In June 2022, the Analytical Center of the Ukrainian Cluster Alliance (UCA) developed the program “Export and Internationalization of Industrial SMEs“. This document is the basis of the current main front of the UKA’s activities – the search for new markets for domestic industrialists and their deeper integration into the international business environment.
According to UKA analysts, taking into account the provisions of the Program by the state will significantly increase the effectiveness of the government’s anti-crisis measures. The maximum effectiveness of the joint efforts of the business community and the Government can be achieved under the condition of high-quality coordination of actions in the following key areas:
- Buy Ukrainian is a program for the export of Ukrainian goods and support for their promotion/certification in the world, already offered by the State Enterprise Development and Export Support Office.
- Integration into GVC – a program to support the integration of Ukrainian enterprises into European and international chains of added value (by introducing a broad industrial dialogue of leading business associations and clusters of Ukraine with European and world organizations), which requires immediate coordinated actions of business and the Government to save enterprises, that suffered the most from Russian aggression.
- Inno-Integration is a program of accelerated inclusion and support of Ukrainian innovative enterprises in the relevant European programs of innovative development, dual digital and green transition. The restart of the industrial dialogue at the level of leading European associations and the acceleration of the integration into the European value-added chains of enterprises from the most mature sectors of the high-tech industry (auto industry, mechanical engineering, biopharma, metalworking, engineering, industrial automation) are expected.
- Standardization is a program to support technical regulation and accelerated transition of Ukrainian enterprises to international technical standards.
In accordance with these four above-mentioned directions, UKA has 7 proposals for the Government:
- Consolidate the proposals of this document, as well as others from leading business associations, in a single government action program on export and internationalization of SMEs, giving it priority status in 2022.
- Designate one specific body of the executive power responsible for the implementation of the government program of export and internationalization of SMEs.
- In the development and implementation of anti-crisis measures, the Government must adhere to the principle of selective focus on a limited number of strategic priorities; preference should be given to sectors of the economy that meet one of the following criteria: belonging to industries critical during the martial law; high prospect of export growth; the ability to neutralize crisis trends for the leading exporting economic sectors.
- The criteria specified in point 3 should be well balanced in the actions of the Government, aimed at the preservation and development of numerous high-tech SMEs, the crisis situation of which the government is actually ignoring. And we are talking about thousands of enterprises from the fields of engineering and industrial automation, machine, ship, instrument, auto-transportation, aerospace, biopharma industry, innovative materials, alternative energy. Specialists in these fields are also the basis of the domestic military industry, so special attention of the government should be paid to preventing the degradation of the relevant sectors of the economy to the point where recovery becomes impossible.
- The government should pay attention to the trend of the outflow of specialists from the high-tech industry sectors to the IT industry. This process has already led to large personnel losses in the hi-tech industry sectors in 2016-21, and in war conditions this phenomenon can lead to the degradation of the domestic military industry and significantly limit the opportunities for post-war economic recovery. While implementing measures to increase the influx of specialists in the IT industry, the Government should simultaneously implement programs to support and develop personnel for the high-tech industry.
- The government should place special emphasis on supporting cluster-type business associations that strengthen internal value-added chains (VCAs) by consolidating SMEs at the regional industry level and focus on the production of finished products and solutions. After all, such clusters constantly generate their own tools for neutralizing risks in production LDVs. The project of the cluster development program of Ukraine, which was submitted for consideration by the Ministry of Economy back in 2020, needs priority support, but has not yet received state support.
- The program of integration of Ukrainian SMEs, startups, engineering and service providers into EU programs needs quick implementation. UKA, together with other leading business associations, offers the Government assistance in developing a unified state program for integration into the LDV and the innovation space of the European Union. Today, the window of opportunity in Europe for Ukrainian business is quite large, but it is hardly used.
This publication was prepared with support from “EU4Business: SME Competitiveness and Internationalisation” programme which is co-financed by the European Union and the German Government and is implemented by German Federal Company “Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH”. The programme aims to create better conditions for the development of Ukrainian small and medium-sized enterprises, support innovation and export promotion, resulting in sustainable and equitable economic growth. As part of the Team Europe approach, the initiative will also contribute to Ukraine’s COVID-19 recovery.
EU4Business is an umbrella initiative that includes all EU support to small and medium-sized businesses (SMEs) in the Eastern Partnership countries – Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine. Read more: www.eu4business.org.ua.