Page 75 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.77, # 1, 2020, pp. 65-83

overwhelmingly focused on the capital – which has existed as a major nexus of
government and business affairs in Korea for centuries. During decades of rapid
urbanization, rural laborers began flooding into Seoul – which absorbed over 60 percent
of all rural-to-urban transfers during the 1960s. Capital - intensive growth reprioritized
the focal points of urban growth to the major cities, providing a key difference between
the urbanization development of China and South Korea” [Sang Woo Kim (2017)
Shanghai American School/ An Analysis of How Urban Communities Intersect with
Digitalization in Chinese and Korean Megacities// 4th International Conference on
Innovation in Economics and Business IPEDR vol.87, p.13].

Of course, many times higher economic activity in the capital than in other regions
of the country is not desirable in terms of balanced and sustainable development.
Speaking at the meeting, it should be noted that the problem is also topical in
Azerbaijan.

The agglomeration effect is the savings achieved in the territorial organization of
production, and its types are classified according to different indications. In terms of
quantitative assessment capacity, we consider the following classification more
expedient:

-internal savings arising from the expansion of the scale of production;
-saving conditioned by transport (accommodation);
-external savings arising from the expansion of the scale of production;
-savings provided by urban infrastructure.

“A digital environment is an environment that creates logical entities that can be
used to model (or simulate) other environments based on mathematical laws.”
[Balayev R.Ə. (2018). Rəqəmsal mühitdə transaksiya xərcləri və rəqabət //
Azərbaycan Dövlət İqtisad Universitetinin Elmi xəbərləri. Cild 6, s. p. 6]. Therefore,
it expands the algorithmic and information capabilities of quantifying the above-
mentioned different types of agglomeration effect in the digital environment.

It is more realistic to achieve economic benefits without figures in urban conditions.
The fact is that the digitization becomes a leading factor in ensuring harmony and
efficiency in everyday city life and labor activity. Digital technologies expand the
possibilities of developing and implementing the necessary preventive measures.
Creativity in the realization of these opportunities can provide a transition from the
course to innovative modernization by insisting on imitation of the subject, which is
considered to be the leading one.

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