COMPETITIVENESS OF THE AGRICULTURAL MACHINERY INDUSTRY: CURRENT STATUS AND PROSPECTS
Abstract
In the article considers the strategic imperatives and determinants of the competitiveness of Ukraine's agricultural machinery industry amidst the profound challenges of 2021–2025. The authors determined that the sector is currently navigating a period of intense structural crisis caused by both military aggression and global technological shifts toward Industry 4.0. The study indicates that the institutional framework of the industry is suffering from “institutional inertia”, a phenomenon where the nominal growth of registered entities (from 792 in 2021 to an expected 977 in 2025) contrasts sharply with a decline in the actual share of active enterprises, which fell to 40.6%. In the article considers the labor market dynamics, revealing that the industry lost approximately 44.7% of its workforce within five years, a factor that severely limits its innovative capacity. The authors determined that while segments like tractor manufacturing have nearly collapsed, the soil-tilling and seeding equipment sector has shown remarkable resilience, maintaining a revenue level of USD99 million in 2024. The study indicates a high level of international competitiveness in this specific sub-sector, evidenced by a Revealed Comparative Advantage (RCA) index of 1.802. However, the authors determined that Ukraine remains critically dependent on imports for energy-intensive machinery, with imports reaching USD975.1 million in 2024, vastly exceeding domestic exports. In the article considers the impact of military actions, which resulted in direct damages of over USD5.8 billion to the agricultural machinery fleet. The study indicates that the path to recovery must involve the adoption of smart farming technologies, including IoT, drones, and AI-driven precision agriculture, alongside deeper integration into European Union supply chains. The authors determined that localized production and strategic partnership with global brands are essential for overcoming the current technological gap. Digitalisation (Agriculture 4.0) is not just a trend, but a prerequisite for survival. The high level of adaptation of precision farming in Ukraine creates a unique domestic market for "smart" technology, which can stimulate the creation of new high-tech jobs.
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