Public Support for Small and Medium-Sized Business in the Regions of the Russian Federation

Author Name(s): Ekaterina A. Eremeeva, Natalya V. Volkova, Alina M. Khamidulina
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The article considers the measures of State support of small and medium entrepreneurship (SME) in particular regions of the Russian Federation. For reference we selected the Republic of Tatarstan, Amur oblast, Kamchatka Krai. Examination of these regions make it possible to compare the development of small and middle-sized business entities in different geographic regions and administrative districts of Russia. Development of small and medium-sized business (SMB) currently seems relevant for Russian regions. Small and medium-sized business put significant contribution into the regional economics, gross territorial product and the budget of the region. Those entities provide advanced competitive environment and improve the quality of goods and services. Besides, small and middle-sized business increases the number of jobs created and partially address the issue of unemployment. In this regard studying the experience of different regions of the Russian Federation in creating favorable conditions and support for small and medium-sized entrepreneurship seem appropriate. The impact of state support measures for SME is also analyzed in the article. This analysis is based on the comparison of the state support measures for SME under implementation and the level of small and medium-sized businesses development in the regions covered. The analysis resulted in the conclusion about key results and perspectives of SME development in Russia and identification of critical issues hampering it.


Nowadays small and medium-sized businesses (SMB) are considered by researchers and politicians as a basement of socio-economic development of the state and its particular regions. SMB generate new jobs, facilitate to reduce unemployment in a region, make a considerable contribution to the regional budget by means of tax payments, attract investment to regional economics, etc. Therefore, many studies are dedicated to the impact of small and medium-sized entrepreneurship (SME) to economics of a territory [1, 2, etc.].

However, the issue of the impact of current socio-economic situation to the development and successful operation of small and medium-sized entities is not less relevant or important [3, 4, 5, etc.]. Since SMB can potentially improve socio-economic situation in a region, public sector is focused on creating enabling environment for those entities and providing assistance to them. The most common support measures for small and medium-sized entrepreneurship are subsidies from regional budgets [6, 7, 8, 9, 10, 11], government lending programmes [12], tax exemptions and simplified taxation [13] and other preferences and benefits for such companies [14, 15, 16]. Yet not even the examination of these support measures is the most essential issue. Primarily, academics pay special attention to the efficiency of the measures carried out. This article thereby deals with state support measures for SME in particular regions. The main objectives of the study are to analyse these measures as well as estimate their efficiency and prospects for Russian regions. Three subjects of the Russian Federation located in different geographic and administrative districts were selected as the study objects: Republic of Tatarstan, Amur Oblast, and Kamchatka Krai. The study outcome is expected to represent a comparison between these regions in the performance level of public support measures for SME, along with identification of key problems and prospects of regional public policy development in this area.


On the basis of the analysis the following conclusions can be made. None of public policies on SMB support in the regions reviewed can be described as effective. The study let us identify two groups of reasons. The first one consists of administrative reasons. These might include limited number of areas of state support for SMB, similar measures of support, low incentives to use allocated funds efficiently by entrepreneurs (beneficiaries) when providing particular types of SMB support, non-compliance of the measures implemented with the demands of entrepreneurs and socio-economic situation in region, etc.

However, based on the study it may also be concluded that implemented measures do not always lead to direct positive impact. In this regard, it is necessary to pinpoint the second group of reasons of public policy inefficiency on SMB support. These are socio-economic, ecological, geographic and other objective reasons. The article covers 3 regions located in different geographical territories. Geographical, climatic, demographic, transport, social and other conditions in the Republic of Tatarstan are significantly better in many aspects than such conditions in Kamchatka Krai or Amur Oblast. This affects the level of SMB development in these regions. Moreover, public support for SMB in any of them is not focused on improving the environment, and hence does not lead to proper outcomes.

To sum up, we might conclude that not only direct assistance to entrepreneurs should be provided, but also operational environment for business must be enhanced in different regions to comprehensively improve and achieve higher efficiency of the state policy on supporting SMB.


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