Page 67 - Theoretical and Practical Interpretation of Investment Attractiveness

It should be noted that in the literature on economics, the concept of "economic
potential" has not been explicitly defined as a basic category (fundamental), and as such, it
has not been considered as an important factor in ensuring the development of
entrepreneurship and the competitiveness of the economy. Usually, the concept of potential
participates directly in economic relations and, in particular, in the production process as an
economic factor. In classical economic theory, factors of production are considered as factors
that participate only in the production process and are related to the volume of production,
namely land, labor, and capital.
The term "potential" originates from the French language in the 19th century, derived
from the Latin "potentialis" and "potens," meaning "possible" or "powerful," and is used to
describe a quality of something that has the capacity or capability. In Uzbek, "potential" is
translated as "opportunity, ability, power". Potential is defined as "the combination of
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resources and capabilities existing in a certain area ."
In physics, the concept of potential refers to the total energy of a certain system and its
potential for use. For example, magnetic potential refers to the size of a magnetic field,
electron potential refers to the energy conditions in an electrostatic field, and chemical
potential refers to a thermodynamic function that defines the state of a particular component
in a given external condition. It can also refer to "a characteristic of a vector field."
While originally a term in physics, "potential" has also been accepted in social
sciences. Today, the term "potential" is commonly understood in a general sense.
The term "potential" has been used in economics to assess the level of productive
forces. V.I. Veyts and K.G. Vobliy introduced the concept of "production potential" to assess
the material resources produced to meet the needs of the population. The concept of
"economic potential," on the other hand, was introduced by S.G. Strumilin and includes all
the efforts made by the labor force and society as a whole to create economic potential. The
term "expanded production potential" introduced by V.S. Nemchinov refers to the resources
available in the national economy that ensure the economic development of the country or
region .
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In economic literature, definitions and explanations of the term "potential" can be
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divided into four groups :
1. Economic potential is understood as the total capabilities of economic systems.
Here, the main aspect of economic potential is considered to be its production function.
2. Economic potential is understood in terms of the availability of all existing resources
("investment resources," "number of units," etc.). In this context, the potential of enterprises,

on attracting foreign investment." 08.00.007 – “Finance, money circulation and credit” specialization for the degree of
Doctor of Economic Sciences." /UzR Banking and Finance Academy. – T., 2008.; Muminov B.Sh. "Ways to increase the
efficiency of centralized investments in Uzbekistan." 08.00.07.: Dissertation for the degree of Doctor of Economic
Sciences." /UzR Banking and Finance Academy. – T., 2012. 135 p .; Raimzhanova M.A. "Promoting investment in free
economic zones in Uzbekistan." 08.00.07 – Finance, money circulation and credit specialization for the degree of Doctor
of Economic Sciences /TMA. – T., 2012.
83 "Economic Encyclopedia" edited by L.I. Abalkin, Moscow, 1999.
84 Durdieva D.A. "Assessment of the Potential for Sustainable Socio-Economic Development of the Region," 2013. URL:
http://dibase.ru/article/07112013_142069_durdueva.
85 Lapin E.V. "Economic Potential of an Enterprise," Sumy: ITD "University Book," 2002. 310 p.
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