Strategy for the development of small and medium-sized businesses// Mariupol city

A strategy for the development of small and medium-sized businesses in Mariupol was developed and adopted in 2019.

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Due to its historical characteristics, industrial Mariupol lags behind other Ukrainian cities in terms of small- and medium-sized enterprises (SME) development.

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Goals

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The main goals of the SME support programme are the following:

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1. Promoting entrepreneurship and being a role model of the entrepreneur through events and educational programmes in schools and universities. Development of support tools and programmes for developing existing SME – easy access to knowledge and information, technology and innovation, and consulting. 
2. Development of activators – market niches and industries in trade, hospitality (HoReCa), construction, services, creative industries and manufacturing.
3. Creating a favourable external environment that stimulates the emergence and development of SME: reducing administrative barriers, creating tax incentives and financial support mechanisms, and developing incubators and hubs.

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Analysis

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In the process of developing the Strategy, several starting points and approaches to the problem of developing small and medium-sized businesses were used:

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1. Analysis of European experience - research of best practices in the EU and the Small Business Act for Europe (SBA).
2. Study of the conditions for the development of small and medium-sized businesses in Mariupol.
3. Analysis of benchmarks for Mariupol both within Ukraine, the European Union and the world.
4. Focus groups with city businessmen, SME representatives, officials, deputies, journalists and public figures.
5. Analysis of possible ‘soft’, ‘hard’ and ‘infrastructure’ interventions in accordance with Asian practices of SME development.

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Research and focus groups have identified three sets of features that threaten the effective development of SMEs:

1. Culture: lack of an entrepreneurial culture, the associated mindset and prestige of this type of activity; negative attitudes towards entrepreneurs, the prestige of working at a factory and the lack of role models of successful entrepreneurs in the city.
2. Activators: A range of market factors, niches, and industries traditionally occupied by SMEs are underdeveloped: trade, hospitality, construction, creative industries, tourism, etc.
3. Support mechanisms: There are practically no systemic support mechanisms for SMEs.

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Offer

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The SME development strategy in Mariupol includes three strategic pillars:

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1. Culture - to stimulate an entrepreneurial culture in the city.

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Goals:

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• Promotion of entrepreneurship: to ensure the growth of support and positive perception of entrepreneurship among the city's residents.
• Changes in education: to organise entrepreneurship and related skills training at all stages of education by 2021.
• Assist in creating entrepreneurial communities (general and thematic) in Mariupol.

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Methods:

2. Activators - to implement activator projects for SMEs.

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Goals:

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• Localisation of procurement: to increase the current level of localisation of procurement by local authorities and businesses.
• De-shadowing of business: to create equal conditions for all and provide tools to support white businesses.
• Activation of market niches: to stimulate the creation of new SMEs by activating market niches that can potentially develop the city's economy.

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3. Support mechanisms - to create quality and developed support mechanisms.

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Goals:

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• Establish an SME Centre responsible for coordinating support for SMEs in the city.
• Launch support programmes for new and existing SMEs.
• Reduce administrative barriers - create a single window (hotline, training, etc.).

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Implementing the initiatives will help create all the conditions for a full-fledged entrepreneurial journey.

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What's next

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In 2019, the city council approved a targeted programme based on the strategy and established the SME Support and Development Centre.

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In 2019-2020, we worked with the city council, with support from USAID Ukraine, to develop the Centre and its team:

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1. Helped to open the SME centre: wrote the statute, regulations, business processes, organisational structure and other documents necessary for its launch.
2. Conducted a competition for the centre's director and key personnel positions.
3. Helped to develop an operational plan and business model.
4. Conducted training for the centre's staff, including workshops and study visits to Lviv and Ivano-Frankivsk to learn from business support experience.
5. Developed a functional zoning of the Centre's building and a list of logistical support.

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The Centre received a special award as part of the Best Local Government Practices 2021 competition.

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Team

Maks Yakover - founder of Big City Lab urban bureau

Viktoria Titova - CEO of Big City Lab urban bureau

Kyrylo Kryvolap - CEO of the Centre for Economic Recovery, Advisor to the Prime Minister of Ukraine