The Regional Aspects of Small Business Development Diversification in Ukraine
Ivanov Y. B.

Ivanov, Yuriy B. (2025) “The Regional Aspects of Small Business Development Diversification in Ukraine.” The Problems of Economy 2:96–108.
https://doi.org/10.32983/2222-0712-2025-2-96-108

Section: Regional economy

UDC 334.012.64:332.132

Abstract:
The aim of the article is to identify regional differences in the development of small businesses and their diversification in spatial and intra-regional dimensions, which should serve as a basis for specifying strategic documents of the State regional policy, regional strategies, and programs for supporting entrepreneurship. The article analyzes the distribution of small business entities across regions and types of economic activity in those regions, the role of small businesses in providing employment and attracting hired labor. The analysis was conducted based on data from the State Statistics Service of Ukraine for the years 2010–2023 regarding the number of entities, employment, sales volumes, and the industry aspect was researched in the context of individual entrepreneurs for the years 2014–2023. It is shown that small businesses prevail in the number of economic entities, but are not the main player in providing jobs and in the sales volumes of products (goods, services). It is determined that the main differences between regions lie in the productivity of employed persons. The highest volume of produced goods (products, services) per employed person is in the city of Kyiv, and among other regions, only five have productivity that exceeds the national average in Ukraine. A hypothesis has been proposed, which is partially confirmed, that the sectoral focus of small businesses and the level of their diversification within regions determine overall productivity. Overall, the level of spatial and regional-sectoral diversification of small business development is low, and there are trends of concentration of business activity. Small businesses are highly concentrated in all regions within the service sector, with wholesale and retail trade being the primary focus. Transportation services, professional activities, and other services for the population are secondary in most regions. A positive aspect of development has been noted as follows: the structural shift of individual entrepreneurs’ activities from the trade sector to the high-tech field of computer programming across all regions, although the distribution of this type of economic activity remains highly concentrated among regions.

Keywords: small business, development, region, diversification, employment, sectoral distribution.

Fig.: 8. Bibl.: 14.

Ivanov Yuriy B. – Doctor of Sciences (Economics), Professor, Chief research scientist, Research Centre for Industrial Problems of Development of NAS of Ukraine (2 floor 1-a Inzhenernyi Ln., Kharkіv, 61166, Ukraine)
Email: yuriy.ivanov.ua@gmail.com

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