CLUSTERING BUSINESS DEVELOPMENT ACROSS THE REGIONS OF UZBEKISTAN USING PCA AND K-MEANS: AN ANALYSIS OF 2023–

Abstract

This paper examines regional business development across Uzbekistan’s 14 regions using 22 statistical indicators covering financial performance, costs, income, assets, investment, employment and exports. Principal component analysis (PCA) and K-means clustering are applied to standardised data to identify regional economic profiles. The first two PCA components explained 62.8% of the total variance in 2023 and 62.3% in 2024. The silhouette coefficient of 0.186 for k = 3 in 2023 indicated weak cluster separation. In 2023, Samarkand Region and Tashkent City formed one cluster, the Republic of Karakalpakstan and Navoi Region formed another, and the remaining 10 regions formed a third. In 2024, Bukhara Region formed a separate cluster, Navoi Region and Tashkent City were grouped together, and the remaining 11 regions formed the third cluster. The findings highlight changes in regional cluster composition and the importance of evaluating cluster centres, component loadings and stability. Combining clustering with a composite index supports a more comprehensive interpretation of regional economic differences without treating clusters as definitive rankings.