Fuzzy Approach for the Formation of an Optimal Portfolio of Strategic Projects to Achieve Regional Development Targets in the Digital Economy

Abstract

This study was performed as part of an essential task of accumulating and developing regional human capital in the digital economy. In this age of uncertainties, risks, and scarcity of resources, regional leadership faces the task of the optimal allocation of available financial resources among strategic projects that directly or indirectly affect the development of regional human capital. The aim of this study was to develop and test the economic and mathematical method of forming the optimal portfolio of strategic projects to maximize progress towards achieving the target values of key indicators of regional development through the development of human capital using a fuzzy approach. A fuzzy model is proposed, and its objective function is an integrated index that takes into account the degrees of achievement of strategic indicators of the social and economic development of a region. The information base of the study is composed of statistical data from official information resources. The model is a fuzzy mathematical programming problem in which the uncertainty and lack of information are modeled using a fuzzy approach. The variables used for the optimization are the Boolean variables of the inclusion of a project in a particular investment area at a certain point in time in a project portfolio. The transition from a fuzzy optimization problem to a crisp one is performed by setting confidence levels for the objective function and constraints. The choice of a certain confidence level allows, to some extent, one to take into account the uncertainty, which in turn affects the structure of the investment allocation. For the Primorsky Region, an example of the formation of an optimal portfolio of projects is considered by each year of a given planning period, which allows for maximum progress towards achieving the targets of development for the region.

Keywords

• economic and mathematical model
• fuzzy logic
• project portfolio optimization
• regional human capital
• social and economic development