Transformations in the industrial sector of Ukraine’s economy: regional dimension

Abstract

Industry forms the basis of the economy of all developed European countries and Ukraine in particular, as it makes the largest contribution to commodity exports and innovations, ensuring the reproduction of all other sectors and the social sphere due to the mass production of means of production and consumer goods. The purpose of the article is to identify transformations in the industrial sector of the economy of the regions of Ukraine based on a comprehensive assessment of the activity and effectiveness of its functioning in the current period and in dynamics. The results of the calculations prove that industrial production is mainly concentrated in industrial regions, which also demonstrate the highest current level of product innovation and the greatest return on investment in innovation. These regions are characterized by the highest level of production and labor activity in terms of the volume of industrial products sold and labor productivity. At the same time, during 2011-2021, the industrial potential of Ivano-Frankivska, Kyivska, and Lvivska oblasts significantly increased. Vinnytska, Volynska, Donetska, and Ternopilska oblasts demonstrate the highest dynamics of capital investments in industry during this period, while the leaders in foreign direct investments are Kirovohradska, Poltavska, and Chernihivska oblasts. Lvivska, Kyivska, Odeska, Rivnenska, and Khmelnytska oblasts have achieved a noticeable increase in the values of product innovation indicators. However, in general, innovative activity in the industrial sector of Ukraine’s economy is very low. The majority of innovations were produced in Donetska oblast. The full-scale Russian armed aggression has accelerated the transformation processes that have been taking place in the industrial sector of the national economy over the last 10 years, namely the formation of new industrial centers in Ukraine, still small in scale, but with higher (compared to traditionally industrial regions) values and higher positive dynamics of individual indicators of production, labor, and investment activity of industrial enterprises. Such “new industrial” centers are located in the western and central regions, where the largest number of enterprises from the east have relocated.