Expert opinions, Interviews

Denis Munshtukov: Clusters increase productivity of firms and industries

ZETO electrical equipment plant is the anchor enterprise of the electrical engineering cluster in the Pskov Region, which includes about 19 electrical engineering facilities in Velikiye Luki and Pskov and employs about 5,000 people. The cluster also includes a university, two technological and industrial infrastructure facilities, and one financial company. ZETO General Director Denis Munshtukov shared his ideas about the cluster’s development.

– What is the electrical engineering cluster’s impact on the regional economy?

 Clusters are a key structural element of the strategy to improve the competitiveness of the national and regional economy and introduce innovative technologies. Territorial integration of technologically and economically interconnected enterprises improves the logistics for their products and leads to an additional synergy effect from combining the regional strategy with the local companies’ competitive advantages.

Small and medium-sized enterprises’ economic sustainability significantly increases within the cluster, as their capabilities for accomplishing logistics, innovation, personnel and other tasks expand through combined efforts. A well-functioning cluster is a guarantee of creating and maintaining SME jobs, which reduces unemployment and helps maintain and increase the tax base in the region.

You are actively developing inter-regional cooperation within the cluster. What is the benefit of this cooperation for businesses and the region? 

The Pskov cluster is located within the borders of one Russian region but it doesn’t mean that interaction within the cluster is limited to it. By doing their work, participants of the industrial cluster are developing cooperation with other regions, especially their neighbors (Leningrad and Novgorod regions) as well as with the regions further away such as the Oryol Region. Steady cooperation between the regions and aligned regional policies are the necessary conditions for developing industrial and territorial clusters and building their competitive power.

How does increased competitive power manifest itself?

Clusters impact competitive ability because they increase the productivity of companies and industries, create opportunities for innovative and industrial growth, stimulate and facilitate forming a new business that supports innovation and cluster expansion.

The enterprises within the cluster are constantly sharing information on production opportunities and their needs which allows identifying the types of product, materials and equipment required by a specific consumer. Joint projects by cluster participants are aimed at creating new types of industrial products, including as part of import substitution, improving quality, increasing added value created by the participants thanks to realizing the potential of efficient interaction related to their geographical proximity, including expanding access to innovation, technology, know-how, specialized services and highly qualified workforce and cooperation with the region’s leading university.

Can clusters be considered a new stage of industrial development?

A cluster can be seen as a new stage of industrial development in the region. It is a point of growth and the core of the innovation-oriented economy.

The economy which has regional clusters playing a key role has every chance to become competitive and, importantly, investment-attractive. A regional cluster plays a role of the tool that stimulates the region’s growth: it creates a special favorable environment for development of small, medium and large businesses, has a positive effect on industrial development, and makes for better living standards in the region.

What plans for developing the electrical engineering cluster in the Pskov Region do you have for 2019?

The main aim of the electrical engineering cluster is to build industrial capacity of the cluster members for creating a new competitive high-tech product, as well as expanding the presence and sales of member enterprises’ products in the domestic and foreign markets. 

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