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FEATURES AND SUPPORT OF SMALL AND MEDIUM-SIZED ENTERPRISES (SME) IN RUSSIA

Vilenskiy, A.

Abstract

There is a sharp contradiction between public policies to support SMEs and features of Russian national SMEs. Using western experience in Russia, doing some bright projects to stimulate small businesses was important twenty years ago. Quantitative and qualitative parameters of SMEs in Russia lag behind most countries, largely due to the structure of its economy with the traditional dominance of large enterprises and the prevailing business climate. Small and medium-sized business in Russia is not innovative, does not perform antitrust function and does not create many jobs. Small and medium-sized business generates a positive competitive environment. But the importance of SMEs in Russia should not be exaggerated. The scale of subcontracting and franchising with independent small businesses in our country is extremely small. It happened so that the Russian economic policy and the leading part of the national political establishment were in a subordinate position in relation to the interests of a narrow circle of large businesses, mainly engaged in production and export of the most important natural resources. Manufacturing, infrastructural and other facilities of big business, its supply and marketing relations and, most importantly, its long-term economic interests focus on large enterprises and, with few exceptions, show no interest for the SMEs sector. The situation is exacerbated by the fact that the Russian system of economic institutions encourages big business mostly. It also proves an essential specific situation of small and medium-sized businesses in Russia. The development of Russian small and medium-sized business entirely depends on the state of the economy and the business climate in the country. The business climate in Russia does not correspond to the needs of small and medium-sized businesses. Measures to improve the business climate can potentially help Russian small and medium-sized businesses much more than the existing costly system meant to support them. It is obvious that the whole Russian system for SMEs support, fold increase in the federal budget to support Russian SMEs occurred in the recent years, is unable to compensate for a generally unfavorable business environment in Russia. It is necessary to improve the quality of investment, business climate and institutions in Russia. The real growth of the Russian SMEs can be expected only with the modernization, new industrialization of the Russian economy and business climate improvements.

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DOI resolver: doi.org/10.5593/sgemsocial2014/B24/S7.035

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