“Ukrainian Clusters Development Guide” — the key to the development of Ukrainian business under the auspices of EU4Business.

Within the framework of the EU4Business program, funded by the EU and Germany, the presentation of the “Ukrainian Clusters Development Guide” took place in Kyiv on December 4, 2023. The project is designed to expand the opportunities for Ukrainian business through the development of the cluster movement. The concept is implemented by the “Ukrainian WoodHouse Cluster” in partnership with the international business community Board.

The presentation of the project “Ukrainian Clusters Development Guide” gathered over 30 representatives from various fields, including business, the public sector, and donor organizations. After all, creating clusters provides small and medium-sized enterprises (SMEs) with the opportunity to establish strategic partnerships with other companies,government institutions, and civil society. Such cooperation can increase enterprise specialization, enhancing the variety and differentiation of products or services, which contributes to increased profitability, learning, and innovation.

Opening the meetings, Alina Doroshenko, COO of Board, highlighted the mission of the business community, emphasizing the importance of joint work and uniting efforts for the development of Ukrainian business.

Illia Gzoim, Director of the “Ukrainian WoodHouse Cluster,” presented the “Ukrainian Clusters Development Guide” and its practical content, revealing the advantages of the cluster approach for strengthening economic competitiveness. On its journey, the WoodHouse Cluster faced challenges such as insufficient understanding among SMEs regarding the functioning and value of cluster organizations, a lack of clear methodological recommendations for creating clusters in Ukrainian conditions, and limited practical experience.

To implement the project, an Expert Council of 10 specialists was formed, including mentors from the Board community, the Ukrainian Cluster Alliance, the CAESC foundation, and international partners. The team developed the Guide with practical recommendations and successful cases, supplemented by a series of 10 expert videos.

To familiarize themselves with the experience of successfully functioning cluster organizations worldwide and to study their operational features for inclusion in the Guide, members of the WoodHouse Cluster visited Austrian colleagues. Mykyta Lukianchuk, founder of a modular home production and a member of the delegation, shared his impressions:

“Thanks to being in the cluster, exchanging experience with international colleagues, and meeting leading specialists, we can influence not only the woodworking business market but also the economic processes in our country in general. 

A cluster is about real people, real business interest in the world, real projects, and a real chance for a company to grow larger by transferring difficult processes to experienced cluster experts. Because in a cluster, everyone is business-motivated,” said Mykyta Lukianchuk.

“Thanks to cluster membership, we gained access to a production facility ranked among the top 5 in Austria. We even had the opportunity to examine various details of modern technologies and meet its owner in person,” shared Bohdan Kobryn,founder of House Group, discussing the opportunities that opened up for Ukrainian entrepreneurs after the experience exchange with the Austrian cluster Holzcluster Steiermark GmbH and the signing of memorandums.

Anatolii Dolynnyi, Board Member of the Ukrainian Cluster Alliance and Director of the Kyiv High-Tech Cluster, spoke about the advantages and attractiveness of clusters for external donors.

“When my generation of entrepreneurs entered market conditions in the early 90s, everyone was doing everything, and it was called chaotic entrepreneurship. Sectoral public organizations began to form around 1995. This example inspired a wide circle to mass-produce public organizations in the early 2000s and beyond. Entrepreneurs understood that to move forward, they had to think sectorally, consider ‘neighbors’ in the market, and account for technological innovations. I believe that in the European Union, the formation of clusters also began during this period. And since 2020, international partners have started actively supporting them through their own programs, including Ukrainian clusters,” noted Mr.Dolynnyi.

Roman Lysenko, project coordinator of the “ReACT4UA/EU4Business: recovery, competitiveness and internationalization of SMEs” program at GIZ, spoke about the opportunities for grant support for cluster initiatives in Ukraine. EU4Business supports clusters through the UCA as well as directly. Over the past year, 40+ clusters were supported. Among them, 11 are implementing projects aimed at increasing efficiency, digitalization, and innovation. 20 clusters are participating in management training from the Kyiv School of Economics. 12 clusters received educational support to participate in the European Cluster Conference in Košice (Slovakia). 2 clusters in Warsaw (Poland) and Milan (Italy) participated in fashion industry events, and 4 clusters completed internships in EU clusters.

During the event, the main tools and programs provided for business development and how they integrate with each other were also discussed. Valerii Maiboroda, Deputy Executive Director of the Entrepreneurship Development Fund, spoke about these instruments: soft loans involving partners from the German government; interest compensation under the “5-7-9” program; credit guarantees; and grant support.

The activation of the cluster movement within the Board business community is evidenced by the launch of new initiatives. Oleksii Leshchynskyi, founder and owner of EnginUP — a manufacturing group of companies in the field of engineering networks — shared his impression of the Guide:

“Concrete, clear, crystallized. I have already been developing a thermal power cluster for 2 months. I had been gathering this information for 2 months, meeting with various experts, but it was the information from the Guide by experts Andrii Dlihach and Mykola Smolinskyi that proved to be very useful for me personally,” said Mr. Oleksii after the presentation.

“A positive impact on increasing the region’s competitiveness can only be achieved through the creation of an innovative infrastructure for the regional ecosystem (for example, the creation of a medical cluster, a cosmetic cluster, or a functional food cluster) that would benefit many. However, this is only on the condition that the business needs it. I would like to note that a department of industry and cluster policy has been created within our department to support cluster initiatives,” noted Nataliia Pohrebna, Director of the Department of Economy of the Kyiv Regional State Administration, who attended the event online.

Thus, the involvement of such a diverse group of participants emphasizes the significance and relevance of the cluster approach in the development of Ukraine’s economy, and also ensures a broad exchange of opinions and ideas for the further development and improvement of the cluster model in the country.

The EU4Business program, initiated by the European Union and the German government, primarily supports those SMEs that are in a disadvantaged position. It offers tools for recovery and establishing links with European partners. This facilitates their mutually beneficial development and prepares the ground for a strong economic partnership with Europe.

• The document is available for download on the Board website (category “Projects”).
• The recording of the presentation can be viewed here.
• The video recording with the experts can be viewed here.

Background Information:

The project is implemented within a grant competition for systematic support of small and medium-sized enterprises commissioned by the international cooperation program “EU4Business: recovery, competitiveness and internationalization of SMEs,” which is jointly funded by the European Union and the German government. The program aims to support Ukraine’s economic resilience, recovery, and growth, creating better conditions for the development of Ukrainian small and medium-sized enterprises (SMEs), as well as supporting innovation and exports. Details: www.eu4business.org.ua.

The grant competition is executed by the Entrepreneurship Development Fund (EDF), and the strategic executor of the program is the German federal company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The implementation partner is the “Ukrainian WoodHouse Cluster” Public Union.

The contents of this publication are the sole responsibility of the “Ukrainian WoodHouse Cluster” Public Union and do not necessarily reflect the position of the European Union, the German government, or the EDF. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

#eu4business, #MovingForwardTogether, #gizSME