Importance The article analyzes the innovation activity as a main factor of economic growth and enhancing of its competitiveness. We pay particular attention to solving the issues of economic transition of the Republic of Kalmykia to an innovative path of the development and formation of a knowledge-based economy. The subject of the research encompasses the mechanism for integration of education and science in the innovation area of regions. Objectives The article aims at identifying the features of the executive authorities' interaction and the institutions of science and education to build the innovative potential of region. We underline that the notion of the educational system space is much broader than the educational complex concept, since it includes the mass media and institutions, which focus on people active involvement in solving of the public education system issues. Methods The knowledge-based economy serves as a tool to enhance the current level of socio-economic development. The science and its derivative education is one of the few State institutions that unite the whole society. The content of the educational activities and education management should be rebuilt on the basis of a strategic partnership between the government, business and society. We emphasize that education acts as a systematically important priority of the Republic of Kalmykia's State policy development implementation. We present the measures and calculate the expected results from the establishment and operation of the above-mentioned mechanism. Results We emphasize that the university should play the central role in the development of region. At the present stage, the regional institutions of higher education should not only provide a quality education, conduct research, but also to raise funds for their core activities. Conclusions and Relevance The findings can be used by the regional authorities to improve the regional economic policy in the area of shaping of the innovation potential of a region.
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