The article analyzes an aggregate indicator consisting of 10 components of governance (sub-indices) to assess the competitiveness of cities. The competitiveness of cities is ranked by 10 components. Under conditions of decentralization, the role of local government in economic development is growing, and it is not countries and regions that are competing, but enterprises and their clusters. To assess the business climate in cities, the article summarizes the data of the US Agency for International Development's Report "Competitive Economy of Ukraine" in partnership with Info Sapiens and the Institute for Economic Research and Policy Consulting introducing the Index of Competitiveness of Ukrainian Cities developed through personal interviews with business representatives in Ukrainian cities and with the help of desk research. Indicators and obstacles to increasing the competitiveness of the regions of Ukraine are summarized. The conducted analysis made it possible to establish the negative dynamics of reducing the level of competitiveness of Ukrainian regions and to identify the reasons associated with a significant decline in economic indicators of the regions. Given modernity, among the strategic steps to improve the state regional policy, the article suggests motivating the creation of a favorable environment for business development in the regions; simplifying the business access to finance and the tax administration system; promoting the acquisition of skills, the development of a culture of entrepreneurship, and the formation of responsible behavior; improving the legal framework for compliance with EU standards; promoting the export of business products and services and their internationalization; promoting the process of competitiveness and innovation development, supporting the transfer of knowledge and technology, modernizing the existing infrastructure; strengthening the institutional framework for creating a favorable environment for business growth, monitoring the current business support activities, and their innovation activities. 

urban competitiveness index, business climate, urban competitiveness, subindex, strategy, regional development, regional policy