Peculiarities, problems and incentives of relocation of national production in conditions of war

Abstract

The article provides an overview of the trends in the relocation of manufacturing companies to safe regions from territories where active hostilities have taken place. The main threats of the enterprises relocation under the war have been identified, in particular: disruption of economic ties; logistics challenges; lack of a qualified workforce due to the outflow of residents from the country; high cost, legal and technical complexity of relocation procedures; resource loss as well as goods, fixed assets, etc. during relocation. There are also mobility restrictions for certain types of enterprises due to their territorial «attachment» (primarily, agribusiness, major manufacturers and logistics enterprises). The growth share of business relocation abroad can be recognized as a threat to the balanced spatial development of Ukraine. It has been emphased that the state program for business relocation with appropriate financial assistance and support should be launched in order to foster the process within the country and reduce the rate of enterprises relocation abroad. Other important directions for improving and increasing the efficiency of the state policy of enterprises relocation include: expanding list of eligible regions for business relocation; development and implementation of an efficient system of leasing industrial equipment and provision of a state financial guarantee for enterprises which have an intention to relocate. Moreover, technical and economic predictions of urgent actions to ensure an efficient process of enterprises relocation should be developed as well as promotion domestic products on the domestic and international markets, searching for a new export opportunity. Special attention has been paid to legislation concerning the development of industrial parks and its adaptation to the process of business relocation. The importance of involving regional employment centers in job search assistance and training personnel for relocated enterprises has been underlined.It has been concluded that the launch of a new business in the territories where there are no active hostilities will allow, firstly, to broaden the tax base for local authorities, secondly, to create a new jobs, to restrain the outflow of workforce abroad, and contribute to improving their solvency.