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The article presents the results of the Luhansk region economy analysis and highlights the directions of its structural and innovative renewal, which are determined by using the smart specialization approach. The dynamics of the main economic indicators of the region, the value-added structure and export of goods are analyzed. It has been studied that deindustrialization and the transition to an agrarian economy continue in the region. That is a consequence of the influence of systemic and situational factors, as well as the lack of effective state regulation of socio-economic processes. Attention is drawn to the need for an early modernization of the regional economy, aimed at diversification and ensuring the competitiveness of the Luhansk region. It has been determined that despite the loss of a large number of scientific personnel by the region, it still has the ability for innovative development in certain areas. Further implementation of the smart specialization approach at the regional level is required to enhance innovation. The importance of searching for development prospects for traditional industries is emphasized, as well as new sectors/activities, that may arise as a result of intersectoral and inter-regional collaboration. Two directions of the regional smart priorities identification are presented. The first is based on unlocking the strategic potential of the chemical industry, in which a significant number of the employed population, business structures are concentrated, and strong scientific and educational resources are still preserved. The development of this direction is seen through the use of cluster technologies and the use of European integration prospects. The second area involves cooperation between the chemical, agricultural and ICT sectors, which is aimed at achieving Sustainable Development Goals and, in particular, the implementation of the Precision Farming concept.

Prospects of Innovative Development and Structural Modernization of the Luhansk Region Economy Based on Smart Specialization