Russian Version

Stanislav Sokolenko

Ukraine faces the difficult challenge of choosing an effective path to development, based on democratic ideals. Problems, specific to Ukraine hinder this choice. In order to overcome these challenges, we must first understand the impact of centralized economic governance, and the need for a shift to new organizational systems.

World experience in new production systems based on cluster development, as well the first steps taken in that direction in Ukraine, should be welcomed. I would like to address the following topics in my discussion:

• Foundation for economic revival in Ukraine
  
  
• The status of current transformation of Ukraine's economy
  
  
• The economic cluster model
  
  
• First steps toward clusterization in Ukraine

Ukrainian leadership falsely puts Ukraine with the world's industrialized nations. The country's progress has been very limited. Ukraine has lost most of its industrial base during the transition period. Many talented and educated Ukrainians flee the country to make their living elsewhere. Delaying the country's economic developing any further will carry irreversible implications for its future. Cluster development emerges as a necessary solution to Ukraine's stagnation.

Cluster development began in Ukraine in 1997, in Khmelnitsky. Industrial clusters existed in Great Britain since the 19th century, when Alfred Marshall identified the textile cluster in Manchester, and a metallurgical cluster in Sheffield. Italian economists contributed to cluster theory in the 20th century. A cluster is a territorial association of inter-related companies, which targets its activities toward the global market. Clusters are not just concentrations of local industries, but rather are the arena, upon which the interaction of local firms and other economic institutions takes place. Cluster formation depends on:

• Distance from the market
  
  
• Workforce development
  
  
• Natural resource abundance
  
  
• Economic scope
  
  
• Low production costs
  
  
• Access to information
  
  
• Cooperation among regional firms

Clusters face lower operational costs than their traditional rivals because of the higher level of cooperation and trust among cluster partners. Clusterization has been very successful in Italy, India, Brazil, and Chile. In Europe, Slovenia, Poland, Hungary, and Croatia have all produced impressive results. Slovakia, Romania, and Bulgaria have become more active in cluster development in recent years. This progress can be explained by the fact that clusters create positive externalities sharing information, social development, workforce education and growth, political stability.

• Clusters have several necessary components:
  
  
• Innovation
  
  
• Effective use of information and communicational achievements
  
  
• Clusters should effectively use entrepreneurial activity

What accomplishments does Ukraine have in cluster development? There are 5 clusters in the Podilie Pershiy NGO.

• Textile cluster description
  
  
• Construction cluster
  
  
• Food processing cluster
  
  
• Tourism cluster
  
  
• Milk cluster