Until March 2022, Ukrainian clusters were not prominent actors in the domestic economic discourse. Likewise they were not present in the European arena as a consolidated and united movement. The war changed everything. The emergence of the Ukrainian Cluster Alliance (UCA) symbolizes a new stage in the development of Ukrainian clusters, when cooperation with European partners is perceived not only as natural, but also necessary.
Emergence of the Ukrainian Cluster Alliance – response to the war challenges
UCA, as an organization, arose as a result of the Clusters4Ukraine initiative development, which emerged in the early days of the war. In turn, this initiative, as a rapid unification and mobilization of clusters, has its roots in the Industry4Ukraine platform cluster committee, which has been lobbying for cluster policy at the state level and uniting clusters since 2019. This committee was successful in 2019-21 in uniting EAM (Engineering – Automation – Machinery) clusters, as well as a number of other, mainly industrial, regional clusters.
Resources of this committee, experience of previous years, strong relationship between the platform key activists and cluster coordinators were the main factors that contributed to the rapid mobilization of clusters in spring of 2022.
So, already on March 2 call of the coordination headquarters to mobilize Ukrainian clusters was posted on the Industry4Ukraine website. The day before, on March 1, the headquarters called on foreign partners to deploy comprehensive assistance to Ukraine. The headquarters formulates tasks around the challenges of assistance to the Ukrainian Armed Forces, humanitarian aid for civilians and formation of economic front.
Further in March – early April events unfolded as follows:
The initiative forms the main challenges of clusters on a separate page with a call for help to foreign partners. Here, for the first time, there was a clear call for a focus on critical industries as the highest priority during the war.
- On March 20, the headquarters published the basic provisions of the UCA (the basis of the organization’s Charter), and on March 24 the general meeting results in a decision to create an alliance as a voluntary association of clusters.
- At the moment, the UCA comprises 16 Ukrainian clusters. On March 31, the headquarters issues a general description of the UCA, the benefits of joining and the areas of activity that serve to attract new clusters. Active involvement of clusters begins – by the end of April their number doubles.
- On April 5, UCA holds its first European C2C (Cluster-2-Cluster) meeting with Euro-clusters.
- On April 8, UCA publishes a list and a brief description of the organization’s projects portfolio. Among them, the most notable are the projects of international cooperation (EU), and production projects of assistance to the Armed Forces and the Territorial Defence Forces. All the projects are positioned as clusters’ responses to common challenges.
Thus, this period from March 1 to April 5 can be considered the UCA launch and the first entry into the European arena.
At the same time, the process of uniting with the European team took place throughout March. Assistance from the European Cluster Alliance (EСA) with the support of DG GROW of the European Commission came almost simultaneously with the creation of the Clusters4Ukraine initiative, i.e. in the first days of March. The essence of the UCA proposal was to create a single “Support Ukraine” marketplace. A united team was created, consisting of the UCA representatives, the ENN-Ukraine network, the Ukrainian Chamber of Commerce and Trade, the Polish Cluster Association and DG GROW. The marketplace was to perform, primarily, the humanitarian aid functions – in response to the posted Ukrainian humanitarian needs European clusters were to submit their proposals.
At the end of March, UCA proposed to expand the areas of cooperation by holding direct C2C and B2B meetings between Ukrainian and European partners. ECA supported this proposal, and in April-May there were 5 C2C meetings (inter-cluster meetings in different industries) and more than 50 B2B meetings. Together, these meetings covered more than 300 participants from both sides, and more than 100 Ukrainian companies were registered on the EEN “Supply chain resilience” platform.
The first results of UCA clusters European integration
Thus, from March to May, UCA clusters were highly active in the international arena – in fact, much more active than before the war. In summary, meetings were held weekly, and often, it was 2-3 meetings or group meetings per week. What are the first results of these activities?
1)First of all, it should be noted as a result the very fact of Ukrainian clusters’ and business associations’ entry into various Euro-Atlantic structures and launch of industrial dialogue:
ECA membership has opened the doors of numerous European structures and business associations to UCA. The list below is far from complete and grows every month.
The UAMC automotive cluster was one of the first to reach an agreement on joining the European automotive cluster and today its agenda is quite fully synchronized with the European one.
Ukrlegprom Association reached the first agreements on integration into EuraTex Association.
A systematic dialogue has been established with the national cluster associations of Poland, Romania, the Czech Republic, and Lithuania – dozens of B2B meetings are held.
2) UCA has become visible at the European Commission level. After a series of meetings, the UCA leadership received an invitation to a prestigious “EU cluster talks” event on June 8, where we communicated to the leaders of the European clusters, as well as to the European Commission about the current challenges and directions of UCA actions. Immediately after this meeting, which was also attended by the Ministry of Economy and the Office of European Integration representatives, Ukraine received a response to its proposals on the single market, after almost a month of waiting. On June 16, a similar meeting in a narrower circle took place for key European cluster policies makers. Together, this suggests that this year UCA can become one of the leading actors in determining the European Commission’s decisions, directions and action programs for Ukraine in all areas related to industrial SMEs and clusters of Ukraine.
3) The Ambassadors of Ukraine initiative is gaining momentum. Unlike the previous directions of action, it is rather an association of professionals from the industrial and high-tech sectors, which is formed “from below”. Each professional independently decides on their role and contribution within the tasks set by the initiative. They are united by a desire to help our SMEs and business associations during the war, but also by an understanding of the prospects of Ukraine’s accession to the EU. Currently, the group of ambassadors includes colleagues from France, the Netherlands, Germany, Austria, Italy, the Czech Republic, Moldova, Lithuania, as well as a large group of Ukrainian specialists who are temporarily abroad.
4) The first success stories are formed and systematized at the individual cluster level:
Podillya Fashion Cluster is the first to show the best results in the production of a batch of clothes – and in cooperation with German and Polish partners.
The Ukrainian Association of Furniture Manufacturers breaks all its own and all-Ukrainian records in terms of performance on the international arena in exhibitions – in 1 month they visited 3 exhibitions in Poland, the UAE and Italy with their own collective stands.
The U-Food cluster is also successful – they presented the products of Ukrainian agri-food enterprises at exhibitions in Poland.
5) UCA rethinks and widely promotes the use of modern European instruments in its environment, as well as creates its own. In particular:
The account of participants of UKA clusters who already use the B2B platform of the European EEN network goes to 40+ firms.
After the successful launch of the BOWI project (creation of an innovation hub based on the Kyiv Polytechnic Institute), APPAU, which is the contact point of the I4MS program, is expanding its innovative fundraising services on a single platform and for all UCA clusters.
These 5 categories of results will obviously remain the criteria for measuring progress in future. Their understanding is still ongoing and is also being converted into forcing the first lessons, best practices and benchmarking indicators of the UCA.
Export-Internationalization program as a continuation of the European integration course
What will be the future course and actions of UCA? In fact, the leadership of the alliance offers this in the new program of Export and Internationalization, common to all industrial and high-tech sectors and UCA clusters. The program offers 4 specific areas of action:
Expansion and better support of the “Buy Ukrainian” program, which is already offered by the governmental “Entrepreneurship and Export Promotion Office”.
Integration into GVC: a program to support the integration of Ukrainian enterprises into European and international value chains.
Inno-Integration: programs of accelerated inclusion and support of Ukrainian innovative enterprises in the relevant European programs of innovative development, double digital and green transition.
Standardization: programs to support technical regulation and accelerated transition of Ukrainian enterprises to international technical standards.
Each of these areas is detailed into separate sub-categories of activities, among which there are also some already developed UCA projects (11). You can download the entire document by following the link.
The UCA leadership has already consolidated all the clusters around this program and will start communicating with the Ukrainian government in June. After all, without state support, most projects will not be implemented, because everything rests on funding.
Meanwhile, UCA is actively pursuing the internationalization course. In June – July, UCA plans:
Expansion of the Ambassadors initiative and the beginning of joint actions in the European arena
Reaching new agreements and memoranda of cooperation with specific business associations and national cluster associations.
Conducting new C2C and B2B meetings, in particular in the areas of synchronization of Ukrainian developments in cluster policies with the European ones, as well as innovation and digital development
Launch of the UCA website in 2 languages and publication of more than 10 successful stories of Ukrainian clusters’ internationalization.
The UCA leadership will also represent clusters of Ukraine at a prestigious business forum in Turkey on July 22.
Taking this opportunity, UCA calls on Ukrainian clusters and cluster-type business associations to join. Terms and conditions of accession can be found at the link.
The example of the UCA clusters’ internationalization is a clear indication of how great the potential of cooperation between Ukrainian SMEs and their business associations is, and how important this movement is today to support our business and economic front.
This publication has been produced with the assistance of the European Union. The material reflects the position of the Ukrainian Cluster Alliance, and does not necessarily reflect that of the European Union.