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International consulting company Monitor Group has been working with Donetsk Region to produce the strategy of regional economic development within the framework of the regional economic development project of the Foundation for Effective Governance. According to the strategy, in 10-15 years the region has a good opportunity to become a region with a developed economy and to modernize its heavy industry to produce high value-added products. Diversification of the regional economy will be ensured through development of other industries, e.g. agricultural sector, food industry, construction and so on. The key initiatives, which will help attain the goals and implement the long-term vision, include raising funds, application of modern technologies, adjustment of educational programs in compliance with the business needs, contribution to cooperation within the cluster framework as well as improvement of regulatory and legislative base and fighting against corruption.
The strategy is based on the methodology of building the clusters developed by the Monitor Group.
A cluster is a group of interconnected businesses and associated institutions in a particular region that are involved in one business area.
According to the methodology it is necessary to define the most competitive clusters in the region, which will become the drivers of economic growth in the region and improve its competitiveness on the global scale. The most competitive clusters of Donetsk Region are metallurgy, as well as agriculture and food products. By selecting the two clusters the region should not get focused only on these sectors of economy. One of the project objectives is to create capabilities in the region, to transfer knowledge and methodology of the cluster approach, which will allow the region to efficiently develop other industries of economy in the future. The cluster economy model is attractive for investments and able to provide high living standards for citizens.
Metal cluster is an important element of Donetsk Region economy now. Still, in the last years the growth of this sector resulted from the ever-growing rise in world prices for steel. To ensure long-term and sustainable competitiveness of the cluster it is necessary to engage investments and implement innovative technologies.
By developing the agriculture and food product cluster the Region will be able to use the existing potential and improve productivity in these areas. To create successful agricultural cluster the Region needs to review financing of the cluster key components, to engage investments in the area of education in order to improve skills of the work force.
The regional economic development project consists of two stages. The first stage completes after selection of promising economy clusters and designing of the long term strategy of their development. For the period of 6 months the Monitor Group considered 20 key economic clusters in Donetsk Region by analyzing statistical data, analytical reports and previously developed strategies as well as by numerous consultations with representatives of local authorities, business, academic circles and public organizations.
Since June 2009, Foundation for Effective Governance, Monitor Group and local authorities have been working together on implementation of the developed recommendations to create successful clusters and increase economic competitiveness of the Oblast as a whole. At this stage the Foundation and the consultants provide only methodological support and help in the implementation process. The role of active participation of regional representatives such as local authorities, business or expert community has become much more important. To ensure success of the developed strategies we are building special structures to institutionalize the strategies. These structures bring together all stakeholders and secure project sustainability after the Foundation and Monitor Group leave the regions. Their operation principle is based on a pattern new for Ukraine, which includes interaction between the government and business and can serve as an example for similar cooperation at all management levels.
Profile:
Donetsk Regional Economic Development Project (http://www.feg.org.ua/en/cms/projects/development_of_regions) was launched on October 9, 2008 upon the initiative and with the financial support of the Foundation for Effective Governance and with support of Donetsk Regional Council and Donetsk Regional State Administration. To implement the project the Foundation for Effective Governance has applied to the best world expertise: the world leading consulting company Monitor Group was engaged on the tender basis.
International Consulting Company Monitor Group (www.monitor.com) was founded in 1983 by six entrepreneurs, including Harvard Business School Professor Michael Porter. Headquartered in Cambridge, Massachusetts, the company employs over 1,500 people in 22 countries worldwide.
Monitor Group works with the world’s leading corporations, governments and social sector organizations to drive growth on the issues that are most important to them. The company has extensive expertise in regional economic competitiveness and has worked on over 175 projects in 58 countries for the last 20 years to analyze and develop economic development strategies in regions and countries around the world.
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Foundation for Effective Governance
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