the socioeconomic situation in the region and develop indices that will consider these factors.
However, there are still prospects for the development of the resource-index method in the northern regions of Russia. With the development of infrastructure and improvement of data collection and processing methods, we can expect better quality of indices and more accurate assessment of resource availability. Also, the development of modern technology, such as the use of remote sensing and artifi- cial intelligence, allows for more efficient data collection and assessment of data availability.
A step in this direction is the creation of the platform “Federal State Informa- tion System of Pricing in Construction” (FSIS PC).
FSIS PC is information support for the process and procedure of determining the estimated cost of construction of capital construction projects financed using funds from the budgets of the budgetary system of the Russian Federation, funds of legal entities created by the Russian Federation, constituent entities of the Russian Federation, municipalities, wh ere the Russian Federation, constituent entities and municipalities have more than 50% in the charter capital. One of the main tools for transition to the resource-index method of deter- mining the estimated cost of construction is the information placed in the FSIS PC. The creation of a self-developing system of pricing and cost estimating in con- struction, which will be improved on a regular basis, with a constant increase in the reliability of construction cost estimates. Despite the problems associated with the establishment of indices using the resource-index method for the northern regions of Russia, there are still pros- pects for their solution. The development of modern data collection and process- ing methods, taking into account climatic conditions and socioeconomic factors, as well as the use of innovative technologies can help develop the resource-index method and ensure its successful adaptation not only to the northern regions of Russia, but also to other BRICS+ countries.
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