Exchange of Cluster Analysis recommendations and related knowledge 

The specific objective of this component is: Cluster-Analysis recommendations and related knowledge are exchanged with all relevant target audiences and partly applied by the decision-makers of the Carpathian region. 

When FORZA began in 2004, there was a recognized need to inject market awareness into the forest and wood based sector of the Carpathian region. The project started activities in the pilot lishops of Rahiv and Khust in the Transcarpathian oblast, and then expanded beyond. Key thrusts were working with lishosp economists to increase economic efficiency; with wood-based industries to improve market linkages; and with decision-makers to raise awareness on the need support industries in a systematic, linked manner. The latter entailed introducing a cluster-based approach – which had not previously been known in the Ukrainian forest sector.

Project outcomes

Improved lishosp efficiency

• Based on the findings of the financial assessment of conversion cuts compared against traditional silvicultural methods, the economists and foresters of the Carpathian region became convinced of the economic feasibility of conversion cuts. The figures were derived from hard data collected from the project-supported sample plots. A further assessment targeted to a less specialist audience, which includes environmental as well as economic aspects, has added weight to the argument in favour of conversion cuts, demonstrating that actual costs for conversion cuts are equal to costs of other traditional cuts like thinning. The long term environmental and even economic benefits clearly outweigh the necessary primary investments in roads and low impact harvesting technology.
• These innovative studies have made a particular impact on lishosp decision-making as they had never been done before. They thus provided the first hard data (evidence) on which to base decisions.
• Knowledge sharing amongst lishosp econo-mists in the Carpathian region has greatly incre-ased as the result of project-instigated regular meetings. The meetings are recognized to be so useful that the TFHA plans to continue them after the project end.
• The participation of lishosp staff in various cluster related meetings has also raised knowledge and awareness, and contributed to a more open mindset. Furthermore, lishosp staff is collaborating more readily with a wider variety of economic actors within the forest sector. Greater efficiency is difficult to bring about, although there are preliminary signs of changing attitude towards new ways and forms of interactions with private businesses in the relevant field of activity. 
• A toolkit for involving the private sector in forestry activities was developed by the project and first introduced to the 18 Transcarpathian lishops in 2007. It has subsequently been recognized by the SCFU and, at their request, distributed to all 360 Lishosps of Ukraine. All lishosps are thus equipped with the knowledge and tools to improve their economic efficiency through outsourcing, and are ready to apply these findings in their daily work.
• A number of new market-related tools and practices were introduced to lishops but could not be taken up. Nevertheless these ideas have been discussed and might yet be reconsidered in future, should the institutional environment permit.

Cluster analysis and development

• Cluster analysis was first introduced to oblast administrations of the Carpathian region in a series of meetings, which resulted in a written commitment on the part of all four oblasts to conduct the analysis. This analysis was completed in 2008 and widely disseminated in 2008-2009.
• The findings of the analysis have been integrated into the strategic planning of two out of the four oblasts (Lviv and Chernivsy) and have served as the basis for increased collaboration between forest sector actors.
• The Ministry of Economy has established a working group on issues of cluster formation, with a view to developing a national cluster policy. FORZA has been invited to participate in this group – giving the opportunity to anchor project findings in new legislation.
• A strong collaboration has been established between Carpathian companies and the Swiss Import Promotion Programme SIPPO. As a result, five companies have participated in 7 exhibitions in Switzerland and Germany; another 10 companies from throughout the Carpathian area are potential candidates to be invited to export fairs in 2011.
• A CD directory con-taining the details of 40 wood processing and furniture companies of the Carpathian region has been created in collaboration with SIPPO. This has been disseminated locally by FORZA and internatio-nally by SIPPO and is expected to facilitate linkages between the companies and potential clients. It is available on the SIPPO website: http://exdima.sippo.ch/UkraineWF/.
• The National Forest and Technical University of Lviv has introduced a new module in their Masters curriculum on the cluster approach and cluster analysis in the forest sector. Developed with project support, the course has received very positive feedback from the first 14 undergraduate students who studied it. The course will be continued in coming years; the lecture notes are available for students at the NFTU website http://tvd.org.ua/predm-klaster.htm. They have also been published in a small, attractively laid out book, which has been disseminated to national forest university libraries.
• Two leaflets complementing each other on practical steps of cluster formation and hints on forming forest clusters has been prepared, based on practical real life examples in Europe and Ukraine. They have been widely disseminated to the relevant institutions, including the Ministry of Economy and the emerging clusters.

As part of the FORZA project activity, the Cluster analysis of forest and wood based industries of the Carpathian region was elaborated and widely disseminated in 2008 and received a lot of attention from the stakeholders.

It was the first study of this kind in the forest sector of Ukraine, which provided important findings and recommendations to decision makers and made them aware of the high socio-economic significance of the forest sector for the regional economics.  Particularly, it showed that the forest sector is the fourth largest economy sector in the Carpathian region.

The cluster analysis findings used in cluster management are being an important strategic instrument for the regional economic development, providing important recommendations to the local governments and showing ways for more coordinated actions for decision makers, private sector and communities.

The dissemination process during 2009-2010, when the CA results were communicated to the stakeholders groups in Uzhgorod, Lviv, Chernivtsy, Ivano-Frankivsk has shown that there are tendencies in the wood-processing sector to unite efforts and create clusters.

Consequently in 2010 three Lviv-based companies have formed the Wood Processing and Furniture Cluster DOMV, with the aim “to increase innovation and competitiveness of sector enterprises in the Lviv oblast”. Throughout 2009-2010 the Swiss Ukrainian forest development project in Transcarpathia, FORZA gave a significant support to this initiative through cluster management training, development of promotional materials, and the establishment of a cluster website http://www.domv.lviv.ua/.

The Wood Processing and Furniture Cluster has the following goals:

• Extending markets for the products of the member companies and markets for wood in general
• Developing new products, improving production processes and implementing innovation-related projects
• Improving level of staff competences and access to the human capital for member companies
• Establishing collaboration with the authorities

This cluster is an association of companies operating with wood in Western Ukraine, – from basic processing to furniture makers. Nonetheless, DOMV cluster differs from the typical industrial association in its focus on market-oriented tasks (extending markets, implementing new products) as opposed to representational tasks (lobbying).

Each cluster member irrespectively of the company’s size has a representative in the Cluster’s Board. This guarantees that interests of all members are equally represented in the Cluster. The cluster coordination and administration task is delegated to a third party PPV Knowledge Networks http://ppv.net.ua/, that is collaborating with the regional administration and federation of business circles in Lviv.

In May 2011 the DOMV cluster representatives with the support of the IN2WOOD project http://www.in2wood.eu/ took part in the LIGNA fair in Hannover. Through participation in the IN2WOOD Conference „Sustainable Forestry and Wood-Based Industries as Key Contributors to Intelligent and Integrative Growth in Europe” the cluster representatives got the megatrends of sustainable forestry and wood industry in Europe and Overseas, the sense and trends in the work of wood clusters as drivers for regional wood innovation processes. 

For the DOMV cluster it was a great opportunity for networking, establishing new contacts and creating collaboration with the project partners and other clusters that are part of the mentoring process of IN2WOOD.