A Methodology for Forecasting the KPIs of a Region’s Development: Case of the Russian Arctic

Abstract

Forecasting the development of regions is one of the most challenging tasks of modern economics. The quality of any forecast is determined by the methodology used. Accordingly, criticism of existing forecasts is largely connected to their methodological approaches. In this paper, a multi-level approach to forecasting the development of the region is proposed, starting with the definition of the key performance indicators and ending with the assessment of various scenarios. The study was conducted on the example of the Russian Arctic, divided into three technological zones, with three scenarios of the development for each (negative, base, positive). The application of the proposed methodology allowed for modeling the development of the region until 2035. The results show that the Russian Arctic has a huge difference in the achievability of different goals, e.g., 98% of the electricity supply targets are achievable in a baseline scenario, while only 52% are achievable in a set of “navigation” targets. The proposed methodology can be useful for diving into the details of regional forecasts, such as the impact of key companies in a region or the influence of international politics.