International Conference
“
Science of the 21st century: society and digitalization
”
Conference Proceedings. Scope Academic House, January 30, 2021, Sheffield, UK.
100
DIGITAL REFORM OF SMALL BUSINESS AND ENTREPRENEURSHIP DEVELOPMENT
MANAGEMENT IN UZBEKISTAN
Narzullaeva D.K.
1
Khasanova Zh.N.
2
1
Narzullaeva Durdona Kuysunovna,
Senior lecturer of the Faculty “Digital economy
and mathematicsDisciplines”, Plekhanov Russian University of Economics, Tashkent
Branch (Uzbekistan),
2
Khasanova Zhamila Nizamiddinovna, Senior Lecturer of Tashkent State University of
Oriental Studies (Uzbekistan)
The digitalization of business structures is the basis for the reorganization of the market
economy; information support for business process management is essential for the
dynamic development of an enterprise. And the process of managing business processes
itself is understood as a manifestation of the entrepreneurial ability to direct the
resources used to the area where there is an opportunity to obtain the best results.
Key words: business, digital economy, management, process, reform, development,
entrepreneurship.
For several years, developed and developing countries have been investing in a
digital transformation strategy to strengthen their positions in domestic and
international markets and increase the competitiveness of their products and services.
The significant role of the state as a regulatory div that improves productivity
conditions and reduces costs in this way not only improves the business climate of the
state, but also contributes to the influx of investment in a country where digitalization
is given special attention.
Since 2017, the global community has set a course for digital transformation of
business and building a digital economy. The world is changing so fast that we can say
that the future has already arrived. But in different cities and countries, the movement
to the "digital planet" still occurs at different speeds.
Therefore, the ability to see new trends and change in real time ensures business
competitiveness and success in the digital economy.
What is digital transformation? First of all, it is the introduction of modern
technologies into the business processes of the enterprise, which implies not only the
installation of modern equipment or software, but also fundamental changes in
management approaches, corporate culture, internal and external communications. As
a result, each employee's productivity increases, decisions are made quickly and
efficiently, their work is quickly adapted to the requirements of the current moment and
meets the needs of customers, and the organization gains a reputation as a progressive
and modern organization.
Digitalization of processes is relevant not only at the level of individual
enterprises, but also entire industries choose this path of development as the only way
to meet the rapidly changing conditions of the surrounding world. Due to this, the digital
transformation of industry, retail, public sector and other areas is already changing the
lives of every person and every company.
International Conference
“
Science of the 21st century: society and digitalization
”
Conference Proceedings. Scope Academic House, January 30, 2021, Sheffield, UK.
101
Half of the world's inhabitants are already connected to the Internet, according to
experts, by 2025, and 25% of operational tasks will be performed by robots. In 2020,
more than 80 billion devices in the world will be connected to the Internet. [4]
Modern information technologies used in business processes not only reduce
production costs, but also the universal availability of information increases
transparency in all areas, including the economy. Consumers will be able to get the
necessary information about various products and services and order them from
anywhere in the world.
In 2019, Strategy Partners studied global experience and conducted a survey of
Russian companies to assess the current level of business readiness for digital
transformation. We interviewed representatives of more than a hundred Russian
companies from different market segments: major enterprises, medium and small
businesses, including state-owned companies.
The survey showed that 83% of CEOs plan to transform their business models in
the next 3-5 years. Only 4% said they don't need digital transformation.
Many of the surveyed entrepreneurs are already experimenting with digital
technologies to improve the effectiveness of business strategies, but only a few managed
to get a significant result. As a rule, companies automate operational work, but they do
not have a large-scale strategy for switching to digital processes.
Tab. 1. Whether the current business model needs to be changed.
Due to digital transformation in the next 3-5 years[4]
1
Digital transformation is not required
4 %
2
Separate measures to digitalize business models are needed
39%
3
Full digitalization of the existing business model is needed
22%
4
Fully digitalize the existing business model is needed: work on
creating a new one
22%
5
Switch to a new digital model is needed
9%
6
Could not answer
4%
An analysis of the responses of the surveyed entrepreneurs of Russian companies
showed that about 2/3 of enterprises today spend no more than 5% of the total
investment on digital transformation, use no more than 5% of their labor resources in
it, and do not have a special competence center in the company's structure. Only every
third industrial enterprise out of the top 100 largest companies in Russia today has the
position of head of digital transformation in its staff. (Table 1)
Speaking about the obstacles that hinder the transformation of enterprises, more than
half of managers point to a lack of knowledge about technologies and high-quality
information about suppliers (30%), a Lack of specialized personnel (17%), a lack of
understanding of the prospects from the introduction of technologies (25%), the Lack of
digital infrastructure and the lack of demand for digital goods and services (23%). (Table 2)
Research by Russian experts shows that there is a need for business and
entrepreneurship to switch to a digital platform, but some difficulties are also inevitable,
in particular, financing the introduction of digital technologies and training employees
to use them. All the barriers to digitalization of the Russian economy show a lack of
readiness of business representatives not only to switch to digital relations, but also the
International Conference
“
Science of the 21st century: society and digitalization
”
Conference Proceedings. Scope Academic House, January 30, 2021, Sheffield, UK.
102
lack of development of the necessary digital infrastructure. It is also important to note
the fact that Internet resources are mainly used by the middle and young generation of
the population, while the elderly only study or do not know how to use them at all.
Tab. 2. As representatives of businesses see
the barriers to digital transformation[4]
1
Lack of knowledge about technologies and suppliers
30 %
2
Lack of understanding of the effect of technology implementation
25%
3
Lack of financial resources
22%
4
There is no demand for digital goods and services
22%
5
Lack of specialized personnel
17%
6
Lack of a transformation strategy
17%
7
Transformation is not a business priority
13%
8
Inefficient industry standards
9%
9
Lack of access to foreign technologies
9%
10 Absence of digital infrastructure
4%
Nevertheless, Strategy Partners experts note the following key factors for the
success of digital transformation: understanding the inevitability of change and
supporting all key changes by the company's first person; a digital agenda that changes
critical business processes, rather than being limited to implementing individual tools;
creating a powerful competence center within the company. [4]
Uzbekistan, as a rapidly developing country, has also taken a course towards
digitalization of the economy. in this regard, at the suggestion of President Shavkat
Mirziyoyev, 2020 has been declared the Year of development of science, education and
the digital economy in Uzbekistan. [2]
Over the past year, Uzbekistan has implemented four reforms that allowed it to
become one of the 20 countries that have made the greatest progress in improving the
business climate, according to the new annual report "Doing Business" of the World
Bank group 2020[5].
The report analyzes the following indicators that assess the ease of doing
business in the country: creation of enterprises (businesses); obtaining construction
permits; connection to the power supply system; registration of property; getting loans;
protection of minority investors; taxation; international trade; contract enforcement;
resolution of insolvency.
Key reforms implemented in Uzbekistan based on indicators for assessing the
ease of doing business are:
1. Strengthening the protection of minority investors by expanding the rights and
role of shareholders in making key corporate decisions, clarifying ownership and
control structures, and increasing corporate transparency.
2. Simplification of taxation by combining the tax on the development of social
infrastructure with the income tax.
3. Simplification of international trade by introducing a risk-based customs
verification mechanism, as well as easing requirements for import documents.
International Conference
“
Science of the 21st century: society and digitalization
”
Conference Proceedings. Scope Academic House, January 30, 2021, Sheffield, UK.
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4. Simplification of contract enforcement through the adoption of a law on
voluntary mediation, as well as the creation of financial incentives that encourage
parties to resort to resolving disputes through mediation. [5]
The accelerated development of small businesses and private entrepreneurship
in Uzbekistan has had a positive impact on the country's socio-economic development.
Based on effective state regulation mechanisms, the share of private entrepreneurship
(together with small businesses) in GDP reached 56.9 percent. Small private businesses
operate in almost all sectors of the national economy.
The improvement of regulations adopted by the government ensures further
development and expansion of this sector. In this regard, on January 8, 2020, the
Government adopted a resolution "Measures to implement a system for assessing the
level of business development in the regions of the Republic" [2]
In accordance with the decree, from March 1, 2020, a system for assessing the
level of business development in the regions of the Republic will be introduced based
on the automated online information system "BUSINESS INDICATOR" launched on
March 1, 2020 for calculating and evaluating indicators of business development.
The share of small businesses in Uzbekistan in relation to GDP in January-
December 2019 was 56.5 %. the Number of small businesses per 1000 population was
13.3 units. In January-December 2019, 92.9 thousand new small businesses and
microfirms were created again (without dehkan and farms), which is 1.9 times more
than in the same period of 2018.
In January - December 2019 in regional terms, the highest number of newly
established small enterprises and microfirms was made in Tashkent - 18252 units,
Tashkent region - 9671 units, Samarkand region - 7980 units. In Navoi region, this figure
reached 7129 units, in Ferghana-6712 units, and in Andijan - 6632 units. At a low level,
this indicator was recorded in the Syrdarya region - 3153 units.
By region, the largest share is in Tashkent and accounts for 19.7 % of the total
number of newly created small enterprises and microfirms, in Tashkent region-10.4 %,
Samarkand region-8.6 %, Navoi region-7.7 %, Ferghana region-7.2 %, Andijan region -
7.1%, Bukhara region - 6.6%, Namangan region - 5.9 %. In Kashkadarya region, the
share was 5.6 %.
In January-December 2019, the largest increase in newly created small
businesses and microfirms was registered in Chilanzar district - 2279 units.
In January - December 2019, in the regional context, the largest indicator of the
number of small businesses (per 1000 people, units) was in Tashkent-28.8 units, Navoi
region-18.1 units.
The share of the digital economy in relation to Uzbekistan's GDP in 2019 was
2.2% compared to 10.9% in the United States, 10% in China and 5.5% in India. In Russia,
the use of digital technologies will ensure GDP growth from 19 to 34%.[6]
Digitalization technologies are increasingly being introduced and developed in
the country, but the pace could be higher if it were not for a number of barriers.
Due to the weak digital infrastructure and lack of digital skills among business
representatives, digital trade is developing at a slower pace in Uzbekistan. For example, the
Decree of the President of Uzbekistan Shavkat Mirziyoyev notes that there is an insufficient
level of online trade and trading platforms in the Republic. Therefore, according to the
decree, it is planned to double the share of the digital economy in Uzbekistan's GDP by
International Conference
“
Science of the 21st century: society and digitalization
”
Conference Proceedings. Scope Academic House, January 30, 2021, Sheffield, UK.
104
2023. To do this, according to the instructions of the head of state, they will modernize the
digital infrastructure, introduce information and communication technologies in all
spheres of life, and develop digital entrepreneurship. [2]
By the end of April 2020, Uzbekistan continues to widely implement the "E-
government" system, designed to ensure openness, transparency and efficiency in all
areas, in particular, the provision of 178 services through a Single portal of interactive
public services has been established, which saves time and reduces costs for the
population. [2]
A Technology Park for software products and information technologies is being
built in Tashkent. In 2020-2024, it is planned to organize branches of the Technopark in
14 regions, triple the number of residents and bring the number of employees to 40
thousand. [2]
In conclusion, we can say that the technologies of digitalization of the economy,
in particular, business and entrepreneurship, allow you to organize the most
personalized interaction between production and consumption. Digital transformation
of processes optimizes the work of employees, which increases the productivity of each
individual team member. For example, automation of routine operations provides more
time for solving really important and complex tasks.
References
1. Meeting of the President of the Republic of Uzbekistan Shavkat Mirziyoyev on
the development of information technology and the creation of the necessary
infrastructure.https://uza.uz/ru/politics/rassmotrena-realizatsiya-proektov-
posozdaniyu-tekhnoparkov-13-02-2020
2. Government resolution "Measures to introduce a system for assessing the level
of business developmen
t in the regions of the Republic» (№ 8, 08.01.2020 г.).
3. Resolution of the President of the Republic of Uzbekistan "Measures to further
improve the business environment and improve the business support system in the
country" November 20, 2019
4. Is Russian business ready for digitization? Analysis of social networks. Survey
of entrepreneurs conducted by StrategyPartners
http://www.tadviser.ru/index.php/
5.The
World
Bank
project
"Doing
business
in
2020»
https://russian.doingbusiness.org/ru/rankings
6. Data from the state statistics Committee
ru/7724-statistika-predprinimatelstva-i-bankovsko-finansovykh-uslug-2020
