| Lviv economic development strategy has been worked out by Monitor Group consultancy under the project of regional economic development realized by the Foundation for Effective Governance. According to the strategy, in 10-15 years Lviv will establish a modern economy open for external expertise and capital and represented by a well-balanced range of companies. This is going to be a stable and diversified economy, which uses own human resources and helps to retain them in Lviv. It will also provide the city with the required investment in services sector to create a healthy and safe environment for the citizens. To this end, Lviv must ensure transparent and business-friendly management of the city processes and modernize the support infrastructure for industry cluster development, in particular for tourism and business services. The strategy is based on the cluster building methodology.
A cluster is a group of interconnected businesses and associated institutions in a particular region that are involved in one business.
The methodology helps identify the most competitive clusters to drive the economic growth in the city and improve its competitiveness from the global perspective.
Tourism cluster is an important element of Lviv’s economy already today. However, creating a strong economic tourism cluster requires improving the city infrastructure significantly and finding out the tourism segment able to attract the most tourists to Lviv. A developed tourism industry is obviously a success factor of Lviv in the process of preparation for Euro 2012.
Cluster of business services includes advisory services, database and information management, software services, etc. In the modern world cluster of business services is a multibillion industry. Still, for Ukraine and Lviv in particular, the business services sector is a new area of activity, which has just emerged in the market. To ensure successful development of the cluster, the city can use the existing competitive advantage – its strongly operating IT companies producing software.
Clusters building methodology can also be used in other sectors of the city economy to diversify and improve Lviv’s competitiveness. While creating strong clusters the city will have to address such problems as shadow economy, corruption, inefficient taxation system, absence of long-term planning, lack of innovations and brain drain in form of labor migration to western countries.
The project analyzed 15 key economic clusters in Lviv and selected the clusters of tourism and business services as drivers of the economic growth of the city. The choice of two clusters does not mean that the region should limit to only these sectors. One of the project objectives is to build city’s capabilities, transfer knowledge and methods of the cluster approach to local specialists, which will allow the region to develop other industries effectively. The cluster economy model will attract investment and can ensure high living standards for citizens.
The Foundation for Effective Governance, Monitor Group and local authorities have been working since June 2009 to ensure practical implementation of the recommendations to create successful clusters and improve the general competitiveness of the city. At this stage the Foundation and the consultants provide methodology support and assist to realize the strategy. Active participation of regional representatives such as local authorities, businesses and experts has increased significantly.
To adopt the developed strategies we establish special structures consisting of all stakeholders and ensuring sustainability of the project when the Foundation and Monitor Group leave the city. The structures operate to a new for Ukraine form of public and business cooperation, which can become a model example on all governance levels.
Profile:
Lviv City Economic Development Project was launched in October, 2008 upon the initiative and with the financial support of the Foundation for Effective Governance and with support of Lviv City Council and Lviv City Administration. To implement the project the Foundation for Effective Governance has applied to the best world expertise: a 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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