The White House discusses a new strategy for the development of small and medium-sized companies

Despite the growth in the number of people employed in the small business (SME) sector, the White House is unhappy with its structure – it creates fewer jobs and less added value than foreign ones. The government is counting on qualitative changes in small companies through a new strategy for the development of SMEs until 2030, but the main topic of its discussion was not business as an activity aimed at producing a product and making a profit, but, on the contrary, measures to support small companies by the state. However, the possibilities of the budget are limited, therefore, the ideas of more accurate distribution of subsidies and benefits through digitalization and their concentration on the new economic priorities of the Russian Federation are laid at the heart of the SME support system. In this way, the authorities hope to achieve import substitution and technology development relatively cheaply.

On May 29, at a meeting of the government commission for the development of SMEs in the Moscow technopark Kalibr, officials and entrepreneurs jointly searched for new sources of development for the sector — the profile national project ends in 2024, and the SME strategy adopted in 2018 is outdated. Both the role and the needs of SMEs have changed. However, the reasons for this were not discussed on Monday, as well as the question of why “business development” as an activity for the production of a product and making a profit is considered by the authorities only in the context of certain rules for distributing budgetary funds to the sector.

Prime Minister Mikhail Mishustin recalled that the Russian Federation already has a system of measures to support small businesses, which stimulated the growth of the sector. Thus, the number of employed in the fourth quarter of last year exceeded 28 million people – rapid growth was largely ensured by individual entrepreneurs (almost 4 million of them) and the self-employed (already over 7.5 million, they do not belong to SMEs, but are taken into account in the national project). However, in terms of quality characteristics, the sector does not yet meet the government’s expectations.

“Compared to other countries, we are among the leaders in terms of the number of SMEs per thousand people. But at the same time, the role of the smallest business, judging by the share of GDP, is lower. An SME entity in Russia, on average, creates so far fewer jobs and less added value than an SME entity abroad,” complained the head of the Ministry of Economy Maxim Reshetnikov at the meeting.

Now 96% of the sector is made up of micro-enterprises, mainly engaged in trade and services. At the same time, only 3% of SMEs are moving from micro to small enterprises, head of the Federal Tax Service Daniil Egorov reported earlier.

The infrastructure for entering entrepreneurship has already been built (inflow is provided by the self-employed, as well as youth entrepreneurship support programs and social contracts aimed at starting a business), and the goals of the new strategy will be related to the acceleration of existing enterprises. The Ministry of Economy offers four support priorities: assistance to start-up entrepreneurs in the first two years of operation (during this period 51% of SMEs are closed), smoothing the transition from category to category for growing micro, small and medium-sized enterprises (problems arise due to tax increases, complicating reporting and tighter control). There are also plans to focus resource-intensive support on growing SMEs from “priority” industries that have the greatest effect on the economy (processing, IT, engineering centers, small technology companies, tourism), and financial support for the SME+ category (companies that have grown from SMEs with export potential risking “grinding” due to a sharply increased load).

However, all these measures are yet to be discussed with the Ministry of Finance. In the meantime, the authorities expect to increase the effectiveness of support: with declining budget revenues, the challenges of adapting the economy to sanctions, and the need for large investment incentives, there are no resources for frontal support for small companies. The government is leaning towards their concentration on more efficient SMEs. This, in particular, was said by the governor of the Kaliningrad region, head of the State Council Commission on SMEs Anton Alikhanov: “The point of growth … should be entrepreneurs in industries that have the greatest potential for acceleration and meeting domestic demand.

Support measures, respectively, should also be focused on providing resources and conditions, first of all, to such entrepreneurs.” Changes in the system of its distribution through digitalization should also increase the efficiency of state support.

Thus, the analysis of concessional lending programs for SMEs helped the Ministry of Economy to remove SPVs of large companies that mimic SMEs from support. “For less money, we got more coverage and results,” Maxim Reshetnikov said.

It should be noted that the government’s interest in the SME sector since 2022 is explained by hopes for its innovative activity and import substitution through the replacement of foreign suppliers and parallel imports (which has already supported both SMEs themselves and the share of counterfeit goods in the markets). Non-economic interest in the sector is ensured by its electoral potential (40% of those employed in the economy) – last week, Vladimir Putin already announced in the Russian Federation “five years of creative entrepreneurial work.”

Diana Galieva, Oleg Sapozhkov