Efficiency of activity and management of the enterprise in the conditions of post-war reconstruction

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State Scientific Research Institute of Armament and Military Equipment Testing and Certification

Cherkasy State Business College

Efficiency of activity and management of the enterprise in the conditions of post-war reconstruction

Hmyria Victoria

PhD, Associate Professor, Leading Research Scientist

Poliakh Sergii

PhD, Associate Professor

Abstract

The economic growth of the national economy, first of all, depends on the level of production development. It is production that forms the basis of the economy of any state. Successful functioning of enterprises in modern economic conditions largely depends on various factors of external and internal environment, as well as on how effectively and purposefully the enterprise is engaged in innovation activities. Growth of economy of any country occurs due to two factors only: accumulation of capital (means of production, raw materials) and deepening of division of labor. The creation and accumulation of capital is carried out by entrepreneurs when they invest part of their profits in means of production, raw materials and inputs. The greater the profit of entrepreneurs, the more they invest in the creation of new capital. The development and implementation of innovations at the enterprise should contribute to the growth of the technical and technological base of the enterprise, which is a part of the production capital materialized in buildings, structures, machinery, equipment and other means of labor, which are repeatedly used in production, transferring their value to the finished product. Manufacturing, services, transportation, and even agriculture are using an increasingly wide range of digital technologies. The underlying technologies and processes have far-reaching implications for the organization of work, production and commerce, reinforcing the existing organizational and geographic dispersion of knowledge-intensive production functions and occupational groups. Companies using digital technologies can improve the efficiency of their organizations and gain opportunities to access and serve consumers more easily, accelerate product development, and create new goods and services at lower costs without the need for extensive systems-level expertise or in-house IT staff.

Keywords: development, growth, efficiency, innovation, digital transformation.

Забезпечення економічного зростання підприємств у постіндустріальній економіці

Гмиря Вікторія Петрівна

Державний науково-дослідний інститут випробувань і сертифікації озброєння та військової техніки

Полях Сергій Сергійович

Черкаський державний бізнес-коледж

Анотація

capital entrepreneur external environment

Економічне зростання національної економіки насамперед залежить від рівня розвитку виробництва. Як показує аналіз господарської практики, у процесі економічного зростання підприємства не повинна досягатися єдина мета отримання та максимізації прибутку. Сталий розвиток підприємства визначається можливостями підприємства адаптуватися до впливів зовнішнього середовища на основі вибору найбільш ефективних науково обґрунтованих управлінських дій в інтересах самого підприємства і суспільства в цілому. Саме виробництво становить основу економіки будь-якої держави. Успішне функціонування підприємств у сучасних умовах господарювання багато в чому залежить від різноманітних чинників зовнішнього і внутрішнього середовища, а також від того, наскільки ефективно і цілеспрямовано підприємства займаються інноваційною діяльністю. Зростання економіки будь-якої країни відбувається завдяки винятково двом факторам: нагромадженню капіталу (засобів виробництва, сировини і матеріалів) і поглибленню поділу праці. Створення та нагромадження капіталу здійснюється підприємцями, коли вони частину свого прибутку інвестують у засоби виробництва, сировину та матеріали. Чим більший прибуток підприємців, тим більше коштів вони інвестують у створення нового капіталу. Розроблення та впровадження інновацій на підприємстві мають сприяти зростанню техніко-технологічної бази підприємства, що являє собою частину виробничого капіталу, матеріалізованого в будівлях, спорудах, машинах, в устаткуванні та в інших засобах праці, які багаторазово застосовуються у виробництві, переносячи свою вартість на готовий продукт. Переробна промисловість, сфера послуг, транспорт і навіть сільське господарство застосовують дедалі ширший спектр цифрових технологій. Основні технології та процеси мають далекосяжні наслідки для організації роботи, виробництва і торгівлі, посилюючи існуюче організаційне та географічне розосередження наукомістких виробничих функцій і професійних груп. Компанії, що використовують цифрові технології, можуть підвищити ефективність своїх організацій і отримати можливості до більш легкого доступу до споживачів і надання їм послуг, прискорити розробку продукції і створювати нові товари і послуги з меншими витратами, без необхідності надбання досвіду на системному рівні або власного штату фахівців з інформаційних технологій.

Ключові слова: розвиток, зростання, ефективність, інновації, цифрова трансформація.

Statement of the problem. In today's postindustrial economic environment, the most important goal of enterprise development is to maximize their value by ensuring economic development. The ability of enterprises to efficiently form and use capital forms a fundamentally new area of key organizational competence, and the ability to form a goal turns into a source of sustainable competitive advantage that cannot be bought and is difficult to copy. The actualization of the economic growth of enterprises on a new methodological basis is due to the processes of digitalization and socialization of social production, which has become a catalyst for the development of a new stage of discussions on the quality and performance of enterprises. In this context, scientific and practical issues related to the economic development of enterprises in a strategic direction, where the priority of management focus shifts from the objective space of financial support and forms the resultant aspects of investment, taking into account the commercial interests of business and based on shared social values, acquire new meaning.

Analysis of recent research and publications. The issue of evaluating the activities of enterprises is widely represented in scientific publications, among which the most popular are the works of researchers: G. Barunov, M. Dedkova, O. Derevyanko, M. Lototskyi, L. Melnyk, O. Mendrul, L. Pronko, L. Samsonova, E. Sivankova, L. Syrota, A. Turil, G. Khotynska, I. Khrystoforova, L. Frolova, L. Chernykova, N. Shevchuk, etc. The theoretical aspects of ensuring economic growth, taking into account the specifics of enterprises' activities, are traditionally considered in the scientific literature in the areas of improving the efficiency of management of various types of capital and are covered in the scientific studies of І. Alekseev, O. Bogutska, N. Bryukhovetska, І. Bulieiev, S. Voitko, V. Gerasymchuk, V. Hrynchutskyi, O. Derevianko, V. Lysiuk, I. Repina, S. Filippova, G. Shvydanenko, etc.

The relevance and imperfection of the study of certain issues related to the peculiarities of determining, evaluating and forming the economic growth of enterprises in post-industrial conditions of activity determined the choice of the research topic and the logic of the work.

Formulation of the objectives of the article (statement of the task). The purpose of the study is to develop provisions and recommendations for determining, evaluating and ensuring economic growth in the postindustrial conditions of enterprises.

Presentation of the main research material. Economic growth is one of the most important social problems to which economists and politicians are constantly paying close attention. It is the pace of economic growth that determines the dynamics of a country's economic development, its authority in the international arena and historical prospects [1].

Theoretical research in the field of economic growth, along with a thorough scientific development of theoretical models and approaches,hasasignificantproblem-theoretical inconsistency and polarity. Even the concept of economic growth is interpreted ambiguously in the economic literature. The lack of theoretical unity makes it possible for some scholars to be skeptical about theories of development and growth in general.

The problem of economic growth emerged as an independent theory in the late 1930s. At that time, the world's attention was focused on the consequences of the Great Depression (1929-1933). In his works, J.M. Keynes drew attention to the role of the state as the main regulator of the economic system to ensure a continuous process of social production. The main factor of the Keynesian model is effective demand. An increase in aggregate effective demand will contribute to economic growth. [2] In addition, an important element of J.M. Keynes's theory of economic growth is the principle of multiplication, which characterizes the impact of investment growth on the growth of aggregate income. E. Domar and R. Harrod developed the idea of J.M. Keynes and proposed a neo-Keynesian theory of economic growth. The Domar-Harrod model focuses on investment. It uses the Leontief production function, which has a constant marginal productivity of capital. Output depends only on capital, since labor is not a limited resource. The savings rate s and the capital stock (K/Y) are constants. Under the influence of the Domar-Harrod model in the midtwentieth century, most researchers emphasized the dependence of economic growth on capital accumulation, and, accordingly, the long-term growth of capital mobilization was considered important [3].

Under the influence of the Domar-Harrod model in the mid-twentieth century, most researchers emphasized the dependence of economic growth on capital accumulation, and thus the long-term growth of capital mobilization was considered important.

The key element of economic growth in the neoclassical model of R. Solow is also capital accumulation. However, the neoclassical approach differs fundamentally from the neo- Keynesian approach in that the model uses the Koba-Douglas production function, in which factors of production are non-fungible, and the rate of capital retirement is constant and proportional to capital. Thus, in the Solow model, the position of the economy on an equilibrium growth trajectory depends on the values of s, n, and g. The exogeneity of these variables of economic growth, in particular technical progress, has led to criticism of the neoclassical model.

In today's environment, industry is one of the main institutions of the modern economic system, and in the domestic economy it has traditionally been the flagship of successful development. The trends of post-industrialization and the emergence of the knowledge economy directly affect the processes and results of enterprises, including in the area of economic growth. The knowledge embodied in innovations determines the specifics of management, transforms organizational business processes, changes the scale of competition and consumer needs, which, accordingly, actualizes adequate changes in the ways of ensuring them at all stages of economic relations. The specifics of modern economic growth of enterprises are defined in terms of intellectuality, innovation, and sustainability, which, accordingly, changes the management focus and priorities for the development of business structures focused on long-term economic growth. The current trends in the structure of economic change in favor of an increase in the share of the service sector does not mean a proportionality in reducing the role of industrial sectors, since "the material base of modern production remains and will remain the foundation on which new social and economic processes develop" [4].

The objects of the study are processing, metallurgical and machine-building enterprises. This choice is primarily due to the fact that in the structure of industrial production, these types of industrial activity have traditionally accounted for the largest share of sales. Thus, in 2021, the total share of these types of industrial activities accounted for 56.4% of industrial output.

In 2021, the three defined industries generated 72.8% of the total industrial value added in terms of costs, while labor productivity at manufacturing enterprises was 27.7% higher and metallurgy 15% higher than in the industry as a whole (Table 1).

One of the significant problems of the domestic machine building industry is saving on R&D costs. In developed countries, the share of such costs in total funding reaches about 8-10%, while in Ukraine it is barely 1.0% [6]. In the United States, about 2.0-2.5% of GDP is spent on research in the field of mechanical engineering, in the EU countries - 3% of GDP, in Ukraine - the best indicator in the mid-2000s reached 0.1% of GDP [6].

One of the key problems of the Ukrainian machine building industry is that equipment manufacturers have not been able to fully reorient themselves from exporting to Russia to other countries. In this regard, the decline in industrial production was about 25% from the level of 2013. The return to a profitable level starting in 2017 is associated with the growth of investments by European investors in the construction of machine-building plants in Ukraine. This is certainly a positive development factor for Ukrainian manufacturers of machinebuilding products, although it is worth noting that only the production of bearings, cables and various components under tolling schemes from European countries is in demand. In other words, as already noted, the karma of the "raw material orientation" remains with domestic machine builders even in the knowledge-intensive sector of industrial activity - instead of "intelligence" we sell "man-hours".

Table 1. Performance indicators of enterprise development in 2013-2021

Source: [5]

Processing companies are among the most successful in the domestic industry. Thus, in 2021, compared to 2013, the volume of processed products increased by 26.4% due to an increase in agricultural production. In the overall structure of the processing industry, the largest share is accounted for by the oil and fat industry, meat processing, dairy products, and beverages. The processing industry employs more than 18 thousand enterprises that process more than 5 thousand products and meet the needs of the domestic market by 75%, while accounting for almost 45% of the foreign trade turnover of the domestic agroindustrial complex [7]. During 2013-2021, the processing industry accounted for 30% of foreign direct investment of the total industrial value, while the share of investments increased in 2021 compared to 2013 from 15.1% to 19.3% of the total industry.

The peculiarity of domestic steel production is that Ukrainian enterprises manufacture the entire required range of steel products with a high level of quality, which in turn requires a significant amount of investment. In 2013-2021, specific capital investments per 1 ton of steel had a steady upward trend, while comparing these indicators with those of Japan and the United States, the values are consistently almost half as high.

Investments in metallurgical production are directly related to the renewal and modernization of equipment and technologies, and experts estimate the state of physical and moral depreciation of the active part of the mining and metallurgical complex's fixed assets at 60-70%.

Russia's full-scale invasion of Ukraine requires a revision of approaches to defining the policy of state regulation of the economy and the search for new effective methods of public administration.

The key challenges for Ukraine's current economy are a decline in production, an increase in the number of unemployed, weakening public finance sustainability, and threats to currency stability.

Ukraine ended 2022 with a 30% drop in real GDP. Forecasts for further growth of the Ukrainian economy vary on a very modest scale: from +0.3% in 2023 to +6.4% in 2025 (according to the NBU forecast). This is very low both for wartime conditions and for the conditions of a possible post-war recovery [8].

The country's investment development is hampered by military risks, the recruitment of labor resources into the Armed Forces, energy terror, and logistical problems. Since the beginning of 2023, a spiral of cyclical output decline and rising unemployment has begun to manifest itself in Ukraine [9].

In the field of digital transformation of the economy, the efforts of the Government of Ukraine from January to August 2023 were aimed at continuing digital transformation and protecting the rights and freedoms of citizens to ensure the sustainability of the economy and the state's defense capability on a new regulatory basis.

Digital transformation has a positive impact on innovation productivity, regional entrepreneurship, and broader economic and social benefits. Digital technologies can serve as a common conceptual platform for the development of the Ukrainian economy and become a key tool for restoring and enhancing the country's competitiveness in the global market.

An important step in the digitalization of innovations is Ukraine's participation in the European program "Digital Europe" (until 2027), which provides funds to accelerate the digitalization of European countries in the following areas: high-performance computing, artificial intelligence, data and cloud, digital services and skills, as well as the use of digital technologies in the economy and society to improve cybersecurity [10].

The problem of falling production and rising unemployment is a key risk to the functioning of the Ukrainian economy.

Ukraine's investment development under martial law is hampered as the economy faces such problems as military risks, migration and conscription into the Armed Forces, and logistical problems. The problem of energy supply also remains open, as the entire industry in the country depends on energy resources, and thus production volumes also directly depend on these resources.

The decline in production directly affects the development of the state's currency policy and the amount of financial resources that go to the state budget. Changes in the functioning of the national economy, including changes in GDP, require adjustments to macroeconomic policy.

The martial law status of the economy has created the conditions for a corresponding increase in spending on defense, social support and restoration of the infrastructure destroyed by the war. These expenditures increase the budget deficit, which in turn has a negative impact on the country's economy.

In 2022, the state budget deficit amounted to UAH 1.4 trillion (excluding grant funding), or about 30% of GDP. A large-scale deficit is also planned for the current year - UAH 1.3 trillion (20% of GDP).

The deficit was financed almost equally from three sources: international grants, external loans, and NBU emissions.

Modern post-industrial trends that lead to changes in the structure of the economy in favor of the service sector do not fundamentally change the importance of industry as one of the main institutions of the economic system. Thus, during 2013-2021, the share of industrial production in the total economic turnover consistently exceeded 35% and in 2021 amounted to 38.1% compared to 30.5% in 2013.

Conclusions

The military economy and the production of dual-use goods should become a priority of state economic policy.

Supporting economic growth and financial stability should be prioritized by the government. It is necessary to increase spending to support job creation, which will ensure economic development by generating a multiplier effect and reducing the risks of the tax base.

Reforming the domestic economy under martial law and taking into account the priorities of its postwar development means changing the goals of the state's structural economic policy. That is, government support should stimulate the development of small businesses while encouraging self-employed individuals and entrepreneurs to invest in startups and innovative projects.

References

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Список використаних джерел

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3. Черкашина, Т. Виробнича функція Кобба-Дугласа як інструмент політики економічного зростання україни в умовах ринкових реформ. Економіка та суспільство, 2020. (21). вилучено із https://economyandso-ciety.in.ua/index.php/journal/article/view/26.

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