Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Private Sector Development and Access to Finance
141
employment size of small businesses indicates that they have not supported 
satisfactory job creation in Uzbekistan. This suggests that structural change 
of enterprises is needed to sustain economic growth in the country. The next 
subsection reviews Uzbekistan’s small businesses in detail and discusses what 
structural changes will be needed.
4.1.2. Small business and entrepreneurship development
Effective January 2019, the government redefined the categories of small 
businesses, adding a new category of medium enterprises. The new definition 
has four categories: (i) an individual entrepreneur, (ii) a microenterprise 
as a legal entity with an annual average of up to 25 employees, (iii) a small 
enterprise as a legal entity with an annual average of 26–100 employees, and 
(iv) a medium enterprise as a legal entity with an annual average of 101–250 
employees. This important reform enables the government to target a group of 
firms that seek growth of innovative businesses in its national growth strategies, 
but the new classification is yet to be reflected in national statistics. Thus, data 
analyzed in this chapter follow the definition of small businesses applied until 
the end of December 2018.
3
The sectoral structure of small businesses did not change between 2003 
and Q3 2018. About 60% of small businesses are in services and the rest 
are engaged in agriculture, industry (manufacturing), and construction
(Figure 4.4a). Retail trade and catering services accounted for the largest share 
of small businesses (34%) in Q3 2018. Agriculture is the fourth-largest sector 
of small businesses but would be the third-largest if food processing were 
included in the sector. Food processing however, is considered part of industry, 
and accounts for a quarter of manufacturing production (24% in 2016).
Small businesses concentrate in the capital city, Tashkent (Figure 4.4b). The 
number of small businesses in Tashkent city trebled from 2003 to Q3 2018, 
and comprised 22.6% of all small businesses in Q3 2018, a 5 percentage point 
rise since 2003.
3
Until the end of December 2018, small businesses were legally classified into three categories:
(i) microenterprise, (ii) small enterprise, and (iii) individual entrepreneur. The categories were defined 
as follows: a microenterprise has any form of ownership and employs up to 20 persons in manufacturing 
and up to 5 persons in services and other industries per year on average; a small enterprise has any form 
of ownership and up to 200 employees in manufacturing and up to 100 employees in services and other 
industries; an individual entrepreneur is a person with a certificate of state registration as an individual 
entrepreneur, with the right to hire up to 3 persons.

---