Deindustialization of Ukraine’s Manufacturing Industry and Its Specific Features in the Context of Capitalization
Year: 2025
Type: article
Abstract: Topicality. Ukraine is currently undergoing a simplification of its structure and a decline in its technological capabilities. This process is accomplished by increased wear and tear of fixed assets, decreased investment activity, deterioration of production, transport, and energy infrastructure, stagnation innovation, degradation of the commodity structure of exports, and a significant loss of human capital. These multifaceted challenges necessitate a comprehensive analysis of the ongoing processes and the identification of their specific characteristics in the context of capitalization. Aim and tasks. The aim of this study is to analyse the process of deindustrialization within Ukraine's manufacturing sector and to identify its distinctive features in the context of capitalization. Materials and Methods. The research applies both general scientific and special research methods, including comparison, generalization, synthesis, system analysis, and logical-dialectical analysis. The information base of the study comprises monographs, specialized literature, information and analytical materials, academic journals (both domestic and international), and statistical data from the State Statistics Service of Ukraine. Research results. The article examines the concept of “deindustrialization” and highlights its core features: a decrease in industrial output at constant prices; structural shifts within the manufacturing sector marked by a declining share of high-tech industries; and a deterioration in the quality of industrial output. The main drivers behind deindustrialization of Ukraine's manufacturing sector have been identified as follows: increasing depreciation of fixed assets and insufficient investment; simplification of Ukraine’s economic the structure and a reduction in its technological complexity; a decline in employment in the high-tech sector; structural transformations at the sectoral level of the manufacturing industry; declining labour productivity within key manufacturing segments; worsening of the commodity exports; deepening liberalization of foreign trade; stagnation of the innovation process; and loss of human capital. Additional destructive factors influencing the development of the manufacturing industry since 2013 include: the loss of traditional markets for Ukrainian manufacturing products, particularly in russia; difficulties in reorienting production and exports toward developed markets due to intense competition and protective trade barriers; underdevelopment of the domestic market for manufacturing products and the passive role of the state in addressing these issues; the rise of global protectionist sentiments and trade trends, in contrast to Ukraine’s continued liberal access for foreign goods in its domestic market. Conclusion. Based on the analysis of the deindustrialization of Ukraine's manufacturing industry, several specific features of this process in the context of capitalization have been identified. These include: a reduction in human capital due to labour emigration and a shrinking supply of highly qualified workers; loss of physical capital due to excessive depreciation of fixed assets and limited capital investment; stagnation in intangible investment assets and a corresponding decline in the technological level of manufacturing; deterioration of the institutional environment due to further liberalization of foreign trade and ineffective state policy.
Source: Economic innovations
Language: English
Topic: Economic Issues in Ukraine
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4412842166