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The implementation of comprehensive measures to further improve the business environment provides an opportunity for development and sustainable economic growth of small businesses and private entrepreneurship. In 2000-2016, share of small business in GDP increased from 31.0% to 56.9% (by 25.9 percentage points) (Fig. 1).

Figure 1

Share of small business and private entrepreneurship in GDP

 

For comparison, in France, the share of small business in GDP is 62%, Italy - 60%, Japan - 55%, Germany - 54.0%, Great Britain - 53%, USA - 52%, Kazakhstan - 25.6%, Russia - 20% (fig.2).

Figure 2

Share of small business in GDP in different countries of the world

 

It should be noted that the criteria for referring to small businesses is different in various countries. For example, in the US, enterprises with up to 100 employees and an annual turnover of 3 to 12 million US dollars are small business entities. At the same time, entities with a staff of 100 to 500 people are medium business entities. In Russia, small businesses include entities with a staff of up to 100 people and with an annual sales volume that does not exceed 400.0 million rubles.

In 2016, the largest share of small business and private entrepreneurship in GRP was in Djizak and Namangan regions - 80.3%. Accordingly, this indicator was 78.0 percent in Samarkand region, in Surkhandarya region-75.3 percent and in Khorezm region -74.2 percent. The share of small business and private entrepreneurship in GRP in the Syrdarya, Bukhara, Andijan, Ferghana, Tashkent and Kashkadarya regions, the Republic of Karakalpakstan and Tashkent city are within the range of 50-70 percent. In Navoi region, this indicator remains low and is equal to 37.6 percent (table 1).

Table 1

Share of small business and private entrepreneurship in GRP by regions

(in percentage)
  years Change in 2000-2016.,
(+;-), p.p.
2000 1) 2005 2010 2016
High level
Namangan region 33,4 45,2 76,0 80,3 46,9
Djizhak region 37,1 58,3 77,3 80,3 43,2
Samarkand region 44,3 49,9 73,6 78,0 33,7
Surkhandarya region 39,1 42,8 71,7 75,3 36,2
Khorezm region 34,2 47,1 71,8 74,2 40,0
Middle level
Syrdarya region 38,9 59,8 77,4 68,7 29,8
Bukhara region 33,0 40,7 64,1 67,9 34,9
Andizhan region 32,9 35,8 54,7 66,0 33,1
Fergana region 32,0 40,8 59,5 63,4 31,4
City of Tashkent 41,5 46,4 49,9 58,9 17,4
Tashkent region 34,0 32,3 54,7 57,1 23,1
Republic of Karakalpakstan 26,9 45,1 63,6 57,0 30,1
Kashkadarya region 25,8 34,9 55,0 51,7 25,9
Low level
Navoi region 21,5 18,5 34,4 37,6 16,1

 

1) Small and medium business

Figure 3

Share of small business and private enterprise in GRP (2016, %)

Demography of small business entities. Implemented measures to create a business environment, comprehensive support and further encourage the development of small businesses and private entrepreneurship contributed to an increase in the number of small businesses. As of 1 January 2017, the number of operating small business entities (excluding dehkan and farming entities) in the Republic was 218170 units, which is 118731 units or 2.2 times higher than in 2000 (Fig. 4).

Figure 4

Number of operating small business
(thousand units)

 

As of 1 January 2017, 61220 enterprises (28.1% of the total number of entities) operate in trade, 42862 (19.6%) in industry, 21796 (10.0%) in construction, 18051 (8.3% %) in agriculture, forestry and fishing, 15355 (7.0%) in the field of accommodation and food services, 10639 (4.9%) in the transportation and storage of goods, 6385 (2.9%) in the information and 5903 (2.7%) in the sphere of health and social services and 35959 (16.5%) in other spheres (Fig. 5).

Figure 5

Distribution of operating small business entities by kinds of economic activities as of 1 January 2017
(as percentage of total)

 Employment in small business and private entrepreneurship.

If in 2000 the number of employed in the sphere of small business and private entrepreneurship amounted to 4.5 million people, in 2010 and 2016, this figure was 8.6 and 10.4 million people respectively, and as compared to 2000, there is an increase in the number of employed in this area by 5.9 million people or 2.3 times (Fig. 6).

In 2016, in the sphere of small business and private entrepreneurship, 79.0 percent (8.2 million people) were employed in the individual sector, 21.0 percent (2.2 million people) - in small enterprises and microfirms.

Figure 6

 The number of employed in the small business and private sector
(mln.people)

If in 2000 the share of small business and private entrepreneurship in the total number of employed in the economy was 49.7 percent, in 2005 - 64.8 percent, in 2010- 74.3 percent, in 2016, this figure was 78.2 percent (28.5 percentage higher than in 2000) (Fig. 7).

The share of small business and private entrepreneurship in the total number of employed in the economy in 2016 was 78.2 percent. Of these, 61.9 percent were employed in individual entrepreneurship, and 16.3 percent were employed in small enterprises and microfirms.

Figure 7

Share of small business and private entrepreneurship in total number of the employed in economy

For comparison, the share of small businesses in the total number of employed is 78% in Japan, Italy - 71%, Germany - 69.5%, Great Britain - 56% USA - 54%, Russia - 25,6% (fig.8).

Figure 8

Share of small business and private entrepreneurship in total number of the employed in economy of different countries of the world

The role of small business and private entrepreneurship in the development of key economic sectors.

Industry. Owing to the sustainable high growth in number of new small business entities in industry, the creation of a favorable business environment, reducing the tax rate for a single payment, improved access to resources and production infrastructure, as well as strengthening the cooperation of small businesses with large companies, the share of small business and private entrepreneurship in the production of industrial products has significantly increased from 12.9% in 2000 to 45.3% in 2016 or 32.4 percentage points (Fig. 9).

Figure 9

Share of small business and private entrepreneurship in industry

In 2016, small businesses and private entrepreneurs produced industrial products worth 50,654.4 billion soums (45.3 percent of the total volume of industrial products), which is 16.4% more than in 2015.

In recent years, the number of small businesses has increased
in the main industries, in particular, in food industry, light industry, construction materials industry, mechanical engineering and metal processing, chemical and petrochemical, pharmaceutical industries, which is one of the main factors of sustainable growth in the share of small business and private entrepreneurship in industry, as well as high growth rates of their manufactured goods.

According to the Decree of the President of the Republic of Uzbekistan of April 7, 2014 УП-4609 "On additional measures to further improve the investment climate and business environment in the Republic of Uzbekistan", in labor-intensive industries such as food industry, light industry, construction materials industry, the maximum average annual number of employees for small businesses is increased to 200 people, which creates conditions to increase the number of small businesses that operate in these industries.

If it is analyzed by region, it can be seen that the share of small business and private entrepreneurship in industry for 2000-2016 grew by 53.8 percentage points in the Namangan region, 41.5 percentage points - Andijan region, 41.0 - in the Samarkand region and 40.0 percentage points - in Tashkent city (table 2).

Тable 2

Share of small business and private entrepreneurship industry by regions
(in percentage)

  years Change in 2000-2016,
(+;-), p.p.
2000 1) 2005 2000 1) 2005
High level
City of Tashkent 31,0 32,0 39,5 71,0 40,0
Namangan region 15,6 18,8 42,6 69,4 53,8
Samarkand region 19,1 24,8 45,9 60,1 41,0
Middle level
Djizhak region 19,7 31,9 42,3 59,1 39,4
Andizhan region 8,9 4,1 15,5 50,4 41,5
Khorezm region 24,0 10,0 38,8 47,7 23,7
Syrdarya region 10,1 8,8 26,9 46,5 36,4
Bukhara region 10,6 10,7 28,5 46,0 35,4
Fergana region 5,6 6,0 22,5 45,4 39,8
Surkhandarya region 23,1 10,1 25,4 45,2 22,1
Low level
Tashkent region 8,1 8,1 21,5 34,0 25,9
Kashkadarya region 6,8 4,2 29,1 27,0 20,2
Republic of Karakalpakstan 19,8 12,6 29,5 26,6 6,8
Navoi region 2,9 1,3 8,7 20,8 17,9

 

1) Small and medium business

Agriculture. Agriculture, as one of the most important branches of our economy, provides food products to the population and is a supplier of raw materials to the industry.

During the years of independence, deep structural reforms in agriculture have been carried out in our country, the market relations have been formed in the industry, the process of privatization of state property has been under way, and great attention has been paid to the solution of important tasks to improve the activities of dehkan and farming enterprises. The farmer movement is rapidly developing in agriculture: crop production, cotton production, rice production, fruit and vegetable production; in animal husbandry: livestock production, sheep breeding, karakul breeding, poultry farming, beekeeping, fish farming, and in the sphere of processing products; multisectoral farms are developing.

As a result of high rates of development of farms in the Republic, the share of small business and private entrepreneurship in agriculture increased from 73.6 percent to 98.2 percent (fig. 10) in 2000-2016.

Figure 10

Share of small business and private entrepreneurship in agriculture

Construction. As a result of the program adopted by the Government for the construction of standard houses in rural areas, small business entities ensured a stable growth in the volume of construction work in the country, including in rural areas. Along with the construction of residential areas, construction of social infrastructure facilities, rural medical stations, general educational institutions and services were carried out by small businesses.

If the share of small business and private entrepreneurship in the construction sector was 38.4 percent in 2000, it reached 67.8 percent in 2016, which gave a significant increase - by 29.4 percentage points (fig.11).

Figure 11

Share of small business and private entrepreneurship in construction

In 2016, the small business and private entrepreneurship entities completed construction works for 20488.5 billion soums (67.8 percent of the total volume of construction work), the growth was 11.9 percent compared to 2015. Moreover, small enterprises and microfirms completed construction works, amounting to 10197.1 billion soums (33.7 percent of the total volume of construction works), which, as compared to 2015, increased by 15.0 percent. Also, individual entrepreneurs carried out construction work, amounting to 10.291 billion soums (34.1 percent of the total volume of construction work), which as compared to 2015, increased by 8.8 percent.

In 2016, the largest share of small business and private enterprise in construction was observed in Namangan region (95.1%), Samarkand region (94.9%), Andizhan region (93.7%), Djizhak region (92.6%), Syrdarya region (90.3%) and Fergana region (90.1%).

The share of small businesses in construction in Khorezm region, Surkhandarya region and the Republic of Karakalpakstan is at average level within the range of 80.3 - 88.9%, Navoi region - 74.9%, Tashkent region - 73.8%, Kashkadarya region 73.3% and Tashkent city - 70.2%. In Bukhara region, this indicator remains the lowest and equal to 66.4 (Figure 12).

Figure 12

Share of small business and private enterprise in construction by regions in 2016 (%)

Trade. The share of small business and private entrepreneurship in the volume of retail trade turnover in 2016 reached 89.6%, which is 15.5 percentage points more compared to 2000 - 74.1% (Fig. 13).

Figure 13

Share of small business and private entrepreneurship in retail trade turnover

In 2016, the volume of retail turnover of small businesses and private entrepreneurship amounted to 78,867.4 billion soums (89.6% of the total volume of retail turnover). The volume of retail turnover of small enterprises and microfirms - 17754.0 billion soums (20.2% of total volume of retail turnover), the volume of retail turnover of individual entrepreneurs - 61113.3 billion soums (69.4% of the total volume of retail turnover).

Foreign trade activity of small business and private entrepreneurship. The state support of export-oriented small business entities contributed to an increase in the contribution of small businesses to the growth of exports.

The share of small business in the total export volume of the Republic in 2000 was 10.2%, it increased to 26.5% in 2016 (by 16.3 percentage points) (Fig.14).

Figure 14

Share of small business and private entrepreneurship in exports

The share of small business and private enterprise in the total volume of imports of goods and services in 2013 was 42.4%, in 2016 it increased to 46.7%, or by 4.3 percentage points (Figure 15).

Figure 15

Share of small business and private enterprise in import, %

Investments in small business and private entrepreneurship. The most important indicator of active economic activity of small businesses in the economy is the volume of investments.

In 2016, owing to favorable conditions created in the country, investments were made in the economy by small businesses and private entrepreneurship for 19482.8 billion soums, which is 18.7% higher than in 2015.

The share of small business and private entrepreneurship in the total volume of investments in 2016 amounted to 39.1%, which is 23.7 percentage points higher than in 2000 (fig.16).

The growth of the share of small business and private entrepreneurship in the total volume of investments is due to the increase of long-term loans attracted for enterprises’ investment purposes. Therefore, in the structure of funding sources for investment to the main capital by small businesses, its own sources and bank loans account for the largest share.

Figure 16

Share of small business and private entrepreneurship in fixed capital investment

Thus, as it was demonstrated by the dynamics of statistical indicators, the role of small business and private entrepreneurship in the socio-economic development of the country increases year by year. Positive trends in this area have been achieved through the implementation of comprehensive systemic measures to increase market reforms and liberalize the economy, improve the business environment, promote competition and protect private property.

Family enterprises. in2016, net revenues from the sale of products (goods, works and services) of family enterprises amounted to 679320.3 million soums.

The average volume of net revenues from sales of products (goods, works and services) of one family enterprise in 2012 amounted to 27.6 million soums, in 2016 this figure increased in 5.1 times (Figure 17).

In 2016, the largest average volume of net revenues from the sale of products (goods, works and services) of one family enterprise reached 323.4 million soums in Tashkent city. In Syrdarya region, this figure remains the lowest and equal to 39.7 million soums .

Figure 17

Average volume of net revenues from the sale of products (goods, works and services) of one family enterprise, mln. soums

The largest part of the net revenues from the sale of products (goods, works and services) was received by family enterprises in industry - 40.8%, trade - 33.1%, accommodation and food services - 11.1%, agriculture, forestry and fishing - 3.3%, construction - 3.0%, transportation and storage - 0.8%, other types of economic activity - 7.9% (Figure18).

Figure 18

Volume of net revenues from the sale of products (goods, works and services) of family enterprises by types of economic activity in 2016, %


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