Business and state: modern dimension of interaction (case of Ukraine)

The integration of Ukraine into the world economy on the equal rights is one of the priorities for the Ukrainian economy at the present stage of development. It should be noted that in the modern context of globalization of economic life the basis for economic development, which allows the country to integrate into the global economy, is constructive interaction of business, science and state at all levels (figure 1) [1].

Fig. 1. Conceptual model on integration into the world economy [1] 

As a matter of fact, practical interaction between business, science and state, carrying out diverse influence on each other, is embodied in the following main areas: representation of reputable representatives of business and science in government to coordinate relevant decisions and recommendations; lobbying as a method of interaction in solving strategic tasks of development; education system (especially higher education). But it should take into account the complexity and diversity of this interaction, which provides a balance between interests of business, science and state in all dimensions.

Let‘s demonstrate the importance and the need to consider various aspects of interaction on the example of government and business communications in the context of business reforms in Ukraine, using data from the World Bank experts (the reports ―Doing Business‖) (tables 1-2) [2-5]. 

Table 1 Business Reforms in Ukraine (2009-2016)

Source: http://www.doingbusiness.org/reforms/overview/economy/ukraine [2] 

It should be noted over the 13 years since its inception the Doing Business report has become one of the world‘s most influential policy publications. It is an annual report on the state of health of economies based on detailed diagnostics not of the relatively more visible features (such as growth) and various macroeconomic parameters (such as the public debt) but of underlying and embedded characteristics – such as the regulatory system, the efficacy of the bureaucracy and the nature of business governance [3].

The above results indicate that Ukraine made improvements in the local regulatory framework by spending business reforms in the country (see more detail information in the table 1) [2]. But even a brief analysis of only a few parameters of interaction ―business – state‖ in the triangle ―business – science – state‖ gives reason to believe that, on one hand, the current state systems act as stimulants (e.g. Ukraine made a business easier by spending some reforms (table 1)) or vice versa (e.g. Ukraine made a business more difficult by doing some changes in the definite areas (table 1)) in business development and on the other hand – the evidence of the complexity and contradictions of the system of administration and regulation of business activity in the country.

Despite some positive changes and achievements, further development of Ukrainian business requires the reforms in many fields with the purpose of improving the conditions for entrepreneurs and increasing the business activity in the country in whole (table 2) [4]. 

Table 2

Ease of doing business in Ukraine 2015-2016 [4] 

Source: http://www.doingbusiness.org/data/exploreeconomies/ukraine# [4]

In general, state and business should take obligations and share responsibility for the future of the Ukrainian economy. So, government need to spend the effective reforms affecting main areas of the life of a business: Starting a Business, Dealing with Construction Permits, Getting Electricity, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading Across Borders, Enforcing Contracts, Resolving Insolvency. Ukrainian business should develop a common consolidated position and bring it to the government and also abandon illegal actions and operate according to the modern legal framework.

Obviously, today we need to move away from support through development policy to the policy of partnership.

It is clear that the declared official aims of partnership have not conflict, and they are acceptable to all parties due to their social orientation and modern pragmatism. However, sources of potential conflicts may lie in the hidden interests of the parties in their desire for personal power and monopoly on decision- making and escape from personal responsibility for the taken decisions.

Therefore, further development of Ukraine requires an adequate model of interaction between business, science and state at all levels and improvement the ―rules of the game‖ by restructuring the management and coordination of interests in the framework of the partnership policy that will help to solve many existing problems in each region, approach the level of socio-economic development of developed countries and provide integration of the country into the global economy.

References:

1. Бабінська О. В. (Babinska O.V.) Політика партнерства як модель сучасних взаємовідносин бізнесу, науки і держави (Partnership policy as a model of modern relations of business, science and state) / Materials of final international scientifically-practical conference ―The Science: theory and practice‖. 4. Economic sciences. – Praha : Publishing House ―Education and Science‖ s.r.o.; Prague, Czechia – Dnepropetrovsk, Ukraine – Belgorod, Russian, 2005. – 72 p., P. 15-18. (in Ukr.).
2. Business reforms in Ukraine. Available at: http://www.doingbusiness.org/reforms/overview/economy/ukraine.
3. World Bank. Doing Business 2016: Measuring Regulatory Quality and Efficiency. Washington, DC: World Bank. DOI: 10.1596/978-1-4648-0667-4. License: Creative Commons Attribution CC BY 3.0 IGO.
4. Doing Business 2016 data for the Ukraine. Available at: http://www.doingbusiness.org/data/exploreeconomies/ukraine#.
5. World Bank. Doing Business 2015: Going Beyond Efficiency. Washington, DC: World Bank. DOI: 10.1596/978-1-4648-0351-2. License: Creative Commons Attribution CC BY 3.0 IGO.