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| A Country in Transition
Ukraine is now a country in transition after 70 years of central planning,
there was little understanding of supply and demand forces, and even less
of how small businesses can revitalize the economy. Small and medium sized
enterprises will be key in creating jobs and commercializing technology
developed in research and development (R&D) centers.
The BID Program
The International Technology Research
Institute (ITRI) at Loyola College
in Baltimore is managing a pilot program funded by USAID to establish the
Business Incubator Development (BID) Program in the two largest cities
of Ukraine: Kiev and Kharkiv. Respected institutions have partnered with
Loyola as the basis of the incubators. In Kiev, the International Management
Institute manages the small business incubator. In Kharkiv, the partner
is the highly successful Institute of Single Crystals. There are plans
to expand the incubator concept within 18 months to other Ukrainian cities
and rayons.
The experienced Ukrainian staff has backgrounds in science, technology,
and business development. The program has strong support from the Ukrainian
Government, State Innovation Fund, Renaissance Military Program and local
organizations. This support will maximize the potential for success of
the BID Program and help leverage its resources.
Loans and loan guarantees for entrepreneurs may be awarded based
on the viability of their business and could qualify for loans of between
$5,000 and $50,000 based upon the satisfactory completion of milestones.
Micro-credit loans (up to $5000 each) - loan funds to support
micro-entrepreneurs who have demonstrated the potential to expand a business.
Senior management of the ATI company visited the BID Program in
September to discuss possible joint ventures with BID client companies.
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The purpose of the BID Program is to accelerate the growth of small
businesses in the Ukraine thus creating wealth and job opportunities and
improving the overall economic situation. To help facilitate the growth
of the small business technology sector, small business incubators (SBIs)
have been established in the Ukraine's two largest cities: Kiev and Kharkiv.
Incubator services that are being offered include:
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Providing Ukrainian companies with assistance in business plan development,
proposal preparation and general business consulting services.
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Delivering training programs in management, marketing, and finance for
Ukrainian incubator staff and client entrepreneurs
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Assisting the Ukrainian companies to access financing and commercial opportunities
in the Ukraine and the U.S. and create joint ventures
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Evaluating the technical and commercial potential of companies business
projects
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Marketing research leading to competitive product development
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Assisting companies in the technology development, management, and commercialization
process
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Seeking and negotiating licensing opportunities for companies that can
lead to strategic partnerships
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Assisting companies in the export of technology-related products
BID Program incubators provide individual consulting as a service
to clients.
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| Harnessing Intellectual Talent
Entrepreneurs of all professional backgrounds are welcome to participate,
but there is a special focus on the technology and light manufacturing
sector, thus, there is an intent to identify those scientists and engineers
who have an entrepreneurial flair, and have developed technologies with
commercial potential around which to build a successful company. For those
who need management assistance, the incubator will organize a management
team to work with the technology developers. This will enable the entrepreneur
to remain in the environment where their skills can be best utilized.
Science and technology are of high caliber in the Ukraine and was supported
by the government at a high level. However, commercialization of ideas
is in an embryonic state due to the lack of knowledgeable people and resources
to act as agents of change. The country has a set of chronic shortages
that the development and growth of small businesses could satisfy, if only
its intellectual assets were put to work.
Growing a Small Business Sector
The BID Program is a key component in the growth of a private small
business sector that will produce economic growth, jobs, and prosperity,
while addressing identified needs of the country.
Small business incubators in the Ukraine will contribute to the development,
vitality, and sustainability of the Ukraine's small business sector. The
incubators are helping to build public recognition, acceptance, understanding,
and support of the vital role small businesses will have on the growth
of the Ukrainian economy. The focus is on creation and sustained operations
of successful incubators, which naturally involves sustained operations
of successful small businesses. The BID Program will create quality jobs
in the Ukraine through:
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Accessing financing and business support services to stimulate the small
business sector and produce sustainable growth
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Supporting small business development in key industry sectors, such as
fuels and energy, agriculture, medical and health, and pollution mitigation
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Training entrepreneurs in business management and marketing to create supporting
emerging private businesses
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Facilitating partnerships with U.S. corporate business interests; and
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Helping create small commercial businesses out of the defense industries
BID will initially focus on the technology and light manufacturing sector
because of the growth opportunities this sector offers for economic development.
The BID Program is working with select Ukrainian banks for business loans
by providing loan guarantees. The banks will be involved in the selection
and evaluation process and have agreed to co-fund select projects presented
by the incubators. This will help entrepreneurs and Ukrainian financial
institutions begin to build a level of trust and confidence in working
with each other.
Many successful ventures have been founded by teams of entrepreneurs,
and one of the services to be provided by BID Program will be to encourage
the formation of multidisciplinary teams of founders with expertise in
marketing, finance, and other business issues as well as technical ones.
A series of workshops will also be organized at which small businesses,
including incubator clients, seeking financing can present their business
plans to potential investors. |
| The Ukraine Coordination Office (UCO) is located at the International
Management Institute. The UCO is responsible for management of the two
incubators, including training their staffs and operational procedures.
Contact information:
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| The partner for the KievSBI is the
International Management Institute, IMI, whose General Director is
Dr. Bohdan P. Budzan. The IMI is a respected business college offering
Master of Business Administration degrees to Ukrainian students. The KievSBI
was created as a division of IMI.
Contact information:
Signing the contract to operate the KievSBI in January 1998. Dr.
Bohdan Budzan (l) signed for the International Management Institute, and
Dr. Duane Shelton signed on behalf of Loyola College.
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| The partner organization for the KarkivSBI is the Institute of Monocrystals.
Also participating as partners to help with the training is the Kharkiv
Polytechnic University. The Institute of Monocrystals is known world-wide
for its excellent research and development of products. The Institute has
been one of the most successful organizations in Ukraine in transitioning
to market economy. The U.S. Department of Energy (DOE) has selected the
Institute to serve as a node on a new high-speed Internet connection. KharkivSBI
will have access to this connection, and its clients will be able to utilize
the link.
Contact information:
Web Site:
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The seminar announcing the opening of the KharkivSBI. Kim Vazira,
a Peace Corps volunteer, represents the BID Program in Kharkiv. (center). |
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Greg Huger, Director of the USAID mission to Ukraine, Belarus, and
Moldova, delivering the keynote address at the KharkivSBI seminar in February.
Dr. Boris Grinyov, Director of the Institute for Single Crystals and Deputy
Minister of Science and Technology, is on the front row (l) of the picture
at right.
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Ukraine
BID Program 
