Abstract

The goal of the article is to identify peculiarities and main problems of small business development in Ukraine, including taking into account changes in the market environment as a result of the deployment of the fourth industrial revolution. To achieve this goal the following tasks are set: to analyze the specific operation of small businesses along with big and medium; identify trends of small businesses compared with big and medium in Ukraine and small businesses in other countries; to determine the factors influencing the formation of these trends; to assess the level of innovation potential of small enterprises of Ukraine in terms of types of economic activity; identify potential internal strengths and weaknesses, opportunities and threats of small business development in Ukraine. It has been established that in the countries of the European Union (EU), the USA and Japan, small and medium-sized enterprises account for about 50% of the total number of employed. Their share in GDP is more than 50 %. For comparison, the added value of small and medium-sized businesses in Ukraine amounted to 60,1% in 2016. At the same time, there is a certain difference between Ukraine and the EU countries in the allocation of value added by size of enterprises. So, in the EU micro-enterprises produce more than 20% of value added, and small and medium-sized enterprises – about 18 %. In Ukraine, the bulk of value added (43,4 %) is formed by medium-sized enterprises. The small enterprises is formed 16,7% of value added, and micro enterprises – only 5,4%, which indicates the low efficiency of micro enterprises in Ukraine. Among the factors that now have a negative impact on the development of small businesses in Ukraine, the following are highlighted: very low demand for products (59 % of 1800 respondents), unstable political situation (44 %); high taxes (35 %); complex tax administration (27 %); inflation and frequent changes in legislation (26 %), high regulatory pressure and corruption (23 %); war in the east of the country (20 %); low availability of loans (19 %). Among other factors, insufficient financial capacity remains a significant obstacle to the expansion and improvement of the activities of small enterprises. Problems with lack of financing for business development are relevant for 44 % of small and medium-sized enterprises. The difficulties of bringing small businesses in foreign markets are another widespread problem. 33 % of medium-sized and 36 % of small enterprises suffer from the lack of working capital. In Ukraine small entrepreneurs also complain about limited opportunities for obtaining loans. The main factor that makes enterprises abandon bank lending are high rates. The most important measures of the state policy to promote the development of small business in conditions of the fourth industrial revolution should be such as: reducing the number of documents required for business, simplifying tax administration and transforming the State fiscal service into a service for taxpayers, creating a single information resource for entrepreneurs and transfer of administrative services to electronic mode, improvement of credit conditions. 

Keywords: small enterprises, small and medium businesses, entrepreneurship, internal strengths and weaknesses of development, external opportunities and threats, innovative potential, the Fourth Industrial Revolution, scientific and technical progress.

JEL Classification: O1, O2, O4.

Cite as: Fedulova, I., Piatnytska, G., & Lukashova, L. (2018). Small business in Ukraine: peculiarities and problems of development in the conditions of the fourth industrial revolution. Marketing and Management of Innovations, 3, 216-228. https://doi.org/10.21272/mmi.2018.3-19

This work is licensed under a Creative Commons Attribution 4.0 International License

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