PROMISING DIRECTIONS FOR ENHANCING THE EFFECTIVENESS OF SMALL BUSINESS ENTITIES IN INDUSTRY
Keywords:
Small business, Gross Regional Product (GRP), Uzbekistan, industrial sector, econometric modeling, economically active population, digitalization, entrepreneur-champions, resource distribution, sustainable development.Abstract
This study evaluates the macroeconomic factors influencing regional development in Uzbekistan, specifically focusing on the industrial effectiveness of small business entities (SMEs) and their impact on Gross Regional Product (GRP). Employing a semi-log (log-linear) regression methodology based on fifteen distinct regional observations, the research identifies a significant, counter-intuitive negative correlation between the share of small businesses in the economy and overall GRP growth. Specifically, the model reveals that a 1% increase in the share of small business entities correlates to a 5.36% decrease in GRP. This phenomenon is attributed to "resource capture," where low-productivity small firms divert essential capital, energy, and skilled labor from more efficient large-scale industrial enterprises. Conversely, the economically active population (EAP) remains a robust driver of growth, with an increase of 1,000 persons yielding a 1.38% rise in GRP. The paper argues that current industrial policy must shift from quantitative expansion to a qualitative "entrepreneur-champion" model, utilizing digital transformation and specialized Project Offices to foster high-tech manufacturing and medium-sized enterprise scaling.
