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REGIONAL COOPERATION FORUM “SMALL BUSINESS IN RUSSIAN REGIONAL DEVELOPMENT” Sergey Borisov, President of All-Russian public organization of small and medium business OPORA RUSSIA Geneva, July 9-10, 2006

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REGIONAL COOPERATION FORUM

“SMALL BUSINESS IN RUSSIAN REGIONAL DEVELOPMENT”

Sergey Borisov,

President of All-Russian public organization of small and medium business OPORA RUSSIA

Geneva, July 9-10, 2006

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OPORA RUSSIA

OPORA RUSSIAAll-Russian public

organization of small and medium business

(founded in September, 2002)

OPORAAll-Russian Union of

business organizations(Founded in September, 2001)

Committees and commissions

Regional coordinators(7 RF federal districts)

Entrepreneurs

Entrepreneurial regionalUnions and Associations

Entrepreneurial branch associations,

unions (96)

Entrepreneurs

More than 320 000

Regional departments in 78 RF regions

About About 3,53,5 millionmillionjob placesjob places

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Small entrepreneurship in Russia today and plans for the future

979,3 979,3 thousands of small enterprisesthousands of small enterprises

Aim – annual increase minimum Aim – annual increase minimum 5-10%5-10%

13-15%13-15% in production of Gross Internal Product in production of Gross Internal Product Aim – more than 50% Aim – more than 50%

24,7% 24,7% of economically active population is involved in small and medium businesof economically active population is involved in small and medium businesss Aim – more than 50%Aim – more than 50%

979,3 979,3 thousands of small enterprisesthousands of small enterprises

Aim – annual increase minimum Aim – annual increase minimum 5-10%5-10%

13-15%13-15% in production of Gross Internal Product in production of Gross Internal Product Aim – more than 50% Aim – more than 50%

24,7% 24,7% of economically active population is involved in small and medium businesof economically active population is involved in small and medium businesss Aim – more than 50%Aim – more than 50%

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Branch structure of small entrepreneurship

50%

13%13%

21%

2,5%

17%

trade

industry

construction

services

innovations and IT sector

other

Small Enterprises (SE)* SE +Private Entrepreneurs

*Number of small enterprises (legal persons) on branches of economy according to the Federal service of the State statistics

50%50%

13%13%

21%

2,5%

20%

80%

in other spheres in the trade sphere

17%

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Rating of the regions

Successful regions

Moderate +

Moderate -Lagging

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Actual risks

Most actual risks of small enterprises, %, in general for Russia

64,4

45,2

28,9

26,3

22,1

7,4

4,8

drastic deterioration of general situation ineconomy

growth of lease payments

changes in regional legislation

appearance of large monopolist

unjustified penalties, abuses in verifications, etc

unlawful attempts to withdraw or liquidate business

racket by criminals

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institutional environment

Po

licy

of

au

tho

riti

es

co

nc

ern

ing

sm

all

bu

sin

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sIndex of OPORA(the index of enterprise climate)

Tula area

Yamalo-Nenetskyi AR

Moscow

Krasnoyarskregion

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Programme of support of small entrepreneurshipDirections of support:

Creation of business incubators;

Development of micro-financing;

Support of exports;

Creation of venture funds;

State guaranty for SME credit.

Volume of funding:From funds of

the federal budget

Raised funds from the

regional budgets

2005 $50 Million above $50 Million

2006 $100 Million above $100 Million

2007 $200 Million above $200 Million

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Decisions of the Government of May 24, 2006

New law for small business

Increasing possibilities of using of the simplified taxation system

Reducing of administrative barriers for small enterprises

Simplification of access of small enterprises to property leased from the government

Developing simplified procedure of connecting small enterprises to electricity networks and reduction of prices for connecting to networks of natural monopolies

Developing of credit system for SME

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Examples of potential clusters in Russia

Perm Region •Machinery;•Chemical industry,•Timber industry

Samara region/ Tolyatti

Automobile industry

Arkhangelsk regionTimber industry

Republic of Tatarstan/Naberezhnye Chelny•Automobile industry;

/Nizhnekamsk•Petrochemicals

Tver regionRecreation &

tourism

Krasnodar territory

Recreation & tourism

Irkutsk region and Republic of BuryatiaRecreation & tourism

Leningrad regionTransportation & logistics

Astrakhan region

Recreation & tourism

Moscow and Moscow region•Biotechnologies;

•Information and communication technologies