Reform of the system of local government provides, that the amalgamated territorial communities, having obtained financial, proprietary, and land resources and powers, will be able to decide local problems on their own.
However, the future self-sustainability of communities depends on positive economic dynamics of their development: increase of goods and services volume, promotion of local business activity, realization of investment and innovation projects. Therefore, the urgent issue of the state policy at this stage of the reform is motivation of economic growth of the amalgamated communities and activation of their “points of growth”.
Acceleration of social and economic development of communities, which first decided to amalgamate, is of special importance against the background of hesitation and even resistance to the amalgamation of the most territorial communities of Ukraine. The successful development of the first integrated community should be a convincing argument in favor of reform for those communities, which have concerns and resist. Successful development of the first amalgamated communities has to become a satisfactory argument to support the reforms for those communities, which have doubts and resist.
We consider this urgent, that perspective instrument of the economy development of the amalgamated communities is local clusters, especially, agrarian and touristic.
Cluster model of the regional economy development is widely and efficiently used in the EU, USA, Japan, Singapore and other countries. There are successful examples of clusters functioning in Ukraine, for example, the berry cluster in Snitkiv Village of Vinnitsa Region, touristic cluster in Kamianets-Podilskyi Region etc.
Why is this beneficial for the government to contribute to the clusters establishment in the amalgamated communities?
It is mentioned in the State Strategy of Regional Development[1], that “under condition of the financial resources limitation, which the Cabinet of Ministers of Ukraine can use for the development of territories, the priorities of the resources distribution shall be defined and focused on those establishments and territories, which can provide the best result as soon as possible and will have long term and complex influence on the development not only this territory, but the neighboring regions as well”.
Therefore, the amalgamated communities can become such supporting territories of economic development in the region, and, the government shall focus on their support, first of all. They have competitive advantages, since within their territories land and people resources are accumulated. Councils of the amalgamated communities have functions of the State Architectural and Construction Control, will be able to dispose lands outside the populated localities, enabling them to conduct their own investment policy and will provide with an opportunity to implement projects, which community wants to see in its own territory.
Communities, which decided to amalgamate, have an active position and desire to be changed, to introduce know-how and innovations. Their economic development will have multiplicative impact on the neighboring communities of the region, and positive experience will provide the latter with the successful example for inheritance.
Problems related to the clusters organization and functioning
- Absence of normative and legal base, aimed to regulate the work of clusters. In the current legislation there is definition for the word “cluster”. In the State Strategy of the Regional Development of Ukraine by 2020, without giving any definition to cluster, it is mentioned, that it is inefficient instrument to overcome depression of territories and find out “points of growth”[2];
- Absence of stable relations and interactions of local entrepreneurs between themselves, between entrepreneurs and government, and institutes of civil society;
- inactivity of scientific and research institutes in the field of innovations development.
Conclusions and Recommendations
Analysis of the Ukrainian and foreign experience of local production clustering showed the efficiency of such an approach to the local economy development. Clusters increase competitive ability of goods produced by local companies and stabilize their position at the market.
However, in Ukraine the legislative base related to stimulation of clusters development is not advanced, although, the cluster approach is reflected in the state and regional strategies of the regional development.
Establishment of the regional agencies focused on the regional development and Ukraine participation in Horizon 2020 EU Program can provide a positive impact on the development of innovative clusters in Ukraine.
Perspective territories for the local clusters development are the amalgamated territorial communities, which due to the accumulation of people and land resources can create new clusters and promote clusterization of local production.
To motivate development of clusters at the level of amalgamated communities we propose to:
The Ministry of Regional Development and Construction:
- render by means of SFDR support to the projects of the amalgamated communities, focused on the clusters development;
- render methodical and informational assistance to the amalgamated communities concerning the clusters mapping (determination of conditions and potential members for the clusters establishment and development).
The Ministry of Economic Development and Trade:
- to give normative and legal definition to the word “cluster”;
- draw up and approve by the relevant Resolution new “Concept of Clusters Establishment in Ukraine.
State Regional Administrations:
- organize training seminars for the amalgamated communities devoted to the issues of local clusters development.
The Amalgamated Territorial Communities:
- at the local government body create an advisory and consultative body, which will help to find out clusters potential for establishment and development in the territory of the amalgamated community. It is reasonable to engage local entrepreneurs, representatives of non-governmental organizations, scientists);
- Delegate the established advisory and consultative body to perform clusters mapping and find out potential clusters;
- Use an instrument of cooperation of the territorial communities for the clusters development within several communities;
- Submit projects related to the clusters establishment to SFDR.
[1] On approval of the State Strategy of Regional Development 2020: Resolution of the Cabinet of Ministers dated 06.08.2014 No. 385. – Access:http://zakon5.rada.gov.ua/laws/show/385-2014-%D0%BF
[2]Refer to: http://zakon5.rada.gov.ua/laws/show/385-2014-%D0%BF