In 2025, Zhytomyr won a competitive selection process and became one of four pilot cities to join the local transformation programme “Mission-Oriented Economy.” The programme is part of the “Mayors for Economic Growth” (M4EG) initiative, funded by the European Union and implemented by the United Nations Development Programme (UNDP).

Alongside Zhytomyr, the programme also includes Khmelnytskyi, Bucha, and Slavutych. Within this framework, the cities will apply a new systemic approach to planning economic transformation, develop and activate a set of initiatives that reflect each city’s identity, unique potential, and specific local characteristics.

Each selected city will receive approximately USD 20,000 to initiate its own project portfolio and will also have the opportunity to attract an additional USD 100,000 to design and implement a series of projects aimed at economic resilience and the green transition. To ensure the effective implementation of these changes, cities will apply the portfolio approach. How does this approach work? Read more below.

What Is the “Portfolio” Approach?

The portfolio approach is an innovative method of managing local development that helps cities plan and implement systemic change more effectively, particularly in conditions of uncertainty. It views a city not as a collection of isolated problems requiring separate solutions, but as a complex system of interconnected elements.

Instead of relying on a single initiative, cities develop a set of parallel initiatives—so-called “options”—that operate simultaneously and reinforce one another.

The logic is simple: just as a financial investor does not invest all resources in the shares of a single company, cities should not rely exclusively on one solution.

The portfolio approach enables better change management and continuous exploration of more effective solutions over time. A key element of this approach is learning through implementation, as well as adaptive management that allows teams to quickly adjust actions in response to new circumstances.

The portfolio approach can be compared to a journey. Imagine you need to travel from point A to point B, but:

• navigation maps are outdated;

• weather conditions constantly change;

• unexpected obstacles appear, such as roadworks or closed routes.

Instead of following one predetermined route, you prepare several alternatives, take the necessary equipment, move step by step, and adjust your plan along the way. This allows you to manage risks and optimise resource use. This is exactly how the portfolio approach to city development works.

What Are the Key Stages?

First, cities define a shared mission—what they aspire to become—and then outline pathways to achieve this goal. At the initial stage, the city team may not yet have a clear vision or ready-made solutions, due to a high level of uncertainty. The portfolio approach helps test different options and identify effective solutions based on local specificities, while developing them dynamically.

It also takes into account the needs and expectations of community residents and other stakeholders, including businesses, civil society, educational and cultural institutions.

The team can design and pilot several initiatives to test what works and what does not. During implementation, the city team continuously analyses results: what is effective, what requires adjustment, and which new opportunities emerge. In the portfolio approach, this process is referred to as MEL (Monitoring, Evaluation, and Learning).

When Is the Portfolio Approach Most Effective?

The portfolio approach is particularly effective under three conditions:

• high uncertainty;

• work with complex systems (such as a modern city);

• the need for non-standard solutions to complex problems.

This approach is not always appropriate—for example, in cases of relatively simple problems with known linear solutions—since it is more complex and requires additional effort, resources, and engagement. However, it is especially relevant for Ukrainian cities during wartime and in the post-war period. Most cities face high uncertainty when shaping their future vision, numerous risks, and complex challenges that cannot be solved through linear approaches and therefore require a systemic solution.

How Does This Look in Practice?

The first Ukrainian cities to pilot the portfolio approach were Mykolaiv and Ternopil.

Example 1: Mykolaiv’s experience — read more here.
Example 2: Ternopil — read more here.

Why Is This Important Now?

During wartime, traditional approaches to urban strategic planning require reconsideration. In many communities, long-term planning has been deprioritised due to urgent challenges that demand immediate responses. Paradoxically, however, this work is critically important now, as it directly affects the speed and quality of post-war recovery and long-term development.

As Yale University professor and historian Timothy Snyder noted in a recent interview:
“If the process of reconstruction and integration does not begin during the war, it will not begin after it ends. The major challenges you will face after the war will be the same ones you are facing now.”

First, the war will eventually end. Cities that are already developing recovery and development plans will have a significant advantage. They will be better positioned to attract investment, use resources more efficiently, and create favourable conditions for people to return. Investors and international partners want to see not fragmented projects, but systemic efforts, a clear vision for the future, and transparent strategies.

Second, even during the war, cities need development—not just survival. The economy must function, people need jobs, and businesses seek growth opportunities. The portfolio approach enables development even under uncertainty by providing flexibility and dynamic risk management.

Third, Ukraine is moving toward European Union membership. This brings new requirements: sustainable economic development, alignment with the European Green Deal, and the adoption of modern governance practices. Developing clear recovery and development plans based on European standards is a key prerequisite for strengthening trust among international partners and investors.

The war has become both a challenge and an opportunity to rethink the future. Innovative strategies, partnerships with international organisations, and active community engagement create the foundation for sustainable recovery and development.

The future of Ukrainian cities depends, among other things, on their ability to integrate modern governance practices and adapt to new realities. What makes the M4EG initiative truly transformative is its approach: it offers not only grants, but also access to broader financial mechanisms, such as public-private partnerships and integration with European financial instruments. For Ukrainian cities seeking recovery and a reimagined future, these opportunities can become a real breakthrough.