ABSTRACT
This chapter focuses on the modernization of underdeveloped regions in Eastern Europe. The model of centrally guided restructuring of the economy applies also to developed regions and to existing industrial centres. Greater innovation possibilities occur with new investment, especially when new industrial units are constructed. New establishments with up-to-date technology can play the role of innovation-creating units. New policies of regional restructuring based on internal innovation, or development from below, have to be adopted. In all East European countries, national economic growth and particularly industrial development have been strongly dependent on central, sectoral management. The sectoral system of planning and management has developed specially in the Soviet Union, where industries in a given region have been dependent on federal ministries, ministries of a mixed federal and republic status, as well as on a particular republic's own ministries. The GDR system is also relatively centralized. Most industrial enterprises belong to large complexes, which are supervised by central, sectoral ministries.
