DEINDUSTRIALIZATION AS AN OPPORTUNITY FOR GROWTH IN A FINANCIAL CRISIS

Abstract

The article is devoted to topical issues of identifying growth opportunities connected with the deindustrialization phenomenon during a financial crisis. It is argued that in the 21st century, the financial crisis due to a global pandemic is a signal to most countries to reconsider their long-term economic development strategies. The purpose of this study is to summarize negative and positive aspects of the "deindustrialization" phenomenon in order to outline and justify long-term growth opportunities for Ukraine's economy. The most relevant achievements of the world's scientific community, which form the theoretical and methodological basis for the analysis of the deindustrialization phenomenon, are analyzed. The main idea of deindustrialization follows from the three-sector hypothesis, according to which, industry shifts are mainly caused by two factors: increasing elasticity of demand for income, and different rates of productivity growth by sector. It is determined that socio-economic consequences of certain forms of deindustrialization must be considered in terms of economic success or failure, and it is necessary to compare the industrial policy in a country with best practices worldwide. It is proposed to define the main manifestations of deindustrialization: a consistent decline in industrial production or employment in the manufacturing sector, which differs from the processes of prolonged cyclical economic recessions; transition from the production of goods to the production of services, in which the share of industria production decreases in the final product, and the share of services increases; reduction of industrial production share in the structure of exports of the country or region; long-term persistence of a trade deficit, which leads to the inability to pay for imports and causes a new round of industrial decline. The necessity of changing the economic policy of Ukraine is substantiated, with a clear goal – technological transformations with a clear definition of technological modernization as national priorities.