Government regulation and support for small and medium sized enterprises in the Russian Federation and foreign practice: a comparative analysis

<p>Small and medium-sized enterprises (SMEs) are the backbone of modern economy in virtually all developed countries. SMEs create new jobs, develop and introduce new technologies, products and services, adapt to local conditions, occupy market niches, which are unprofitable for large businesses, as well as provide a significant portion of taxes to the budgets.</p><p>In developed countries, SMEs are the main sources of economic growth, forming a gross domestic product of up to 70% and providing about 80% of jobs. In Russia, these figures appear to be dramatically small and reach only 21% and 27%, respectively. This fact seems to be the key problem of the present research.</p><p>The hypothesis: Russian policy of state support of SMEs has certain drawbacks, which provoke its ineffectiveness.</p><p>The purpose of the study: to identify the key reasons for the ineffectiveness of state support for SMEs in the Russian Federation, and measures for their neutralization.</p><p>According to this purpose, a number of objectives was identified:</p><p>1) Systematizing the existing ways and methods of government support for SMEs;</p><p>2) Comparing Russian and foreign experience and normative regulation in the sphere of public support for SMEs;</p><p>3) Adapting foreign ways and methods of SMEs support for Russian environment;</p><p>4) Considering regional specificity of SMEs support in Nizhny Novgorod region, creating recommendations for its improvement.</p><p>The present study was conducted using the following methods:</p><p>1) the analysis of the sources (statistics);</p><p>2) the critical analysis of the official documents and legal acts;</p><p>3) the comparative analysis of the statistics and legal acts;</p><p>4) the classification.</p><p>The present study produced the following results:</p><p>1) The mechanisms of state support of SMEs were systematized and classified into direct and indirect.</p><p>2) The analysis of the international experience in the sphere of state support and development of small and medium sized enterprises illustrated that in developed countries the main purpose of SMEs&rsquo; support is not direct subsiding or providing financial resources but creating favorable conditions for comfortable functioning of SMEs and facilitating SMEs&rsquo; access to credit resources.</p><p>3) Taking into account foreign experience a number of measures in order to improve the efficiency of state support for SMEs in the Nizhny Novgorod region was developed:</p><p>&bull; limiting the administrative burden on SMEs;</p><p>&bull; simplifying state registration and liquidation of the company;</p><p>&bull; reducing the number of non-tax payments;</p><p>&bull; building a clear system of support for export-oriented SMEs;</p><p>&bull; facilitating SMEs&rsquo; access to public procurement;</p><p>&bull; changing the system of financial support (through infrastructural organizations);</p><p>&bull; supporting and developing of regional clusters;</p><p>&bull; engaging government and business representatives in the preparation of educational programs;</p><p>&bull; creating a special site in order to support start-ups and innovative projects.</p><p>4) The hypothesis of the study was approved. The basic reasons for the ineffectiveness of government support of SMEs in Russia are insufficient use of indirect tools of SMEs&rsquo; support and limited access of SMEs to credit resources.</p><p>In conclusion it can be said that adaptation of international experience of implementing of indirect mechanisms aimed at creating favorable conditions for small and medium-sized businesses, as well as the expansion SMEs&rsquo; access to credit resources instead of using direct financial support for SMEs should become one of the most important priorities of public policy in Russia.</p><p>&nbsp;</p>