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ANALYSIS OF THE STATUS OF DEVELOPMENT AND CHANGE TRENDS OF THE
SERVICE SECTOR IN UZBEKISTAN
Sobirova Lobarkhon Abdulkhamidovna
Fargana state university
Abstract:
This article analyzes the current state and development trends of the service sector in
Uzbekistan. The article examines such important aspects as the role of the sector in the economy,
its rapid growth rate, its inclusion of various sectors, investment flows and increased competition.
The article also analyzes trends in change such as the introduction of technologies, improving the
quality of services, the development of tourism and the emergence of new services. The article
also discusses the problems that hinder the development of the sector, including the lack of
qualified personnel, infrastructure problems and increased competition. In conclusion, the article
emphasizes that the future of the service sector in Uzbekistan is bright, but it is necessary to focus
on state support programs, investments and training of personnel to solve the problems.
Keywords:
Service sector, Uzbekistan, Development status, Trends in change, Economy,
Investments, Competition, Technologies, Tourism, Human resources, Infrastructure, State support.
ENTRY : Uzbekistan economy fast photos with developed going one in the period service show
field increasingly important importance profession This is industry not only economic to grow ,
maybe work places to create , to the population marriage level to increase and society general
well-being to improve also contribution adds . Service show field various kind sectors own inside
including trade , transport , communications , finance , education , health storage , tourism , hotel
services and heart open . Last in years In Uzbekistan service show field fast photos with is
developing . This of the industry share In GDP increasingly increasing is going and this of the
country economy diversification to do aimed at strategy important part However, along with the
development of the service sector, there are also a number of problems. For example, problems
such as the lack of qualified personnel, infrastructure problems, and increased competition are
hindering the further development of the service sector .
The rapid development of the service sector is one of the priority areas of the Development
Strategy of New Uzbekistan. By developing services and service sectors in the regions, the
volume of services will increase by three times in the next 5 years and create a total of 3.5 million
new jobs in this area. The prospects for transforming the service sector into a leading sector of the
economy largely depend on the development of entrepreneurial activity in this area, especially
small and is inextricably linked to the development of private entrepreneurship, as services are
mainly provided by small and private businesses.
It is worth noting that he, having distinguished all the currently known elements and components,
methodologically proved the connection of entrepreneurship with innovation in the development
of the economy and society. That is, he proved that an entrepreneur is an innovator, a subject of
creative combination of resources and capital in order to make a profit. In general, in this classical
concept, the essence of entrepreneurship as a phenomenon, entrepreneurial activity as a process is
used in the practice of market management, as well as in scientific circulation. He is considered
the direct founder of the classical theory of entrepreneurship, which has survived to our days and
is a set of ideas for determining the fundamentals of entrepreneurial characteristics. At the same
time, it is also believed that the priority in the distribution and definition of the concept of
entrepreneurship according to the category of “entrepreneur” belongs to R. Cantillon, who, as M.
Blaug[1] said, proposed the main factors of entrepreneurship as an entrepreneur, emphasizing that
entrepreneurial activity is a subject that seeks to make a profit, and for this he risks capital and
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resources. Theoretical and methodological skills for understanding the essence of
entrepreneurship as a phenomenon that determines the prospects for human development have
long been formed by science. In this sense, it is appropriate to theoretically and methodologically
systematize the categories of importance of entrepreneurship and their characteristics in the study
of entrepreneurship (Figure 1).
Figure 1. Theoretical and methodological systematization of the categories of importance of
entrepreneurial activity and their characteristics
At the present stage of social development, the service sector occupies a significant place as an
important and rapidly developing sector of the world economy. In the developed Western
countries of the world, the service sector has become the most developed, first-class sector of the
national economy. Its role in increasing GDP, creating new jobs, ensuring employment,
increasing their income and free time, and fulfilling other important socio-economic tasks is
increasingly growing. The service sector accounts for 70% of the GDP of the United States, 71%
of France, and 62.5% of Germany. Also, more than 70% of the population employed in the
economy in these countries is engaged in the service sector.
Scientific research is being conducted in the world to address the urgent problems of the rapid
development of the service sector on an innovative basis. In particular, such important issues as
the role of the service sector in ensuring employment and improving the well-being of the
population, its impact on the processes of accelerating economic growth and forming a knowledge
economy, its importance in the development of human capital, the creation and implementation of
new types of services in the sector, etc. are being studied on a large scale. At the same time,
consistent scientific research is being carried out to improve the innovative potential of the service
sector, increase the competitiveness of the sector, and improve state policy aimed at its
1
https://finance.tsue.uz/index.php/afa/article/view/139/148
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development. At the current new stage of social development, scientific research on the tasks
facing the service sector, ways to introduce high technologies in the sector, and mechanisms for
improving the living standards and employment of the population in the service sector is gaining
importance.
Since 2017, e-government services have reached 368. Analysis shows that private sector
involvement has stimulated the growth of the services sector.
Figure 2. Dynamics of development of types of services in Uzbekistan in 2017-2022
Experts from the Institute for Forecasting and Macroeconomic Research (IMPR) analyzed the
results of work on the development of services in Uzbekistan in 2017-2022.
In recent years, the service sector in Uzbekistan has been developing rapidly. The share of this
sector in GDP is constantly increasing, and this is an important part of the country's strategy
aimed at diversifying its economy. According to the results of 2022, the service sector in
Uzbekistan accounted for 41.5 percent of GDP, and the real growth rate of the sector in 2017-
2022 increased by 1.9 times.
Important steps have been taken to support and accelerate the development of the service sector.
In particular:
- The "e-government" system has been improved, and the total number of e-government services
has reached 368 (in 2019 - 173), of which 242 are intended for entrepreneurs;
- Business registration has been simplified and the number of small businesses in the services
sector has increased by 2.2 times (128 thousand in 2017, 325 thousand in 2022);
- ICT infrastructure has improved by almost 6 times and the logistics system by 1.2 times. The
length of fiber optic communication lines has increased from 20.3 thousand km in 2017 to 118
thousand km in 2022. Cargo transported has increased from 1146.2 million tons in 2017 to 1398.9
million tons in 2022.
2
https://imrs.uz/
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Encouraging the involvement of the private sector in the development of modern services has
borne fruit, and the following changes were noted in the years analyzed:
- financial services increased by 5.1 times. The involvement of private and foreign banks in the
sector increased their competitiveness, and as of December 1, 2022, the HHI index decreased to
1016 (as of January 1, 2018, it was 1520);
- services in the information and communication sector increased by 2.8 times. The capacity of
the international data transmission network increased to 1800 Gbit/s in 2022 (64.2 Gbit/s in 2017);
- services in the field of education increased by 2.5 times. The number of private preschool
educational institutions reached 833 (250 in 2017), the number of preschool educational
institutions based on public-private partnerships reached 1,313 (250 in 2018), the number of
family preschool educational institutions reached 20,676 (579 in 2018), the number of non-state
general educational institutions reached 194 (39 in 2017), the number of non-state higher
educational institutions reached 55 (1 in 2018), the number of foreign higher educational
institutions reached 30 (7 in 2017);
- healthcare services have increased 2.8 times, and currently 7,320 private medical institutions (of
which 5,823 are outpatient and 1,497 are inpatient) are operating (in 2017 there were 4,000).
In the process of building a new Uzbekistan, special attention is paid to the issues of intensive
development of the service sector, ensuring employment of the population in the regions through
the effective use of its potential, and reducing poverty. The Development Strategy of the Republic
of Uzbekistan for 2022-2026 sets out important tasks to further increase the well-being of our
people, transform economic sectors, and unconditionally ensure human rights and interests based
on the principle of "For the sake of human dignity." In solving these tasks, it is urgent to deepen
scientific research in the areas of intensive development of the service sector in our country and
increasing its role in ensuring employment of the population.
Development status of the service sector:
In recent years, the service sector in Uzbekistan has been developing rapidly. The share of this
sector in GDP is steadily increasing, and this is an important part of the country's strategy aimed
at diversifying its economy. The service sector includes various sectors, including trade, transport,
communications, finance, education, healthcare, tourism, hotel services and entertainment. Each
of these sectors has its own characteristics and affects different aspects of the economy. The flow
of foreign and domestic investments into the service sector is increasing. The introduction of
modern technologies in this sector is helping to improve infrastructure and improve the quality of
services. Competition in the service sector is intensifying, which leads to an increase in the quality
of services and a decrease in prices. This creates advantages for consumers, but requires
businesses to be more competitive.
The introduction of technologies in the service sector is becoming increasingly widespread. In this
area, the use of e-commerce, mobile payments, online services and other technologies is
becoming widespread. This helps to make services more convenient and efficient. With the
growth of consumer demands, attention is being paid to improving the quality of services. In this
area, attention is being paid to individualization of services, customer orientation and quality
control of services. The tourism sector in Uzbekistan is developing rapidly. This leads to an
increase in demand for hotel services, tourist packages, transport and other services. The
development of tourism also contributes to the development of other sectors of the service sector.
With the development of technologies, new services are emerging. This leads to an increase in
demand for online education, telemedicine, online shopping and other new services in this area.
These services create even more opportunities for consumers.
Problems hindering the development of the service sector:
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Lack of skilled personnel: The lack of skilled personnel in the service sector is hindering the
development of this sector. To solve this problem, it is necessary to improve the personnel
training system, modernize training programs, and introduce employee retraining programs.
Disadvantages of the education system: Curriculums do not meet market requirements, and there
is insufficient attention to practical skills.
Low level of foreign language proficiency: In the service sector, especially in tourism, knowledge
of foreign languages is very important.
Insufficient staff retraining and development programs: There are insufficient opportunities to
introduce employees to new technologies and service standards.
Low wages: It is difficult to attract qualified personnel in the service sector due to low wages. 2.
Infrastructure problems:
Unreliability of utilities: Outages in electricity, water, and gas supply disrupt the operations of
service businesses.
Inadequate transport infrastructure: Underdeveloped roads, railways, and airports make service
delivery difficult.
In conclusion, the service sector in Uzbekistan is developing rapidly and plays an important role
in improving the overall well-being of the country's economy and society. The achievements
made in recent years, in particular, the increase in the sector's share in GDP, investment inflows,
the development of tourism, and the emergence of new services, are helping to accelerate the
country's economic growth and create jobs. However, there are also a number of problems that
hinder the development of the service sector. The lack of qualified personnel, infrastructure
problems, increased competition, shortcomings in state policy and legislation, as well as cultural
and social factors hinder the further development of the service sector. To address these problems,
it is necessary to focus on state support programs, investments, training, improving legislation,
and strengthening the fight against corruption. Businesses should also focus on increasing their
competitiveness, improving the quality of services, and introducing new technologies. The
development of the service sector will help accelerate Uzbekistan's economic growth, create jobs,
and improve the living standards of the population. The joint efforts of the state, business, and
society will contribute to the further development of this sector and a brighter future for the
country.
References:
1. BlaugM . Cantilon , Richard // 100 velikikhekonomistovdoKeinsa = Great Economists before
Keynes: An introduction to the lives & works of one hundred great economists of the past. Saint-
Petersburg: Ekonomikus, 2008. S. 114-116.
2. Decrees and resolutions of the President of the Republic of Uzbekistan (2021–2024). A
collection of documents aimed at the development of innovative activities.
3. Statistical reports on the socio-economic development of Fergana region (2022). Fergana
regional statistics department.
4. "Innovative Development Strategy of the Republic of Uzbekistan" (2018-2021). Documents of
the Ministry of Innovations.
5. Bozorov, UT (2020). Regional Economy and Innovative Entrepreneurship. Tashkent: New
Generation of the Century. 16. “Guide for Young Entrepreneurs” (2023). Published by the
Ministry of Investments and Foreign Trade of the Republic of Uzbekistan.
