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THE ROLE OF SMALL BUSINESSES IN THE CURRENT ENVIRONMENT. SMALL BUSINESS PROSPECTS IN RUSSIA
Abstract
This topic is particularly relevant for Russia today. Small business plays a very big role in the national economy, its development affects economic growth, the acceleration of scientific and technological progress, on the saturation of the market required quality products, the creation of new jobs, that is, to solve many pressing economic, social and other problems. The experience of developed countries of the modern world clearly demonstrates the need for any national economy highly developed and effective small business sector.
Keywords
small business, tax revenues, entrepreneurial activity, sanctions, support programs,
development difficulties
AUTHORS
Olga Aleksandrovna Makhnyreva
Student, Faculty of Economics, Kuban State Agrarian University. 13, Kalinina Str., Krasnodar, 350004, Russia.
Inna Grigoryevna Ivanova
PhD in Economics, Associate Professor, Kuban State Agrarian University. 13, Kalinina Str., Krasnodar, 350004, Russia. E-mail: Inna_ivanova_2010@mail.ru
Introduction
1.1 The urgency of the problem
Russia's economy is now in its infancy. Although Russia recognized as a country with a market economy, it would have been more correct to call this feudal economy that lives by its own laws. Management of development today has been reduced to the creation of favorable conditions for exporters at the expense of the rest of the population. The actual development of the controls in the Russian economy does not exist - the reason for the sharp slowdown in economic growth. Apparently, in its development, Russia must actively use the rich experience of the economically developed countries, often begin their ascent from similar situations. One of the ways to ensure the sustainability of economic growth,
repeatedly confirmed by international practice, is the development of small businesses -the most mobile, risky and competitive segments of the economy of any country.
Materials and Methods
Almost a third of the population of Russia, one way or another, connected with a small business. This multi-million real owners, managers, financiers, organizers of production. For all the years of reform, it is actually a small business was the only growing sector of the economy.
But at the same time, the small business is still enough to play a minor role in the Russian economy remains "in the shadows". Meanwhile, the only reasonable scope of products and services produced by small businesses are able, first, to saturate the market with competitive products, and secondly, to create new jobs, thirdly, to begin the formation of the foundations of society in any civilized country - the average class.
Result
Thus, further development of the situation without the active and positive government intervention can lead to a reduction of this sector of the economy with a corresponding worsening of economic problems and increasing social tensions. Continuation of the policy of reforms requires the support of citizens' private initiative and small business development in our country has become an essential part of the national doctrine held by the socio-economic transformation.
Discussion
4.1 Place the small enterprises in the economic structure
Understanding the role of small business requires a clear idea of what place it occupies in the national economy and what are its distinctive features. The formation and development of market relations requires the free and equal coexistence and development of different forms of ownership and different sectors within each form of ownership. Considering the private sector, we can speak of three groups of companies, which in common terminology is defined as large, medium and small businesses, depending on their size. Owners of these companies united by a common corporate interest - the preservation, development and protection of private property - which are due to similarities in their behavior in all respects relating to the property. However, business in general, is very nonuniform, each of these three groups has its own domestic interests, determine the strategy of economic behavior, attitude towards the state and its policy, socio-economic, political and national issues. (Kolomyts O.N., 2016)
Big business is mainly determined by economic and technical power of the country. For the purposes of self-preservation and development, it tends to integrate by absorbing or controlling the smaller partners, on the one hand, and on the other - together in international organizations, partially losing their independence, and falling under the influence of the more powerful partners. At the same time, guided by the situation on the international market and fulfilling the will of the stronger partners, big business becomes an instrument of the international expansion of business structures in the domestic market. In certain conditions, this dependence leads to the internationalization of big business interests at the expense of national interests.
Medium business increasingly relies in its activities on the domestic economic situation and forced to compete within their own group, as well as with large domestic
and foreign capital. This determines the interest of medium-sized enterprises in protecting the domestic market by means of protectionist state economic policy and formation of certain rules of market economy, which determines a closer link medium-sized businesses with national interests.
Small business, or small business, is the most numerous stratum of small owners, who by virtue of its mass is largely determined by socio-economic and partly political level of the country's development. By their standard of living and social status they belong to the majority of the population, at the same time being as the direct producers and consumers a wide range of goods and services. small business sector forms the most extensive network of companies operating mainly in local markets and directly related to the mass consumer goods and services. In combination with the small size of small enterprises, their technological, industrial and managerial flexibility it allows sensitive and respond to the changing market conditions. (Tolmachev A.V.,2016)
small business sector is an essential, objectively necessary element of any developed economic system, without which the economy and society as a whole can not normally exist and develop. Although the "face" of any developed state are large corporations, and the presence of powerful economic forces - big capital largely determines the level of scientific, technical and productive capacity, the true foundation of life of the countries with the market economic system are small businesses as the most massive, dynamic and flexible form business life. It is in the small business sector is created and circulates the bulk of national resources, which are a breeding ground for medium and large businesses.
High flexibility and massive coverage of virtually all areas of the internal market ensures sustainable development of the economy and contribute to the stability of the political climate.
One of the reasons for the successful development of small and medium-sized businesses in the advanced economies is that large-scale production is not opposed to the small. In developed countries, the principle of co-cultivation of large and small enterprises, with large associations do not suppress it a small business, and mutually complement each other, especially in the area of specialization of individual industries and in innovative developments.
The functioning of the local market, rapid response to changing conditions of the market, the direct relationship with the consumer, specialization in a particular segment of the market of goods and services, the opportunity to start their own business with a relatively small start-up capital - all these features of small business are its advantages, increase resistance to the domestic market, but are disadvantages under certain conditions, hindering his development. On the one hand, rapid response to changes in small businesses operating conditions makes it more mobile and adaptable, and on the other - depending on market conditions, the dynamics of the external socio-economic and political conditions. Relatively small capital narrows the scope of production, limits the ability to attract additional resources (scientific, technical, financial, industrial, labor, etc.). The limited scale of production and a small number of employees rise to the simplicity and efficiency of enterprise management.
4.2 Features of small business in Russia
Small business in Russia has some distinguish it from the majority of small business features of foreign countries. Features its alignment within a single small business of several activities, the inability in most cases to focus on single-commodity model of development; the desire for maximum autonomy, while a significant portion of foreign small businesses working on the terms of the subcontract, etc .; - General low
technological level and low technological equipment in conjunction with a significant potential for innovation. (Kobozeva E.M.,2015)
Russian small businesses have a high degree of adaptability to the difficult economic situation, aggravated by the disorganization of the system of public administration and the growing criminalization of society. While the lack of development of the system of self-organization and infrastructure support to small enterprises have a negative impact on the functioning of the sector.
An important condition for the economic formation of small businesses, which largely depends on the efficiency of public administration, management and control is the presence and degree of development of the market of production factors such as capital market, labor market, market of capital goods, including land and other properties.
This implies not only the existence in Russia of these markets and the availability of appropriate infrastructure to ensure their efficient operation, but also the ability to access them small businesses to increase their role in the formation of the demand, as well as full and accurate information about the state of the markets, and nationally .
4.3 The role of small enterprises in the Russian economy
- Social role
The social importance of small business is determined by the mass groups of smallholders - small business owners and their hired workers, the total number of which is one of the most important quality characteristics of any country with developed market economies. It is this group of active population serves the bulk of consumers, producing complex products and services in accordance with the rapidly changing market requirements.
Development of small business contributes to the gradual creation of a broad stratum of small owners (middle class), providing their own well-being and a decent standard of living, which is the basis of social and economic reforms, the guarantor of political stability and democratic development of society.
It should also be noted that small business employment is not only a source of livelihood, but also the manner of disclosure of the internal potential of the person. Objectively, the inevitable restructuring of the economy is forcing a growing number of people to do self-employment.
small business sector can create new jobs, and therefore, can provide a reduction in unemployment and social tension in the country. Mass development of small enterprises contributes to changing social psychology and life goals of the general population, it is the only alternative to social dependency.
- The political role
The political influence of small businesses in various countries is large enough, as this social group has long been a foundation formed middle class, the most representative in terms of numbers and is the spokesman of the political preferences of a significant part of the population. In the context of sustainable socio-economic and political development of society characterized by small entrepreneurs greatest commitment to the principles of democracy, political stability and economic freedom. Layer smallholders is most active, and even aggressive in the event of threats to the property, as opposed to large and medium-sized owners for small business owners their property is often the only means of livelihood, and the most important way of self-expression. The middle class or forms its own political movement, or becomes the object of the struggle of various political forces for votes.
This factor determines the continuity of the connection of small business with the interests of local and regional communities, which makes it dependent on a national basis
and is a breeding ground for his patriotism. At the same time, as evidenced by the historical experience of Russia and other countries, patriotic sentiments among smallholders in the economic downturn and political instability can take extreme forms, and push them to support the most extremist political forces.
-The economic role
The essential role of small businesses in the economic life of countries with market economic system is determined by the fact that in this sector operates the vast majority of enterprises are concentrated most of the economically active population and produces about half of the gross domestic product.
small business sector is the fastest-developing new products, and economic niches, develop in sectors unattractive to big business, etc. The most important features are the ability of small businesses to accelerate the development of investment and high turnover of working capital. Another characteristic of this sector is an active innovation and accelerate the development of various sectors of the economy in all sectors of the economy.
The inherent flexibility of small businesses and high adaptability to market conditions variability contribute to the stabilization of macro-economic processes in the country. However, the sector characterized by a relatively low yield, high labor intensity, the complexity of the introduction of new technologies, limited own resources, and increased risk of acute competition. This leads to a constant renewal in the MF sector as a result of massive bankruptcies or reorientation activities. In 2002, the number of registered small enterprises has increased by 5.1%, amounting to 880.6 thousand last date. According to all indicators in 2002 compared to the same period last year recorded an increase, which gives hope for the continuation of this trend over and 2003 city
4.4 Small business and public policy
Small business without state support and without their own intragroup interactions are not always able to successfully resist the competition to big capital, to defend their economic, political and social interests.
On the definition of public policy objectives and targets for the enterprise dominates the purely fiscal approach is applied, which is caused by the same utilitarian understanding of the place and importance of the business sector in the economy. Small business is considered only as one of the possible additional factors that affect the reduction of unemployment, the intensification of innovative processes, the development of competition, saturation of certain segments of the market in goods and services, etc., ie, as a tool for solving various social and economic problems, the use of which depends on a number of objective factors, and is not mandatory.
In Russia observed a dangerous trend. Economic policy continues to focus on the support of large government and the post of state economic structures and their associations, primarily financial and industrial groups. The emerging state - monopolistic economic system, small businesses are represented as a kind of foreign body, and their existence may be mainly used for filling niches unattractive for big business, the establishment of financial dependence and integration into the structure of big business, to perform the most difficult, time-consuming and less profitable operations .
With access to significant material and financial assets, large enterprises have more favorable access to credit and the possibility of obtaining more favorable bank loans, the founders of which they are. New small company it is often impossible to break long been divided monopolized market to gain access to government contracts, as well as to the media, reaching the so-called "support the national economy." The head of a large
company, of course, easier to "break through" profitable for him an administrative decision, especially at the local level.
4.5 State policy in the sphere of small business
The existence and significance of such a potentially powerful and dynamic social and economic phenomenon, as a small private enterprise, involves the formation and implementation of specific public policies to ensure favorable conditions for the development of small business and including legal regulation, tax, financial and credit incentives, special public institutions, providing the enforcement of such a policy. Currently, the state policy in relation to small business in the Russian Federation is still emerging, determined by its purpose, direction, implementation mechanisms. Made only the first is not always correct and consistent steps towards the formation of a coherent policy of support and development of small business and the creation of mechanisms of its implementation. Many measures of state regulation of small businesses are contradictory. For example, the extension of tax benefits for income tax combined with a general increase in both federal and local taxes, and the introduction of a simplified tax system for micro-enterprises - with a tendency towards total abolition of tax breaks for small businesses.
Small businesses by their very nature has a strong regional orientation. Small businesses typically base their activities based on the needs and opportunities of the local market saturation, volume and structure of local demand. They provide jobs to the local population. In the context of small business economic independence of regional development can be seen as an important means of optimizing the structure of regional economy.
As noted by Tolmachev AV, Lisovskaya RN and Ivanova IG government policy in respect and entrepreneurship in general and small businesses in particular can be effective only if its orientation coincides with the vector of internal development of the enterprise. The support of the state can be nothing other than just support the business process of self-development, aimed at mitigating or eliminating the obstacles to this self-development, with a wide range of instruments and incentives in achieving the overall socio-economic objectives that every entrepreneur alone in front of as a rule, do not put.
From the point of view of the entrepreneur state must create the conditions in which it can effectively achieve their goals, especially economic (profit maximization, efficiency of investments, own well-being, the victory over the competition, risk minimization).
From the point of view of the state entrepreneur aims to provide realization of the goals and interests of a higher order. It is in the area of the intersection of the objectives and interests of the state and business can be an effective public policy.
The main principle of state support of small business should be to create a predominantly economic and legal conditions for the normal conduct of market economy. State support should be expressed in the formation of economic and legal conditions, incentives for self-development and the competitiveness of small businesses, taking into account sectoral, geographical, national, historical features and traditions as well as international experience. state support of small business important task is to provide small businesses the same rights, to minimize the gap in terms of economic opportunities between small and larger enterprises in the competitive market competition, create equal opportunities for doing business in the conditions of freedom of choice of its forms and self-manifestation techniques and enterprise.
The successful development of small business is possible only if there is political will of the state to form a favorable social, economic, legal, political and other conditions,
the maintenance and strengthening of which, in turn, provides a large-scale development of small business.
4.6 Small business potential
Small business potential remains unrealized. There are serious economic and administrative barriers to entry of new companies into the market and the development of their activities.
Provisions for the development of small businesses related to the release of property and large enterprises capacity, their monopolization, downsizing, liquidation or reprofiling, not used. Interests small business practically not taken into account in the allocation of public investment resources, the organization of deliveries for state needs, the formation of the tax system, the customs and foreign trade regulation.
Focusing primarily on macroeconomic reforms, the State is essentially removed from the responsibility for the fate of the economically active citizens working in the small business sector, believing that his development is not a decisive factor in carrying out economic reforms. In other words, the view and position of the representative of small business, his group pressing needs, problems and concerns are taken into account by the state to a minimum extent.
In summary, we can say that in the current environment small businesses are in the most precarious position, which is determined by a number of points.
Ideologies reform is absent, the core of which should be an integral state policy in relation to small business and a systematic approach to solving its problems. The common was the thesis that small business is growing rather than because of, but contrary to public policy.
The lack of settlement of economic relations does not allow owners to fully enjoy the pledge and guarantee a right to attract loans and investments, which often leads to clotting activity of many small businesses.
The main problems are also fashionable attributed the reluctance of the state to see in the small business sector an equal subject of economic relations, the most active and the moving party's market transformation process, which is at the minimum own resources provides a high turnover of capital. Small owner does not have any significant advantages in credit and financial and tax systems, customs protection, experienced significant obstacles in business development, operating in extremely difficult conditions for survival. For a small business becomes unprofitable any business activity in the sphere of production, and the more it seeks to establish itself in trade or mediation. (Lisovskaya R.N,2016)
The relationship of small businesses with the local authorities are complex and controversial. On the one hand, small businesses are becoming a natural, objective and reliable support of the authorities in dealing with economic problems at the local level, which provides the sector some support. On the other hand, a small business at the local level is fully dependent on the bureaucracy in the face of officialdom. The unresolved legal status of the civil servant allow the official to use his official position for the removal of significant financial and material resources in small businesses, in exchange for the issuance of certain permits, he must deliver in operation.
Conclusion
Small business - an essential element of the market economic system, without which the economy and society as a whole can not normally exist and develop. Small businesses are the most numerous stratum of private owners, and by virtue of its mass play a
significant role not only in the socio-economic, but also in the political life of the country. Small entrepreneurs provide the strengthening of market relations based on democracy and private property, and on the economic situation and living conditions are close to most of the population and constitute the basis of the middle class, which is a guarantor of social and political stability.
In the conditions of Russia, located at the initial stage of development of market relations, namely the creation and development of a vibrant small business sector should become the basis for the social restructuring of society, providing training of the population and the transition of the entire economy of the country into the world market economy.
Measures that have hitherto been taken by the state in the sphere of small business, are contradictory and inconsistent. Provision of some benefits is inevitably accompanied by the tightening of other measures to counteract the development of this sector of the economy. The neglect of the state to the interests of small businesses adversely affects the political preferences of entrepreneurs.
Given the complexity of the transformations taking place in Russia, it should be borne in mind that the basis of these reforms and the guarantor of their irreversibility can only serve as a large middle class of society. The basis of the formation of the middle class make it small entrepreneurs, who represent one of the real forces that ensure socioeconomic revival of Russia, strengthening its statehood, preservation and development of democracy. (Ivanova I.G,2016)
Thus, due to objective reasons and factors at the present stage of socio-economic reforms in the Russian questions of support and development of business, and especially small business, will inevitably be imposed in public policy center. Analysis of the situation shows that small business is playing an increasingly important role in the development of the national economy, it is becoming an important factor of social and political stability in the society. In fact, for all the years of reform, it is a small business was the only growing sector of the economy, providing a return on investment and efficient use of resources. He absorbs the bulk of the working population, released from other sectors, thus removing the acute social problems.
Recommendations
This article may be of interest to all interested people economically, especially for small businesses.
REFERENCES
Ivanova I.G., Lisovskaya R.N. and Tolmachev A.V. (2016) Essence, the stages of growth and the direction of support of small agricultural entities // multidisciplinary network electronic scientific journal of the Kuban State Agrarian University. №115 (01). - S.498-516
Ivanova I.G., Kolomyts O.N., (2016) Software-oriented approach in the system of regional innovation and investment development. // Economy and predprinematelstvo. №1-2 (66-2). S.376-379
Ivanova I.G., Kobozeva E.M. (2015) The role of regional agrarian and industrial complex in the import system // The conference on topical issues of economics, law and humanities in 2015. .: Proceedings of the International scientific-practical conference. Conference May 20, 2015, Krasnodar. ed. Krasnodar CSTI, 109-114
