THE ROLE OF SMALL AND MEDIUM-SIZED ENTERPRISES IN INCREASING EMPLOYMENT AND REGIONAL DEVELOPMENT

Abstract

The primary objective of this study is to evaluate the structure of micro, small, and medium-sized enterprise (MSME) entities, their distribution across economic sectors, their relationship with regional development, and the impact of financial support mechanisms on this process based on official statistical data. The study employs statistical analysis, comparative analysis, a systematic approach, and empirical generalization as research methods. The findings indicate that in 2024, the number of MSME entities increased by 5.7% compared to 2023, reaching 1,505,893 enterprises. The number of employees working in these enterprises also increased by 6.9% compared to the previous year, reaching 417,838 in 2024. Of these employees, 83.4% were employed in non-state MSMEs, while 16.6% worked in state-owned MSMEs. Furthermore, the fact that more than half of the active business entities are located outside Baku demonstrates the significant role of the MSME sector in promoting regional economic activity. Nevertheless, strengthening the positive impact of the MSME sector on employment requires expanding access to financial resources, developing service and production infrastructure in the regions, accelerating digitalization, enhancing vocational skills, and strengthening local value chains.