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Development of Ukraine-Czech Republic bilateral agenda on Industry 4.0

In May 2022, as a part of the ‘Ambassadors of Industry4Ukraine’ program, the Ukrainian cluster alliance (UCA) proposed a separate initiative to prepare for deepening and development of bilateral relations with the most mature ambassadors. Colleagues from Czech Republic were among first ambassadors, and during the summer months, UCA worked out a program for development of these relations for 2022-23. The first important element in this program is the Ukrainian delegation visit to Brno planned for October. A solid 3 day program has already been prepared and the preparation of the Ukrainian stand has begun.

However, this story goes beyond a usual trade mission and is positioned by UCA as a turning point in transition to strategic long-term relations with key partners in internationalization of Ukrainian clusters.

Why we need long-term agendas by market segments

This question is rhetorical from the point of view of diplomatic and economic relations between neighboring countries. Of course, similar things have been practiced between states for centuries and testify to intentions of the parties to develop good-neighborly and mutually beneficial relations.

But this question is not at all rhetorical, given the state of relations in the current directions of digital and industrial development. As we noted back in 2019, Ukraine is almost the only large country in Eastern Europe with still big industrial, scientific and technical potential which does not have its State strategy for development of digital technologies in production sectors of manufacturing, energy and infrastructure (= Industry 4.0).

Initiatives of the leader among business associations, the Association of Industrial Automation of Ukraine (APPAU), within the framework of the integrated national strategy project, developed in 2018, were not supported by the previous governments. Some of them are included in the National Economic Strategy till 2030, but they still move from one ministerial document to another rather than have real support. 

In 2022, with the start of the war, the issue of international support became super-urgent already within the activities of the Ukrainian Cluster Alliance. Numerous initiatives and tasks have gained momentum within the framework of the critical need for international support of all participants in innovative ecosystems of industrial sectors. After all, the threat of significantly accelerating degradation of these sectors and the general de-industrialization of the country’s economy has become obvious.

In particular, it is very important for us not only to preserve, but perhaps, and using the opportunity of international support, to strengthen and develop those sprouts of innovative ecosystems and value added chains (VAC), which have only just begun to grow. Among them, centers of applied expertise and support of SMEs (Centers 4.0 and DIH – Digital Innovation Hubs) and innovation clusters occupy a special place. Both networks are positioned by APPAU as the basis of innovative ecosystems in regions and industries, and both have virtually no State support. There are only 3 DIHs in Ukraine (2 working), while there are 600+ in the EU and a good dozen in each of the neighboring countries of Eastern Europe. The BOWI project, launched together with Kyiv Polytechnic University, once again showed the fragility and difficulty of launching initiatives in cooperation with universities. Only in this one area there are very problematic and unsolved tasks:

  • Launch an effective and dedicated DIH structure
  • Update infrastructure of our leading technical universities, including for the task of innovative development of digital technologies
  • Train individual specialists in the category of innovation brokers and specifically for the tasks of supporting SMEs (and not only their own universities).
  • Significantly improve their integration into the European space, etc.

We are only approaching individual tasks of innovative development among the UCA clusters – the vast majority of clusters do not have innovative strategies and policies, and now these tasks are considered by many as “cosmic”, because another task on the agenda is “just to survive”.

Many other initiatives of APPAU, already initiated or planned within the framework of NES-2030 – such as development of Industry 4.0 experts network, specialized incubators and accelerators, key industries large-scale digitization programs, etc. are at risk of stopping altogether. In other words, the war can set us back many years and finally turn us into a raw, weak state, practically eliminating those weak centers of innovation, digitalization and expertise in hi-tech industry that were still present in recent years.

In these conditions, we see international support as the only and truly effective opportunity not only to preserve, but also, if possible, to strengthen and develop these Industry 4.0 centers in Ukraine.

Bilateral agendas with EU countries are a tool for implementation of this strategy, which is taking on concrete outlines in UCA.

How the bilateral agenda is built and what it includes

APPAU started exchanges on Industry 4.0, following the strategy for the development of bilateral relations developed at UCA. First of all, this was made possible by series of C2C (Cluster-2-Clusters) meetings in spring 2022, as well as launch of the ‘Ambassadors of Industry4Ukraine’ initiative, aimed at involving active supporters of Ukrainian resilience during the war, hi-tech industry professionals. Our colleagues from the Czech Republic, such as Tereza Šamanova from the CzechInno association, are such ambassadors who generate the lion’s share of proposals from the Czech side. CzechInno is positioned as a key matchmaker for the innovative development of the Czech Republic, the association unites and facilitates cooperation of almost all the main innovation ecosystems participants, including industrial ones. Later, colleagues from Brno entered the dialogue – the local Chamber of Commerce and Industry 4.0 cluster. Exchanges with this cluster began in 2021, and the Zaporizhia EAM cluster was added to them. The people of Zaporizhia signed a memorandum of cooperation and also hosted the head of the cluster from Brno Tomas Kubala at the industrial forum in Zaporizhia in December 2021.

Czech colleagues were easy and the first among foreign partners to enter into dialogue on development of bilateral relations. First of all, we set common goals until end of 2022:

1) Organization of a matchmaking event between Ukraine and the Czech Republic involving at least 20 innovative SMEs from each side.

2) Participation in at least 3 international grant projects in Industry 4.0 or related sectors.

3) Building a joint program of actions for 2023, taking into account the identified business opportunities for cooperation

Therefore, the program of stay in Brno, which we have already presented on the UCA website, becomes clearer – in fact, it is fully focused on achieving all 3 goals.

But how and in what way can such a program and implementation of the above tasks help us in solving the above-mentioned problems?

First, effective matchmaking is a universally recognized tool #1 for finding partners quickly – both from potential customers and suppliers, as well as other categories (agents, distributors, general contractors, etc.). Of course, such partners are now very necessary our clusters’ participants – the need for orders is key among all Ukrainian SMEs. As a part of the MSV exhibition program on October 5-7 in Brno, we plan to organize at least 50 live meetings, and in general, online platform, which works specifically for preparation of such meetings and has no restrictions – here you can communicate with hundreds of counterparties.

Secondly, the exhibition program allows you to deeply reveal specifics of each party’s proposals and, in general, works to create an image and better awareness of Ukraine and our opportunities in the international community. In particular, on October 6, the Smart Export Forum “Ukraine-Czech Republic” will be held, at which we will present our EAM and APPAU clusters’ proposals. These proposals already include a package of outsourced engineering services, which APPAU developed in the field of system integration of automated control systems back in March. It is expected that by October we will be able to clearly strengthen it with proposals in design, development of industrial sectors software, as well as other types of engineering disciplines.

Thirdly, and precisely in context of our low awareness of how to build innovative ecosystems, professional exchanges on this topic, as well as visits to actors of these ecosystems, are important. In Brno, we plan to visit the local technology park, Industry 4.0 cluster, as well as the local DIH, which specializes in cyber security issues.

Thus, this program perfectly corresponds to the goals set for 2022. After Brno, we plan to develop new relations during the month, and in November to hold a new meeting (online) to outline guidelines for 2023.

The trade mission in Brno is not the only event unfolding in our relations. At the same time, we are constantly in contact with CzechInno regarding cooperation in international grant projects, and preparation of the 2nd grant application this year is currently very intensive. And we are also already in the 1st joint project – we are talking about development of DIH (BOWI project), which began in 2021 and where APPAU together with DIH KPI is already cooperating with CzechInno.

The task of preparing the Ukrainian delegation

In advance, the Ukrainian delegation will be represented by 5 UCA clusters (20+ participants, recruitment is still ongoing), which will mainly represent the key competencies of EAM and APPAU clusters, including innovative developments and services in Industry 4.0.

In addition to proposals of individual companies, important tasks of the delegation members are development of joint proposals, in particular:

1) A high-quality presentation of the entire UCA, EAM pool and I4.0 clusters involves development of joint communication tools – from brochures, leaflets to individual presentations. Currently, they are missing, and this work must be started already.

2) Completion outsourcing engineering services package formation. APPAU has already started finalizing the Land4Developers resource at its own expense, where, in addition to the already existing marketplace for Industry 4.0, it is planned to place a separate marketplace for engineering resources. Creating a base of these resources is a certain challenge for EAM clusters, since the level of consolidation and allocation of individual resources for this task remains low.

3) Development of other collective proposals regarding bilateral cooperation, and taking into account positions of the Czech side where the following questions are open:

  • What can we offer in the field of cyber security, where the Czech side looks quite powerful and consolidated?
  • Will we have proposals for cooperation in the field of robotics and digital technologies in mechanical engineering, where Czech manufacturers are the strongest in Eastern Europe?
  • Similarly, what can we offer in the aerospace industry (Brno program provides for separate events in this area, and our delegation will include the head of the aerospace cluster association)?
  • What could cooperation between Czech and Ukrainian DIHs look like?
  • No less important is the dialogue regarding participation of Czech partners in Ukraine’s regions recovery programs in the post-war period, as well as the necessary support already now, also within the framework of anti-crisis measures.

UCA Coordination Headquarters has begun intensive preparations for these events. General issues of the delegation organization are dealt with by Rapid Response Center of EAM clusters, which is managed by Oksana Sytnyk, the head of the Kharkiv EAM cluster board. Oleksandr Yurchak, UCA head and CEO at APPAU, is handling questions about the detailed program of his stay in Brno and relations with Czech partners. Accordingly, there is already a need for significant activation on the part of Ukrainian clusters, their development of joint positions and proposals in response to the above questions.

Donor support is also very important in this event, it will allow to present Ukrainian participants at a high level with a collective stand. Negotiations with donors are still ongoing.

Ukrainian delegation’s visit to Brno is the first and therefore very important step in building agenda of long-term relations with partners from the Czech Republic in the Industry 4.0 field. We are convinced that this is the way to build relations with our partners from the EU, taking into account interests of the other party, taking into account the medium and long-term perspective.

We are beginning to develop similar relations with France – the first major online exchange is planned for September 30. It is obvious that there will also be talk of presenting collective proposals from Ukrainian Industry 4.0 community, and further events will develop according to a similar scenario.

Thus, creation and implementation of agendas for bilateral relations is a powerful mechanism of export and internationalization for Ukrainian manufacturers united by UCA.

For questions about joining the delegation, or developing collective proposals from the Ukrainian delegation, please contact info@clusters.org.ua.

The publication was prepared with the support of the European Union as part of the implementation of the EU project “Internationalization of the Ukrainian Cluster Alliance: improving direct dialogue between European and Ukrainian professional communities during the war”. The presented material reflects positions of the Ukrainian Association of Furniture Manufacturers and Ukrainian Cluster Alliance and does not necessarily reflect opinion of the European Union.

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