The Ministry of Economy recorded the results of the development of the SME sector

The Ministry of Economy has recorded the results of the development of the SME sector over the past few years – the results of the implementation of state support programs for small and medium-sized businesses in 2019–2022 are described in the department’s report available to Kommersant. The document records the formal achievement of the indicators stated in the national project for the development of SMEs approved in 2018 and in fact is the rationale for the next revision of the strategy for supporting the sector, which now, according to the authorities, should be focused primarily on import substitution and achieving technological sovereignty.

The government, as follows from recent statements by officials (including at the relevant strategic session, see Kommersant on October 9), is ready to recognize the task of quantitative growth of the SME sector as solved and even exceeded. The number of small and medium-sized businesses remains stable and amounts to about 6 million companies and individual entrepreneurs. The total number of employed people is now approaching 30 million people (the corresponding national project approved in 2018 set a goal of 25 million).

However, these quantitative goals have been achieved largely formally – this can be confirmed by data from the new report of the Ministry of Economy “On the state of small and medium-sized enterprises and measures for its development for 2019–2022” (available to Kommersant). The document, edited by Deputy Minister of Economy Tatyana Ilyushnikova, clarifies some of the sector’s statistical indicators. It follows that the overall growth in the number of SMEs is largely due to micro-enterprises: in 2020–2022, their number increased from 5.45 million to 5.76 million. Such companies, primarily engaged in trade and services, occupy the largest share in the SME sector. At the same time, as they exist, as a rule, they do not increase in size – only 3% of enterprises move from micro to small enterprises. The number of medium-sized companies, of which there are relatively few in the country, increased from 17.69 thousand to only 18.01 thousand in 2020–2022. The number of small enterprises decreased altogether: from 216.6 thousand to 212.2 thousand.

There are also nuances in achieving employment indicators. The number of workers in the sector in 2019–2022 increased from 22.7 million people to 28.17 million. At the same time, the number of self-employed increased by almost 6 million, to 6.22 million, and by 300 thousand, to 3. 69 million,—IP. On the contrary, the number of employees of small and medium-sized companies decreased by 700 thousand, to 18.26 million.

However, at yesterday’s parliamentary hearings in the State Duma, officials made it clear that they were generally satisfied with the results of SME development, although are going restructure approaches to supporting the sector. In recent years, manual reconfiguration of SME assistance measures has been carried out several times. At the beginning of the pandemic, the government significantly expanded support; at the end of it, abandoning “help for everyone”, it focused on supporting the most stable and promising. Then, after the start of the military operation, these same two concepts were successively replaced.

The nature of state support for the sector is largely linked to the tasks that the authorities expect businesses to fulfill: now this is, first of all, replacing foreign suppliers and achieving techno-sovereignty. Taking these guidelines into account, the further strategy to help the sector will, apparently, increasingly refer to the initial not only quantitative, but also qualitative plans that the authorities developed back in the pre-COVID years of 2018–2019 in the hope of gradually “growing up” companies and their more significant contribution to the economy.

Let us note that the report of the Ministry of Economy in this context looks like a justification for the need for a conceptual restructuring of state support. It follows that the largest number of companies in the sector are now concentrated in the trade sector (36%) – while in order to achieve the stated goals, an increase in the share and number of primarily manufacturing SMEs is necessary.

Kristina Borovikova