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Russian Federation: Key Issues and Policies

image of Russian Federation: Key Issues and Policies

This publication examines the major policy challenges, achievements and next steps for the creation of a more entrepreneurial population and a stronger SME sector in the Russian Federation, which are critical to the country’s economic growth and diversification. Despite less regulatory burdens and more subsidy financing for start-ups, production modernisation, innovation and exporting, framework conditions need to be improved in areas such as the rule of law, commercialising science and improving entrepreneurial skills and education. Gaps in SME and entrepreneurship programmes also need to be filled, such as through new initiatives for high-growth firms and large firm-SME linkages. Strengthening business development services infrastructure and improving access to finance are further important challenges. All these improvements will need to be spread across the regions of the Russian Federation if national objectives for growth and balanced spatial development are to be met.

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Assessment and Recommendations

One of the most distinctive features of the Russian Federation’s SMEs is their relatively small contribution to the economy compared with other OECD countries and emerging economies. In real terms (i.e. excluding significant numbers of enterprises that are registered but not in operation), there were only 3.2 million operating businesses in the business sector in the Russian Federation in 2010. By international standards, this is a relatively small figure when juxtaposed with the size of the economy (). Italy, Mexico and Korea, for example, each have more businesses than the Russian Federation although the total outputs of these countries are smaller. The rate of 31 registered enterprises per 1 000 working population in the Russian Federation is well below that of the OECD countries, and is low in comparison to rates of 67 in Mexico and 102 in the United States.

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