Managing the Functioning of Small Business at the Municipal Level as a Driver of Regional Economic Development

• Main Authors: Kremin Aleksandr E., Gulin Konstantin A.
• Format: Article
• Language: English
• Published: Russian Academy of Sciences, Vologda Research Center 2017-09-01
• Series: Economic and Social Changes: Facts, Trends, Forecast
• Subjects: small business; entrepreneurship; regional economy; management mechanism; municipal entity; own revenues of local budgets; system for enhancement of activity
• Online Access: http://esc.vscc.ac.ru/article/2330/full?_lang=en

Small business plays a special role in socio-economic development of territorial entities. Implementing the resource potential of a local area is the main and typical feature in the functioning of its subjects. However, issues related to the management of the sector, remain insufficiently developed in the framework of individual municipalities. On this basis, the aim of the present research is to develop an organizational and economic mechanism for managing small business, which would ensure the implementation of policy measures to enhance the functioning of regional small business at the municipal level. In order to achieve this goal, we set out the tasks to develop recommendations to promote the work of small organizations with the help of program activities and organizational and economic mechanism to ensure their implementation, as well as recommendations for the calculation of their economic effects. Methodological approaches to the research are based on general scientific methods (comparison, generalization, analysis, synthesis) and statistical methods (correlation, regression analysis). Their theoretical and methodological basis is formed by the works of Russian scientists (A.I. Ageev, A.P. Asaul, M.G. Lapusta, Yu.L. Starostin, and others) and foreign scientists (R. Cantillon, J. Meyer-Stamer, A. Smith, D. Ricardo, J.B. Say, J. Schumpeter) in the field of regional economics, specifically, small business management. Findings of the research confirm the need to develop an optimal approach to the organization of relations between small business and government structures at the municipal level. In this regard, we developed and proposed guidelines for designing programs aimed to enhance the functioning of small business for different types of municipalities chosen on the basis of application of methods that we developed previously for estimating the functioning of small business at the municipal level. In order to ensure their implementation we also developed an organizational-economic mechanism for managing small business functioning. Calculation of the effectiveness of implementation of the recommendations presented on the example of the Vologda Oblast shows that their implementation increases the autonomy of local budgets, releasing the funds of the regional budget in the next fiscal year in the amount of 52% of the amount of project financing (409.5 million rubles). The materials presented in the article can be used by regional and municipal authorities when determining future strategy and elaborating territorial development programs