The Innovations Meet Clusters campaign is gaining momentum, and on August 17 at 4:00 p.m., members of the Ukrainian Cluster Alliance (UCA) will meet online to connect needs and solutions at the interface between different categories of industrial ecosystems. Over the past week, a lot of work was done by the management of UCA to identify and systematize the needs within the alliance – talk about voting in networks, 2 meetings with activists of UCA and data from the matchmaking platform. This publication reflects the results of these works, including analytical ones, in the form of 10 top problems.
Matchmaking framework and context for August 17
The innovative ecosystem of UCA can be represented as in fig. 1.
Fig. 1 General structure of the innovation ecosystem of the UCA at the current moment
The key actors that regulate and influence the development of innovations within clusters are cluster management and individual actors of the external environment. A general overview of the state of innovation ecosystems is presented here, and it clearly states the general degradation of innovation ecosystems in industry. Therefore, our event on August 17 is a certain response of the Ukrainian Academy of Sciences to this challenge, we will try to mobilize internal resources in order to maintain and improve cooperation between the actors of our ecosystem in the field of innovative development.
At the same time, it is obvious that the topic of innovation is difficult and not for everyone. Only a small part of the participants of the UCA responded to the campaign’s proposals – these are mainly the old members of the Industry4Ukraine-APPAU platform, individual integrators-innovators of the EAM clusters, cluster coordinators themselves, members of the platform’s committees and WGs. There is also a large group of consultants from agencies, there are also universities and representatives of young innovative development structures (Fig. 2).
Fig. 2. The composition of matchmaking campaign participants is highlighted in yellow and green.
It is these representatives who are most represented in the Innovations meets Clusters group, and that is why we analyze their needs in the first place. Unfortunately, the representation of industrial enterprises that dominate the traditional clusters of UCA (food, clothing, furniture, etc.) is scanty. The clusters of EAM, FCU and the automotive industry are also very poorly represented, and the participants of the aerospace clusters have not yet joined – although the topic of innovation should be native to all of them.
Nevertheless, even within the framework of the qualitative matchmaking experiment, the number of group participants (more than 40) for the given conditions is sufficient for consideration.
So, the tasks of matching these participants are as follows:
- Determination of priority needs of ecosystem participants.
- Determining the suite of solutions that best meet these needs.
- Connection of ecosystem participants among themselves.
In this publication, we consider only point 1, and other tasks will be solved at the event on August 17.
Top 10 needs of participants
As already mentioned, the needs below are the result of analytical work carried out during the first phase of the campaign from August 8 to 15, based on data from the platform participants themselves (profile needs requests), several discussions (focus groups) and several online polls .
So, what do the 10 most priority needs of the above-mentioned representatives of the UCA look like:
1.Financing of SMEs: consultations on fundraising – from the selection of a grant to the writing of an application.
Target audience: according to fig. 2, this need is most relevant to the clusters themselves and their participants, various categories of SMEs.
The essence of the need: it is necessary to significantly increase the level and quality of counseling and assistance in the selection and writing of grant applications.
Examples of needs:
Clusters: According to UCA management estimates, almost 30 out of 37 UCA clusters do not have an integrated fundraising function. Accordingly, even when grouping clusters into certain groups by industry (such as Rapid Response Centers, TSHR), we do not see high-quality project applications at the output. Although this task has been pending since the spring, none of the three existing TSRs has yet submitted a high-quality project application in their field. In some cases, this problem becomes critical (organization of export missions).
SMEs: the exact statistics are unknown, but even among the advanced members of the UCA, the number of examples of attracting funds and grants to the needs of SMEs is low (the most cited in us are only 2 clusters: Podillya Fashion Cluster and UAM).
What is the problem of finding solutions: there are two main problems in this area. A low level of awareness by cluster leaders of the depth of the existing problem and a somewhat inadequate or delayed reaction to it. The second problem is the involvement of professional consultants, there really aren’t that many of them, and the methods of their involvement in the UCA have not been worked out.
2. Funding Innovators: Technology Brokerage in Fundraising
Target audience: all innovators, innovative SMEs, customers, integrators, developers, startups.
The essence of the need: despite the huge number of innovative circles, no one promotes (details) them – the level of promotion remains very low. As a result, innovators simply ignore them.
Examples of needs: members of APPAU and individual EAM clusters unanimously declare that they would increase participation in innovation circles (various Euro-programs) if experts (technology brokers) showed themselves, their cases and their services more powerfully and vividly.
What is the challenge of finding solutions: very few technological expertise centers and teams with motivated and trained experts.
3.Export and Internationalization – quality marketing for engineering outsourcing for market participants
Target audience: ACS-IT integrators, designers of industrial systems and equipment, developers of software and hardware, designers, etc.
The essence of the need: in the conditions of the decline of domestic markets, a sharp cut in demand for external customers. Most engineering companies do not have quality export marketing. Accordingly, this function is a bottleneck.
Examples of needs: a number of participants of the UCA platform put this need first (the majority are members of APPAU).
What is the problem of finding solutions: the problem is that quick solutions (export – tomorrow) are difficult to find here, while long ones (gradual exit over several years) are not of much interest to our CA. APPAU offers collective solutions, such as joint promotion through the Land4Developers platform, and even has funding for this project. But here there is a resource problem – for a month APPAU has not been able to find technical writers and content managers, there are practically no offers from the market. Another problem in this area is the same weak fundraising of clusters, we simply miss numerous grant opportunities in the UCA, due to the fact that this function is weak and not centralized.
4.Export and Internationalization – search for partners and customers in one’s segment
Target audience: clusters and their participants, SMEs.
The essence of the need: each industry and segment is specific, and the portraits of the “ideal partner” (supplier, agent, distributor, etc.) and the “ideal customer” are very different. Therefore, it is really difficult to find your own and the one that suits a specific cluster or SME – there are thousands of search options.
Examples of needs: Podillya Fashion Cluster is looking for a partner abroad with whom it would be possible to organize projects on the processing of agricultural raw materials. In the spring, the cluster found Lithuanian partners, but they are more interested in the import of raw materials from Ukraine than in projects for the organization of production in our country.
Similarly, APPAU in its promotion of the outsourcing base reached 5+ potential partners who were interested in the offer. But further development requires constant attention and qualified resources, which are not available.
There are many similar requests on the matchmaking platform among commercial participants, such as Triada Zvarka, Vostok Engineering, SoftElegance, etc., who are looking for customers or partners abroad.
What is the problem of finding solutions: the main problem is the complexity of the task. It is necessary to sort through tens or hundreds of options of potential partners, hold the same number of meetings and negotiations, significantly increase your promotion, etc. All this requires much more concentrated efforts and powerful resources, while the target segments and directions of actions of the UCA clusters are different. Together, this explains why, despite the numerous successes of the UCA in the field of internationalization, many clusters and their participants have yet to experience these changes.
5. More effective matchmaking within the framework of existing VACs and the UCA ecosystem
Target audience: all participants of the innovation ecosystem.
What the need is: Matchmaking remains weak. That is, even within the framework of the ecosystem, it is theoretically possible to cover much more needs. But this does not happen due to insufficient readiness of both sides, both from the side of demand and supply.
Examples of needs: the most vivid example is the matchmaking platform itself – despite repeated invitations and calls to declare needs in their profile, most participants do not do it. Accordingly, what solutions can we talk about?
What is the problem of finding solutions: the problem is the readiness and maturity of ecosystem participants. That is, matching is possible when each member of the ecosystem, in its clearly defined role, very clearly and clearly articulates not only about its solutions and services, but also about needs. Growing awareness (maturity) in these matters is much more important than the technical features of the platform. The second reason is the presence on the market of really highly qualified, developed services in the field of innovation. In some segments, they are just being created (such as the same innovative brokerage).
6. Qualitative market analysis – deep understanding of trends and positions of customers in target markets
Target audience: clusters and their participants, SMEs; other ecosystem stakeholders (donors, state authorities, agencies, etc.).
What is the essence of the need: there are practically no high-quality analytical materials that would reflect trends by industry or sector.
Examples of needs: many participants of the UCA innovation ecosystem say that the Ukrainian customer is “silent”, there is no detailing of his key needs. Moreover, there is no information about foreign markets and what is happening there.
What is the problem of finding solutions: at first glance, UCA is an ideal place to detail these needs. Most of the participants of the UCA represent industrial enterprises of traditional branches, from mechanical engineering to the food industry. The problem of reflecting their needs (of specific enterprises) lies rather in the absence of an analytical function within clusters. Attempts to bring these tasks to the level of the Ukrainian Analytical Center have not yet been successful, the main problem is the lack of funding for this center.
7. Qualitative analytics – formation of consolidated positions of clusters in the form of joint, short documents (position papers)
Target audience: heads of clusters and committees of the Ukrainian Academy of Sciences; government stakeholders; donors
What is the essence of the need: in the absence of short strategic documents that would reflect the positions of the UCA clusters on certain issues.
Examples of needs: UCA has its own clear positions on issues of government orders, export and internationalization, integration into VAC, etc. But so far it is not possible to find persons who would undertake the formulation of these positions in the specified areas.
What is the problem of finding solutions: in the leadership and quality of consultants or experts, as well as in the ability to cooperate.
8. Qualitative strategizing – definition and implementation of new business approaches and strategy both at the level of clusters and their participants
Target audience: heads of clusters and committees of the Ukrainian Academy of Sciences.
What is the essence of the need: that many heads of clusters understand that “it’s time to change something.” But (according to Goldrat) managers do not understand “what to change and what to change”, and even more so “HOW to change”.
Examples of needs: Zaporizhzhia EAM cluster says that individual donors refuse to finance cluster projects or its participants due to high risks. The cluster is looking for a way out of this situation. However, in the view of the UCA, the problem is more global – none of the front-line clusters has yet developed its strategy for survival in these conditions.
The situation is similar in clusters of poultry-combined feed. The cluster is relocated from Kharkiv (and therefore weakened), while internal competition (with large agricultural holdings) is very strong. The cluster wants to create an innovative business model for its members and is looking for options.
What is the problem of finding solutions: in the complexity of situations. But also in the weak cooperation of clusters with the best consultants for strategic planning and development.
9. Methods, best practices and technologies for involving market participants in innovative development
Target audience: heads of clusters, DIH, technology brokers, consultants.
What is the essence of the need: the low involvement of market participants in the issues of innovative development, in particular, in the consideration of grant proposals in this area.
Examples of needs: this first UCA campaign is an example – currently the most active are cluster managers, experts and consultants, while this activity and requests would be expected from commercial market participants.
What is the problem of finding solutions: several reasons: 1) ecosystem participants do not make enough use of best practices and engagement methods; 2) we do not sufficiently cooperate with each other in this involvement, 3) many clusters do not see the priority of innovations in these conditions.
10. Positioning of clusters: access to more powerful positions in GR and in relations with donors
Target audience: leadership of clusters of Ukrainian Academy of Sciences.
What the need is: significantly better positioning in the eyes of several priority groups of donor and consultant stakeholders. Currently, some donors simply use the work of clusters in order to select the most suitable SMEs for them and then connect them directly to their network of consultants. USAID is the most striking example. Meanwhile, neither these consultants nor the projects they implement have any coordination with the management of the clusters. Such a development has led to the loss of confidence of clusters in donors and consultants, because they level their work with these SMEs, but also ignore those opportunities for synergy and scaling that exist at the level of clusters. Simply put, some important stakeholders for us (in addition to donors, this is also the government) do not understand the role of clusters in the development of the economy and SMEs.
Examples of needs: in 2022, we have a number of similar examples when the donor and his consultants “bypass” the management and go directly to SMEs, without any coordination with the heads of clusters. At the same time, and as the above-mentioned needs show, more than half of the needs of UCA relate to a qualified consulting resource.
What is the problem of finding solutions: UCA and our structures do not sufficiently explain and emphasize the role of clusters and opportunities for cooperation.
Approaches to finding solutions for August 17
So, what performances and proposals in the implementation of these needs are we looking for on August 17 – here are three tips for potential providers of solutions and services.
- Specific offers that exactly meet the needs. For those who wish to present their services or solutions on August 17th, please be as relevant and specific as possible. For example, it would be great if DIH KPI prepared a 10-minute presentation that would demonstrate: a) the number and quality of ready-made technology brokers; b) their plans for the promotion of I4MS calls, c) other services for SMEs.
- Bright case studies that convince. We cultivate success stories and case studies at UCA, but there is always a shortage of them. For example, if there is a consultant or an agency or a team that will explain from their own experience how we can quickly and qualitatively bring the development of a position paper to the stream, or how we can put fundraising in TSC, or how we can find additional resources for the outsourcing promotion team, etc., a place in performances are guaranteed to them.
- Consider all internal possibilities. We are deeply convinced that we can cover many needs on our own – in fact, this is the essence of matchmaking. But for this you need to take a closer look and realize: a) your own needs; b) the capabilities of the closest partners (including in their cluster, then in the UCA); c) to think over possible options of connection. All ideas and suggestions are welcome, and you can share them both in your news feed, in our group on the matchmaking platform, and in other existing tools (forum, chat, maintaining shared documents, etc.).
Send your proposals for performances to firstname.lastname@example.org. For those interested in joining the discussion on these issues on August 17th, a link to the Zoom conference will be sent to all participants of the Innovations meet clusters group, so register there first.
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.