STRATEGIC INDUSTRIAL DEVELOPMENT SCENARIOS OF UKRAINE AND THEIR FEASIBILITY UNDER UNCERTAINTY
Authors:   State Organization “Institute for Economics and Forecasting, NAS of Ukraine”, Kushnirenko Oksana , Gakhovych Nataliia ,   State Organization “Institute for Economics and Forecasting, NAS of Ukraine”, Venger Liliia ,   State Organization “Institute for Economics and Forecasting, NAS of Ukraine”
Published: December 2022

Introduction. In this paper, we examine the importance of scenario strategizing of industrial development under conditions of uncertainty caused by human, material and non-material losses during wartime. The main approaches to the development of the industrial development scenarios are systematized. It has been established that scenario methods can be used to cope with future uncertainties by envisioning plausible futures and identifying paths to reach desirable targets. Based on the study of the main indicators that characterize the internal opportunities for the manufacturing development in Ukraine (the dynamics of sold product volume, labor productivity, industrial energy consumption, the dynamics of research and innovation activities, high-tech exports, etc.), the authors identify the driving forces and weaknesses of the Ukrainian industry. Also the opportunities and threats of innovative transformations for manufacturing in the war and post-war period were identified. The proposals for a quick and effective manufacturing recovery in relation to the development policy priorities of the European Community were substantiated relying supports country-level collaboration between governments, business and civil society. Materials and methods. In article the methods of the system analysis and logical modeling - for explanation the ways of transition of the industry from the current situation to the target one; structural analysis to determine the system of indicators characterizing the sustainability of the industry were used. For this, national (State Statistics of Ukraine) and international (World Bank, Eurostat official website) databases characterizing the level and structure of industrial development over the past 5 years were used. The calculation methodology takes into account the criteria for changing indicators: direction (growth/decline occurred); rate of changes. The calculation of trends for measures with quantitative units is based on the cumulative annual growth rate for the 5 years period. The study was carried out using elements of the method of analyzing the influence of trends in the formation of strategic scenarios in the event of unpredictable situations (in conditions of wartime uncertainty), to assess changes in the probability of occurrence of a given set of events due to the actual occurrence of one of them, which made it possible to identify trends, justify scenarios and take them into account when analyzing the prospects for industrial development to strengthen the defense capabilities and economic growth of Ukraine. Results and discussion. Strategic scenarios for the industrial development of Ukraine will be adjusted as needed for post-war industry recovery in case of an long-term military external threat to preserve the state sovereignty of our country. It stresses the importance of ensuring a consistently high level of state defense capability. This additionally prioritizes the need to develop a developed industrial complex in creating available resources to meet the needs of not only the civilian population, but also the army. Achieving the set strategic goals depends on the driving forces that determine the industrial development in our country. As the main indicators characterizing the tendencies of industrial development in Ukraine, the indicators reflecting the efficiency of the use of productive forces were chosen: indicators of the industrial production`s efficiency; labor productivity; indicators characterizing innovative development; performance indicators of foreign economic activity and investment development. This choice is due to the fact that a strong industrial base should generate productive and stable employment, and, as a result, an increasing in the average level of wages. In addition, the industry should ensure the production of socially significant industrial goods (food, medicine, hygiene items, clothing and footwear, fuel). Taking into account the influence of each of the driving forces of the industry development in the conditions of the wartime uncertainty, three scenarios of industrial development have been developed: a conditionally positive scenario, in which the economic system will gradually stabilize due to the cessation of hostilities and the manufacturing capacities recovery; a conditionally negative scenario, which will be characterized by the disintegration of the economic system, the destruction of energy infrastructure facilities, where negative trends will be dominant; a conditionally neutral (basic) scenario, in which the turbulence of the economic system will not reach extreme levels, and industrial production will develop in areas not covered by hostilities. Conclusions. The key problem of restoring the economic stability of Ukraine is to provide conditions for the favorable conduct of industrial business, which depends on balanced strategic policy decisions. The transformation of industry into an effective force for the revival of Ukrainian business in the conditions of wartime and the post-war period requires a balanced strategic management of the future development of the economy, because it is critically important to meet the unprecedented demands of the war on the available resources in the country and prevent a social, humanitarian, economic, financial, environmental, military crisis. At the same time, traditional methods of indicative planning cannot take into account all factors of the wartime uncertainty, therefore, the rationale for future development vectors based on scenario planning makes it possible to create conditions for minimizing threats and realizing potential opportunities.