Small business in Russia : The case of St. Petersburg

Kihlgren, Alessandro (2000) Small business in Russia : The case of St. Petersburg. PhD thesis, University of Glasgow.

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Abstract

The thesis is about the development of small businesses in Russia with a focus on St. Petersburg. Any analysis on this sector is hindered by question marks over the reliability of the official data. While these point to a stagnation in the small business sector, surveys indicate a continuous growth in the share of the economy represented by new firms. How to reconcile these two sets of data is hard given the dearth of evidence. It seems, however, clear that even in Russia the emergence of new private firms has been an organic process which has been slower due to a variety of factors that have characterised the transition process: the strong influence of interest groups; the legislative chaos; the punitive taxation; the unpredictable economic environment; the scarcity of financing and the precarious state of large industrial firms. Mainframe small business theory can, instead, offer little explanation given the particular conditions of the transition from a planned to a market economy. By Russian standards, St. Petersburg has experienced a very large growth in the small business sector, despite the fact that the business environment in St. Petersburg does not differ from that in Russia in general and incomes per capita are close to the Russian average. This is in contrast to Moscow where the expansion of small businesses can be ascribed to the much higher income levels. In St. Petersburg the local administration has not been particularly business- friendly, dispensing favours to its "cronies" and doing little to rein in bureaucratic abuses. Policy making in industry has been centred, in particular, on helping certain sectors deemed as priorities, but the efficacy of these measures is doubtful at best. Economic policies in St. Petersburg may be seen as being shaped by the mentality of a planned economy, reflected in the drafting of countless plans and measures, which have, however, largely remained unrealised. Little has, instead, been done to meet small businesses demands. Nevertheless, from the survey I undertook and from other sources small businesses in St. Petersburg seem to perform much better than in the rest of the country. The higher educational level and the "Western mentality" of the population has represented a fertile environment for the emergence of entrepreneurship. The expansion of the small business sector has been boosted by the larger retail spending per head than in Russia as a whole due a variety of factors. This explains why growth has been particularly strong in the service sector. On the contrary, despite the wealth of scientific knowledge in the city, scientific firms have not developed to any great extent. The difficult environment for scientific firms is highlighted by the experience of science parks. Even if there are some success stories the average tenant firm struggles to survive due to the limited demand for scientific products.

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Additional Information: Adviser: Richard Berry
Keywords: Business administration, Commerce-Business, Management
Date of Award: 2000
Depositing User: Enlighten Team
Unique ID: glathesis:2000-71984
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 17 May 2019 13:31
Last Modified: 17 May 2019 13:31
URI: http://theses.gla.ac.uk/id/eprint/71984

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