STARS International University
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FORECASTING
INDICATORS
OF BUSINESS
DEVELOPMENT
IN UZBEKISTAN
Abstract:
The article is devoted to econometric modeling and forecasting of business
development using correlation and regression analysis. Also, a model for the develop-
ment of GDP business is given, taking into account the indicators of the share of busi-
ness in the number of employees in the volume of agricultural production, exports of
the Republic of Uzbekistan, and the forecast value of the share of business in GDP by
2021–2025.
Keywords:
business, dependent factor, independent factor, regression equation, signi-
ficance estimation, multiple linear regression model, Fisher’s test, prediction.
INTRODUCTION
Business is an integral part of the economy in most developed countries, it
performs the most important socio-economic functions of providing employ-
ment and creating a competitive environment and contributes to improving the
welfare of the population.
Business plays an important role in shaping and developing the economy of
Uzbekistan. Since gaining independence, the government, at the initiative of the
first President of the Republic of Uzbekistan, I.A. Karimov, has carried out huge
economic changes. Our priority in the economy is the development of private
property and private entrepreneurship through the implementation of funda-
mental structural changes, as well as the consistent continuation of the proces-
ses of modernization and diversification. “Business,” according to the President,
“is already becoming not only the main link providing employment for the popu-
lation and a source of income, but also the most important factor in the stability
of the economy, the guarantor and support of the social and political stability of
BOSIMBEKOVA FARANGIZ
SURATOVNA
student of 21/2 group Stars
International University
Izabellbella02@gmail.com
SCIENTIFIC SUPERVISOR:
SAIDOVA MARKHABO PHD
Associate professor Stars
International University
saidovamarhabo1991@gmail.com
https://doi.org/10.47689/STARS.university-pp89-97
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our society, and an active driving force for the country progress along the path
of progress”.
Regulatory legal acts in specific areas are updated annually in the country.
Confirming certain conditions and opportunities in Uzbekistan, experts in the
field of economics are constantly conducting scientific and practical research
on the modernization and development of the infrastructure of the economy of
the country. Business in a market economy helps to achieve specific goals, and
it is also of great importance in overcoming poverty and accumulating human
capital. The flexibility inherent in small businesses and high adaptability to mar-
ket conditions and changes contribute to the stabilization of macroeconomic
processes in the country.
Based on the foregoing, studying the development of a business and predic-
ting its future is a vital necessity. One of the ways to solve this problem is eco-
nometric modeling of the business development process in a specific place and
time.
LITERATURE REVIEW
Theoretical scientific problems of creating and developing a business were stu-
died by such foreign scientists as J. Schumpeter, R. Cantilon, M. Weber, W. Som-
bard, J.B. Say, R. Khizrich, M. Peters, A. Hosking, A. Busygin, Yu. Osipov, A. Sha-
ripov, M. Balashevich. S. Khachatryan, N. Koroleva, N. Egorova, E. Main, B Breev,
O. Voronevskaya, E. Helfert, P. Belykh wrote about socio-economic process of
modeling, the basis and method of business development.
Scientific and practical foundations and problems of business development
research in the Republic of Uzbekistan are presented in the works of S. Gulomov,
Y. Abdullaev, A. Vakhobov, M. Kosimova, T. Dustzhanov, S. Salaev, K. Muftaidinov
and others. Methods and models of statistical analysis of the structure and dy-
namics of economic indicators in a market economy were studied by T. Shodiev,
B. Khodiev, Sh. Kholmuminov, N. Makhmudov, B. Begalov, B. Berkinov, K. Safae-
va, B. Ataniyazov, B. Salimov, Yu. Mukhamedov, A. Aimbetov, etc.
Econometric modeling of business trends and development problems are
presented in the works of B.Yu. Khodiev, B.B. Berkinov, S.K. Salaev, A.B. Yugay,
M.A. Repina (Process approach to management. Business process modeling),
V.G. Eliferova (Business processes. Regulation and management), Andersen Ber-
na (Business processes. Improvement tools), A.V. Scheera (Business process mo-
deling), G. Kalyanova (Methods and tools for enterprise architecture modeling),
they all analyzed and gave scientific and practical recommendations on these
issues.
METHODOLOGY
In the country, due to the lack of direct information, the study of business dy-
namics presents great difficulties. In this regard, we tried to model the develop-
ment of business in Uzbekistan using its indirect data, i.e. the share of business in
the production activities of industries and in the country as a whole (in percent).
The volumes of manufactured products and services rendered by sectors of the
economy for a certain period in market prices constitute the volume of GDP.
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Hence, the situation arises that the dynamics of the volume of GDP is directly
affected by the dynamics of the volume of manufactured goods and services
rendered in the country as a whole.
From a methodological and practical point of view, when studying the dyna-
mics of the development of the share of business in GDP, taking into account
all its influencing factors presents certain difficulties. In this regard, we limited
ourselves to factors that, in our opinion, have a significant impact on the dyna-
mics of the share of business in GDP, such as the share of business in the number
of people employed in the economy, in the volume of agricultural production,
exports of goods and services, as well as the shared business in the volume of
other sectors of the economy, although in terms of methodology it was possible
to take other factors.
RESULT AND DISCUSSION
The objectives of the study are to identify patterns in the dynamics of the de-
velopment of the share of business in the country’s GDP over a certain period of
time, taking into account the dynamics of the development of the share of busi-
ness in the above sectors of the economy.
This problem can be solved by econometric modeling using correlation-reg-
ression analysis.
When studying the main indicators of business development, the share of bu-
siness in GDP acts as a dependent factor, and the share of business in the number
of people employed in the economy, in the volume of agricultural production,
exports of goods and services, and other indicators – as an independent.
In the future, we will adhere to the following notation: Y-dependent variable;
X – independent variables; – the number of the studied trait.
As initial information for modeling, we use the actual data presented in Table
1 [2. S. 18, 24, 49, 72].
Table 1
Share of business in GDP and factors influencing
on it in the Republic of Uzbekistan (in percentages)
Years
Share of
business in
GDP
Share of business
in the number of
employees
Share of business
in output product
agricultural
Share of
business in
export volume
Y
X
1
X
2
X
3
2000
31,0
49,7
73,6
10,2
2001
33,8
51,8
74,5
9,3
2002
34,6
53,5
74,9
7,5
2003
35,0
56,7
78,1
6,9
2004
35,6
60,3
81,1
7,3
2005
38,2
64,8
85,7
6,0
2006
42,1
69,1
94,0
10,7
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2007
45,7
72,1
97,6
14,8
2008
48,2
73,1
97,7
12,3
2009
50,0
73,9
97,8
14,6
2010
52,5
74,3
97,8
13,6
2011
54,0
75,1
97,7
18,8
2012
54,6
75,6
97,8
15,7
2013
55,8
76,7
98,0
18,0
2014
56,1
77,6
98,3
26,0
2015
56,7
77,9
98,4
26,9
2016
56,9
78,1
98,5
28,5
A visual study of the development dynamics of each of the factors makes it
possible to record formally the dependence of the share of business in GDP on
the factors affecting it as follows [3]:
0
1 1
2
2
3
3
Y a a X a X
a X
ε
=
+
+
+
+
,
(1)
where
Y
– share of business in GDP;
X
1
- the share of business in the number
of people employed in the economy;
X
2
- the share of business in the volume of
agricultural production;
X
3
- share of business in the volume of exports of goods
and services;
a
i
– desired parameters (
i
=1,3);
ԑ
- the share of business in the volu-
me of unaccounted factors.
A multiple correlation-regression analysis was carried out to compile the reg-
ression equation of the process under study, the results of which are given in
Table. 2.
Table 2
Calculation results of the correlation-regression analysis
№
Indicators
Y
X
1
X
2
X
3
1.
Sum
780,8
1160,3
1541,5
247,1
2.
Mean
45,9
68,3
90,7
14,5
3.
p-value
0,64
0,03
0,57
0,01
4.
Multiple Regression Coefficients
R=0,979
5.
R2 determinism coefficient
0,959
6.
Normalized R-square
0,950
7.
standard error
2,121
8.
t – statistics
-0,5
2,4
-0,6
2,9
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9.
Multiple odds
a
0
=-3,8
a
1
= 0,9
a
2
= -0,2
a
3
= 0,44
10.
standard error
8,1
0,4
0,3
0,1
Thus, according to the results of the correlation-regression analysis, the reg-
ression equation has the following form:
1
2
3
,8 0,9
0,2
0,4
3
Y
X
X
X
ε
= −
+
+
+
−
.
(2)
The significance of the resulting multiple regression equation is evaluated
using Fisher’s F-test:
where
D
факт
- factorial sum of squares per degree of freedom;
D
ост
- residual sum of squares per degree of freedom;
R
2
- coefficient of multiple determination;
m
- number of parameters for variables x;
n
- number of observations.
D
ост
- residual sum of squares per degree of freedom;
R
2
- coefficient of multiple determination;
m
- coefficient of multiple determination;
n
- number of observations.
For m > 3 and 17-3=14, the degree of freedom F – the Fisher distribution is
equal to:
2
2
0,959
17 3 1 49,6
1 0,959
3
F
− −
=
•
=
−
.
According to Fisher’s criteria, the actual significance of the equation is grea-
ter than in the Fisher table (Ftable 3.20). In addition, to determine the adequa-
cy of the compiled model to the process under study, theoretical values of the
dependent factor are calculated, substituting the values of independent factors
for the period under study into the resulting regression equation. The sums of
the actual and theoretical values of the dependent variable must be equal. The
results of calculating the theoretical values of the dependent variable are given
in Table. 3.
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Table 3
The results of calculating the theoretical values
of the share of business in GDP in the study period
Years
Y
1
X
2
X
3
X
1
2
3
,8 0,9
0,2
0,44
3
Y
X
X
X
−
= −
+
+
2000
31,0
49,7
73,6
10,2
30,7
2001
33,8
51,8
74,5
9,3
32,4
2002
34,6
53,5
74,9
7,5
32,7
2003
35,0
56,7
78,1
6,9
34,6
2004
35,6
60,3
81,1
7,3
37,5
2005
38,2
64,8
85,7
6,0
40,2
2006
42,1
69,1
94,0
10,7
44,3
2007
45,7
72,1
97,6
14,8
48,1
2008
48,2
73,1
97,7
12,3
47,9
2009
50,0
73,9
97,8
14,6
49,6
2010
52,5
74,3
97,8
13,6
49,5
2011
54,0
75,1
97,7
18,8
52,5
2012
54,6
75,6
97,8
15,7
51,6
2013
55,8
76,7
98,0
18,0
53,6
2014
56,1
77,6
98,3
26,0
57,8
2015
56,7
77,9
98,4
26,9
58,5
2016
56,9
78,1
98,5
28,5
59,3
Ʃ
780,8
780,8
Fisher’s criterion and the results obtained in Table 3 confirm that the compiled
model is significant, and it can be used to predict the share of business in GDP
under the influence of the above factors X1, X2, X3.
It is necessary to have forecast values of independent factors for the cor-
responding period to calculate the forecast values of the share of business in
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GDP. They can be determined by the method of analytical alignment of the initial
series of independent factors by compiling an equation that describes the dyna-
mics of the process. A number of computational experiments were carried out to
select the type of equations to solve the problem. The results of the experiment
showed that the equation has the form Х
i
=a
0
+a
1
t.
So, as a result of calculating the parameters a0 and a1, respectively, the equa-
tions of independent factors X1, X2, X3, the dependence of the factors on time t
is obtained, i.e.: Х t=a0+a1t.
The dependence of the first independent factor
¬¬¬¬
X1 – the share of business
in the number of employees on time has the form: X1= 77.1+ 0.95*t;
– second independent factor X2; X2= 96.1+ 0.54*t;
– third independent factor X3; X3=18.2+1.01*t.
By substituting its values instead of t, we obtain forecast data of independent
factors for the coming periods.
Substituting the obtained values into equation (2), we determine the share
of business in GDP for the following periods. Thus, summarizing the results of
calculating the dynamics of the development of the share of business volume in
GDP, they can be presented in the form of Table 3.
Table 4
Forecasting the values of the share of business in GDP
Years
Years Share
of business
in GDP
Share of business
in the number of
employees
Share of business
in output product
agricultural
Share of
business in
export volume
Y
1
X
2
X
3
X
Actual condition
2017
55,8
76,7
98,0
18,0
2018
56,1
77,6
98,3
26,0
2019
56,7
77,9
98,4
26,9
2020
56,9
78,1
98,5
28,5
Forecast results
2021
60,3
84,9
98,7
38,0
2022
61,4
86,8
98,9
41,6
2023
62,6
88,7
99,1
45,7
2024
63,7
90,6
99,3
50,1
2025
64,9
92,4
99,5
53,7
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The results of forecast calculations show an annual increase in the share of
business, which is no more than 2% compared to the previous one. At the same
time, indicators of the share of business in GDP are closely related to indicators
of the volume of agricultural production, with the share of exports and the num-
ber of employees. The projected share of business in the number of employees
in 2017 will be 76.7%, and by 2021 this figure will be 84.9%. The most important
indicator that affects the share of business in GDP is the share of business in the
volume of agricultural production. The share of business in the volume of exports
in 2021 will be 38.0%, and by 2025 it will be 53.7%. With this growth in business
indicators in Uzbekistan, a positive trend in the development of the country’s
economy is expected.
CONCLUSION
The introduction of business in Uzbekistan is a necessary and urgent task. The
resources of private enterprises, their experience, incentives, and other advan-
tages can ensure rapid progress in the modernization of socio-economic infrast-
ructure, without burdening the budget with heavy operating costs and a signi-
ficant increase in public debt. The Action Strategy of the five priority areas for
the development of the Republic of Uzbekistan in 2017-2021 is a continuation of
institutional and structural reforms aimed at reducing the presence of the state in
the economy; further strengthening the protection of rights and the priority role
of private property; stimulating the development of small business and private
entrepreneurship: ensuring reliable protection of the rights and guarantees of
private property, removing all barriers and restrictions, providing complete free-
dom in the development of private entrepreneurship and small business; imple-
mentation of the principle “If the people are rich, then the state will be rich and
strong” (Sh. Mirziyoev, 2017).
At the same time, business is a very delicate tool that requires experience and
resolution of legal and procedural issues, as well as deep professional analysis.
In Uzbekistan, at present there are no legal, institutional, financial and personnel
prerequisites for running a successful business on a full scale, adequate to the
needs of the development of industrial and social infrastructure. Under these
conditions, under the pressure of the urgent needs of the economy and limited
budgetary funds, it would be a mistake to begin immediately mass application of
business in the infrastructure sectors of the country.
Business in Uzbekistan should develop in accordance with the program of eco-
nomic reforms carried out in the country, including privatization, improvement of
antimonopoly policy, decentralization of power, increase in efficiency and targe-
ting of social protection for all segments of the population.
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