The State of The Service Sector in Bukhara Region

Abstract

The service sector plays a pivotal role in fostering employment and inclusive economic growth in developing regions. In Uzbekistan, particularly in the Bukhara region, the service sector is expanding rapidly but exhibits structural disparities and underutilization of potential. Despite policy support, limited empirical research exists on the interrelation between economic indicators and employment within regional service sectors, especially using robust econometric models. This study investigates the current state, regional disparities, and development potential of the service sector in the Bukhara region, with a focus on its employment impact and economic linkages. Between 2019 and 2024, service employment in Bukhara grew by 24.2%, with significant contributions from tourism, ICT, and finance. An econometric model confirmed strong statistical relationships between service employment and regional indicators such as GRP, investment, per capita income, and enterprise count (R² = 0.892). The study provides a data-driven, district-level analysis supported by econometric validation, offering new insights into service sector dynamics and labor market alignment. These findings highlight the need for targeted regional policies, investment incentives, digital transformation, and service cluster formation to reduce imbalances and stimulate inclusive growth in Bukhara’s service economy.