From Direct SMEs’ Support to Entrepreneurship Policy in Russia: Why Do Regional Entrepreneurial Ecosystems Matter?

Abstract

Abstract Traditional approaches to entrepreneurship support prevail in Russia. Significant amounts of direct federal support are allocated to small and medium enterprises (SMEs), but their role in the economy is consistently low. Public support imposes a weak impact on the SMEs development in comparison with macroeconomic and institutional factors. However, the support has increased significantly during the pandemic. We show that direct financial support is not always efficient, especially in developing countries. The aim of the article is to propose an alternative entrepreneurship policy for Russia and other countries, based on creation of favourable business environment in regions and cities, networks of business agents and proactive public support system considering specifics of regional entrepreneurial ecosystems. The article formulates the principles and goals of the ecosystem approach. The approach involves cooperation of local stakeholders and evaluating the support measures’ efficiency to reduce transaction costs for business agents and creating the motivation for growth and diversification. The work identifies the best practices in Russia and abroad. Previous policy in Russia does not fully comply with the principles and goals of the ecosystem approach: local authorities and business agents are not sufficiently involved, do not always consider regional specific, some measures create the wrong incentives for business agents, and some support institutions are not opened enough to public control. We proposed an appropriate typology of regional entrepreneurial ecosystems, based on the mentioned goals and principles, for a more differentiated entrepreneurship policy. There are several successful regional practices of SMEs’ development (Belgorod, Voronezh, Kaliningrad, Leningrad, Lipetsk, Novosibirsk, Samara, and Tyumen oblasts, Moscow, St. Petersburg, the Republic of Tatarstan), that can be distributed within similar types of ecosystems.

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