Научная статья на тему 'ANALYSIS OF REGIONAL POTENTIAL AS AN AIM TO DEVELOP SME CLUSTER SPECIALIZING IN RECREATION BASED ON THE CASE OF THE REPUBLIC OF ARMENIA'

ANALYSIS OF REGIONAL POTENTIAL AS AN AIM TO DEVELOP SME CLUSTER SPECIALIZING IN RECREATION BASED ON THE CASE OF THE REPUBLIC OF ARMENIA Текст научной статьи по специальности «Социальная и экономическая география»

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Ключевые слова
АНАЛИЗ РЕГИОНАЛЬНОГО ПОТЕНЦИАЛА / КЛАСТЕРНЫЙ ПОДХОД К РЕГИОНАЛЬНОМУ РАЗВИТИЮ / КЛАСТЕРЫ МАЛОГО И СРЕДНЕГО БИЗНЕСА / МСП / САНАТОРНО-ОЗДОРОВИТЕЛЬНЫЕ КЛАСТЕРЫ / REGIONAL POTENTIAL ANALYSIS / CLUSTER APPROACH TO REGIONAL DEVELOPMENT / CLUSTERS OF SMALL AND MEDIUM ENTERPRISES / SMES / RECREATION CLUSTERS

Аннотация научной статьи по социальной и экономической географии, автор научной работы — Suvaryan A., Manukyan I.

The article introduces the problem of the analysis of regional potential as an aim to identify the appropriateness of developing recreation cluster of small and medium enterprises in the Republic of Armenia. The authors highlight the methodology, according to which it is possible to prove the choice of a particular region for cluster development. As part of the research, the analysis of economic conditions of the region, as well as the analysis of its main determinants of competitiveness were conducted and presented in the article.

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Текст научной работы на тему «ANALYSIS OF REGIONAL POTENTIAL AS AN AIM TO DEVELOP SME CLUSTER SPECIALIZING IN RECREATION BASED ON THE CASE OF THE REPUBLIC OF ARMENIA»

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Санкт-Петербург: Экономическая школа, 2006. -275 с.

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- М.: ИНФРА-М, 2017. - 649 с. - ISBN: 978-5-16006502-1.

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19. Сытнков, И.А. Оценка эффективности системы управления затратами предприятия / И.А. Сытнков // Вестник ВГТУ. 2010. - № 9. - С. 133135.

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АНАЛИЗ ПОТЕНЦИАЛА РЕГИОНА С ЦЕЛЬЮ СОЗДАНИЯ САНАТОРНО-ОЗДОРОВИТЕЛЬНОГО КЛАСТЕРА МАЛОГО И СРЕДНЕГО БИЗНЕСА НА ПРИМЕРЕ

РЕСПУБЛИКИ АРМЕНИЯ

Суварян А.М.

д.э.н., профессор, заведующий кафедрой управления, бизнеса и туризма Российско-Армянский университет, Ереван, Армения

Манукян И.К.

студентка 4 курса по направлению "Менеджмент" Российско-Армянский университет, Ереван, Армения

ANALYSIS OF REGIONAL POTENTIAL AS AN AIM TO DEVELOP SME CLUSTER SPECIALIZING IN RECREATION BASED ON THE CASE OF THE REPUBLIC OF ARMENIA3

Suvaryan A.

Doctor of Economic Sciences, Professor, Head of the Department of Management, Business and Tourism Russian-Armenian University, Yerevan, Armenia

Manukyan I.

4th-year Bachelor student in Management Russian-Armenian University, Yerevan, Armenia

АННОТАЦИЯ

В статье рассматривается проблема проведения анализа потенциала региона для выявления целесообразности создания в стране санаторно-оздоровительного кластера малого и среднего бизнеса на примере Республики Армения. Авторы демонстрируют, по какой методике возможно обосновать выбор конкретного региона для создания в нем соответствующего кластера. В рамках исследования были также осуществлены и отражены в статье анализ экономического состояния региона и анализ основных детерминант конкурентоспособности.

3Данная статья была подготовлена в рамках гранта 18T-5B269 «Малое и среднее предпринимательство в регионах Республики Армения и разработка стратегии их территориального развития на основе кластерного моделирования»

ABSTRACT

The article introduces the problem of the analysis of regional potential as an aim to identify the appropriateness of developing recreation cluster of small and medium enterprises in the Republic of Armenia. The authors highlight the methodology, according to which it is possible to prove the choice of a particular region for cluster development. As part of the research, the analysis of economic conditions of the region, as well as the analysis of its main determinants of competitiveness were conducted and presented in the article.

Ключевые слова: анализ регионального потенциала; кластерный подход к региональному развитию; кластеры малого и среднего бизнеса; МСП; санаторно-оздоровительные кластеры.

Keywords: regional potential analysis; cluster approach to regional development; clusters of small and medium enterprises; SMEs; recreation clusters.

Introduction

Nowadays cluster approach to management of small and medium enterprises is considered as an efficient mechanism of economy development. As a result of intensive cooperation, cluster members contribute to the increase of positive synergy effect and the boost of economic growth of countries on local and global markets. According to Michael Porter, it is possible to develop clusters in any country. However, specialists should, first of all, conduct thorough analyses of the potential of countries and regions in order to decide which specific economic sectors to include into cluster models. [1, p.19]

That clusters have a tendency to be created well-prepared in advance or spontaneously is a given. Nevertheless, among clusters that survive in severe competition are the ones that were developed as a consequence of identification of social-economic, natural-resource, infrastructure, human and other potentials. This problem is of particular importance to countries that are in weak economic conditions. The point is that cluster development is time-consuming and requires considerable investments. Therefore, incomplete analyses of potential might lead to incorrect decision of which type of clusters to create. Accordingly, there is an obvious risk of developing an inaccurate cluster model. This, in turn, might lead to destructive repercussions, especially in case of weak economies.

Thus, today in theory and practice of cluster approach implementation it is essential to appropriately analyze the potential of countries and regions in order to identify, which specific fields should be included into the cluster model.

The aim of the research

Contribution of economic sectors 1

The authors set a goal to conduct analysis of regional potential to identify the necessity of cluster creation in Vayots Dzor region of the Republic of Armenia, which is famous for its warm mineral springs that have healing effect on human health. The reason why the case of Armenia was chosen are the following:

• Although cluster approach to development of SMEs is indicated as a priority area in state strategic programs, no cluster exists in the country;

• Several projects of cluster initiatives that have been developed for Armenia are too expensive and might require a long period of implementation;

• Existing clustering projects do not encompass the country's regional potential and concentrate on strengthening the capital city.

The objectives of the research

Conducting the research, the authors set and solved the following tasks:

• analysis of economic conditions of Vayots Dzor region of the Republic of Armenia;

• identification of the necessity to develop a cluster that specializes in recreation;

• analysis of main determinants of competitiveness of Vayots Dzor region.

Economic conditions of Vayots Dzor

Vayots Dzor region is rich with ancient churches and other historical, cultural and natural monuments. The mountainous terrain of the area includes three rivers. Being the least populated region of Armenia (with about 49.000 permanent inhabitants) Vayots Dzor encompasses 2310 km2. Let us list the economic sectors that contributed to the development of the region in 2018 (Table 1).

Table 1

The economic sector The contribution (billions of AMD)

Agriculture 22

Construction 21

Industry 0.028

Retail trade 0.0082

Services 0.007

Source: [2]

The contribution of Vayots Dzor (in %) into Armenia's economy in the year of 2018 is presented below:

• Agriculture - 2.5%;

• Construction - 2.4%;

• Industry - 1.4%;

• Retail trade - 0.6%;

• Services - 0.5%.

Agriculture (mainly animal raising, grape production, as well as production of fruits and vegetables) comprises a significant part of the economy. What comes to the region's industrial sector, it is mainly composed of production of bottled mineral water, wine, electrical equipment, fabricated metal products and carpets.

Development of recreation business in Vayots Dzor

Annually, Vayots Dzor is visited by approximately 50.000 tourists, and this number has a positive upward trend. [3] One of the main reasons of such interest to the region is Jermuk city, which is famous for its warm mineral springs that leave healing effect on human health. The water of Jermuk was used to get rid of various illnesses in Middle Ages. Noble Armenians used to heal their pains in a special pool, the remains of which were found during excavations in the end of the 19th century.

Currently, 8 hotels and 6 recreation centers in Jermuk. To those who are reluctant to stay at hotels, individual entrepreneurs and family businesses of Jermuk provide small resting places. As a part of the state "Program of Vayots Dzor development", the construction of 25 new hotels in different cities of the region (including Jermuk), as well as the renovation of 28 existing hotels were planned. Construction and renovation works are projected to finish in the second part of 2020. [4]

Not only are tourists of Jermuk given an opportunity to improve their health, but they also can visit one of the most ancient existing churches - Gndevank church (10th century). Annually, this monastery is visited by about 1.300 tourists. Apart from that, 42 historical and cultural monuments (39 of them are functioning) and 15 natural monuments (all are functioning) are situated in Jermuk. [5] Every year about 1.500 people visit these places. In the vast majority, there is no entrance fee for visiting the monuments.

Thus, it is obvious that the highest demand of local and foreign tourists is for Jermuk city and its healing water. Nevertheless, this factor is not enough to increase the economic strength of Vayots Dzor and thoroughly use its whole potential. Although recreation centers have been in operation for decades, SMEs still experience inconvenience in doing business. Local small and medium enterprises produce goods and services that are not sufficiently competitive. Moreover, the rate of unemployment in Vayots Dzor is quite high, despite of the fact that a considerable part of the unemployed is comprised of economically active population of working age. Consequently, it is reasonable to assume that there is a necessity to manage the work of independent SMEs of Vayots Dzor on a mutually beneficial basis. Working together within the cluster, small and medium enterprises will obviously reach positive synergy effect.

Based on the above-described concept, it is essential to observe the possibility of developing recreation cluster in Vayots Dzor with a nuclear center situated in Jermuk.

Analysis of main determinants of competitiveness of Vayots Dzor region

Undoubtedly, various determinants put influence on competitiveness of countries. [1, pp. 109-173] Let us create Porter's diamond model to reveal the region's potential to manage the work of its SMEs in a cluster and to find the main competitive advantages of Vayots Dzor in order to reveal the economic sectors that should be consolidated into the cluster.

1. Factor conditions

One of the main competitive advantages of the region is related to its natural resources, particularly warm mineral springs of Jermuk. Despite small budget, recreation centers of the city offer services of high quality throughout the year. Another competitive advantage

is that the Ministry of Territorial Administration and Infrastructure of the Republic of Armenia, in a joint project with "European Union for Armenia" significantly improved the quality of energy infrastructure (the project's implementation took 34 months and finished in 2019). [6] In the short-term perspective it is planned to use only alternative energy in Vayots Dzor. This will, undoubtedly, lead to an increase in Armenian ecotourism and leave a positive impact on the development of the cluster. However, in spite of good energy infrastructure, the region has difficulties with its road infrastructure. Due to the imperfections of the relief, many roads and junction points are bumpy, which greatly hinders the movement of goods and people in the region. Nevertheless, Regional Directorate of Va-yots Dzor is slowly solving this problem by allocating funds from state and regional budgets on renovation of roads. Finances for renovation of roads that are in critical conditions have been provided by the EU. [7]

Several cities of Vayots Dzor have a weak irrigation system - this problem refers to irrigation supplies, methods of irrigation and water itself. The Governor of the Vayots Dzor mentions this problem as a strong barrier to regional development. [5]

High unemployment rate is another major problem in Vayots Dzor. To overcome this difficulty, it is planned to create new workplaces in the sectors of agriculture, industry and hospitality. As a part of the "Program of Strategic Development of Vayots Dzor 20162025" it is projected to make one-time payments to the population. Apart from that, a special credit system for small and medium enterprises has been developed, and this system is permanently being improved. The people of the region have an opportunity to deepen their knowledge in SME management due to an active role of the "Fund Investment Support Center of Armenia" that provides thematic training sessions in various regions of the Republic of Armenia, including Vayots Dzor.

2. Related and supporting industries

It is essential to have connections between the cluster's nuclear SMEs (recreation centers) and firms from related industries, such as agriculture and wine-making. As clusters should be developed in several directions, it is hardly possible to foster the growth of recreation centers without strengthening SMEs from related and supporting industries. Over the past few years, an increase in construction and exploitation of guest houses has been recorded in several cities of Vayots Dzor, including Jermuk. [8]

In the year of 2019, "Visit Jermuk" information portal was created. This portal provides its visitors with information about tours within the city, between Jer-muk and other cities, as well as the attractions and events. [9] Tourists are given opportunities to choose from a wide range of thematic tours, such as trips to ancient churches, fishing, zip line or cable car rides, extreme hiking, helicopter ride or trips to the mountains. Eco tours and cultural tours are not available, however, a trip to warm springs with mineral healing water is provided. In spite of the existence of tourism portals, Vayots Dzor is not actively promoted as a tourist destination outside the country (in the CIS countries, Caucasus, EU).

As it was mentioned above, wine-making is one of the most developed fields in the region. The wine is

mainly produced in Areni village, which is included into the wine map of the world and is also a part of the wine route of Vayots Dzor. [10] There exist many cases when wine-making and tourism are linked within clusters. In case of the cluster of Vayots Dzor the role of wine producing SMEs should not be underestimated.

Although agriculture comprises a significant part of the region's economy, the system of production and distribution of agricultural products is quite weak. For instance, partnerships between clients and suppliers are unstable and non-permanent. This might be a barrier to the implementation of cluster approach to SME development, as clusters require long-term and reliable cooperation of its members who are consolidated around a specific aim.

3. Demand conditions

The interest to recreation centers of Jermuk is growing. However, such a significant determinant of competitiveness, as strong client demand to the quality of services, is not developed. This might be the reason why local SMEs do not have motivation to improve their performance.

4. Firm strategy and rivalry The existence of SMEs that specialize in recreation services should be considered as a strong competitive advantage. This factor is crucial, but not enough for cluster creation and development, as recreation centers are not witnessed to make active steps towards attraction and retention of clients due to the lack of market scale and the absence of programs of their joint development in Jermuk.

The above-described strengths and weaknesses of competitive determinants are presented in Table 2.

Strengths Weaknesses

Factor conditions + Warm mineral springs + Energy infrastructure of high quality (switch to alternative energy consumption in 2019) + Opportunities for workers to deepen business knowledge - Imperfection of irrigation system - Weak road infrastructure - Unemployment

Related and supporting industries + A remarkable increase in the activity of hospitality sector within the recent five years + Availability of "Visit Jermuk" information portal + Availability of various thematic tours in Jer-muk (trips to ancient churches, fishing, zip line or cable car rides, extreme hiking, helicopter ride, trips to the mountains, etc.) + Developed wine-making and availability - Weak promotion of the region by local tourism portals - Difficulties with production and distribution of agricultural products (including the lack of reliable partnerships between clients and suppliers)

Demand conditions + Growing interest of tourists to the region (mainly to Jermuk city and its warm springs with mineral healing water) - Weak client demand of tourists to the quality of recreation services and other services provided in the region

Firm strategy and rivalry + Availability of SMEs that specialize in recreation services - Weak rivalry of recreation centers - Absence of strategies for development of Jermuk as a recreation complex

Table 2

Analysis of regional potential as an aim to develop SME cluster specializing in recreation services in Vayots

Dzor (based on the Porter's Diamond model)

Source: developed by the authors

Apart from the four main determinants, there exist two additional significant determinants that are able to influence the competitive advantage of nations. Let us analyze them in more detail.

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5. Government

The Government of the Republic of Armenia actively contributes to the development of SMEs. The support is expressed in various forms like subsidizing, low-interest lending, training sessions and master classes from experts of "Fund Investment Support Center of Armenia", partnership UNICEF, USAID, AGBU. Priority areas are as follow: agriculture, infrastructure, industry, tourism, education. Although the Government does not highlight the necessity of development of recreation centers, it is obvious that the concept of recreation cluster does not contradict the strategy of Armenian Government and might even improve and strengthen it.

6. Chance

Chance is an unpredictable determinant that can radically change business and influence the competi-

tiveness of a country. In management theory such factors as natural disasters, wars, pandemics can be considered as chances. This determinant is highly relevant due to the recent outbreak of COVID-19. States apply various measures in order to fight against the invincible enemy, and the repercussions of these measures will undoubtedly leave destructive repercussions on world economy. Millions of people all over the world do not go to work and do not produce goods or services as they follow the rules of self-isolation. This problem is not the only negative consequence of the pandemic. Experts predict the approach of a devastating crisis, which will undermine economic prospects of countries. In such circumstances, governments should adapt principles of business management to the requirements of uncontrollable conditions of the external environment and should be able to recover economic indicators after crises.

Conclusions and proposals

The research shows that the potential of Vayots Dzor allows to develop an international SME cluster specializing in recreation services with a nuclear center

in Jermuk city. There is a high probability that the region's economic indicators as well as its strong determinants of competitiveness combined with qualified management will raise the development of Vayots Dzor to a higher level.

The methodology for the above-described analysis can be applied to regions of other countries as an aim to identify the potential in order to develop clusters of similar types.

The research provides a basis for further studies of the opportunity of recreation cluster development in the Republic of Armenia.

References

1. Портер, М. "Международная конкуренция. Конкурентные преимущества стран", Изд. Альпина Паблишер, 2016, 947 с.

2. Vayots Dzor region in numbers, 2019. 1 AMD = 0.0021 USD. [Electronic resource] Retrieved from: official website of Statistical Committee of the Republic of Armenia https://www.armstat.am/am/?nid=433

3. Социально-экономическое состояние региона Вайоц Дзор [Электронный ресурс] Режим доступа: официальный сайт Министерства территориального управления и инфраструктур Республики Армения http://vdzor.mtad.am/socio-economic-situation/

4. Отчет о результатах девятимесячной деятельности областного управления Вайоц Дзора и

губернатора Вайоц Дзора, 2018/2019 [Электронный ресурс] Режим доступа: официальный сайт Министерства территориального управления и инфраструктур Республики Армения http://vdzor.mtad. am/files/docs/43695.pdf

5. База административных данных муниципалитета Вайоц Дзор, 2018

6. AREVADZOR - «Enhancing SME competitiveness through promotion and wider use of sustainable innovative technologies» project. Retrieved from:

http://www.arevadzor.eu/im-ages/R2_CRIS_381861_AREVADZOR_PRDP_proje ct_04_EN_2019.pdf

7. Отчеты о результатах деятельности областного управления Вайоц Дзора и губернатора Вайоц Дзора [Электронный ресурс] Режим доступа: официальный сайт Министерства территориального управления и инфраструктур Республики Армения http://vdzor.mtad. am/socio-economic-situation/

8. Программа стратегического развития региона Вайоц Дзор 2016-2025 [Электронный ресурс] Режим доступа: официальный сайт Министерства территориального управления и инфраструктур Республики Армения http://vdzor.mtad. am/TZKrazm1/

9. Visit Jermuk [Electronic resource] Retrieved from: http://visitjermuk.am/

10. Vayots Dzor Wine Route [Electronic resource] Retrieved from: https://vayotsdzorwineroute.com/

ЗАРУБ1ЖНИЙ ДОСВ1Д РОЗВИТКУ МАЛИХ М1СТ I МОЖЛИВ1СТЬ ЙОГО ЗАПРОВАДЖЕННЯ

В УКРАШ!

Маркова Е.В.

аспгрант кафедри менеджменту та управлгння економгчними процесами, Мукач1вський державний утверситет

FOREIGN EXPERIENCE OF SMALL CITY DEVELOPMENT AND THE POSSIBILITY OF ITS

INITIATION IN UKRAINE

Markova E.

PhD student in the Department of Management and managing economic processes, Mukachevo State University

АНОТАЦ1Я

В статп розглянуто зарубiжний досвщ розвитку малих Micr високорозвинених кра!н £вропи i свпу, виокремлеш основш характеристики розвитку малих мют в цих крашах. Виявлено проблеми, що стриму-ють розвиток малих мют в Укрш'ш. Запропоновано заходи, необхщш для забезпечення позитивного ста-лого розвитку малих мют в украшських реалiях на основi зарубiжного досвщу.

ABSTRACT

The article examines the foreign experience of developing small cities in highly developed countries of Europe and the world, outlines the main characteristics of the development of small cities in these countries. Problems hindering the development of small cities in Ukraine have been identified. The measures necessary to ensure a positive sustainable development of small cities in Ukrainian realities based on foreign experience are proposed.

Ключовi слова: малi мюта, зарубiжний досвщ державна политика, розвиток.

Keywords: small towns, foreign experience, public policy, development.

Вступ. Сучасне мале мюто е цшсною соща-льно-економiчною системою, яка е частиною тери-торiальноï оргашзацп сустльства, народного гос-подарства i репонально1' системи розселення. На даному еташ розвитку в малих мютах мае мюце складна соцiально-економiчна ситуа^. Специфжа

i масштабнють проблем малих мiст, яш накопичи-лися тут в ходi трансформацiï нацiональноï еконо-мiки, формуе необхiднiсть нових пiдходiв до 1'х ви-рiшення. Cьогоднi система мюцевого самовряду-вання функцiонуe в умовах широкомасштабного реформування соцiально-полiтичноï та економiчноï

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