The economy of Uzbekistan: a course for the dynamic development of the service sector

As practice shows, business starts working faster and more efficiently at low costs and high incomes. For the most part, the service sector falls under these criteria, including transport, banking and financial, consumer services, construction, tourism, trade and others.

Over the past two decades, these industries have been one of the most dynamically developing sectors of the global economy, and at the same time they are among the main sources of employment in both urban and rural areas. This is due to the increasing complexity of production, saturation of the market with new goods, accelerating scientific and technological progress.
According to the International Labour Organization, an increase in the service industry by just one percent reduces the number of poor by 1.5 percent. And its development is very relevant today for the entire national economic complex.
The role of this sector in the modern economy is connected not only with its predominance in this infrastructure, but also with the fact that such key factors of economic growth as scientific knowledge, intangible forms of accumulation, information technology, as well as the globalization of economic activity are formed in services.
All the variety of services in the modern economy can be grouped as follows. These are transport, communications, wholesale and retail trade, the credit and financial sector, insurance, household and cultural and recreational services and a block of social services (education, healthcare and others). The conclusion is obvious: all the activities of not only citizens, but also the state are covered, which indicates the high potential of the sphere.
At the beginning of this millennium, the direction in the economies of leading foreign countries grew into the largest sector of the economy: the total share of the service sector in GDP reached almost 80 percent. In terms of growth rates, a range of new business services (engineering, construction, accounting and auditing, as well as marketing and advertising services, leasing operations and others) is leading in many countries.
New types of services are actively developing in Uzbekistan. Their importance for regional economies has increased markedly, primarily in urban agglomerations. Not so long ago, interactive services (for example, electronic banking and online shopping) were unknown to consumers. And today they are already an integral part of our lives.
In the modern information world, as a result of the widespread use of the Internet, logistics, the emergence of network payment systems and electronic document management, a new form of activity is actively developing - web commerce. More and more consumers are purchasing goods online, and organizations are somehow using the possibilities of the World Wide Web in carrying out business activities. In such conditions, the service sector contributes to an increase in free time, creates opportunities for more complete satisfaction of people's needs, the development of society, and acts as an important element in the formation of a modern quality of life.
This sector of the economy helps to improve productivity and production efficiency. Its final result is not a finished product, but the provision of services that can be provided to both enterprises and individuals - end consumers. In this context, it is extremely important for the effective functioning of an innovative developed economy not to be episodic and fragmentary, but to constantly interact with all participants in the system.
In modern conditions, it is necessary to take into account natural changes in the ratio of material production and the service sector in favor of the latter, the value of which, according to economists, is sharply increasing. Computer and IT support are developing the fastest (the result of scientific and technological progress, because now almost everyone has sophisticated equipment), and recruitment services. Therefore, it is necessary to overcome the theoretical assessment of the service sector as a secondary sector that does not correspond to reality.
First of all, the state should promote the formation and development of small businesses, which occupy important positions in the service sector. After all, solving social, political and social problems is impossible without raising the economic potential of the regions and their sustainable development. The goals of regional policy can be achieved only through the implementation of predominantly economically viable projects.
It is necessary to make up for lost time in the domestic service sector at the scientific and technical level. The development of modern technical tools for small businesses and specific operations in the service industries should be a priority area of policy (especially conversion programs). Special attention should be paid to the creation of a system of incentives for the introduction of innovations in production. It is necessary to provide assistance to projects on the formation of technopolises, technoparks, scientific incubators, which are already becoming centers of scientific research and development.
It is important to note that market forces gain greater freedom in many countries as a result of the privatization and corporatization of a number of services, primarily in the fields of transport, telecommunications, credit and finance, insurance, and trade. For effective management, facilities are provided with economic independence, that is, healthy competition, freedom to switch to a contractual model and a competitive form of financing institutions with equal participation in tenders of public and private structures.
Among the important global trends in the field are the decentralization of social infrastructure management systems in all countries, the delegation of a significant part of rights and responsibilities to the lower levels of the management vertical.
However, such fundamental changes are impossible without financial support. For this reason, a great contribution to the development of the sphere was made by the Presidential decree "On measures for accelerated development of the service sector" dated May 11, 2021, providing for the allocation of a credit line from the Reconstruction and Development Fund in the equivalent of $ 300 million to promote the direction. A number of organizations and startups have received these funds, whose business ideas have already resulted in successful projects today.
And such initiatives are important not only for the financial stability of the state. The development of this sector in the country has a significant impact on a wide variety of industries. This includes a significant increase in the number of service organizations, the emergence of foreign competitors on the market with experience in the service sector in their countries and the strengthening of the non-governmental sector of the economy - small business and private entrepreneurship.
 The importance of the service sector has increased in the global economic space. As a result, services in our republic are undergoing drastic changes, especially in recent years. This not only contributes to achieving high growth rates of the domestic service sector, but also creates an excellent basis for further development of the country.
Thus, it can be argued that it is possible to solve this difficult task and achieve a breakthrough of domestic firms into the world market under the condition of rapid institutional, structural, scientific and technical changes in the relevant sectors of the Uzbek economy. The use of marketing, taking into account the specifics of the field, is a necessary condition for successful economic development. This has every chance to stimulate production and update the range of goods and services.

Kudrat Rakhimov,
Associate Professor at Tashkent State
University of Economics