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2IMPROVEMENT OF THE INSTITUTIONAL BASIS OF DEVELOPMENT OF REGIONAL INDUSTRY
Graduate student Iqboljon URINOV ALFRAGANUS UNIVERSITY ikbolurinov12@gmail.com
Abstract: The article examines issues of improving the institutional foundations of regional industry development. The following issues were resolved in it: analysis of the organizational-economic mechanism of innovative formation and development of the regional industrial complex and their grouping; clarification of the forms of support of innovative activities by regional management bodies; determining the correct directions of application of modern innovative technologies in the development of the regional industry. Furthermore, the role and prospects of development of the regional industry in the field of service provision are analyzed in the article. The analysis of the effectiveness of improving the institutional foundations of regional industry development is given. In order for the country to transition to an innovative economy, firstly, it is necessary to create a competitive infrastructure, mechanisms and a system of institutions that support innovative activities in all sectors of the economy in its regions. In this direction, it is desirable to form the institutional basis for the development of free industrial economic zones, special industrial zones, technological parks and business incubators, which are the foundations of the innovative infrastructure of the regional industrial complex. In this regard, the set of economic and organizational mechanisms should be properly developed. In the context of the transition to an innovative economy, one of the most important conditions is the application of the correct method of applying modern innovative technologies in the development of the regional industry, with the effective use of scientific and technical achievements. In our country, a number of activities are being carried out in order to modernize and diversify production and expand the production of competitive industrial products. The main goal of regional industrial development is not only to strive to increase the growth rate of this sector of the economy, but also to develop priority industries and production by using the potential of rich natural resources, to form its modern structure, and to create a set of measures to increase the competitiveness of the country's industry in the foreign and domestic markets.
Key words: regional industry; innovation; organizational-economic mechanism; territorial administration bodies
Introduction: Effective operation of industrial enterprises of the region in the conditions of the transition to the innovative economy required fundamental changes in all structures of state management bodies. Only by providing a favorable innovative investment environment and creating an effective mechanism for the operation of each enterprise, the region was able to follow the path of renewal and development. All the reforms carried out in recent years are closely related to solving the problems of forming and developing a competitive environment in the country and its regions that fills the domestic market with necessary industrial goods and services, creates new jobs and produces competitive industrial products for foreign markets.
The first stage after independence covers the years 1991-1995 and is characterized by measures to preserve the existing industrial potential. In 1991-1994, in order to ensure the conditions for the full formation and development of industrial enterprises, decisions were made on the establishment of state joint-stock associations by the Cabinet of Ministers of the Republic of Uzbekistan which are "Uzbekto'qimachi", "Uzbekpoyabzal", "Uzbekchinni", "Uzbekkiyim", "Uzbekyengilsanoat", "Uzdavpaxtasanoatsotish", "Uzgo'shtsanoat". This marked the next stage of making major changes in the industrial network in the country.
In the third stage of industrial network development (2000 - 2010), attention was paid to the establishment and development of export-oriented industries on the basis of import-substituting industries. On April 24, 2000, the decision of the Cabinet of Ministers of the Republic of Uzbekistan "On cooperation with the Italian company "Fata Group" in the development of the agro-industrial complex of Tashkent region" was adopted (Resolution No. 159, 2000). Also, in 2001, in Tashkent region, a new joint enterprise "Chinaz to'qimachi", which processes domestically grown cotton fiber, equipped with the most modern equipment and technologies, was launched. The strict actions and measures
taken, the results of the ongoing reforms had a positive effect on the composition of the gross regional product produced in the region. The adoption of the law, decrees and decisions "On agreements on product distribution" (Law No. 312, 2001), "On safeguard measures, anti-dumping and countervailing duties" (Decision No. 555-II, 2003), "On export control" (Uzbekistan "Export control", 2004), "On measures to further strengthen intra-industry and inter-industry cooperation" (Decree of the President, 2007), "On the program of measures to support enterprises of the real sector of the economy, ensure their stable operation and increase export potential" (Iqtisodiyotning real sektori, 2008), "On additional measures to introduce innovative projects and technologies into production" (Innovatsion loyiha va texnologiyalarni, 2008) made it possible to widely develop industrial production in the country and regions. Attracting foreign investments allowed privatized enterprises to reorganize and improve production, develop new competitive products, increase wages paid to workers, and in short, strengthen the financial and socio-economic position of the enterprise. The adoption of decisions and decrees "On deepening economic reforms and rapid development of the industry in the construction materials industry" (Qurilish materiallari, 2005), "On the Program for modernization and technical re-equipment of textile industry enterprises in 2006-2008" (2006-2008 yillarda to'qimachilik, 2006), "On the Program of modernization and technical re-equipment of fat-oil industry enterprises in the period 2007-2011" (2007-2011 yillardagi davrda, 2007) were one of the important factors of stabilization of industrial production in the sectors. These programs were aimed at increasing the technical level of industrial production, first of all, equipping enterprises with modern equipment that ensures the production of high-quality competitive products, provided that at least 70-80 percent of the total volume of the produced products is delivered to export.
Based on the above decisions, the exemption from import duties on the import of raw materials necessary for the implementation of the production process of industrial enterprises in the region, the use of funds for modernization and re-equipment with equipment, the allocation of short-term loans for the production of export products further accelerated production in industrial sectors.
In the next period (after 2010), special emphasis was placed on innovative development in the industry, as well as in all sectors. After the global financial and economic crisis, modernization measures in the industry were strengthened. During this period, important laws and decisions affecting the development of industries were adopted. This made the industry in the region one of the fastest growing industries.
Also, in the 9last decade, the decrees of the President of the Republic of Uzbekistan "On the priority directions of industrial development in 2011-2015" (2011-2015 yillarda, 2010), "On measures to expand the production and development of new types of competitive products" (Yangi turdagi raqobatbardosh, 2011), "On measures to further improve the management of the food industry of the Republic and development measures in 2012-2015" (Respublikaning oziq-ovqat, 2011), "On the 2012 investment program" (2012 yilgi investitsiya, 2011), as well as the development of the Program for accelerating the development of infrastructure, transport and communication in 2011-2015, the deepening of structural changes aimed at the stable, rapid and proportionate development of industrial sectors in the country and its regions, the diversification of the main industries and the growth of export potential, industrial sectors and modernization of enterprises, based on technical and technological renewal of production, became another impetus to increase their efficiency and competitiveness. All the laws and decisions adopted in order to speed up the process of industrial production made it possible to develop primary and re-production sectors of finished industrial products. In addition, decrees of the President of the Republic of Uzbekistan "On Measures for the training of engineers and technicians in production-industrial sectors in Tashkent region" (Toshkent viloyatida, 2017), "On Priority measures to ensure the rapid socio-economic development of regions" (Hududlarning jadal, 2017), and the organization of small industrial zones in the region on August 10, 2017 formed the basis for the establishment of 17 small industrial zones in the region. On September 21, 2018, the adoption of the decree of the President of the Republic of Uzbekistan on the approval of the "Innovative Development Strategy of the Republic of Uzbekistan in 2019-2021" (2019-2021 yillarda, 2018) served to revive innovative development as a result of the emergence of a number of
benefits in the republic. At the same time, the adoption of the concept of development of the Republic of Uzbekistan until 2035 stimulated innovative development in all sectors of the economy.
Laws and decisions adopted in the country have different effects on the process of industrial production in the region. The implemented economic reforms are aimed at attracting local and foreign investments and establishing complex types of production based on high technologies. One of the main incentives for the development of industry in the region is the "Strategy of Actions on five priority areas of development of the Republic of Uzbekistan in 2017-2021". Also, the decision of the Cabinet of Ministers of the Republic of Uzbekistan on 24.09.2019 No. 802 "On additional measures to develop the industrial potential of the Tashkent region in 2019-2022" (Resolution of the Cabinet of Ministers, 2019) and several other decisions further developed industrial production. In this strategy, goals such as increasing industrial production by 1.5 times in 5 years, increasing its share in GDP to 36%, increasing the share of the processing network in the industry to 85% were set. During the years of independence, more than 130 decisions and decrees were adopted in the region. In the region, industrial production increased by 8.2% in 2019, processing industry made 86.2%, and its share in GDP was 47.2% (Toshkent viloyati raqamlarda ,2023). This decision focuses only on the development of the high-tech industry in the field of pharmaceuticals. However, taking into account the high intellectual potential of the region, it is appropriate to develop measures for the development of other sectors of the high-tech industry.
These legal bases served to further increase the productivity of the regional industry. Along with the strengthening of the legal framework, the process of financial support should be implemented in parallel. Financial support of the activities of subjects in the industrial sector is carried out at the expense of state funds that develop the industrial sector and the state budget. Also, professional education is one of the main sectors of the economy, and this sector should provide the required number of specialists in the labor market in a timely manner. In the region, there is an important scientific and technical potential in some areas of scientific and technical development for the transition of industrial development to the path of innovative development. Although scientific and technical institutions, regardless of their organizational and legal form, do not attach great importance to meeting the market's demand for innovative products, they rely on the local state budget for the main part of their financing.
Literature Review
In the scientific economic literature, the foundations of traditional and industrial societies were studied by the following scholarly economists: P. Krugman, M. Obsfeld (Krugman, Obsfeld, 2005), E.B. Atkinson, B. Anthony (Anthony et al., 2015), J. Galbraith (Galbraith, 1967; Galbraith, 1998), I.V. Poberezhnikov (Poberejnikov, 2006) and others.
The problems of the development of competition in industry have been widely studied in the research papers of M. Best (Best, 2007), M. Porter (Porter, 1998), G. Saidova (Saidova, 2003), R. Kaplan, D. Norton (Kaplan, Norton, 1996), V. Polterovich, V. Popov (Polterovich, Popov, 2006), R.B. Carson (Carson, 1990) and others.
Peculiarities of modernization of the economy and ways of its innovative development are studied in the works of the following economists: E. Yasin (Yasin, 2005), R. Nureyev (Nureyev, 2005), S. Chepel, A. Sindikov (Chepel, Sindikov, 2009) and others.
Specific features of manufacturing policy, as well as its world experience are considered in the works of Ch. Macmillan (McMillan, 2012), D. Rodrik (Rodrik, 2004), A. Tatarkin (Tatarkin et al., 2006), I.V. Lipsits, A.A. Neshadin. (Lipsits, Neshadin, 2002), L.G. Xodov (Xodov, 1997), L. Valinurova, O. Kazakova (Valinurova, Kazakova, 2006), T.M. Akhmedov, D. Muinov (Axmedov, Muinov, 2005; Axmedov, Muinov, 2005; Muinov, 2008), A. Rasulev (Rasulev, Pavlov, 2018), A.K. Bedrensev (Bedrensev, 1998) and others.
Naima Khashimova notes in her research that «The terminological space of the theory of investment in research is represented very widely, which means that further research should be based on a clear and unambiguous conceptual apparatus. Therefore, to reveal the essential role of investment potential, it seems necessary to formulate a different approach to this category. In it, unlike the existing interpretations, two sides of investment activity should be reflected - the availability of investment resources (sources) and the effectiveness of their investments» (Khashimova et al., 2020).
In the book of A. Vaxabov and G. Razykova "Modernization of the economy" the following definition
of manufacturing policy is given. " Manufacturing policy is a set of measures of state influence on the distribution of resources of the society in order to improve the structure of the national economy, maintain the competitiveness of individual industries and enterprises, as well as the economy as a whole in world markets, and correction of the negative consequences of the market mechanism." (Vaxabov, Razykova, 2014).
Sherzod Juraev affirms that «Sectors differ from each other in terms of production, technical and structural-technological specifics, fuels, energy, sources of raw materials, areas where labor is concentrated, consumption of finished products, their location» (Juraev et al., 2020).
Nozim Muminov notes in her research that «Manufacturing policy is often viewed as a strategy for the development, optimization and increase of the efficiency of industrial production, the growth of the competitiveness of industries and enterprises, both in the external and internal markets. Consequently, manufacturing policy, as a lever of structural transformations in the economy, is capable and can have an impact on economic growth in the long-term perspective" (Muminov et al., 2022).
In the context of economic liberalization, implementation of the development strategy in the country, there is an acute need to develop a concept and mechanism for the realization of manufacturing policy for the implementation of structural changes and transfer of the economy of Uzbekistan to an innovative path of development. The relevance of the topic, insufficient study of the issues of the economic mechanism for implementing the manufacturing policy of modernizing the economy, as well as the theoretical and practical significance of solving these problems, determined the choice of the research in this direction.
Metodologiya: The purpose of this scientific research article is to study the basis of improving the institutional foundations of regional industry development. Based on this goal, the following tasks were solved: analyzing the organizational and economic mechanism of the innovative formation and development of the regional industrial complex and their grouping; to determine the forms of support of innovative activity by regional management bodies; determining the right directions for the application of modern innovative technologies in the development of the regional industry.
The methodology of the scientific research article comes from the setting of tasks and the development of concepts for solving problems and their sequence of implementation. In the research work, selective and general research, composite analysis, inter-branch balance, systematic approach to the study of regional industry development problems, targeted forecasting methods were used (Blaug, 1993). The role and prospects of regional industry development in the field of services are analyzed in the scientific research article. An analysis of the effectiveness of improving the institutional foundations of regional industry development has been carried out.
Results: In order for the country to transition to an innovative economy, it is first necessary to create a competitive infrastructure, mechanisms and a system of institutions that support innovative activities in all sectors of the economy in its regions. In this direction, it is appropriate to form the institutional basis for the development of free industrial economic zones, special industrial zones, technological parks and business incubators, which are the foundations of the innovative infrastructure of the regional industrial complex. In this regard, the set of economic and organizational mechanisms should be properly developed.
Table 1. Organizational and economic mechanism of innovative formation and development of the regional industrial complex_
Economic mechanism Organizational mechanism
The mechanism of owning one's property Property rights, privatization, protection of intellectual property rights Structural measures Separation of priority areas, measures to strengthen structural capacity
Development of a mechanism for economic regulation of the state of enterprises Prices, taxes, bank interest and more Organizational administrative tools Development of standardization and certification system, increase of targeted programs
Renewal and restructuring of the main funds Formation of depreciation funds, capitalization of proceeds from the sale of obsolete fixed assets Development of innovative assessment methodology of the regional industrial complex Development of tools and approaches for evaluating innovative development, factor and structural analysis and ranking of the regional industrial complex
Allocation of loan funds for innovative development Venture financing, leasing Creation of innovative funds of different levels Creation of various funds at the expense of budget funds, foreign investments, funds of industrial enterprises, residents and other individuals, establishment of venture funds
State support for innovative development Budgetary support of science and education, rational system of taxation, implementation of customs duties Institutional mechanisms of innovative development Institutional technologies, determination of matrix interconnection of industrial system elements, state regulation of relations between entities
Investment attraction and capital accumulation Implementation of innovation-investment projects, reinvestment of profit, capitalization of income Innovative programs and projects Development of targeted scientific and technical programs, national and regional level projects, development and implementation of innovation-investment projects
Economic stimulation of innovation Innovative system of taxation system, loan funds, pricing, formation of labor incentive system, increase of economic responsibility, risk insurance Organizational forms of innovative activity Choosing one of the organizational forms for rapid implementation of innovation: business incubators, technoparks, technopolises, clusters, outsourcing
Innovation incentive system
To provide conditions for the equal operation of all forms of ownership and to develop incentives for innovation, to create a system of incentives to improve the final results of innovations, to use various economic and non-economic levers, to differentiate between incentives and punishments for system subjects.
Information supply
Organization of scientific and technical information on innovation, effective
mechanism of news dissemination, information resources for application of the status of commodity, technology and intellectual property markets,
development of mechanisms of interaction between competitive enterprises creating innovations
Currently, the institutional basis for the development of industrial sectors has been formed in the country and its regions. Institutes have been established to manage the development of industrial sectors and create a legal and regulatory basis for the implementation of regulatory work at various stages of development.
The Ministry of Economy and Finance of the Republic of Uzbekistan is the specially authorized body for the development of this sector. Also, the Ministry of Higher Education, Science and Innovation of the Republic of Uzbekistan, the Ministry of Investment, Industry and Trade of the Republic of Uzbekistan, the Ministry of Poverty Alleviation and Employment of the Republic of Uzbekistan, the State Statistics Committee, the State Tax Committee, the State Committee for Assistance to Privatized Enterprises and the Development of Competition in the country and its regions are the components of the institutional structure. State bodies such as the Oliy Majlis, the Cabinet of Ministers of the Republic of Uzbekistan, and the Central Bank also have a special role in the formation, regulation, control and development of rules and norms in this direction.
At the same time, the presence of such a comprehensive system of state bodies responding to various aspects of the development of industrial sectors sometimes leads to duplication of functions and makes it difficult to coordinate their activities. This can sometimes cause serious obstacles in the development of the network.
One of the main reasons why the effectiveness of innovation policy in the industrial sector in the current region is not high is the weakness of the institutional base in this area. The systematic scheme of support of the innovative activities offered by the regional management bodies will help the region to take its place in the innovative and technological market (Figure 1).
Support of innovative activities by regional management bodies
Developing an innovative development strategy
Development of the legal base
Financial security
Tax benefits
Development of new sciences (academic, industries, higher education, production)
Innovative infrastructure (technological park and hakozo)
Production of innovations (innovative activity)
Education (training of personnel for innovative business)
New products
New technologies
New services
Market of innovative products and services
Figure 1. Support of innovative activities by regional management bodies3
In addition to the process in Figure 1, it is necessary to use scientific knowledge for technological modernization, to increase the importance of the concept of science. It is explained by the low demand and ability to pay for high-tech products on the part of potential consumers, interest in importing equipment, as well as the incomplete level of introduction or production, as well as insufficient active work by its manufacturers on joint promotion of innovative products on the market.
On July 22, 2019, the Law of the President of the Republic of Uzbekistan "On Science and Scientific Activity", on March 2, 2020, "Strategy of Actions on Five Priority Areas of Development of the Republic of Uzbekistan in 2017-2021", (On the development strategy, 2022), "New Development Strategy of Uzbekistan for 2022-2026" made a great contribution to providing a scientific solution to problems related to achieving the competitiveness and efficiency of the national economy, increasing labor productivity, creating new industries, raising the standard of living of the population, and improving the quality of science and education systems. Currently, there are several scenarios that allow the development of the regional industry. We have to choose one of them. The first is inertial, that is, industrial development based on natural raw materials and energy sources. If we develop based on this scenario, it may gradually exhaust its resource. The second scenario is the development of an industrial network based on an innovative technological breakthrough. For this, it is necessary to significantly increase the volume of innovative capital investments in the medium term. Engineering work of an industrial nature must be created from scratch. In order to modernize the material and technical base of the industry, it is necessary to develop a state program for the technical re-equipment of the main means in a new technological base and a new structure.
First of all, scientific, scientific-technical and innovative projects aimed at the development of new technologies should ensure the production of competitive products capable of meeting the demands of the domestic market at a high level. In order to ensure the rapid development of science and innovation, government agencies at all levels should increase the expenditure on scientific research and development to at least 2.5% of GDP (1% - funds from all levels of budgets, 1.5% - funds from extra-budgetary funds) in the medium term. should create conditions. In this regard, it should be noted that an increase in the volume of financing of research and development, in general, will have a positive socio-economic effect only if there is a large-scale increase in the financing of innovative processes in proportion to the stages and types of work.
At the same time, there is a need for personnel with high qualifications and knowledge in the region. Accelerating the process of establishment of higher education institutions in the localities, the opportunity to train the necessary qualified, highly educated specialists is emerging for each small region based on its own characteristics.
In 2009, there were 2 HEIs operating in Tashkent region with 12,290 students studying in them, by 2022, the number of HEIs will increase to 11, and the number of students studying in them will be 60,399. The number of professors and teachers working in these higher education institutions increased by almost 2.5 times between 2009 and 2022 (from 786 to 1766).
Table 2 Distribution of the ministries and agencies of the operating university's in Tashkent region (Muminov et al., 2022).
ministries and agencies quantity
Ministry of Higher Education, Science and Innovation 2
Ministry of Digital Technologies 1
Ministry of Youth Policy and Sports 1
Non-state higher education institutions 4
Foreign higher education institutions and their branches 3
As can be seen from the table, the number of higher education institutions in Tashkent region has increased mainly due to private universities and branches of foreign universities. At the same time, specialization in the areas necessary for the region is gaining great importance in the modernization of the activities of the existing HEIs and the establishment of new ones. About 10,000 industrial enterprises operate in Tashkent region. For example, large industrial complexes such as "Angren Komir" JSC, "Almalik Kon Metallurgiya Kombinati" JSC, and "MAXAM-CHIRCHIQ" JSC regularly need highly qualified personnel.
In order to increase the effectiveness of budget funds allocated for the innovative development of industry, it is recommended to form a regional order for the implementation of innovative projects, not for individual types of work. It is necessary to increase the effectiveness of state investments in the scientific, technical and innovative sphere through organizational and economic innovations. Organizational and economic innovations are more complex and large-scale than product or technological innovations, because they directly affect the development of not only individual enterprises (organizations), but also the entire industry. The specified forms of regulation should complement each other at the stages of the innovation cycle based on the need to ensure the balance of economic interests of all participants of innovation activity.
The relationship between the state and market regulation should change depending on the state of the economy, the goals and objectives of society, the situation in the market of finished products and production factors, and the stages of the innovation cycle. It is necessary to form such a system of taxation, which should allow the development of the national economy and the achievement of financial stability. In order to create an equal competitive environment, the taxation mechanism should direct economic entities to increase the quality of the produced products and reduce their cost. Of course, this happens with the implementation of economic incentives. In order to increase the investment activity of industrial enterprises, it is necessary to eliminate imbalances in the system of functions performed on taxes. It is necessary to create a model of the tax system that performs tax, regulatory, incentive and distribution functions at the same time.
In the conditions of the transition to the innovative economy, the application of the correct method of applying modern innovative technologies in the development of the regional industry, with the effective use of scientific and technical achievements, remains one of the important conditions. In our country, a number of activities are being carried out in order to modernize and diversify production, and to expand the production of competitive industrial products. In 2019-2020, special attention is paid to this in the program for the development of the industrial potential of the Tashkent region. Only in the program is the primary emphasis on cement production, the creation of cotton clusters, and the secondary emphasis on the development of high-tech industrial production.
Conclusion: It is necessary to take the following measures in order to organize a new science-intensive production, taking into account the rapid introduction of modern scientific achievements and innovative science-intensive technologies into the industrial sectors:
- in the latest decisions on measures for the development of the region in 2020-2022, it is envisaged to develop the regions important in industrial production (Almaliq and Angren, Chirchik, Ohangaron, Zangiota). But the existing disparity between districts and cities in this region can be further increased. Therefore, for the development of comprehensive measures aimed at the development of other districts and cities, re-development of financial support mechanisms for certain innovative projects
that are financially promising and the past approval of innovative ideas and technologies at Republican fairs;
- creation of a marketing structure that works effectively, takes into account all factors, and forms the demand for innovative products of the region;
- an in-depth analysis of the currently existing obstacles that prevent private investments from entering high-tech sectors of the industry, ways to overcome them and measures. Expanding the experience of concluding contracts on the basis of industrial compensation developments and attracting long-term investments in the form of science-intensive technologies that can be converted into high-tech products;
- based on the characteristics of the country, promising (within the new technological system) rapid technologies and industries, to demonstrate the ability to become a driving force for the rise of the innovative economy;
- strengthening inter-sectoral relations between industrial enterprises, higher educational institutions and scientific research institutes as the main participant of innovative processes in the economy while carrying out modernization works, developing cooperation in the educational system related to industry. Activation of the activities of technology transfer agencies, such as centers that coordinate research and finance their results;
- to accelerate industrial technological cooperation at the international level and, in addition, to create an appropriate database (local network) as new forms of exchange of knowledge and R&D results;
- To increase the mobility of classified labor resources in the fields of R&D and industrial innovation, to ensure continuous education of those employed in the economy, as well as to attract young people to specialties in technical and engineering fields at the expense of creating new training places in higher educational institutions in order to conclude contracts with relevant fields and future jobs after graduation;
- introduction of submission of reports on "Innovation activity" by industrial enterprises;
- Increasing the demand for innovation in the industrial network;
- Implementation of technological upgrading of production not at the expense of technology import, but at the expense of local processing;
- creation of many new elements of the innovation infrastructure, the existing elements do not yet support the innovation processes in the innovation introduction and commercialization chain.
-Also, establishment of the association of business incubators and technoparks in Uzbekistan. Provides practical assistance in financing more than a hundred investment projects to business entities in the region.
It is concluded that the main goal of regional industrial development is not only to increase the growth rate of this sector of the economy, but also to develop priority industries and production by using the potential of rich natural resources, to form its modern structure, and to increase the competitiveness of the country's industry in the foreign and domestic markets. - is to create a set of activities.
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