The Business Incubator Development (BID) Program in Ukraine. Abstract

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1 The Business Incubator Development (BID) Program in Ukraine by R. D. Shelton* and C. R. Margenthaler Abstract Loyola College in Maryland operates the Business Incubator Development (BID) Program in Ukraine with funding from the United States Agency for International Development (USAID). It seeks to create and sustain small business incubators to help Ukrainians adapt to a free market economy. Based on a formal review of the best practices in American incubators, a methodology was developed for the Ukrainian environment. Since most clients already have abundant space in underutilized institutes, many are assisted in situ, instead of requiring them to move to a physical incubator the incubator without walls approach. A much more extensive program of business training is provided to compensate for the relative inexperience of Ukrainians with the free market. The BID Program has established successful incubators in Kyiv and Kharkiv, and is now planning expansion to Odesa and Dnipropetrovsk. A Web-based cyber business incubator (CBI) concept is also being developed to reach to the hinterlands, otherwise out-of-reach of such business services. These approaches are well suited to the former Soviet Union where there are many welleducated people who have access to decent communications and computer infrastructure, but who can profit from help in competing in a free market economy. Presented at the Expert Meeting on Best Practice in Business Incubation, UN Economic Commission, Palais des Nations, Geneva, Switzerland, June 3-4, Additional illustrations are available in the presentation in English and Russian at *International Technology Research Institute, Loyola College, Baltimore, MD USA, rds@e-di.net,

2 Introduction The Business Incubator Development (BID) Program in Ukraine R. D. Shelton and C. R. Margenthaler This paper describes adaptation by Loyola College of U.S. business incubator practices to Ukraine. The staff also had experience managing an incubator in Moscow--one of the first USAID-funded projects there. Building on this experience in Ukraine, plans are now being made to expand to additional cities and to a Web-based approach that could work well in Eastern Europe. Loyola College is one of over 50 Jesuit institutions of higher learning located throughout the world, some dating to the XVI Century. Loyola has extensive experience in business education and services, in donor activities and volunteerism, and in international activities. Its Sellinger School of Business and Management is fully accredited by AACSB The International Association for Management Education. It operates undergraduate and graduate degree programs and is well known for its executive MBA program for senior executives. The Sellinger School also includes several centers for business assistance, including the Lattanze Center for applications of information technology in business and the Center for Closely Held Businesses (CCHB), which focuses on small business services. The CCHB also receives funding from the U.S. Small Business Administration (SBA) to conduct business training for minority entrepreneurs. Loyola College promotes volunteerism in assisting those who need a helping hand to take their rightful place in the prosperity of today. Its students, faculty, and the institution as a whole are active in seeking opportunities to help, and particularly abroad. Project Mexico is a student-led program that helps poor folk in a U.S. neighbor improve their housing. The Sellinger School operates the ILADES business training program in Chile and manages a new MBA program in Beijing on behalf of a consortium of U.S. Jesuit colleges. The BID Program in Ukraine grew out of Loyola's International Technology Research Institute (ITRI), which sends U.S. delegations abroad to assess research and to seek opportunities for international cooperation. (Shelton, 1998) ITRI is supported by most U.S Government research agencies: the National Science Foundation (NSF), the Office of Naval Research (ONR), the Defense Advanced Research Projects Agency (DARPA), the National Aeronautics and Space Administration (NASA), and others. It has sent 40 delegations abroad since 1989, including several to the Soviet Union as soon as glasnost made it possible. It was soon clear that the numerous scientists there were going to have difficulty adapting to a free market economy. ITRI helped by making contacts with Western firms that might commercialize their ideas in many technologies including power plant controls (Hansen, 1991), displays (Doane, 1994) (Tannas, 1995), communications satellites (Pelton and Edelson, 1993) (Pelton and MacRae, 1998), nanotechnology (Siegel, 1999) wide band gap electronics (Dmitreev, 1999) and marine technologies (Seymour, 1994) (Mooney, 1996). ITRI contributed to production of a five-volume report on Ukrainian technologies (Gamota, 1996). In 1997 ITRI secured a grant from USAID to assist Ukrainians develop small businesses in the technology sector. A survey of international practices in small business development had revealed that the business incubation approach could be effective (Lalkaka and Bishop, 1996).

3 Best U.S. Practices that Can be Adapted to Ukraine To design the project, a formal review of best practices in the U.S. was made, and an intensive short course was organized in the U.S. in June 1998 to transfer those techniques to American and Ukrainian staff. In examining a number of incubators in the U.S., a number of best practices emerge. While the following is not an exhaustive list, it presents the ones that seemed to have direct applicability to Ukraine. Identify a Champion. Successful incubator operations often come from a vision of groups of forward thinking business people who have a commitment to supporting small business in their community. Often the champion and implementers are the economic development officers of states, counties, or cities. Financial and managerial support from the economic development offices provides the initial investment for physical facilities. Then the managing director, who is the visible champion, creates the environment to attract small businesses to the incubator and sets the tone for its successful operation. Establish a Network of Partners. Developing a network of alliances with successful small businesses, government agencies, foundations, and educational institutions provides a wealth of varied skills to support the needs of the incubator and its clients. From these partners and sponsors, advisory boards may be created to provide guidance to the managing director and to the incubator clients. Further, their financial support will assist in the sustainability of the incubator. Determine a Focus. For incubators to be most successful, an economic sector focus should be adopted based on an objective analysis of the needs of their community. In the U.S. common choices include: high technology, bio-technical, services, light manufacturing, agricultural products, consumer products, to name a few. This sector specialization helps to meet the local demand for assistance by entrepreneurs and small businesses, to know the extent of financing and other resources, to understand the markets available, and to be sure of the availability of technical advice. Provide Physical Space and Business Services. A physical structure for the incubator establishes an environment conducive to developing entrepreneurs and their enterprises. The incubator needs to establish an image and look and feel of a business location and offer quality, affordable space to attract start-ups and businesses with growth potential. Within the incubator a full range of business services is needed that can be provided at low cost through sharing. While in some cases, an incubator without walls can be appropriate, a physical location for provision of quality, low cost business services is a must some forum for exchange of ideas among clients is also necessary. Include Formalized Business Education, Training, and Business Plan Development. Providing formalized business training is not standard among the U.S. incubators reviewed. In many instances, it is informal, relying on individual entrepreneurs to seek assistance from the incubator or on the managing director detecting a need and

4 suggesting the appropriate resources to the client firm. Still, the opportunity for success is enhanced where relationships with educational institutions or appropriate professional organizations, such as Service Corps of Retired Executives (SCORE), exist and regularly scheduled courses are offered. Integration of business plan development into training courses also seems to make a positive contribution. Provide On-Going Business Counseling. One of the most valuable components of being associated with an incubator is the availability of on-going, in-depth business counseling. The opportunity for immediate feedback and assistance leaves the firm with more time for productive work and reduces the number of costly mistakes. Provide Access to Capital. Incubators need to attract sufficient financial resources to ensure their sustainability. This can be a three to five year process. For sustainability of incubators, there are several models that have been implemented: (1) an up-front grant that covers the capital investment and operational expenses of the incubator for the startup period; (2) an up-front grant the covers the capital investment with operating expenses being covered through delivery of services; and (3) sponsors make investments of 10 to 15 years in return for equity positions in the businesses with high growth potential and are willing to cover the expenses of the incubator until the positions are cashed. Incubator managing directors also need to attract financing for their clients. They do this through developing relationships with banking institutions, venture capitalists, foundations, and micro-enterprise loan institutions. Camaraderie. Incubator clients share their experiences in dealing with business problems. These relationships provide new entrepreneurs the opportunity of benefiting from the experienced business owners. It is helpful to provide a forum for a mix of clients, such as: (1) start-ups that show signs of success, (2) successful fast-growing firms near graduation from the incubator, (3) established businesses that may provide business services to other clients in the incubator and have no intention of graduating, and (4) businesses that are candidates for the incubator, but are developing and the outlook for them is uncertain. Indeed one of the most useful services an incubator can provide is though its selection process, which can counsel prospective entrepreneurs that they should not proceed until they have a better business concept. BID Program in Ukraine With these ideas in mind, Loyola College in Baltimore, Maryland created the Business Incubator Development (BID) Program in September The program was initially funded by a generous grant from the United States Agency for International Development (USAID), which administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide. The purpose is to establish small business incubators in several Ukrainian cities and to contribute to the development of small business. The technology and lightmanufacturing sector was selected because of the exceptionally strong cadre of well-trained engineers and scientists in Ukraine.

5 Loyola College began a 30-month pilot program by establishing incubators in Ukraine s largest cities: Kyiv and Kharkiv. (An incubator in L viv was created by another organization, Counterpart, Inc., at the same time.) The BID Program also has plans to establish additional incubators in Dnipropetrovsk and Odesa and to expand services throughout the country by electronic means. (Fig. 1) Well-known local organizations with experienced staff are partners in creating the incubators and sustaining their operations after the initial funding ends. Some acknowledgments are in order. The BID Program staff includes American and Ukrainian professionals experienced in small business creation and development. Dr. George Gamota is in charge of external relations, particularly raising matching funds to sustain and expand the incubators. The methodology is based on an USAID-supported incubator project in Russia developed by Dr. Alistair Brett. Dr. George Mackiw helped organize the BID incubators in the summer of David Bailey, who also helped establish an incubator in Russia, is the Communications Director. Gamota and Mackiw speak fluent Ukrainian. Ukrainian senior staff include Drs. Vladimir Andreev and Ihor Katerniak; others will be listed later. The USAID mission staff in Kyiv has been extremely helpful in adapting U.S. techniques to Ukraine, particularly Greg Huger, Steve Silcox, and Ivan Shvets, who is the program officer. The BID Program is a part of Loyola's International Technology Research Institute, directed by Dr. Duane Shelton. ITRI is well known for providing international technology studies for the National Science Foundation, Office of Naval Research, and other U.S. agencies. Dr. Bob Margenthaler directs its Business Development Division, which manages the incubators in Ukraine. More information is available at (Shelton 1998) The BID Program incubators select entrepreneurs who have passed a technical and business review. The incubators then provide resources to enhance their prospects, including an extensive business training program (practical marketing, finance, management, etc.), and connections to external sources of capital, sometimes as direct loans or loan guarantees. The KharkivSBI provides a physical facility to house some entrepreneurs who need fast Internet access, while the KievSBI is an incubator without walls. The BID website is at in the U.S.; a Ukrainian mirror is at The website is available in English and Ukrainian, with the homepage also available in Russian. The KharkivSBI: A Physical Incubator A visitor from a U.S. incubator would feel at home in the KharkivSBI. It is housed in renovated space in a large under-used building that belongs to the Institute of Single Crystals. The institute has spun off a subsidiary, Kharkov Technologies, to operate the incubator and to help sustain it. Currently six small businesses are housed at subsidized rates. Shared services include high speed Internet access and the usual clerical services. (See Fig.2: Kharkov Technologies Webite at )

6 As a part of their international Peace Corps volunteer assignment, Kim and Henry Vazira helped establish the incubator in February Greg Huger, who heads the USAID Mission to Ukraine, Modova, and Belarus, gave the keynote address at the kick-off conference. The director, Dr. Inna Gagaus, and her staff of three professionals provide the incubator services. Like the KievSBI, the KharkivSBI actually provides services to many other clients off-site. It conducts an extensive business training program that is free or nearly so for small business personnel. Dr. Vladimir Mamchenko and his staff at the American Ukrainian Business Center at the Kharkiv Polytechnic University conduct some of the courses. One reason that Ukraine receives special attention by USAID is that it voluntarily gave up its nuclear weapons and delivery systems when it became independent in In 1998, at the request of the U.S., the large TurboAtom company in Kharkiv canceled an important contract to deliver electrical turbines for a Russian nuclear power plant that was to be installed in Iran. Because of this cooperation, the U.S. Government is working with the existing USAID projects there, like the KharkivSBI, to provide some compensating retraining for the displaced workers. This program and similar development efforts should help sustain the incubator. The BID Program has recently received approval to participate in this effort, through the KharkivSBI spin-off, Kharkov Technologies. The KievSBI: A Distributed Incubator In Kyiv, the International Management Institute (IMI) operates the KievSBI under the direction of Dr. Vladimir Andreev and Ludmilla Kozhara. IMI is a private business school that offers MBA training for Ukrainian and expatriate staff in English. From its point of view, the KievSBI is a division that provides training, consulting and other entrepreneurship resources to small business clients, while its MBA program is optimized for training of executives for large firms. The image in Fig. 3 shows the IMI building in the center of the BID Program homepage. This Web illustration actually rotates among a set of photos that include many of the BID clients as well. Building on the extensive experience of the IMI faculty in training students, the KievSBI provides an intensive program of business education and consultation. Its courses and business club provide a forum for exchange of practical experience among its clients. In addition to the extensive business training program provided by IMI, the BID Program has also supported Junior Achievement's first training program (in Kyiv) for Ukrainian high school teachers to reach out to the next generation. Nancy Keel, a Peace Corps volunteer, is the JA Executive Director for Ukraine. Unlike the KharkivSBI, the KievSBI does not provide space for clients. In the Kyiv region there are many institutes that have excess space that is available for their staffs to establish small businesses. Thus a distributed incubator like the KievSBI allows clients to use such separate facilities. This incubator without walls is also more appropriate for entrepreneurs who have special equipment or when a move of a company would be disruptive. The BID Program accommodates

7 both approaches; space and logistical support are provided in a manner that best suits the entrepreneurs' needs. Lessons Learned from Two Years Operation in Ukraine While space is not much of a problem in the former Soviet Union, lack of knowledge about a free market economy is very serious. Much more extensive training in basic economics and business is needed than at an incubator in the U.S. Except for the few who have traveled to the West, most Ukrainians have never seen a healthy free market at work. The fall of centrally controlled communism was replaced by an economy crippled by declines in GDP like those of the Great Depression in the 1930s. Hyperinflation, an almost total lack of small business loans, collapse of traditional markets, endemic corruption, and government obstacles raised barriers to small business success. In America Clark Kent might succeed as self-reliant entrepreneur, but in Ukraine, even Superman would need the help of an incubator. And building a few incubators in the largest cities does not address the even more desperate needs in the poorer hinterlands. Mission director Greg Huger gave a presentation to the Ukrainian-American community in New York City in June 1998 that showed the delivery of USAID services to all the oblasts (states) and rayons (counties) of Ukraine in series of tables for each program. They were very sparse matrices, because it is not economically feasible to deliver services to remote areas by conventional means. (Huger, 1998) In adapting the best practices in U.S. incubators to Ukraine, some lessons learned include: The deep pockets champion in the form of an economic development community is not yet established in Ukraine. Knowing the importance of this best practice, the BID Program was conceived. In this instance, Loyola College with USAID funding support serves as the deep pockets champion to provide the initial investment and on-going business services. From the beginning, development of sustainability was a management priority in structuring the program. Both SBIs have been housed at institutes that have an interest in sustaining them because they provide a revenue stream (albeit small). Where a minimal full-time staff, a managing director and a secretary, is sufficient in the U.S., it was soon learned that the incubators in Ukraine required more extensive staffing and organizational structure. This is due in part to the nature of doing business in Ukraine, the general business services that are available, and the inclusion of an integrated, intensive business training program required for each of the client businesses. Both SBIs will operate as corporate spin-offs that allow them to accept income from clients: short courses provided for in bulk to the STCU and the Kharkiv Marketing Assistance Program of USAID already demonstrate the potential for sustained operations. It was soon learned small- and medium-sized enterprises in the Ukraine were going to require extensive, formalized business training on the market-driven business model to compete successfully. Consequently, a business training program was developed that

8 integrated business plan development as the entrepreneurs progressed through the course of study. At the completion of this formal program of study, each business owner has in hand a completed business plan that is of a quality to be reviewed by experts. This evaluation is to provide feedback to the business owner of changes before submission to a bank for loan application. Perhaps even more importantly, the owner now has the business plan perspective and tools necessary to analyze business options to determine their profitability. Access to capital to sustain the KievSBI and KharkivSBI and to provide financial resources to the client firms for their sustained operations was not readily available. To meet this challenge, the USAID grant for the BID Program contains funding for sustaining the incubators for the first two and one-half years and funds for loan guarantees for the most qualified client companies. In essence, loans will be made to qualified borrowers through banking institutions in the form of loans guaranteed by funds in the USAID grant. The worldwide financial crisis that arrived in Ukraine in August 1998 has delayed implementation of the loan guarantee portion of the program. In time, it is expected that the banking system in Ukraine will mature to the extent that the entrepreneurs will be able to acquire loans directly from the banks backed by agencies similar to the U.S. Small Business Administration. The KievSBI and KharkivSBI incubators are located in the largest cities of Ukraine. While there is some participation in their training programs by entrepreneurs from other regions, it was soon learned that extension of the benefits to the rest of the country requires an explicit outreach program. Needs abound in Ukraine for business training for entrepreneurs located in the more remote portions of the country. One approach that can work well is that, once the incubators in Kyiv and Kharkiv were established, they could begin a program of outreach in a hub and spoke model. In this model, the hubs are Kyiv and Kharkiv and the spokes are radials reaching out 100 to 200 kilometers to branch incubators or business information centers in smaller cities and towns where the town or oblast government would provide some facilities and staff support. It has also become clear that women and minorities represent a significant population of Ukraine s next generation of business owners. They represent a well-educated work force and are excellent candidates for technology-oriented businesses. Many are located in the rural areas of Ukraine and are interested in starting microenterprises. A proposal was recently submitted to the USAID microenterprise program that emphasizes support of women and the very poor, which could contribute to this outreach. Other cities in Ukraine are well positioned in terms of population, resources, and need for business training designed to help entrepreneurs grow their businesses. After investigation, the two that appear to be the highest priority opportunities are Odesa and Dnipropetrovsk. Future: Expansion to Odesa and Dnipropetrovsk

9 Since Loyola College is based in Baltimore, one strong asset for support of the expansion into Odesa is the 24-year long Baltimore-Odessa sister city relationship, which has supported many humanitarian and cultural exchanges. With the expansion of the BID Program to Odesa, this relationship would be significantly strengthened by adding new education, commerce, and economic growth alliances between the two cities, through developing small businesses based on the regional strengths in manufacturing, research, and higher education. To address the particular needs of Odesa, BID would provide a special focus on health care companies and professionals and on the exceptionally large number of minority entrepreneurs there. Further expanding the BID Program to Dnipropetrovsk and selected other centers will provide much needed business development assistance to the major industrial concentrations in Ukraine impacted by the ending of military-industrial production. From these centers, the BID Program will implement its hub and spoke model developed in the KievSBI and KharkivSBI to reach out to regions of Ukraine with less population but excessively high unemployment levels, and help firms struggling to establish a foothold in the nation's transition from a command to a market economy. Future: The Cyber Business Incubator Concept The fast growing Internet now offers a platform for modern knowledge-based approaches to small business development. There are many sites that provide business information over the Web, but the notion of providing a complete package of services for the prospective entrepreneur is in its infancy. One can adapt a surprisingly large number of traditional incubator services to Web hosting, but to maximize chances of success, such sites should be based on experience with traditional incubators. This Web-based approach could be an efficient way to provide services to small business clients in remote areas of some developing countries. For example, the 15 countries of the former Soviet Union definitely need help, but there are plenty of computers, and telephone services are adequate to provide access, albeit slow. Most importantly, there are plenty of well-trained and talented local people who can use any high technology tool, if it can be made available to them. This concept is not entirely original; on November 30, 1999, President Clinton announced that the Secretary of State would initiate a program to promote growth of the Internet and e-commerce in developing nations at a White House event on the release of a report on the role of the U.S. Government in the Internet (Clinton, 1999). Network applications that could be suitable for business development include distance learning, remote business information services, and the new cyber business incubator (CBI) concept. There are many Web sites that offer the world distance learning and information support for small business development, especially for English-speakers. The CBI concept differs in that it attempts to offer the virtual equivalent of the services of a comprehensive business incubator over the Web. (Shelton and Mackiw 1999).

10 The CBI is expected to have the following features: It is customized for Ukraine to provide delivery of incubator-like services to the hinterlands It is another incubator created by the BID Program based on proven techniques It uses the incubator paradigm as best one can over the Web Existing or prospective entrepreneurs apply for services (register) to be accepted as clients Business education would be provided as distance learning with a business-plan theme Human consulting would be provided via or phone Efforts would be made to provide access to capital--information on loans, venture capital, etc. A Web site would be created for each as the cyber equivalent of physical space; like renting of physical space, this Web-hosting model provides a revenue stream that can sustain the CBI E-commerce help would be provided: posting of catalogs, shopping cart, credit cards Clerical services: phone answering, fax, i.e. forwarding of messages, change of media (convert to fax, snailmail, etc.) packing of physical shipments, customs broker services. There would be physical meetings with consultants, teachers and management occasionally When a critical mass of clients is achieved in a town, a branch physical incubator can be created there to carry the economic development further. These features are not unlike those of a physical incubator. All of these services are can now be provided with standard Web hosting techniques. The BID Program is now designing such a CBI for Ukraine as shown in Fig. 4. The figure shows just the physical structure of the CBI. If funds permit, the physical layer would ideally incorporate high speed satellite links and routers for its network backbone shown in the heavy lines. The lines from regional cities to the outlining towns could be leased telephone lines that would provide inexpensive Internet Service Provider (ISP) services to clients in that region. The unused capacity of this CBI-backbone could be a resource for all international development projects in Ukraine, and the backbone could be turned over to a Ukrainian non-profit at the conclusion of the development phase. If funds are not available for establishment of a custom high speed network, the CBI could be hosted on existing Web providers in Ukraine -- including commercial ISPs in the regional cities. Commercial providers are expanding network services throughout Ukraine, but the recent economic downturn has slowed progress. Conclusion The BID Program has achieved its initial objectives in Ukraine. Its KievSBI and KharkivSBI are operational and have provided business development services to more than 300 entrepreneurs. The SBIs are generating an income stream that gives them a reasonable chance of sustained operations. The BID Program has established partnerships with organizations in Dnipropetrovsk and Odesa that can implement additional SBIs there. President Clinton has called for the Secretary of State to spur the spread of the Internet and e- commerce to developing nations. (Clinton, 1999) Like all professionals, economic development officers are now exploring how the Web can make their work more effective. In the business

11 incubator field, Web-based techniques offer intriguing possibilities, especially for serving remote areas. However, just as computer hardware is not of much use without software applications, merely providing network hardware without network applications is not sufficient. In the developed world it may be sufficient to provide the infrastructure and wait for market forces to deliver economic development. However, in developing nations struggling to provide livelihoods for very poor people, it is not enough just to provide a radically new platform. Technology-push is not effective without balanced market-pull. From this reverse point of view, the business incubator model can provide a market-pull structure for economic development that can make the Web more effective as a tool for developing nations. The CBI combines these two proven elements: the Internet and the incubator. References Andreev, Alexey, The BID Program Web Site, August, Clinton, William, Leading the World into the Information Age, White House policy statement on the Internet, including its use in helping developing nations. November 30, Dmitriev, Vladimir (ed.) TTEC Panel Report on Wide Band Gap Semiconductor Technology: Japan, Europe, and Russia, ITRI, 1999 (in press). Doane, J. William (ed.), WTEC Panel Report on Display Technologies in Russia, Ukraine, and Belarus, ITRI, Baltimore, Edelson, Burt and Joseph Pelton, NASA/NSF Panel Report on Satellite Communications Systems and Technology, ITRI, Baltimore, Gamota, George, Science, Technology, and Conversion in Ukraine, MITRE Corp., Bedford, MA March Hansen, Kent (ed.), WTEC Panel Report on European Nuclear Instrumentation and Controls, ITRI, Baltimore, Huger, Greg, Address on the Delivery of USAID Services to Ukraine, Ukrainian-American Alliance, New York City, June Lalkaka, Rustam, and Jack Bishop, Business Incubators in Economic Development: An Initial Assessment in Industrializing Countries, UN Development Programme, NY, March, Mooney, J. Brad (ed.) WTEC Panel Report on Undersea Technologies in Eastern Russia, ITRI, Baltimore, 1996 Pelton, Joseph and Alfred Mac Rae, WTEC Panel Report on Global Satellite Communications Technology and Systems, ITRI, Baltimore, 1998.

12 Seymour, Richard (ed.) WTEC Panel Report on Research Submersibles and Subsea Technologies, ITRI, Baltimore, Shelton, R. D., The ITRI Web Site, September, Shelton, R. D. and George Mackiw. The Cyber Business Incubator (CBI) Concept, Presented at the National Business Incubation Association, Thirteenth International Conference on Business Incubation, Chicago, Illinois, March 22, Siegel, Richard and Evelyn Hu, Russian Nanotechnology Research, ITRI, Baltimore, 1999 (in press). Tannas, et al., Flat Panel Display Technologies: Japan, Russia, Ukraine, and Belrus, Noyes, Park Ridge, NJ, Authors Robert Duane Shelton has led international technology assessments since 1984, as science policy analyst at NSF, and now as ITRI Director. His degrees are in electrical engineering from Texas Tech (as first in his class of 200 engineers), MIT (as NSF Fellow), and the University of Houston. Dr. Shelton worked at Texas Instruments, Inc. on electronics R&D, and at NASA in performance analysis of the Apollo space communications system and of TDRSS -- the system currently used for Shuttle communications. He has been a professor at the University of Houston, University of Louisville, Texas Tech University, and now Loyola College. During this time, he has served as principal investigator on 35 grants, has written 58 technical papers and one book, and has chaired 60 M.S. and 3 Ph.D. thesis committees. He has chaired academic departments of applied mathematics, computer science, engineering science and electrical engineering. During 1995, he was an IEEE Congressional Fellow, serving as legislative assistant on science issues for Rep. Lloyd Doggett. His current research interests are science policy analysis: international technology assessment, and E-Development: electronic approaches to international economic development. Charles Robert Margenthaler is Director of the Business Development (BD) Division of ITRI and Executive Director of the Lattanze Center. He is also Professor Emeritus in the Joseph A. Sellinger, S.J. School of Business and Management at Loyola College, and served a six-year term as Dean. Dean Margenthaler established three Centers of Excellence to build partnerships with the business community, and worked extensively with small business incubators in the United States. For the field study activity in the MBA programs, he and his students developed business plans for the growth of numerous small businesses. He is a regular lecturer in the Small Business Administration's Program for Minority Business Executives. He has also conducted international courses, focusing on strategic management and total enterprise simulation, at the Egyptian Ministry of Defense in Cairo, Renmin University in Beijing, City Government of Shanghai, XLRI in India, and ILADES in Santiago, Chile. Prior to joining Loyola College, Dr. Margenthaler gained experience in a 24-year career in the United States Air Force, retiring as colonel. He held positions in research and development for space operations; was Chief Scientist of the Logistics Directorate of the Joint Chiefs of Staff in the Pentagon; and was faculty member with the Industrial College of

13 the Armed Forces and the National Defense University in Washington, D.C. He became Executive Director for the Lattanze Center for Executive Studies in Information Systems in April 1997, a center focused on strategic issues for information technology executives. He also assumed leadership of the Business Development Division of ITRI on September 1, Figures (Larger illustrations in color are at ) Fig. 1. Ukraine and its largest cities and towns. Fig. 2. Homepage of Kharkov Technologies Fig. 3. BID Program Homepage. This screenshot also shows the IMI building where the KievSBI is housed. Fig. 4. CBI Backbone for Ukraine