An intensive movement of people, which is typical in areas with strong tourism industry, is perceived to provide numerous positive externalities with regards to the diversity of cultures, ideas, and knowledge. Border regions act as natural contact zones experiencing the influx of tourists across borders. The borderland is expected to benefit from their geolocation and intensive cross-border cooperation, acting as testing grounds for external innovations. The article is designed to test the interdependence between the tourism industry and innovation activity in the borderland. The study focuses on the western border regions of Russia, which is a highly divergent area in terms of socio-economic development and experiences challenging times in the context of geo-economic turbulence after 2014. By using the statistical research method, the study develops on evaluating the dynamics of indicators for tourism industry development and innovation activity. The eight-year period of 2012-2019 is applied for taking into account the lag in innovation performance resulting from the positive externalities of tourism. Results show that the growth in tourism industry and innovation activity of found in regions with intensive public expenditure on large-scale infrastructural projects.