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The Current State and the Prospects of Innovative Development of Export-Organized Ukrainian Industrial Enterprises
Tetiana Protsiuk 1, Oksana Henyk 2, Yaroslava Moskvyak 3, Oksana Protsevyat 4
1 Academy of Financial Monitoring
24 Biloruska Street, Kyiv, 04050, Ukraine
2 National Forestry University of Ukraine
103 General Chuprynka Street, 79057, Lviv, Ukraine
3 Lviv Polytechnic National University
12 Stepana Bandery Street, Lviv, 79013, Ukraine
4 Institute of Regional Research named after V. I. Dolishniy of the NAS of Ukraine 4 Kozelnytska Street, Lviv, 79026, Ukraine
DOI: 10.22178/pos.38-3
JEL Classification: L53, O32
Received 01.08.2018 Accepted 15.09.2018 Published online 20.09.2018
Corresponding Author: Tetiana Protsiuk agat-lviv@ukr.net
© 2018 The Authors. This article is licensed under a Creative Commons Attribution 4.0 License i^O—
Abstract. The purpose of the article is to study the current state and the prospects of innovative development of export-oriented industrial enterprises of Lviv region and of Ukraine on the basis of modern theory and practice in the field of economics and enterprise management. It is established that the innovative activity of Ukrainian industrial enterprises is at a rather low level with the prospect of further reduction. The key obstacles and difficulties arising on the way of innovative development of Ukrainian export-oriented industrial enterprises are highlighted. The ways of solving the problems of innovative development of export-oriented industrial enterprises in Ukraine are offered. The prospect of further research in this area is the study of key aspects of the development of export-oriented industrial enterprises with the prospect of development and increases their export potential.
Keywords: innovation; development; industry; enterprise; export; exports potential; Lviv oblast; Ukraine.
INTRODUCTION
The modern development of the Ukrainian economy may not be imagined without innovation, because these innovations touch the different spheres of economic activity at different levels of functioning. Being particularly noticeable, such phenomena may be observed in the industry, because the innovative development of this type of economic activity is the key to the success of the functioning of industrial enterprises.
The following Ukrainian scholars-economists, such as O. Amosha [1], L. Kalinichenko [6], L. Salomatina [1], P. Khariv [7], O. Khmelevskyy [8], and others have carried out the fundamental research in the field of innovative development of export-oriented industries at micro, meso- and macro levels. The outline of the
research issue is also presented in the writings of other (foreign) scholars, in particular A. Eggert [3], R. Varadarajan [15], J. Johanson [5] and other.
At the same time, paying tribute to the high level of modern scientific achievements, we note that the issues (separate problem aspects) regarding the current state and perspectives of innovative development of export-oriented industrial enterprises in Ukraine are not fully studied. This is especially true for export-oriented industrial enterprises of the Lviv region.
The purpose of the article is to study the current state and prospects of innovation development of export-oriented industrial enterprises of Lviv region and Ukraine on the basis of modern theory and practice in the field of economics and enterprise management.
RESULTS AND DISCUSSION
It is known that today in the world, including Ukraine, there is a significant demand for hightech products. At the same time, the research confirms the significant dependence of export of products on its innovative characteristics. Therefore, in order to increase the level of export of Ukrainian products abroad, first of all, it is necessary to pay attention to its innovative characteristics, and how much it can meet the needs of foreign markets.
It is revealed that the key characteristic features of export-oriented industrial enterprises are their export and innovation-investment capacity. Moreover, export capacity depends on the level of competitiveness, production, financial and export potential of the enterprise [8].
Today, the path of Ukrainian enterprises to export of products is endowed with numerous obstacles and difficulties, the main place among which occupy the following features [4]:
- the difficulties of ignorance of foreign markets;
- the problems of adaptation to new markets;
- the unknown information about Ukrainian products abroad;
- the low level of activity of Ukrainian producers;
- non-compliance with standards and certification.
In order to minimize the risks of economic and social instability that arose in our country today, as well as to create the conditions and promote the stability of export growth of Ukrainian products (including industrial ones), the Export Strategy of Ukraine was developed: the road map of strategic trade development 2017-2021 [10]. In the context of the implementation of this strategy, it is envisaged to achieve the following main strategic objectives as [10]:
1) to create the favorable conditions for the stimulation of trade processes and the development and the implementation of innovation in the context of export diversification;
2) to ensure the development of services in support of business and trade, which will ultimately increase the competitiveness of participants in foreign economic relations (including small and medium enterprises);
3) to promote the skills and competences of participants in foreign economic relations.
In addition to the above, in order to overcome the problems of innovative development of export-oriented industrial enterprises and to pro-
vide the favorable conditions for an innovative environment in which they will operate in the future, it is proposed to undertake a number of further actions [1]:
1) to promote the innovative development both in Ukraine as a whole and in its regions directly in accordance with the developed programs, in particular the program "Horizon 2020" [2];
2) to provide the regional management of the innovation development as a result of interaction with market institutions, which will allow not only to establish further changes that will take place in the market, but also significantly increase the level of competitiveness of these regions, including the economic entities operating there;
3) the geographic diversification of exports of products with high added value through the development and the implementation of new technological chains, referring to the needs of the EU market;
4) to promote the integration not only in European, but also in the world economic space through the development of transnational business;
5) to increase the level of financing of innovation activity.
However, the improvement of the processes of the innovation development of industrial enterprises, in particular export-oriented, requires the introduction of a specially developed system of incentives, which would give a high level of efficiency of the results from the operation of such enterprises. Therefore, in order to solve such a problem, it is necessary, first of all, to improve the existing system of financing by the state on the innovative development of enterprises, including industrial [7].
On the basis by [6], it is established that the state regulation and stimulation in the innovation sphere should do the following:
- promote the development of science and its institutions;
- ensure the development of human capital;
- ensure the participation in the joint innovation programs;
- implement the state orders for joint research and development;
- make the financial incentives for innovation;
- promote attraction of the foreign investments.
Researches show that in the structure of the activities of industrial enterprises, innovation activ-
ity occupies a prominent place. Thus, the number of industrial enterprises in Ukraine engaged in innovation activity is about one fifth of the total number of the industrial enterprises. In Lviv oblast, a similar situation is observed, but unlike the overall Ukrainian dynamics, the share of industrial enterprises engaged in innovation activities tended to increase (except for a slight reduction in 2014 by 0.2 %) - from 13.2 % in 2011 to 20.6 % in 2016 [14].
With regard to the absolute values of dynamics, during 2011-2016, both in Ukraine and in the Lviv region, the number of industrial enterprises engaged in innovation activity decreased by almost 2.0 and 1.6 times in 2016, comparing to the beginning of the analyzed period [14].
The largest number of industrial enterprises in the Lviv region in the structure of innovative activities was involved in the purchase of machinery, equipment and software, but with the beginning of the analyzed period, it has decreased by 12 units to the number of 57 industrial enterprises in 2016 [14].
The analysis of statistical data for 2011-2016 confirms the situation of a non-profit, but a sharp decline in the number of the industrial enterprises that implemented the innovations both in Ukraine (by 1.8 times) and in the Lviv region (by 1.3 times) in 2016, comparing to the beginning of the analyzed period (Table 1).
Table 1 - The dynamics and the structure of the number of industrial enterprises that implemented the innovations
2011 2012 2013 2014 2015 2016
unit % unit % unit % unit % unit % unit %
Ukraine
Totally 1327 100,0 1371 100,0 1312 100,0 1208 100,0 723 100,0 735 100,0
Those that implemented the innovative processes 677 51,0 703 51,3 665 50,7 459 38,0 400 55,3 526 71,6
Those that are low-waste, resource-saving 605 89,4 598 85,1 557 83,8 141 30,7 155 38,8 235 44,7
Those that introduced the innovative species 731 55,1 704 51,3 683 52,1 600 49,7 414 57,3 529 72,0
Those that are new at the market 184 25,2 166 23,6 171 25,0 137 22,8 114 27,5 166 31,4
Lviv oblast
Totally 74 100,0 81 100,0 84 100,0 99 100,0 61 100,0 58 100,0
Those that implemented the innovative processes 38 51,4 49 60,5 42 50,0 37 37,4 44 72,1 46 79,3
Those that are low-waste, resource-saving 33 86,8 42 85,7 37 88,1 8 21,6 11 25,0 22 47,8
Those that introduced the innovative species 37 50,0 43 53,1 47 56,0 42 42,4 27 44,3 45 77,6
Those that are new at the market 12 32,4 8 18,6 17 36,2 10 23,8 10 37,0 17 37,8
The source: based on Statistical Information State Statistics Service of Ukraine and Main Department of Statistics in Lviv Oblast [9, 14]
In particular, a significant decrease in the number occurred among the industrial enterprises that implemented the low-resource and the resource-saving innovations. Thus, according to all-Ukrainian standards, the number of such enterprises has decreased by 2.6 times, and in the Lviv region - only by 1.5 times.
The explanation of the situation of reducing the level of innovation activity of industrial enterprises, including industry, as a type of economic activity in general, is the emergence of diverse
obstacles. In particular, the defining position in the list of obstacles is:
1) the economic and political instability in the state;
2) the migration of highly educated and skilled scientists and youth;
3) the insufficient development of the innovation infrastructure in the state;
4) the low level of financing of innovations;
5) the insignificant support of the investment funds, caused by the low level of development of the regulatory system and the taxation of their activities.
In the structure of innovation costs of industrial enterprises both in Lviv oblast and in Ukraine in general, during 2011-2016, the cost of purchasing machines, equipment and software was
prevalent. However, in 2016, unlike the national values, where their share in the structure of innovation costs increased by 12.2 %, the share of innovative costs for the purchase of machinery, equipment and software in the Lviv region decreased by 14.9 % comparing to the beginning of the analyzed period (Table 2).
Table 2 - The dynamics and the structure of expenses of industrial enterprises in directions of their innovation activity_
2011 2012 2013 2014 2015 2016
th. hrn % th. hrn % th. hrn % th. hrn % th. hrn % th. hrn %
Ukraine
Total expenses 14333891,9 100,0 11480562,8 100,0 9562626,0 100,0 7695892,3 100,0 13813674,4 100,0 23229458,1 100,0
In particular:
The
internal 833285,7 5,8 965166,5 8,4 1312054,4 13,7 1221435,6 15,9 1834084,6 13,3 2063744,9 8,9
GDR
The
external 246631,0 1,7 231111,6 2,0 326385,8 3,4 533104,2 6,9 205377,3 1,5 394049,0 1,7
GDR
The
purchase of machinery, equipment and 10489087,2 73,2 8051762,9 70,1 5546329,0 58,0 5115338,1 66,5 11141256,4 80,7 19829026,5 85,4
software
Other
outside 324701,6 2,3 47043,7 0,4 86978,8 0,9 47235,4 0,6 84909,9 0,6 64212,4 0,3
knowledge
Other expenses 2440186,4 17,0 2185478,1 19,0 2290878,0 24,0 778779,0 10,1 548046,2 4,0 878425,3 3,8
Lviv oblast
Total expenses 162676,8 100,0 280614,4 100,0 257053,9 100,0 219754,3 100,0 277796,2 100,0 429278,9 100,0
In particular:
The
internal 7454,7 4,6 9053,5 3,2 7735,6 3,0 13744,6 6,3 35825,3 12,9 35875,3 8,4
GDR
The
external 414,6 0,3 1399,0 0,5 7983,8 3,1 3103,2 1,4 12748,6 4,6 12667,4 3,0
GDR
The
purchase of machinery, equipment and 148192,8 91,1 259954,9 92,6 232494,4 90,4 149875,6 68,2 202756,6 73,0 327293,6 76,2
software
Other
outside 221,8 0,1 268,1 0,1 578,7 0,2 219,2 0,1 1464,9 0,5 559,5 0,1
knowledge
Other expenses 6392,9 3,9 9938,9 3,5 8261,4 3,2 52811,7 24,0 25000,8 9,0 52883,1 12,3
The source: based on Statistical Information State Statistics Service of Ukraine and Main Department of Statistics in Lviv Oblast [9, 14]
Regarding the financing of innovative activity of the industrial enterprises, the largest share in the structure of the volume of financing of innovation activity of the industrial enterprises takes funds from their own sources. However, in 2016, the share of these sources of financing for innovative activity of industrial enterprises of Lviv Oblast decreased by 8.6 % comparing to 2011, as opposed to the Ukrainian indicator, where a significant increase in the share of such sources of
Researches show that in Ukraine, in particular in the Lviv region, there is a fairly low share of the
funding was observed for 41.9 % (Table 3). The second place in the structure of sources of financing is taken by loans, which are gaining in popularity among the industrial enterprises of the Lviv region, the increase in their share by 16.0% in 2016 is the evident, comparing to the beginning of the analyzed period. Ukraine has the opposite trend where there is a sharp decline in the share of these sources of financing innovative activity (by 35.6 % in 2016, comparing to 2011).
volume of sales of innovative products in the structure of the total volume of the industrial
Table 3 - The dynamics and the structure of innovation activity financing of industrial enterprises
2011 2012 2013 2014 2015 2016
th. hrn % th. hrn % th. hrn % th. hrn % th. hrn % th. hrn %
Ukraine
Total amount of funding 14333891,9 100,0 11480562,8 100,0 9562626,0 100,0 7695892,3 100,0 13813674,4 100,0 23229458,1 100,0
in particular from the followin g sources:
Own 7585550,7 52,9 7335852,7 63,9 6973435,8 72,9 6540272,0 85,0 13427034,7 97,2 22035970,7 94,9
National budget 149169,4 1,0 224256,1 2,0 24659,6 0,3 344063,7 4,5 55141,2 0,4 178965,0 0,8
Local budgets 12261,1 0,1 17591,6 0,2 157665,0 1,6 5729,0 0,1 38361,9 0,3 99159,4 0,4
Extra budgetary funds 491,0 0,003 25,4 0,0002 2171,0 0,02 32855,2 0,4 1403,0 0,0 - 0,0
Ukrainian investors 45386,2 0,3 154461,5 1,3 123749,0 1,3 8197,1 0,1 74277,6 0,5 134385,5 0,6
Foreign investors 56870,6 0,4 994783,7 8,7 1253193,0 13,1 138688,0 1,8 58633,0 0,4 23397,8 0,1
Credits 5489485,7 38,3 2407795,2 21,0 630197,8 6,6 561149,6 7,3 113742,0 0,8 626018,5 2,7
Other 994677,2 6,9 345796,6 3,0 397554,8 4,2 64937,7 0,8 45081,0 0,3 131561,2 0,6
Lviv oblast
Total amount of funding 162676,8 100,0 280614,4 100,0 257053,9 100,0 219754,3 100,0 277796,2 100,0 429278,9 100,0
in particular from the followin g sources:
Own 146669,8 90,2 261419,4 93,2 213668,2 83,1 183234 83,4 206605 74,4 349930 81,5
National budget 831,5 0,5 830 0,3 - - - - 25817,2 9,3 171,1 0,04
Local budgets - - 701 0,2 6113,8 2,4 160 0,1 100 0,04 1044 0,2
Extra budgetary funds - - - - - - - - - - - -
Ukrainian investors 5319,7 3,3 - - - - 2504,7 1,1 11069 4,0 9000 2,1
Foreign investors 9659,8 5,9 - - - - - - - - - -
Credits 196 0,1 17664 6,3 37228,9 14,5 27399,6 12,5 34205 12,3 69133,8 16,1
Other - - - - 43 0,02 6456 2,9 - - - -
The source: based on Statistical Information State Statistics Service of Ukraine and Main Department of Statistics in Lviv Oblast [9, 14]
products sold (does not exceed 3.2 % for the entire analyzed period) (Table 4). As for the implementation of innovative products abroad, in Ukraine, the share of the volume of sales of innovative products in the volume of the realized in-
novation products increased significantly - in 2016 by 17.2 %, as comparing to 2011. Instead, in the Lviv region, the opposite trend is observed - there was a fall in the share by 7.7 %.
Table 4 - The dynamics and the structure of volumes of t he realized innovat ive products
2011 2012 2013 2014 2015
th. hrn % th. hrn % th. hrn % th. hrn % th. hrn %
Ukraine
Volume of the sold industrial products 1305308000,0 100 1367925500,0 100 1322408400,0 100 1428839100,0 100 1776603700,0 100
Volume of the
realized innovative 42386722,5 3,2 36157725,6 2,6 35891639,7 2,7 25669001,9 1,8 23050092,9 1,3
products
Including the volume of the implemented innovative products beyond Ukraine 12630608,5 29,8 13354903,2 36,9 16053359,7 44,7 7486442,7 29,2 10843801,4 47,0
Lviv oblast
Volume of the sold industrial products 32392240,1 100 34873983,9 100 34620468,3 100 39584498,4 100 58501981,4 100
Volume of the
realized innovative 447431,6 1,4 658089,2 1,9 849489,8 2,5 731914,2 1,8 1193855,9 2,0
products
Including the volume of the implemented innovative products 80853,5 18,1 67723,3 10,3 71775,5 8,4 94716,4 12,9 123443,3 10,3
beyond Ukraine
The source: based on Statistical Information State Statistics Service of Ukraine and Main Department of Statistics in Lviv Oblast [9, 14]
According to the researches carried out by [1] one of the key reasons of the low level of sales of innovative products is the low demand for these products both in the domestic and in the external market.
It is clear from the mentioned above that such a situation not only acts as a factor in reducing the competitiveness of the innovative products, but it is also a major problem in the development of the export potential of the industrial enterprises engaged in the innovation activities and innovations.
CONCLUSIONS
Consequently, on the basis of the research of the theory and practice of the current state of innovation development of the export-oriented industrial enterprises of Lviv region and Ukraine as a whole, it was established that the innovative activity of Ukrainian industrial enterprises is at a rather low level with the prospect of the further reduction.
The prospect of the further research in this area is the research of key aspects of the development of the export-oriented industrial enterprises with the prospect of the development and the increase of their export potential.
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