TOP-10 of regions by the share of small business

ranking 21/10/2019

In the countries with the modern economic structure, over 50% of work force is employed in small and medium-sized enterprises. In Russia, this figure is 22%. In 2018, the share of small business in total revenue of companies (including large) was 27,9%.

Contribution of small companies to the GDP is obviously insufficient. Russia is still the country of large corporations and monopoly, and therefore there are artificially high prices and lack of fair competition.

The Government is seeking to bring the GDP share in the economy to the level of developed countries up to 2025. However, there are already regions in Russia with the regional GDP financing mainly by small and medium-sized business.

The Republic of Dagestan with small business’ total share of 75,7% is ranked the first. This fact is due to the traditional economy of the region, where the population is involved in personal subsidiary economy and handicraft industry. Large business is slightly spread because of unavailability of rich natural recourses and effective demand. The similar situation prevails in neighboring North Caucasus republics (see Table 1).

TOP-10 also includes Ivanovo region (72,5%), Sevastopol (65,3%), Kirov region (56%) and Zabaikalye territory (55,5%).

Despite the high share of small business in the leading regions, the absolute contribution of small business is minimal: 1,7 trillion RUB compared to 59,9 trillion RUB for the whole country.

Table 1. TOP-10 of regions with the highest share of small business in the total turnover in 2018, %
Region Small business’ share in total turnover of companies, % Small business’ turnover, billion RUB Total turnover of companies, billion RUB
1 Republic of Dagestan 75,7 308 406
2 Ivanovo region 72,5 425 586
3 Sevastopol 65,3 81 125
4 Kabardino-Balkarian Republic 62,2 75 121
5 Chechen Republic 61,5 109 177
6 Republic of Ingushetia 61,0 16 26
7 Republic of North Ossetia-Alania 58,9 64 108
8 Kirov region 56,0 333 595
9 Republic of Adygea 55,5 90 162
10 Zabaikalye territory 55,5 211 381
  Russian Federation 27,9 59 936 214 562

Source: ЕМИСС, Unified interdepartmental statistical information system, Rosstat, calculations of Credinform based on the System Globas

The highest turnover of small business in absolute figures is recorded for Moscow - 16,7 trillion in 2018. However, the share of small business in total turnover of companies slightly exceeded 25%.

Novosibirsk region is ranked the fourth with the highest share of small business in the regional economy – 50,5% (see Picture 1).

Picture  1. Small business’ share in the regions with the highest turnover of small and medium-sized business Рисунок 1. Small business’ share in the regions with the highest turnover of small and medium-sized business

The priority is to increase the contribution of small business to the GDP, and it is involved stable and continued development of the economy, fair competition and entering new selling markets. However, lack of plans to reduce the tax burden, cancellation of single tax on imputed income from 2021, huge fiscal injections to the large state-owned companies to the detriment of small companies – all these call into question the achievement of the goal.