SMALL AND MEDIUM BUSINESS AS A DETERMINANT OF TERRITORY DEVELOPMENT

Abstract

The article is devoted to substantiating the role of small and medium-sized businesses as determinants of territorial strengthening, which is an important step for developing sustainable development strategies that take into account the specifics and needs of each region. The dynamics of changes in the number of operating small and medium-sized businesses for 2010-2023 are analyzed, which made it possible to note that after a reduction in the number of small and medium-sized businesses in 2022, their number increased in 2023. The role and functions of small and medium-sized businesses in the socio-economic development of the country are highlighted, including: promoting demonopolization processes, including various resources in the economic circulation, increasing the efficiency of market processes, creating additional jobs, supporting the development of the middle class, reducing social tension in society, increasing the flexibility of the economy. The main challenges that hinder the development of small and medium-sized businesses in Ukraine have been identified, including: a full-scale war, a decrease in the level of investment due to the lack of incentives for investment, difficulties with access to credit, a high level of tax burden, the lack of a clear state policy to support entrepreneurship, administrative barriers, excessive interference by state authorities in business activities, a high level of corruption, and a shortage of qualified personnel. The role of small and medium-sized businesses in the development of territories has been determined, which ensures: economic stability and diversification of the economy, job creation and increased employment, stimulation of innovation and economic development of territories, strengthening social stability, stimulation of competition and improvement of the quality of services and goods, development of local infrastructure, and support for social initiatives. The directions of state policy for ensuring the development of small and medium-sized businesses have been determined, namely: creating conditions conducive to the development of small and medium-sized businesses, ensuring access to financial resources for enterprises in this sector, simplifying tax administration procedures for small and medium-sized businesses, increasing competitiveness and stimulating the innovative potential of small and medium-sized businesses.