PROSPECTS FOR THE DEVELOPMENT OF SMALL BUSINESS AND ENTREPRENEURSHIP IN UZBEKISTAN

ISSN: 2582-4686 SJIF 2021-3.261,SJIF 20222.889, 2024-6.875 ResearchBib IF: 9.948 / 2024 VOLUME-5, ISSUE-12 134 PROSPECTS FOR THE DEVELOPMENT OF SMALL BUSINESS AND ENTREPRENEURSHIP IN UZBEKISTAN Israilova Shoira Turg‘unovna PhD in Economics, Associate Professor, Department of “Geography and Fundamentals of Economic Knowledge”, Uzbekistan National Pedagogical University Israilov Iskandar Ismailovich Tashkent State University of Economics Abstract This article analyzes the prospects for the development of small business and entrepreneurship in Uzbekistan. The study examines the country’s economic and social environment, the activities of small business entities, state support mechanisms, and existing challenges. The analysis shows that the development of small and medium-sized enterprises plays a crucial role in ensuring economic stability, creating new jobs, and stimulating innovation. At the same time, such factors as limited financial resources, insufficient education and professional skills, and the complexity of the legal framework remain key constraints to entrepreneurial development. Keywords: Small business, Entrepreneurship, Economic development, Innovation, State support, Economic stability in Uzbekistan INTRODUCTION Small business and entrepreneurship constitute an essential component of the national economy. They contribute not only to economic stability but also to the creation of new jobs, the promotion of innovative ideas, and the improvement of living standards. In recent years, economic reforms and state support programs in Uzbekistan have significantly expanded opportunities for the development of small and medium-sized enterprises. However, several persistent issues — such as limited access to financial resources, a complex legal and tax framework, low levels of education and professional training, and increased market competition — continue to hinder entrepreneurial activity. These factors may restrict the implementation of new business projects and slow economic diversification. Identifying strategic prospects for small business development is crucial to enhancing national competitiveness and ensuring socio-economic stability. Therefore, the aim of this study is to analyze the current state of small business in Uzbekistan, determine its development opportunities and constraints, and propose effective support strategies. Methods A comprehensive methodological approach was applied to study the development trends of small business and entrepreneurship in Uzbekistan. The research was conducted using the following methods: • Statistical analysis: Data from the State Committee on Statistics, the Ministry of Economy and Finance, and the Chamber of Commerce and Industry were examined to assess growth ISSN: 2582-4686 SJIF 2021-3.261,SJIF 20222.889, 2024-6.875 ResearchBib IF: 9.948 / 2024 VOLUME-5, ISSUE-12 135 dynamics, employment levels, SME contribution to GDP, and investment activity. Statistical tables, diagrams, and comparative indicators were utilized. • Comparative analysis: The local business environment was compared with SME support practices in developed countries such as South Korea, Turkey, the United States, and several European states. This method allowed the identification of best practices that could be adapted to the conditions of Uzbekistan. • Expert assessment: Opinions from specialists, entrepreneurs, and economists were analyzed to evaluate major obstacles to SME development and potential solutions. These assessments informed the formulation of practical recommendations. • Document analysis: Laws, presidential decrees, government resolutions, and state programs related to SME support were examined to determine their effectiveness and impact on business processes. • SWOT analysis: Strengths, weaknesses, opportunities, and threats of small business development were analyzed to identify key strategic trajectories. Results The study yielded several significant findings regarding the current state, trends, and development prospects of small business and entrepreneurship in Uzbekistan: • Statistical analysis indicates that the share of small business and private entrepreneurship in GDP has been growing steadily. The number of new small enterprises has increased notably in the service, trade, construction, agriculture, and manufacturing sectors. • Small business has become the main source of employment in recent years, contributing substantially to regional economic activity and the creation of new jobs. • Tax incentives, reduced loan interest rates, the “one-stop-shop” system, and the expansion of digital services have simplified business registration and operational procedures. • Expert assessments show that recent reforms have positively influenced SME development. Industrial zones, small industrial parks, business incubators, and innovation centers have created additional opportunities for small enterprises. • SWOT analysis indicates that improved infrastructure contributes significantly to the growth of innovative activity among SMEs. • Comparative analysis revealed several constraints compared to developed countries: limited access to credit resources, shortage of qualified personnel, bureaucratic obstacles to export activities, and low competitiveness of locally produced goods. • Based on the findings, the most promising directions for SME development include: support for innovative entrepreneurship, incentives for export-oriented small manufacturers, expansion of digital business models, strengthening regional business incubator networks, and improving access to financial resources. Discussion The research findings demonstrate that small business and entrepreneurship are becoming key drivers of economic growth, regional development, and employment in Uzbekistan. Favorable conditions created through ongoing reforms — including tax and credit incentives, administrative ISSN: 2582-4686 SJIF 2021-3.261,SJIF 20222.889, 2024-6.875 ResearchBib IF: 9.948 / 2024 VOLUME-5, ISSUE-12 136 simplification, and the formation of business infrastructure — have contributed to increased entrepreneurial activity. Comparative analysis further confirms that small business plays a similar pivotal role in the economies of developed nations. Their experience highlights effective approaches applicable in Uzbekistan, such as support for export-oriented SMEs, development of startup ecosystems, and promotion of innovative entrepreneurship. Nevertheless, the study identified several constraints — limited access to finance, insufficient professional skills, and underdeveloped marketing and export infrastructure — that continue to impede sustainable SME growth. Addressing these issues requires improving state support mechanisms, expanding training programs for entrepreneurs, and strengthening cooperation with international financial institutions to provide small business credit lines. Additionally, the expanding digital infrastructure — online registration, electronic tax reporting, and remote access to public services — enhances transparency and efficiency, accelerating entrepreneurial processes. Conclusion The study demonstrates the growing importance of small business and entrepreneurship in Uzbekistan’s economy. SMEs are becoming a stable source of economic growth, a key mechanism for job creation, and an essential link in implementing innovative ideas. State incentives, financial support mechanisms, and infrastructural development contribute significantly to increasing economic activity within the SME sector. However, challenges such as limited access to credit, shortage of skilled personnel, and weak marketing and export infrastructure remain relevant. Addressing these requires strengthening startup and innovation support centers, expanding training and consulting services for entrepreneurs, and improving state programs aimed at promoting SME exports. Furthermore, ongoing digital transformation will create new opportunities for small business development. The expansion of online services, electronic payment and reporting systems, and digital marketplaces will further simplify entrepreneurial processes and enhance competitiveness. References 1. Abdullayev, M. (2021). Theoretical Foundations and Practical Aspects of Small Business Development. Tashkent: Economics and Education Publishing. 2. Decrees and Resolutions of the President of the Republic of Uzbekistan (2017–2024). Collection of Documents on Entrepreneurship Support and Economic Reform Strategy. Tashkent. 3. World Bank (2022). Small and Medium Enterprises Development Report. Washington, D.C. 4. Tursunov, B., & Rakhimov, A. (2020). Factors of Innovative Development of Small Business in the Economy of Uzbekistan. Tashkent: Innovation Center Publishing.