This paper deals with the need to modernize the economy and society. The authors reveal meaningful context of the term "modernization" in relation to the Russian economy. Five priority areas of economic modernization, as initiated by the President, are considered. Species, types and sources of funding for modernization of the economy (optimization of budget expenditures, state monopolies, taxation, domestic and foreign investment and business research areas) are investigated. Based on the investigation of the essence and importance of the modernization process, a mechanism of modernization, which components are described in the paper (the process, purpose, types, objects, sources of financing, the results & process control and system upgrade) was developed. Based on the results of the conducted study, the potential for sustainable economic development of the region in the XXI century is presented. A fundamentally new set of its components (educational, human, scientific, innovation, natural resource, industrial, construction, agriculture and infrastructure & tourism potentials) is presented.

This article discusses the theoretical issues of creating an enabling business environment, which is the base platform for the successful development of entrepreneurship in the regions. Provides A definition of a favorable institutional configuration of the regional business environment, which refers to forms of implementing the basic institutions and other regional institutions, taking into account existing regional system of formal and informal interaction between economic actors. States that despite the measures taken, the landscape of the Russian business community in terms of regions, remains uneven, with different indices of investment and business attractiveness, there is differentiation in business conditions in the regions with similar natural and geographical conditions and resource potential, which is primarily determined by , differences in the institutional configuration of the regional business environment and quality of interaction among the business community of the region. Hypothesis about the impossibility of creating a favorable business environment, institutional configurations at the same time in all regions of the country, as well as its limited duration. Conducted theoretical and probabilistic analysis of the parameters of creating an enabling institutional configuration of the business environment in the Russian regions. Grounded approach whereby institutional configuration of regional business environment, may be subject to management and control actions through targeted by the regional authorities can accept the specified (favorable to the business community) parameters. The necessity of planning and effective management of a favorable institutional configuration of the business environment by regional authorities to increase the period of its existence.

The article deals with the institutional support of the regional business environment. Due to the constant growth of social obligations of the regional and municipal authorities causing the growth of the risks of imbalances in the budgets of the respective levels, the necessity of development in the regions of favorable business environment conducive to enhancing business activity is proved. Using the methodology of the institutional matrix business model, the process of development of the institutions of the business environment in the region is analyzed. The mechanism influencing the occurrence of the specific characteristics of the institutional configuration of the regional business environment is revealed. The conclusion of the determining role of the institutional configuration of the business environment in the existing differences in the levels of socio-economic development of regions is drawn. The hypothesis is made that the maintenance of a favorable institutional configuration of the regional business environment stimulating business activity in a territory cannot be indefinitely, and its development is cyclical. The modeling of parameters of development and maintains a favorable institutional configuration of the business environment in the Russian regions is made. For the purposes of the practical application of the proposed approach, the methodological tools, which allows regional authorities to calculate the profitability of a favorable institutional configuration of the business environment and on the basis to form the business rules ensuring the growth of business activity and increase the contribution of business to socio-economic development of the region are proposed. The approach considered in the article provides an opportunity to validate the theoretical — methodological basis for the development of practical design mechanism and maintenance of a favorable long-term future of the institutional configuration of the business environment promoting the growth of business activity in a region resistant to the adverse effects of the environment.