Blue economy of Ukraine – 4BIZ country report

On 17 March, an online presentation of 4BIZ partner countries’ reports took place. We invite you to read the latest information on the blue economy in Ukraine, presented by the speakers of the UMC

Сurrent situation in Ukraine in the field of Fisheries and Aquaculture, Coastal and Maritime Tourism and Maritime Transport.

The Ukrainian economy has been experiencing a large negative shock. Despite the massive economic disruption and mounting fiscal challenges, the economy continues to work and in the long term, the importance of the sea for the economy of Ukraine will grow. Ukraine has favorable conditions for the development of Blue Economy and maritime activities in all the fields including Fisheries and Aquaculture, Coastal and Maritime Tourism and Maritime Transport.

Aquaculture opens wide prospects for the development of fishery complex in the Odesa and Mykolaiv oblasts. Their coastal sea waters are favourable ecosystems for the industrial cultivation of a lot of  species of marine fish that is confirmed by the growing number of business entities over the past 5 years.

The Black Sea coast of Ukraine has also a powerful recreational potential based on the long coastline, unique ecosystem and natural healing resources. Despite these the maritime tourism is characterized by a limited number of tourist products, a small number of service providers, and their rather high cost. There is a lack of creative solutions regarding the types and methods of recreation. Moreover, a wide range of land and marine-based military activities are placing Ukraine’s marine ecosystems at risk, while fragile and ecologically sensitive coastal habitats have been directly affected by the fighting. So, it makes it more important to develop the solution for support and development of the Maritime Tourism.

As for the Maritime Transport, the peculiarity of pre-war Ukraine is the dynamic development of ship repair and ship conversion much more than shipbuilding presented basicly by engineering field. The economy of Ukraine depends on the efficient functioning of ports. In recent years, the volume of cargo processing in seaports has a tendency to increase. Despite this ports located in Odesa and Mykolaiv regions are losing competitive positions in the controlled market segment in the Black Sea basin. The production potential of some is used up to 50 percent due to prolonged hostilities provoked by russian military aggression against Ukraine

Important positive aspects during research.

First, the reality of modern shipbuilding is the flourishing of engineering. More than 12 design bureaus work in Mykolaiv and Odesa. Only one is part of the Ukroboronprom concern. The rest is privately owned and steadily increases the volume of services provided to foreign and domestic customers. The lion’s share of operating enterprises represents a new generation of investors, management and engineers, which has a unique way of thinking and a corresponding way of acting. This means, firstly, that thanks to their enthusiasm and capital, an industry of providing intellectual services has been created, which can only be compared to the IT business. They discovered and implemented a new development strategy based on the standards of the digital economy.

Second, the Black Sea coast has a powerful recreational potential. The therapeutic profile of resorts is characterized by the presence of natural healing resources. And the most promising directions of tourism development are ecological, rural (green), historical and cultural, industrial, youth, active types of tourism (rafting, kiting, jumping, hiking tourism, sports orientation) and of course the water transport like the proposed concept of transequatorial international project “Blue Ribbon”.

Third, aquafarming is one of the promising and economically profitable areas of agribusiness development for SMEs. In addition to the huge capacity of the domestic consumer market, Ukrainian entrepreneurs have prospects for occupying a niche in the international aquaculture market, where positive dynamics of demand growth can be traced. The coastal sea waters are favourable ecosystems for the industrial cultivation of a lot of  species of marine fish that is confirmed by the growing number of business entities over the past 5 years. Moreover, the number of new innovative projects is increasing in the field of Fisheries and Aquaculture.

Success stories.

  • Maritime Competence Center: innovation platform to sustain digital transformation of shipbuilding industry. “Maritime Competence Center Mykolaiv” is an initiative of Ukrainian Maritime Cluster (UMC) to develop innovative platform for support а sustainable development of maritime economy in South of Ukraine. Preceding phases such as the training center “Novel Ship Engineering” and virtual digital training center “Shipbuilding CAD/PDM platforms” have been successfully implemented by UMC partners, and the initiative is further evolving with the purpose to sustain digital transformation of shipbuilding industry. Recent sitting of the shipbuilding expert council of business development in Mykolaiv has decided to integrate the idea of MCCM into the strategy of national shipbuilding industry development.
  • AQUABATOR: innovation approach for boosting SMEs in fisheries and aquaculture. AQUABATOR project creating an ecosystem for the development of aquaculture in the South of Ukraine. A pilot aqua farm and its digital twin (demonstrator) The portal also provides innovative developments in the field of aquafarming, an open database of technological solutions for aqua farms, a training program on starting a business in the field of aquaculture, information on available programs and support tools for micro, small and medium businesses. Financial instruments, inquiries for aqua farming products of Ukrainian producers, offers of seed/source materials from suppliers, information, and analytical materials, as well as registration for thematic events and events on the development of aqua farming in the South of Ukraine.
  • Sikorsky Challenge Ukraine: Innovative tools for promoting the development of small and medium-sized businesse in the field of the blue economy. The All-Ukrainian Innovation Ecosystem “Sikorsky Challenge Ukraine” (SCU) is an open innovation ecosystem that unites the country’s institutions interested in the development of the Ukrainian innovation economy: universities, scientific institutions, state and local self-government bodies, businesses companies, foundations and public organizations. The centres of innovation in various branches of the economy are universities with their scientific schools and expert environments, with a constant flow of students, postgraduates, scientists, engineers and inventors.

Lessons learned during the implementation of the research in Ukraine

First. The survey methodology should be modified for each country to allow gathering insights related to a current challenges and particular area of interest. For instance, for the majority of Ukrainian companies especialy of Fisheries and Aquaculture, Coastal and Maritime Tourism and Maritime Transport suffered from the consequences of the invasion of Ukrainian sovereign territory when the coastline is closed and there are no access to the sea for operating, it’s necessary also  to evaluate the current state of business and their vital needs (how many companies complately stopped their activity, have they relocated or no, do they plan to restart their operating when they have the opportunity, what do they need for this and how do they plan to make their businesses more sustainable, etc.).

Second. The importance of wide promotional campaign during the research to inform more target audience. Also, cooperation with associated project partners playes an important role in reaching SMEs of Fisheries and Aquaculture, Coastal and Maritime Tourism and Maritime Transport fields willing to take the survey.

Third. The importance of diving business into the Sustainable Blue Economy. As the research has shown a lot of SMEs especially of the Fisheries and Aquaculture field are not aware of the Blue Economy concepts and principles. The importance of developing the support instruments for the SMEs of the target fields are also is vital for supporting the maritime sector and boosting the Blue Economy in the region.

Vital needs to effectively ensure the next steps of this project.

First. Increasing the awareness of SMEs of the Blue Economy concepts and principles. The posible solution can be forming the open knowledge database on the Blue economy. Collection of information about the concept and policies of the blue economy, European experience, best practices, available tools, programs and opportunities, as well as European clusters, specialized scientific institutions, innovation centers that are active in the blue economy by involving specialized experts and specialists.

Second. Further facilitating cooperation within the maritime sector in the Black Sea Region between industry players: R&D institutions, Educational establishments, Clusters, Innovation Centres, and of course businesses. Supporting their first contacts and further joint activities.

Third. Implementation of Support Projects. Developing the support instruments and mechanisms based on conducted within the 4BIZ project needs assessment and identified gaps that will contribute to sustainable maritime development in Black Sea region.

*This Project has received funding from the European Union’s European Maritime, Fisheries and Aquaculture Fund (EMFAF) under Grant Agreement 101077576.

**Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or CINEA. Neither the European Union nor the granting authority can be held responsible for them.

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