LVIV, Ukraine — Roman Matys had no plans to work in the civil service when he was a business consultant in marketing and communication.
But, since 2015, the 39-year-old has served as the head of the investment department of Lviv’s regional state administration — in charge of attracting business to Ukraine’s western powerhouse. “I have never had any employers besides clients. I’ve always worked on my own,” Matys told the Kyiv Post, in his Lviv downtown office.
Today, however, Matys serves the state. He’s responsible for helping businesses cooperate with regional state bodies, and helping them navigate through state bureaucracy. Some 500 companies are on his radar.
His office table is stacked with thousands of business cards, sorted by affiliation or other criteria. The biggest stack is cards from state officials.
But Matys’s biggest concern, he says, is potential investors, as well as Lviv’s existing business community.
Matys wants more jobs in Lviv, and higher salaries. His department may have achieved some of this already. In 2017, Lviv Oblast was ranked second after Vinnytsia in the regional business climate index published by Institute for Economic Research and Policy Consulting.
But Matys has even bigger goals.
The strategy
Business in Lviv has made a number of headlines over the past year, with newly-launched and expanding enterprises popping up across the oblast.
Most of them are in manufacturing, working with raw materials from abroad and sending finished goods out of Ukraine.
Businesses like this favor western Ukraine because of its proximity to the European Union, and because the area has a cheap and skilled labor force.
Among the recent launches have been Bader, a German premium car seat manufacturer, which opened a second factory, and then another production line, and Danish company Kragelund Furniture, which launched a new furniture-making department.
Taken together, these launches brought Lviv Oblast around 20,000 new jobs in 2016– 2017, excluding Lviv city itself, said Matys.
But almost all these new jobs are for the least-skilled section of the labor force.
Matys thinks that the region should update from its “Lviv Oblast — factory of Europe” strategy to develop other sectors, and create jobs for highly-skilled workers as well.
To do this, Matys has a few economic avenues in mind. One is just higher-tech manufacturing, which will offer chances of career growth to employees.
The region’s potential in manufacturing remains high, Matys said.
A boy and a girl drive a toy car in front of Lviv Opera Theater on June 12. (Oleg Petrasiuk)
However, he also wants to develop the oblast in other directions, like value-added food processing for agricultural goods, renewable energy farms, tourism, and business process outsourcing. “I stand for the diversification of risk, putting eggs in different baskets,” he said.
Matys argues that, at present, Ukraine is not an agricultural country, but a source of raw materials. Its top agricultural export– grain — goes abroad without any added value.
He would like to change the oblast’s direction, inviting in companies to produce goods from existing raw materials. One such company is Kormotech, a Ukrainian manufacturer of dog and cat food, which has broken into the international markets.
They produce six brands of food for pets in their factory in a village some 30 kilometers from the Polish border, and now export to almost 20 countries.
As for renewable energy, the leader in the region, Eco-Optima LLC, owns three solar power plants, two wind power plants, as well as two thermal power plants, building some with loans from the European Bank for Reconstruction and Development.
When it comes to tourism, what Lviv needs most are good roads.
Matys said that, until recently, some areas were not even accessible by car.
However, the oblast is slowly repairing its road network, with around 600 kilometers fixed in 2017 and more expected this year.
Finally, in the BPO sector, British firm PricewaterhouseCoopers opened its third local office, with 350 jobs in April, providing audit, tax, and consulting services.
Labor flow
Lviv’s proximity to the Polish border is a complication, as well as a lure for investors.
Enterprising Ukrainians can often find better salaries just 100 kilometers beyond the Polish border, where the average gross wage is around $1,200 per month, as opposed to $280 in Lviv Oblast.
That often stimulates Ukrainians to seek better options abroad. To prevent that, Matys says business representatives should increase wages.
But it’s not just a question of salary, Matys said. Rather, companies should lure workers with benefits, like insurance or leisure activities, or letting them take some business trips.
Some of them could offer to let their employees work for an affiliate abroad and then come back.
Matys is also collaborating with local companies to launch an advertising campaign, with billboards promoting family values, and asking workers to stay home.
Similar billboards have been put up in Poland to encourage Ukrainian workers to return home, he said. “Here, you are the owner of your life, your family is waiting for you here,” Matys said. “There, you are living on the edge.”
