Analytical and statistical information on innovations

Analytical and Statistical Information on Innovation Activities of Luhansk Oblast

Luhansk oblast is marked by the insufficient level of innovation activities, which is manifested in paucity of companies that can initiate active innovations and small percentage of innovative products in relation to the total production.

The State Statistics Service of Ukraine in Luhansk oblast provides the following information: for the period of 2016–2018, 61 companies were engaged in innovation activities, which amounted to 21.8% of their total number. The number of such companies increased by 79.4%compared to the previous period of 2014–2016.

On the industrial side, during 2018, 5 enterprises were engaged in innovation activities, which constitutes 7% of the total surveyed enterprises in Luhansk oblast with an average number of employees of 50 people or more. Of these, 2 enterprises allocated funds for their own internal research and development; 2 enterprises purchased machines, equipment, and software; 1 enterprise acquired external knowledge; 2 enterprises developed other areas. The total sum of funds allocated for the innovation activity in 2018 amounted to UAH 16.2 million (20% less than in 2017).

In 2018, 4 industrial enterprises introduced innovations (products and/or technical processes). Of these, 3 enterprises introduced new technical processes (including new or significantly improved low-waste and resource-saving technologies – 1 unit); 4 enterprises introduced innovative products (goods and services), 3 of which launched new products to the market.

In 2018, the industrial enterprises in the oblast showed the increase in the amount of introduced new technical processes (by 10 times compared to 2017), in total up to 41 units, including 1 unit of new or significantly improved low-waste and resource-saving technology, and an increase in the number of new innovative products (goods and services) (by 11 times compared to 2017) in total up to 120 units, including 41 units of product which are new to the market.

In 2018, 5 enterprises, which introduced innovative activities, sold their innovative products (goods and services). Of these, 3 enterprises sold products which are new to the market and5 enterprises sold products being new for their business area.

The overall total volume of innovative products sold (goods and services) in 2018 amounted to UAH 47.3 million (0.3% of the total sales volume (goods and services), including new products for the market – UAH 20.5 million and new products for the enterprises – UAH 26.8 million. Compared to 2017, the volume of innovative products sold (goods and services) increased by 3.6 times in 2018.

Training of scientific personnel

Mainly, highly trained scientific and academic employees gain their qualification during postgraduate and doctoral studies. Luhansk oblast accommodates 5 higher educational institutions (Luhansk National Agrarian University, Luhansk State Medical University, Luhansk Taras Shevchenko National University, Luhansk State University Of Internal Affairs, and Volodymyr Dahl East Ukrainian National University). Of these, 4 institutions provided postgraduate studies and trained 224 students, and 3 higher educational institutions provided doctoral studies and trained 18 doctoral students in 2018.

Activities of research institutions of Luhansk oblast

For the year 2018, the State Statistics Service of Ukraine provides information about 12 organizations which conducted research and development activitiesin Luhansk oblast compared to 15 organizations in 2017.

The number of academic specialists decreased from 350 (in 2017) to 301 persons(in 2018). Of these, 248 specialists have higher education and the following qualifications: DSc in12 persons, PhD in 33 persons, Master’s degree in173 persons, and Bachelor’s degree in 30 persons. A total of 53 employees have another educational levels (except higher education). Of this number of scientists,56% are research scientists, 5% are technicians, and 29% are support staff.

As for the breakdown by a field of study, the proportion is the following: 46% of academic specialists opted for natural sciences, 23% – for engineering sciences, 12% – for medical sciences, 10% – for social sciences, and 9% chose agricultural sciences.

Internally allocated funds for scientific research and development in 2018 amounted to UAH 36.9 million, which is UAH 7.5 million more than in 2017. As for the funding sources, 62% of the expenses are covered by internal funds, 16% – by business sector organizations, 13% – by state budget, and 9% – by foreign investors.

The breakdown of allocated funds for research and development by a field of study is as follows: 48% of funds were allocated for natural sciences, 24% – for medical sciences, 15% – for agriculturalsciences, 10% – for technical sciences,and 3% – for social sciences.

Over the course of 2018, gross expenses for scientific research and development amounted to UAH 37.0 million. The breakdown by a type of expenditure is as follows: 49% – labor costs, 37% – other current costs, 14% – capital expenditure (including equipment – 13%), and co-contractor costs – 0.4%.

As for the breakdown by a type of work, 48% of the main expenditures accrue to applied scientific researches and 44% – to scientific and technical developments. Only 8% of costs accrue to fundamental scientific researches.

Russian-Ukrainian armed conflict and the temporary occupation of certain territories of Luhansk oblast can be listed among the factors that have a negative impact on the development of innovative products. As a result of the conflict, the region lost many innovative and science-intensive industrial enterprises.

Most industrial enterprises, which remained on Ukrainian government-controlled territory, reduced their production volumes significantly or completely due to the added complexity of the technological and production process, energy and logistic problems, and trade restrictions introduced by Russia.

Another factor that negatively impacted the production of innovative products is the outflow of highly qualified and scientific personnel.

Among the factors that have a positive impact on the production of innovative products is the operation of international organizations in the region that provide grant and advisory support to the local enterprises.

The following factors and measures could have a positive impact and stimulate innovation activity in the industrial sector:

-        Fostering scientific and innovative cooperation between the state/non-state sectors of science, higher educational institutions/research institutions and the real sector of the regional economy

-        Supporting research, as one of the pillars of innovative capacity, and creating effective infrastructure that will contribute to the transformation of research results into a commercialization product

-        Promoting production of competitive industrial products

-        Creating conditions for innovative infrastructure development in the region;

-        Creating clusters in such spheres as education, IT science and business, industry, and agriculture

-        Identifying priority areas as a part of smart specialization strategy, which have the potential to generate innovations

-        Reducing the outflow of highly qualified and scientific personnel

-        Expansion of funding sources

-        Establishing close cooperation and sharing best practices with foreign companies

-        Providing intermediate-term loans with lower interest rates to innovative enterprises