DRIVING ECONOMIC PROGRESS: THE ROLE OF SMALL AND MEDIUM-SIZED ENTERPRISES IN UKRAINE'S EMPLOYMENT AND INCOME GROWTH

Abstract

This article provides an analysis of the state of small and medium-sized enterprises (SMEs) in Ukraine and their contribution to the country's economy. It is identified that SMEs play a crucial role in economic progress by generating employment opportunities and fostering innovation. The article highlights that SMEs account for over 99% of the total number of enterprises in Ukraine, with the majority falling under the category of small and micro-enterprises. The criteria for the classification of enterprises by size in Ukraine and the legal acts regulating this classification were studied. Statistical data on the development of SMEs are given, which indicate the positive dynamics of the growth of enterprises, employment and turnover in recent years. From 2010 to 2021, the number of enterprises increased by 22.4%, and employment increased by 77.4%. These figures emphasize the dynamic development of SMEs and their contribution to economic growth. The problems faced by SMEs in Ukraine are considered. Among the most common obstacles are insufficient access to financing, low popularity of legal entity status, and logistical problems. Many enterprises, especially small and micro enterprises, experience limited turnover and employment, which indicates the need to promote the development of medium and large businesses. Measures to improve the state of SMEs in Ukraine are proposed. It emphasizes the importance of creating a favorable business environment by simplifying administrative procedures and reducing bureaucratic barriers. Such measures can increase access to finance and reduce the costs associated with setting up and running businesses. It is recommended to develop support and financing systems for SMEs, including access to credit resources, grants and other financial instruments. These initiatives can help SMEs in securing sufficient working capital and financing for their growth and expansion. The article calls for active engagement of SMEs in innovation projects and development programs. Supporting the adoption of new technologies and improving competitiveness can help SMEs expand their market potential and increase their participation in the global economy. In conclusion, the article underscores the significance of SME development in Ukraine and presents specific measures to enhance their state. By fostering a supportive environment and providing necessary resources, SMEs can contribute significantly to economic growth, job creation, and overall societal benefit.