How can innovative developments be transformed into real serial products when developers focus on R&D while manufacturers have underutilized production lines?

The Vinnytsia Instrumentation and Automation Cluster has found an ideal mechanism — acting as a “trusted broker” that brings together R&D organizations and manufacturers to build new value chains (VCs). Learn how the cluster facilitated licensing agreements, loaded production capacities, and launched at least four new product lines under strict confidentiality and wartime adaptation conditions.

“Through trust, we have reached a new level of relationships within the cluster — institutionalized value chains. The next step is joint R&D,” — Yurii Klymenko, Head of Cluster.

Practice Passport

Practice Title	Building Value Chains in the Instrumentation Industry
Cluster / Source Organization	Vinnytsia Instrumentation and Automation Cluster
Region	Vinnytsia and Zhytomyr regions
Implementation Period	From pilot to scaling stage (since 2021)
Cluster Maturity Level	Mature cluster with a project portfolio
Number of participants	29 participants in total (at least 6 key players involved at the initial stage of the practice)
Thematic Areas	Value chain development, matchmaking (B2B, R&D-to-Business), innovation, crisis/wartime adaptation
Target Audience	Industrial, high-tech (deep-tech), instrumentation, and defense-tech clusters that unite both research institutions/bureaus and serial manufacturing plants

Context and Problem Addressed by the Practice

The region historically concentrates strong potential: both research organizations generating innovation and manufacturing companies (plants) are present. However, due to the economic crisis and war, many production facilities became underutilized, while researchers lacked resources to independently bring their developments to market.

What did not work before?
There was a classic gap between science and business — the so-called “valley of death” in innovation. Researchers feared intellectual property theft, while manufacturers were unwilling to invest in “raw” prototypes. There was neither trust nor a neutral platform with mutually acceptable rules for secure matchmaking.

Description of the Practice Mechanism (“What’s Under the Hood”)

The cluster assumed the role of facilitator of the innovation process and guarantor of security (compliance).

Key elements (process logic):

• Capability audit (mapping): Identification of ready (or near-ready) R&D developments and underutilized but technologically compatible production lines.
• Focused matchmaking: Organization of closed, fully secure presentations of developments exclusively for targeted manufacturers.
• Partnership formalization: Support in signing licensing agreements between developers and factories, clearly defining rights and future profit distribution.
• Creation of value chains: Launch of serial production where each stage (from idea to assembly) is performed by different cluster participants within a unified chain.

Stakeholder roles:

• Cluster management: Moderator, trust guarantor, organizer of the legal and organizational framework
• R&D organizations: Generators of technologies and intellectual property
• Manufacturing companies: Provide infrastructure and equipment, scale production

Resources and Preconditions

The financial foundation consists of mutually beneficial commercial contracts between partners. This model does not critically depend on donor grants.

Key organizational prerequisites include:

• Participants with complementary functions (science + production)
• Strict compliance and strong adherence to NDAs (Non-Disclosure Agreements)

“A licensing agreement is a proven tool for interaction between developers and manufacturers,” — owner of a developer company.

Results and Outcomes

Due to the deep-tech and defense nature, quantitative indicators are anonymized for security reasons:

• At least 6 key participants integrated into joint value chains
• 3 licensing agreements signed
• 4 products / product lines launched into production

Qualitative outcomes and structural changes: The main effect is the shift from declarative cooperation on paper to real, economically viable value chains.

Economic impact:

• Increased revenues for developers (via royalties)
• Efficient utilization of factory capacities

Scaling through trust: Successful pilot cases created a “trust precedent.” Specialized manufacturers, seeing real earning opportunities, began proactively seeking integration into the cluster.

New B2B culture: Licensing agreements became standard at the project start. Trust is built not on words, but on shared responsibility for quality, volume, and timelines.

“Discussions about innovation, ecosystems, and industry become clear when a developer shows manufacturers a real working prototype ready for scaling,” — CEO of a manufacturing company.

Sustainability of the Practice

The practice demonstrates full sustainability. It is driven not by grants but by pure economic feasibility. Its viability is ensured by a focus on joint commercial activity and high market relevance of the products (especially in critical and defense sectors).

Limitations and Risks

Confidentiality risk (NDA): Restrictions on publishing company names and deal values complicate PR and attracting new participants. The cluster therefore focuses on promoting “process and trust” rather than “big brands.”

Access asymmetry: Value chains may face demand ceilings due to uneven business interaction conditions with public authorities (administrative barriers).

Lessons and Recommendations for Clusters4Regions

This practice is a benchmark solution to the problem of isolation between science and the real economy.

Key lessons:

• Do not wait for perfect conditions: Instead of waiting for foreign investments to build new factories, the cluster leveraged existing infrastructure — combining external knowledge with existing equipment.
• Licensing agreement as a foundation: This is the best “glue” for an innovation cluster. A well-structured licensing agreement formalizes trust, eliminates fear of idea theft, and turns competitors or cautious neighbors into business partners.

The presentation of the case study is available via the link:

This practice has been included in the Ukraine Best Practice Guide, which we are developing as part of the Clusters4Regions project.

To be among the first to receive the full version of the Guide, please complete the short pre-registration form.

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Clusters4Regions is an initiative aimed at designing and implementing cluster programs in six regions of Ukraine (Vinnytsia, Volyn, Sumy, Odesa, Khmelnytskyi, and Ternopil regions). The initiative is implemented by the Ukrainian Cluster Alliance at the request of the Ministry of Economy, Environment and Agriculture of Ukraine, with the support of the Swiss-Ukrainian project “Ukraine`s Cohesion and Regional Development” UCORD, and is aligned with EU priorities, international donor frameworks, and Ukraine’s recovery agenda.