STATE REGULATION AND INSTITUTIONAL FACTORS OF BUSINESS MODEL TRANSFORMATION OF ECONOMIC ENTITIES IN THE CONTEXT OF UKRAINE’S ECONOMIC DIGITALIZATION

Abstract

Introduction. The current stage of Ukraine’s economic development is characterized by the intensification of digital transformation processes that encompass all areas of economic activity and create new conditions for business operations. The spread of digital technologies, the development of the platform economy, e-commerce, digital ecosystems, and artificial intelligence systems necessitate the transformation of traditional business models of economic entities. At the same time, the effectiveness of digital transformation depends not only on the level of technological development but also on the quality of the institutional environment, state policy supporting digitalization, and the development of digital infrastructure. These issues become particularly relevant in the context of wartime and post-war economic transformations in Ukraine, where digitalization serves as one of the key instruments for ensuring business resilience, increasing competitiveness, and facilitating integration into the European economic space.

Purpose. The purpose of the study is to substantiate the influence of state support and the institutional environment on the transformation of business models of economic entities in the context of the digitalization of Ukraine’s economy, as well as to identify the main directions for improving state mechanisms supporting the digital development of entrepreneurship.

Materials and Methods. The research is based on the regulatory and legal framework of Ukraine in the field of digital development and business support, official statistical data, analytical reports of international and national organizations, and scientific works of domestic and foreign scholars on digital business transformation, public regulation, and institutional economics. The study employs methods of theoretical generalization and systematization to reveal the essence of digital business model transformation; analysis and synthesis to determine the impact of state support on business digitalization; comparative analysis to investigate current trends in digital entrepreneurship development; a systems approach to assess the relationship between the institutional environment and digital business modernization; and logical generalization to formulate conclusions and practical recommendations.

Results. The article presents a comprehensive study of the impact of state support and the institutional environment on the transformation of business models of economic entities under the conditions of Ukraine’s economic digitalization. It is established that the digital transformation of modern entrepreneurship is driven not only by technological factors but also by state digital development policies, regulatory mechanisms, and institutional conditions of business activity. Current trends in the development of digital business models caused by the expansion of the platform economy, e-commerce, digital ecosystems, artificial intelligence technologies, and automated management systems are examined. The role of state support in stimulating business digitalization through the development of e-government, digital public services, electronic document management, digital identification, and innovation support programs is identified. Special attention is paid to the analysis of the functioning of the “Diia” and “Diia City” digital platforms as instruments for modernizing the institutional environment of entrepreneurship in Ukraine. It is proven that the effectiveness of digital business model transformation largely depends on the level of digital infrastructure development, the quality of state regulation, investment support, and the level of digital competencies of human capital. The main barriers to digital modernization of enterprises are identified, including insufficient financial resources, uneven digital development across economic sectors, workforce constraints, and increasing cybersecurity risks. The necessity of improving state support mechanisms for business digitalization, developing innovation ecosystems, and strengthening Ukraine’s integration into the European digital space is substantiated.

Prospects. Further scientific research should focus on developing methodological approaches to assessing the effectiveness of state support for enterprise digital transformation, improving digital regulation instruments for entrepreneurial activity, and designing mechanisms for adapting business models of Ukrainian enterprises to the conditions of post-war economic recovery and integration into the European Union Digital Single Market.