Agricultural enterprise innovative development

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Kyiv national university of trade and economics

Department of trade of enterprise and logistics

Agricultural enterprise innovative development

Kulik Anna, PhD (Economics),

Associate Professor

Annotation

The article summarizes the state and prospects of innovative development of agricultural entrepreneurship. The influence of new economic realities caused by systemic reforms in the economy on the innovative development of agrarian entrepreneurship in Ukraine for the formation of promising areas of its development is studied. It is established that the current state of the agricultural sector is due to the global impact of technological modernization, which is not always appropriate and does not meet the real needs and capabilities of agricultural producers. The necessity of developing a strategy of innovative development of the industry and on the basis of historical experience and the latest achievements of the stages of its implementation is proved.

Keywords: agrarian sector, innovative development, entrepreneurship, systemic reforms, strategy, forms of management.

Анотація

Кулік А. Інноваційний розвиток аграрного підприємництва

Постановка проблеми. Узагальнення стану та перспектив становлення в межах наукової дискусії питання інноваційного розвитку аграрного підприємництва є важливим завданням, актуальність якого визначається тим, що, прагнучи дотримуватися основних принципів агроінноваційного розвитку, вітчизняна практика має враховувати особливості й можливості аграрного сектора, його стан та менталітет.

Аналіз останніх досліджень і публікацій показав, що питання інноваційного розвитку аграрного підприємництва потребують подальшого вивчення та обговорення в науковому світі.

Метою статті є дослідження впливу нових економічних реалій, обумовлених системними реформами в економіці на інноваційний розвиток аграрного підприємництва України для формування перспективних напрямів його розвитку.

Матеріали та методи. Методичним інструментарієм проведеного дослідження стали методи економічної теорії; порівнянь та статистичного аналізу; формалізації. Періодом дослідження обрано 2010-2019 рр.

Результати дослідження. Сучасний стан аграрної галузі обумовлюється глобальним впливом технологічної модернізації, яка не завжди є доцільною і не відповідає дійсним потребам та можливостям сільськогосподарських виробників.

Систематизація наукових джерел та підходів до вирішення проблем інноваційного розвитку аграрного підприємництва засвідчила значний вплив нових економічних реалій, обумовлених системними реформами в економіці та сільському господарстві на інноваційний розвиток аграрного підприємництва України. За статистичними даними установлено, як саме реагує аграрне підприємництво на проведені реформи.

Висновки. Встановлено, що загалом досягнення аграрного підприємництва досить суттєві, але факторами впливу є насамперед значний земельний банк, дешева робоча сила, пільги в оподаткуванні, державна підтримка у виробництві та експорті окремих товарних позицій галузі. Реформи несуттєво впливають на підприємницьку діяльність, вони дуже повільно, іноді з протилежним ефектом, стимулюють розвиток сільського підприємництва. У той час як у світі агропроцеси дедалі більш автоматизуються, в Україні досі широко застосовуються застарілі методи ведення господарства. Саме тому необхідно розробити стратегію інноваційного розвитку галузі та, спираючись на історичний досвід і новітні досягнення, розробити етапи її реалізації.

Ключові слова: аграрний сектор, підприємництво, системні реформи, інноваційний розвиток, форми господарювання, стратегія.

Background

Generalization of the state and formation prospects of the innovative development of agricultural entrepreneurship is an important task. Its relevance is determined by the fact that domestic practice should take into account the features and capabilities of the agricultural sector, its state and mentality, adhere to the basic principles of innovative development in agriculture.

Analysis of recent research and publications has shown that the issues of innovative development of agricultural entrepreneurship need further study and discussion in the scientific world.

The aim of the article is to study the impact of new economic realities, systemic reforms in the economy on the innovative development of agricultural entrepreneurship in Ukraine, formation of promising areas of its development.

Materials and methods. Methods of economic theory, comparisons, statistical analysis and formalization were used in the paper. The period from 2010 to 2019 was used for the stydy.

Results

The current state of the agricultural sector leads to the global impact of technological modernization, which is not always appropriate and does not meet the real needs and capabilities of agricultural producers.

Systematization of scientific sources and approaches to solving the problems of innovative development of agricultural entrepreneurship has shown a significant impact of new economic realities due to systemic reforms in the economy and agriculture on the innovative development of agricultural entrepreneurship in Ukraine. According to statistics, we found out how agricultural entrepreneurs reacted to the reforms.

According to the Commercial Code of Ukraine, entrepreneurship is direct independent, systematic activity, exercised at one's own risk, directed at the production of goods, the performance of works or providing services to make profit. Research of the state of agrarian entrepreneurship, according to the statistical data, lays the foundation for understanding how it reacts to the changes in the environment. Table 1 indicates the structure of agribusiness by the enterprise size in the total number of economic entities in 2010-2019.

Table 1

Agricultural production in Ukraine by size of enterprises in 2010-2019

Sources: Data of the State Statistics Service of Ukraine [16].

Quantity and structure of agrarian entrepreneurship are relatively stable, e.i. the total quantity of legal entities decreased by 15.79% in 2019, in contrast to 2010, and only by 6.06%. in the agricultural sector. In the macroeconomic dimension, the aforementioned fluctuation is considered to be negligible; therefore, it is possible to argue its constancy (stability). Small businesses account for the major share - above 99%, for example 96% are microbusinesses. Large enterprises are represented by a low number (34 in 2019), therefore, they are not shown in the structure.

The dynamics of subjects of agrarian entrepreneurial activity by the form of ownership is depicted in table 2.

Table 2

Dynamics of the number of agricultural enterprises by forms of economic entities in 2010-2017

*Excluding the temporarily occupied territories

Sources: Data of the State Statistics Service of Ukraine [16].

Considering the abovementioned data, it is claimed that the quantity of farms has declined by 22.8% over the analysed period, the number of business associations remains constant, private enterprises has decreased by 15.2%, state-owned has decreased by 30%. Data regarding the following years have not been compiled by the State Statistics Service of Ukraine. Nevertheless, the mentioned indicators confirm general tendency, concerning the predominance of small businesses in the general structure. We should note that cooperative has become one of the directions of the development in agriculture lately. According to the data provided by the Ministry of Agrarian Policy and Food of Ukraine, a number of agricultural cooperatives has grown by 125 units to 735 over 2018. Despite the absence of constancy in statistics, the state relies on this type of entrepreneurial activity.

The effectiveness of agrarian entrepreneurship is substantiated by the volume of production (goods, services), illustrated by the data in table 3 over the period from 2012 to 2019.

Table 3

Production volume of enterprises (goods, services) in 2012-2019

Sources: Data of the State Statistics Service of Ukraine [16].

It is clear that agriculture is about 9.1% of the volume of production in the increasing dynamics, after recession in 2017. Moreover, the largest share - up to 50% - is held by medium enterprises during specific periods, followed by small, which are about 38.2%, and finally large, maximum of 12.7% of production.

Profitability of business entities by their size and type of economic activity in 2010-2019 is shown in table 4.

Table 4

Production profitability of agricultural enterprises by their size and type of economic activity in 2010-2019

Sources: Data of the State Statistics Service of Ukraine [16].

According to the data, it is clear that agrarian enterprises of all types demonstrate high profitability, whereas the overall economy is characterized by financial losses over the analysed period. By the level of profitability, medium enterprises are the most stable, although such trend differs with years. Factual significance of the added value (according to the production expenses) of agrarian enterprises in 2012-2019 is shown in table 5. Calculations according to this factor indicate that the largest contribution to the formation of added value is made by medium enterprises (about 56.2%). Significant share for small agricultural enterprises is 39.0%. The market share of large enterprises fell from 14% in 2010 to 4.8% in 2019. Concerning the investments, according to the data provided by the Ministry of Agrarian Policy and Food of Ukraine [17], 474 investment projects were realized in the agrarian sector in 2018. In specific, 18.6% of them are those related to processing, storage of cereals and industrial crops, 12.2% - fruit and vegetable storage, 4.2% - perennial plantings, 3% - irrigation, 23.6% - animal husbandry, 12.4% - swine breeding. Agro-industrial sector of Ukraine implemented 380 investment projects worth UAH 27.9 bln as of January 1, 2017. The primary source of financing capital investments is equity funds, their share is 74.3%. The cost of investment projects varies from UAH 0.1 mln to UAH 9.6 bln.

Table 5

The added value according to the production expenses of enterprises in 2012-2019

Sources: Data of the State Statistics Service of Ukraine [16]

The majority of investment activity, according to the identical source, is in the following regions: Vinnytsa (UAH 6.3 bln), Kyiv (UAH 1.1 bln), Poltava (UAH 0.6 bln), Cherkasy (UAH 0.4 bln) and Sumy (UAH 0.4 bln). Manyprojects are implemented in Poltava (69), Lviv (64), Vinnytsa (48), Chernivtsi (43) and Cherkasy (41) regions. According to the forecasts, the realization of those projects in 2018 create approximately 16 thousand workplaces. Furthermore, general growth in investment attraction of the agriculture, improvement of the business climate in Ukraine, stimulating investment attraction, including foreign, restoration of state support programs for the development of small and medium business are supposed to encourage the growth of the number of agricultural entrepreneurs. Simultaneously, it is forecasted that new jobs will be created and the unemployment rate will decrease, rural territories will be re-populated, etc.

Such state of the agricultural development dictates the necessity of its structural re-orientation, one example of which is innovation and technology transfer. According to the data presented by Scientific Analytical report, Innovation activity in Ukraine in 2019 [18], conducted analysis of five international rankings, which evaluates innovativeness of various countries' economies, states that the effectiveness of innovation activity in Ukraine in 2019-2020 decreased by all indices. The expenditure reduction on research and development and education as a percentage of GDP, which has affected the indicators of the quality of human capital and research are among the abovementioned reasons. The level of development of innovation infrastructure remains at a quite low level in comparison to the world's leading countries. Weaknesses include the protection of intellectual property rights, the development of clusters, and proportion of the population who are the Internet users. Among the accomplishments of Ukraine are improvement of the position on the following indicators: the index of attracting talent, market and regulatory opportunities in the labour market, institutions, creativity, penetration of high technology, skills.

In comparison to 2018, the amount of financing for innovation activity has increased up to UAH 14220.9 mln, simultaneously, the percentage of financing of innovation activity has remained at 0.3%. In 2019, personal funds of enterprises, UAH 12474.9 mln (or 87.7% of the total amount of financing for innovations), remained the principal source of financing for innovation activity. State budget funds have been received by 6 enterprises, totalling at UAH 556.5 mln (3.9%); foreign investors' funds have been received by 3 enterprises in the amount of UAH 42.5 mln (0.3%); amount from other sources has totalled at UAH 1147.0 mln (8.1%). The largest shares of innovatively active enterprises for the production of food products are 16.8%, production of machinery and equipment is 10.2%, depending on the types of economic activity. According to the conclusions drawn by the Analytical Reference "Implementation of priority areas of science and technology and obtained results in 2019", the results are in (table 6).

Table 6

Financing for R&D by priority areas in terms of budget funding

Sources: [19].

The largest amounts of total fund expenditures by priority areas in 2019, similarly to the previous years, were directed by the following principal institutions, such as the NAS, the MES, and the NAMS, which most anticipated expenditures for research in general. Thus, in the reporting year, the NAS has allocated UAH 3308.13 mln, which accounts for 100% of the amount of expenditures anticipated by the NAS in general, for the implementation of priority areas, as well as 65.7% of total expenditures on research by priority areas. The MES has allocated UAH 686.19 mln, which accounts for 89.2% and 13,6% respectively, the NAMS has allocated UAH 365.70 mln, which accounts for 100% and 7.3% respectively. The NAAS has invested UAH 362.68 mln, which accounts for 100% and 7.4% respectively. The analysis of the general fund expenditures for R&D by priority areas shows that the trend of distribution of funds remains the same as in previous periods (2015-2018).

The implementation of priority areas in 2019 was carried out, as in the previous years, mainly through basic funding for research and development, which accounted for 98.5% of total expenditures in priority areas. The Funds were directed for the purposes in such areas of budget funding as: "Fundamental scientific research" (66.9%) and "Applied research and development" (31.6%).

In 2019, 6420 STRs were performed in priority areas (89.5% of the total number performed in the reporting year at the expense of the general fund of the state budget), 11780 STP units were created (84.1% of the total number created), 66.0% were implemented (7776 units). The largest number of STPs - 7533 units (63.9% of the total number created by priority areas) were created by the priority area "Fundamental scientific research", portion of which, 4848 units (64.3%), was implemented.

In 2019, R&D was conducted by 45 out of 46 priority thematic areas, which were approved by the resolution of the Cabinet of Ministers of Ukraine dated 07.09.2011 №942 (as amended). In a similar manner to the previous years, in the reporting year, immensely low financing of certain priority thematic areas was recorded. innovative technological agrarian entrepreneurship ukraine

An important aspect in the revision of priority areas according to the Decree of the President of Ukraine "On Sustainable Development Goals of Ukraine until 2030" from 30.09.2019 №722 is consideration of national tasks and indicators of progress in the achievement of Sustainable development goals, which are included in the National report "Sustainable development goals: Ukraine".

Individual data of budget expenditure on the funding of priority areas of innovation and technology transfer activity in Ukraine is compiled in table 7.

According to the report [20], in relation to the GDP, funding in 2019 amounted to 0.0082% (in 2018 - 0.0082%, in 2017 - 0.0087%, in 2016 - 0.0082%), e.i, in 2019, actual funding of strategic priorities of innovation activity was at the level of 2016, despite the growth in absolute amounts of funding.

Table 7

Budget expenditure on the funding of priority areas of innovation and technology transfer activities in Ukraine in 2016-2019, mln UAH

Sources: According to the Department of Innovation and Technology Transfer [12].

Thus, the NAS has allocated UAH 3308.13 mln, which accounts for 100% of the amount of expenditures anticipated by the NAS in general in the reporting year, for the implementation of priority areas, as well as 65.7% of total expenditures on research by priority areas, the MES has allocated UAH 686.19 mln, which accounts for 89.2% and 13.6% respectively, the NAMS has allocated UAH 365.70 mln, which accounts for 100% and 7.3% respectively, the NAAS has allocated UAH 362.68 mln, which accounts for 100% and 7.4% respectively.

In 2019, the amount of two out of four main institutions accounted for 94.0% summarily and were distributed among the NAS (65.7%) and the MES of Ukraine (13.6%). Expenditures on innovation activity were directed by its six types (in 2017 - by three, in 2018 - by five), of which the largest portion is type of innovation activity "Other", which includes mainly performance of RTD in order of enterprises/organizations.

According to the data provided by the State Statistics Service of Ukraine [16], in recent years, the principal factors that impede innovation activity development of domestic enterprises are as follows: lack of equity (80.1% of researched enterprises), substantial expenditure on innovation (55.5%), insufficient state support (53.7%), high economic risk (41%), imperfection of the legal framework (40.4%), extended period of recoupment of innovation (38.7%), absence of funds from buyers (33.3%), lack of qualified personnel (20%), lack of opportunities for cooperation with other enterprises and scientific organizations (19.7%), lack of data on sales market (17.4%), lack of information on new technologies (16.1%).

According to the information of the State Statistics Service, innovation scientific research and developments in Ukraine were conducted by 950 organizations, consisting of 48.1% related to the state-owned economic sector, 37.0% - entrepreneurial sector, 14.9% - higher education over 2018. Nearly half of the expenditure dedicated to the fundamental scientific research accounted for the branch of natural science, 24.8% for engineering, 8.7% for agriculture.

At the beginning of 2019, group of companies "ProAgro Group" held a conference "Agrarian Innovation 2018" [20], which gathered experts of agrocompany innovation implementation, developers of innovative decisions for agrosector, as well as representatives of an agrarian field that are interested in the innovation technology implementation. Innovation technology of management and control in the modern enterprise were presented, including technologies on effective crop cultivation and information systems for the agroindustrial sector.

Regarding the foreign experience, it is stated that over the last century TOP-10 agrarian innovations [21] are considered to be as follows: formation of cooperatives, hybridization, gasoline-powered tractors, farm credits, soil security, in vitro fertilization in the livestock industry, electrification of rural regions, agrarian chemicals, biote...