SUPPORTING BUSINESS IN COMMUNITIES IN WAR CONDITIONS

Abstract

The purpose of this article is to examine the impact of the war on Ukrainian business activity during the period of 2022-2024, analyze the specifics of state and local business support, and propose a comprehensive strategy for its development. The analysis identified the war's profound effects on the business environment, including a significant relocation of enterprises from eastern and southern regions to the country's central and western parts, leading to disruptions in logistical chains. This was accompanied by a shift in the regional employment structure due to mass internal migration and a critical decrease in consumer purchasing power, with the share of the population forced to save on food rising from 12.2% in 2021 to 26.2% in 2023. Despite these adversities, Ukrainian businesses demonstrated resilience, with many achieving growth in sales revenue in 2023 by finding new markets abroad. State support during this period was unprecedented, with government funding for business development in 2022-2024 being among the largest in Ukraine’s history of independence. Key mechanisms included state-guaranteed loans, notably through the "5-7-9" program, and a substantial volume of microgrants, primarily directed towards establishing new businesses and developing processing enterprises. Regarding local-level business support, the study analyzed successful cases in various amalgamated territorial communities (hromadas). These initiatives, such as the creation of industrial parks (Slavutа ТG), business incubators (Chortkivska TG), online sales platforms (Voznesenska TG), and business idea contests (Zhytomyr City Council), demonstrate a strong local interest in fostering a favorable business climate. This proactive stance contributed to a significant increase in local budget revenues even during wartime. As a result, the author proposed a comprehensive strategy for business development that integrates local, state, and international support. The strategy suggests creating intermediary institutions like technology parks to streamline cooperation between business and government and draws upon Israel's experience in developing its defense industry as a model for ensuring economic and national security. The overarching goal of the strategy is to foster superior conditions for business growth and scaling, thereby facilitating beneficial cooperation with government and international partners and advancing Ukraine's economic integration into the EU.