Promoting Quality Growth: Strategies and Tools for SMEs

This is a very important moment for us – for the entire team at the Ministry of Economic Development – with the development of national projects. It is no secret that competition for resources is fierce. <…> The objective is to prove to everyone that SMEs are what really drive and transform the economy. This is ultimately what will help counter inflation — Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.

In May 2018, Russian President Vladimir Putin issued a decree outlining a number of national goals. One of the objectives it set out was to bring the number of Russian citizens working legally for small and medium-sized enterprises up to 25 million. And by working together over the past six years <...> we were able to accomplish [this] even earlier than planned. During this time, the small business sector not only grew, <...> the way it was viewed by society shifted, which was the most important thing. According to the Russian Public Opinion Research Centre and other sociological surveys, Russian citizens’ attitudes towards the sector dramatically improved over this time. <…> Step by step, the country is embracing entrepreneurship — Alexander Kalinin, President, All‑Russian Non‑Governmental Organization of Small and Medium‑Sized Businesses OPORA RUSSIA.

We are proceeding from the fact that small and medium-sized businesses will play a key role. And we need to address a key issue – this, of course, is the creation of a seamless growth system for small and medium-sized enterprises. That is because in recent years we have been struggling with the fact that SME status has become a kind of hindrance to development – growing out of this category was difficult, and also carried with it tangible economic implications. <…> Our objective is of course to get small companies to grow, to genuinely reach the IPO stage, to make it to the stock exchange, for their capitalization to grow, and so on. And in principle, it is evident that we are following this path — Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.

Micro-businesses account for 97% [of all SMEs – ed.]. I would say that small businesses then account for 2.5%, and medium-sized enterprises for the remaining 0.5%. <...> Today, President of the Russian Federation Vladimir Putin has set another objective: to ensure that the profitability of small enterprises grows at a faster rate than national GDP. <...> This means that small enterprises must grow faster than the national economy on average. That is no easy task — Alexander Kalinin, President, All‑Russian Non‑Governmental Organization of Small and Medium‑Sized Businesses OPORA RUSSIA.

The vast majority of investments are made on the basis of income. And the profitability of small enterprises has a direct bearing on the amount of investment. In addition, one of our national goals is to double the size of the stock market. It is vital to very carefully re-examine sources of investment and forms of support for investment — Alexander Kalinin, President, All‑Russian Non‑Governmental Organization of Small and Medium‑Sized Businesses OPORA RUSSIA.

The first thing we are lacking right now is a quick and easy tool to access cheap loans for use as working capital. I say this because in order to enter into a major project or to produce a product, you need funds to make it happen — Alexander Nikitin, Director, INTELKA Group of Companies.

The question of making stock market instruments more accessible to growing small and medium sized companies is a big one. How can things be set up so that you can publicly raise funds for your projects and share future profits with investors without being a company with a revenue of RUB 10 billion? — Konstantin Basmanov, Vice-Chairman, Promsvyazbank.

The objective, the role of entrepreneurship, must be evident to all. <...> In actual fact, these things are private property, they are entrepreneurial initiative, they are, shall we say, a ‘non-abuse’ of price regulation. <...> We consider the focus on entrepreneurial initiative to be crucial. What’s more, we appreciate that it was not in the midst of the public sector that all technological breakthroughs and everything else in industry occurred — Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.

It is now important to properly draw up national projects, federal projects. We must not miss out on the accomplishments of small enterprises. After all, when it comes to the Competitive and Efficient Economy national project, not only are discussions under way as to how many federal projects are to be included, money is also being distributed. Small businesses have nothing to feel ashamed of. Investments in small enterprises are multiple times more effective than public spending. <...> We are demonstrating very high levels of efficiency — Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.

Support for brands should be offered at a national level and encompass not dozens, but thousands of brands. And the ‘This Is Us’ competition [a competition held by the Agency for Strategic Initiatives and the Roscongress Foundation with the support of VEB.RF; this year’s competition featured more than 12,000 entrants from every region across Russia – ed.] should turn into something much larger — Mikhail Khomich, Chief Managing Director, Chief Strategist, VEB.RF; Special Projects Director, Agency for Strategic Initiatives to Promote New Projects (ASI).

We need to roll out the labour productivity support system across the whole country. <...> Why not train professionals specializing in improving labour productivity? Every enterprise should have the option of hiring such a specialist. <...> Improving labour productivity is most definitely an issue relating to the small business sector. When it comes to the new national project, let us work towards ensuring that small businesses – I am not referring to micro-businesses here – have access to the government’s labour productivity support system — Alexander Kalinin, President, All‑Russian Non‑Governmental Organization of Small and Medium‑Sized Businesses OPORA RUSSIA.

We need to find a solution for SMEs, because they really do need to be trained on productivity. We should probably opt for platform-based solutions, and offer training — Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.

A discussion is under way as to whether grants are needed or not. <...> In Russia today, the reality is that it is simply an essential element. We simply do not know of any effective mechanisms for tech companies to navigate the valley of death other than government grants — Sergey Polyakov, General Director, Foundation for Assistance to Small Innovative Enterprises in Science and Technology.

So, when it comes to bonds, the right thing would probably be to draw up a set of criteria. This would define the circumstances under which a company is assigned a particular quality, which would have a direct bearing on the final rate — Aleksandr Isayevich, General Director – Chairman of the Management Board, Russian Small and Medium Business Corporation.