The senior teacher of Management ChairE. O. Kirienko

Amur State University (the Birobidzhan Branch), Russia

Realization of State support of small business in the Jewish autonomous region

At the federal level, the authorities often claim the priority and importance of small business and the need of its full support. In factthe authorities are not interested in the problems of small business. At the local level officials often brakesmall and medium-sized enterprises development.

Many entrepreneurs believe that under current conditions it is difficult to develop small business. The world financial crisis influenced on all areas of the economy, people’s incomes decreased, and, consequently, demand for offered goods and services reduced.Small businesses have to make a great effort to “stay afloat” and receive income from their activity.

Unfortunately, many entrepreneurs say that they don't believe in support of the State and use only their own resources. In fact, there is support and it is quite notable.

At the present time support of small business in the Jewish Autonomous Region (JAR) is realized through the interaction of two levels: regional and municipal. So at the regional level, there is the regional purpose program to support small and medium-sized businesses in 2010-2012 years.

According to statistic data the number of small and medium-sized businesses in the area has decreased slightly last year, and amounted 4644.Though last year the number of small businesses did not change and remained at the same level and totaled 284 units. The number of individual entrepreneurs amounted4398 units.

All State actions show that the Program of small business support operates, and the State makes enough effort to help small businesses, but thoughthe support program is effective, there are gaps in its content and disadvantages in the effectiveness of measures of small businessessupport.

In this regard problems appear in the implementation of support entrepreneurshipmeasures.

First of all, this is a low level of information awareness of small business entities concerning State support of small and medium-sized businesses. This is one of the reasonsof low demand for direct State financial support on the part of business entities.

Although all the information on the business activity, programmes of State business support, federal and regional legislative acts, news are posted on the Internet on the regional website www.eao.ru. Information sites of municipal business support structures (www.biradm.ru), partner siteswork. Matters for entrepreneurs are posted at the State Fund of small business support of the Jewish Autonomous Region, municipal funds of small business support, small business support funds of enterprises, institutions and organizations, as well as in the employment center of the city, on the site of the employment center, and other organizations. Leaflets, booklets, posters, various flyersare distributed as well.

The next problem is that some of the granteesdo not always file documents in time. They resent but file documents because they can count on the continued support.

Also, one more problem can be pointed out. It is some scepticism in evaluating the real possibility to obtain support. Entrepreneurssay about this problem in informal conversations. The typical opinion is that it is better to spend time on business development, than “running from pillar to post”, gathering piles of documents.

One of the problems is that at the present time one of the obstacles to providing effective support for small enterprises by the authorities is the absence or lack of effective infrastructure for small business activities. In this time an effective network infrastructure was not created in our region, as well as business incubators.

The problem of small business entitiespassivity still remains. They have shown little interest to participate in contests, events and various fairs and conferences. Naturally it hinders the further development and strengthening of small business in the region.

Small and medium-sized businesses support is carried out in the absence of clearly aligned priorities and often regardless of the activity of entrepreneurs.

Information on executive bodies of the city district and region, providing support to small and medium-sized businesses is delinked and incomplete in the forms and conditions of itsassignation and posted only on Internet sites of specialized bodies.

Thus, in order to promote development of economic potential by creating favourable conditions for enterprise development in the region and citythe work on implementing the System of stable development of small and medium-sized businesses should be undertaken.

Creation of a multilevel infrastructure will consolidate the ability of Governments, local government bodies, business support organizations to implement an integrated approach to solve the problems faced by small and medium-sized businesses.

Measures on realization of the State support on the part ofregional authorities.

It seems that public policyin regard to business activities can be effective only in case of itscoincidence with the motives of enterprise development,and should focus on business self-development, entrepreneurial activity of population through reductionof administrative barriers and creation of a unified management system. Reasoning from this fact we propose general recommendations worked out on the results of the research:

The important direction of the industrialmanagement activity and the consumer market ofthe regional Government should be increasing transparency.

This includes development of the site of the regional Government, particularly in the sphere of business support, its integration into the All-Russianinformation system of executive bodies; involvement of civil, expert and business communities to discuss a wide range of issues (using various forms of organization).There is a necessity to improve the accessibility of information on the status of the State support of small business, and to ensure the unimpeded access of all interested persons to information.

In this regard the following actions are necessary: to recommend (oblige) municipalities to maintain databases of provincial and municipal programmes concerning support of small business in the region, which would be easily accessible to the public; to establish monitoring of adopted normative legislative acts and programmes of State support for entrepreneurship, and to establish within the information resource of the Government, a constantly updated catalog; to reach an agreement with the developers of information systems such as “Garant”, “Consultant”, “Codex” to include data on municipal and regional target programs on support of small business in the Jewish Autonomous Regionin their databases,; andto lead an information campaign among the population aimed at explanationof the conditions for obtaining State support bysmall business entities, as well as consultations on the use and application of the State aid.

Also the problem of lack and inaccessibility of information can be solved by creation of the special-purpose marketing centers which will provide an equal access to information of large and small firmsexpand possibilities of the analysis of consumer demand, its forecasting and the fastest satisfaction. It, in turn, will allow making the market more foreseeable for firms; reduce a probability of large miscalculations in planning market strategy.

It is possible, on the basis of the State Fund of small business support of the Jewish Autonomous Region to conduct organizational activities, such as: information and advisory activities; informing small and medium-sized businesses about the possibilities of financial support through budgetary and extra-budgetary resources; preparation, publication and distribution of information leaflets on entrepreneurship;promotion of the establishment and functioning of the Institute of business advisors (reference and information service) on the basis of the infrastructure organization of small and medium-sized businessessupport;assistance in production of special reports, thematic rubrics, social ads and other forms of information on various aspects of businessin mass media;making information availableto the population of the city, region and business community concerning small and medium-sized businesses that were successful in the field of quality of products and services.

Informational support of business should be carried out by various departmental, regional and commercial information structures created under the various projects and weakly interacting with each other. Consolidation of the fragmented elements of information support of small business should be carried out on the basis ofState information resources. The development of the “data portal of small business” created by Ministry of economic development and trade of the Russian Federation in the Internet canserve as an example.

The result to be expected of this system isinformation permeability between the authorities, small business entities and entities of infrastructure of its support.

As to the problem that some addressees of grants do not always file accounting documents in time. For solving this problem it is necessary to do the following: in case grantees do not file documents in time, specified by the contract, the Government should suspend assignation,and warn them that the Government of industry and consumer market will have to levythe funds received for business development from organizations and enterprises.

There happen to be the problem of passivity of businessmen thataccordingly constrains the further progress and increase of efficiency of small business in the field. Consequently, to lower passivity of businessmen, and to raise their interest to participation in competitions, actions and fairs Initiationis necessaryon the part of regional and municipal authority, namely the Government of industry and consumer market of the Government of the Jewish Autonomous Region, and as well as the Department of consumer market, international communications and the Mayor's office support of business in developing the mechanism of participation stimulation of small business entities. The incentive mechanism is understood as financial support and assistance, as well as information and consulting support for participation in the international, interregional and regional conferences, festivals, contests, forums, business meetings, and especially in exhibitions and other activities aimed at the development of small and medium-sized businesses. For trade-fair activities is not just a forum or a marketplace.It is an indispensable assistant for every businessman. The value of exhibitions and fairs for the entrepreneur is determined, above all, by an opportunity: for direct communication with potential customers and buyers, suppliers and subcontractors, who are interested in receiving information and networking; to track market trends and evaluate your company's position in the market; to “make a claim about yourself”; to share information with specialists; to get rational ideas in the behavior of competitors and to examine their policies, and more.

Entrepreneurs should remember that participation in trade fairs and exhibitions are always expensive. Therefore, we offer the Government of industry and consumer market to stimulate the interest of local entrepreneurs for exhibitions and fairs, by subsidizinga part of the cost for participation in such activities.

Therefore if the entrepreneur is planning to present his products at the interregional and international exhibitions and fairs, he can receive financial support in the amount of 50% of the costs on participation in trade shows or fairs (costs associated with registration fees, accommodation at exhibitions (fairs), storage of exhibits (products) and use of exhibition equipment, but not more than one hundred thousand rubles. Subsidization will be paid as a lump-sum.Businessmen must file a minimum set of documents to the Government of industry and consumer market.

Also there is the problem of skepticism in regard to State support for business development. According to the data of the territorial body of the Federal State statistics service of the Jewish Autonomous Region in 2011 only14% ofbusinessmen in the area regularly monitor and participate in State programs. More than a half of the respondents (52%) do not even want to try to get State support, because initially do not believe that they will succeed in it. A typical opinion is that it is better to spend time on business development, than on “running from pillar to post” gathering piles of documents.24 per centof the respondents had a negative experience in obtaining State support when they couldn't cope with the paperwork or were refused for other reasons.

Although, competitive procedures were created for obtaining support, reputable representatives of business, public organizations, deputies, representatives of the regionworkin the commissions. All documents are considered objectively, taking into account the established regulations and procedures. And the existing “free interpretations” are an interpretation from ignorance or unwillingness to know all the conditions.

And to allay their skepticism, it is very important that entrepreneurs know what kinds of support they can have in each particular location and where they should go to obtain it. First of all, it is necessary to continue workingon information transparency. For this purpose it is possible to open a portal, with the support of the small business organization and the Government of industry and consumer market of the Government of the Jewish Autonomous Region where everybody can obtain information on the various types of State support, as well as new credit proposals in this area. It is important that on the portal success stories will be regularly published and where entrepreneurs will share their experiences obtaining State support.

Besides, in order to dispel the myth of inaccessibility of State support, as well as to tell entrepreneurs about useful financial tools which they can use to developtheirbusiness, regional authorities should hold annual conference entitled ‘Small business. Funding and Government support”where all current issues of small business will be discussed.

There entrepreneurs can personally communicate with representatives of banks, as well as to learn about the measures of State support of the Jewish Autonomous Region, what exactly they need to do.As well in the conference it is possible to proclaim winners officially and solemnly award them, for example, the winners of the “Business-Success competition 2011”, where participationin the conference for entrepreneurs will be free.

Besides, there is also the problem that, for the time being, an effective network of infrastructure’s organizationsfor support of small business has not been created. There are no business incubators. That is why one of the first concerns of authorities, namely the Government of industry and consumer market of the regional Government is to create an integrated infrastructure for small business support at the regional level.

The infrastructure of small business support should provide such an opportunity, and on affordable terms. It is obvious that without the support of State and local government acomplex and efficient infrastructure of support cannot arise and exist.

Various public business organizations that directly or indirectly represent and lobby business interests or promote joining together efforts to solve their own problemscan be generally attributedto the objects of the infrastructure. They are called upon to play a very important role in protecting the interests of small businesses.

Therefore, we offer and believe that it necessary to create and develop of a business-incubator (BI)in the region. The business incubators are structures placing specially selected small businesses in their areas on favourable terms and providing them with consulting, educational and office services. Business incubators can operate as independent structures and within technopolis, technology centers, and others. Creating such a business incubator will let to establish a necessarybusiness support infrastructure for small businesses in the region. A business incubator will enable to solve many social and economic problems, to create new work places. Another positive factor may be the fact that the business incubator ultimately promotesincreasingof market transparency and legalization of working subjects. This effect is achieved by the fact that firms which are in the business-incubator, initially lead transparent business. Therefore, the establishment and development of a business incubator in the Jewish Autonomous Region will help to solve many problems of new entrepreneurs.

So, the analysis of the main problems arising as a result of implementation of Government support, as well as the situation in small business in the territory of the Jewish Autonomous Region let to come to the conclusion that the business sector is still far from using all its capabilities.

Also we have offered the measures to improve the State support of small business in the Jewish Autonomous Region which will help solve the problems of new entrepreneurs.

Literature:

1 Constitution of the Russian Federation: officialtext – М.:Prior, 2009. – 32 p.

2 Civil Code of the Russian Federation: adoptedby the State Duma 21 October, 1994: approved bytheFederation Council 5 June, 1996: current as of 15 June,2009. – М.:Omega-L, 2009. - 654 p.

3 Tax Code of the Russian Federation: adoptedby the State Duma25 September, 1996: approved bytheFederation Council 06 June,1997: current as of 11 July, 2009 г. – SPb.:Peter, 2010. 782 p.

4 FederalLawdated24 July, 2007 № 209-FL“Concerning the Development of Small and Medium-Sized Business in the Russian Federation”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

5 FederalLawdated19 July, 2007 № 195-FL“OnIntroducingAmendmentstoCertainLegislativeActsof the Russian Federation as regards to formation Favourable Tax Treatment for Financing Innovative Activity”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

6 FederalLawdated17 May, 2007 № 82-FL“Concerning the Development Bank”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

7 FederalLawdated 26 December, 2008 № 294-FL “OnDefenseofRightsofLegalEntityandIndividualEntrepreneurswhileFulfilling StateControl (Supervision) and Municipal Control”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

8 FederalLawdated22 July, 2005 № 116-FL“Concerning Special Economic Zones in the Russian Federation”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

9 FederalLawdated21 July, 2005 № 94-FL“Concerning the Placing of Orders for Supplies of Goods, the Performance of Work and the Rendering of Services for State and Municipal Requirementsof the Russian Federation”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

10 FederalLawdated22 July, 2008 № 159-FL“OnCharacteristicsofAlienationofCapitalFacilities, PubliclyOwnedbythe Constituent Entities of the Russian Federation or Belong to Municipal Property and are Rented by Small and Medium-sized Business Entities, and on Introducing Amendments to Certain Legislative Acts of the Russian Federation”.[Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

11 FederalLawdated30 December, 2008№ 308-FL“OnIntroducingAmendmentstotheFederalLaw “Concerning the Placing of Orders for Supplies of Goods, the Performance of Work and the Rendering of Services for State and Municipal Requirements of the Russian Federation». [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

12 FederalLawdated8 August, 2001 № 134-FL“ OnDefenseofRightsofLegalEntityandIndividualEntrepreneurswhileFulfilling StateControl (Supervision)” (as amended from 30 October, 2002, 10 January, 1 October, 2003, 22 August, 2004, 9 May, 2 July, 31 December, 2005, 30 December, 2006, 22 December, 2008). [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

13 The Edict of the President of the Russian Federation dated 15 May, 2008 № 797 “On High Priority Measures Concerning Liquidation of Administrative Restrictions while Fulfilling Entrepreneurial Activity”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

14 TheGovernmentDecreeoftheRussianFederationdated16 February, 2008 № 79 “TheRulesforConductingSample Statistic Monitoring for Small and Medium-sized Business Entities Activity”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

15 TheGovernmentDecreeoftheRussianFederationdated17 March, 2008№ 178 “On Government Commission of Small and Medium-sized Business Entities Development”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

16 TheGovernmentDecreeoftheRussianFederationdated4 November, 2006 № 642 “OnEnumerationofGoods, Work, Services for Governmental and Municipal Requirements, Placing of Orders which are Carried out by Small Business Entities, and Their Price Limit(Board Lot Price)”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

17 TheGovernmentDecreeoftheRussianFederationdated6 May, 2008 № 358 “OnApprovaloftheDecreeConcerningMaintenanceofRegisterofSmall and Medium-sized Business Entities,Receivers of Support and on Demands to Technological Programme Linguistic Legal and Organizational Supportive Tools of Using Specified Register”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

18 TheGovernmentDecreeoftheRussianFederationdated22 July, 2008 № 556 “OnBoundaryValueofSales Proceeds (Labour and Service) for Every Category of Small and Medium-sized Business Entities”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

19 TheGovernmentDecreeoftheRussianFederationdated13 October, 2008 № 753 “OnIntroductionofAmendmentsto Certain Acts of the Government of theRussianFederationConcerning the Power of Federal Executive Body in the Sphere of Small and Medium Enterprises”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

20 TheGovernmentDecreeoftheRussianFederationdated31 December, 2008 № 1102 “On Implementation of Additional Measures of State Support of Small Business”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

21 TheGovernmentDecreeoftheRussianFederationdated17 October, 2006 № 613 “OnFederalSpecialPurposeProgramme“Research and Development in Priority Guidelines of the Scientific and Technological Complex of Russia for the period 2007 – 2012 years” (as amended dated 27 January, 2009). [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

22 TheDecreeofMinistryofFinanceoftheRussianFederationdated 31 December, 2008 № 154n“OnApprovalofFormsofthe Ledger of Income and Expenditure ofthe Organizations and IndividualEntrepreneursUsing Simplified Tax System, the Ledger of Income for IndividualEntrepreneursUsing Simplified Tax Systemon the basis of Patent and the Order of Their Filling”. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

23 The principlesofcapitalprovisionof federal budget provided for State support of small business including peasant farm enterprise (approved by Government Decree dated 22 April, 2005 № 249). [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

24 Theregionalspecialpurposeprogrammeof small and medium-sized business entities developmentin the Jewish Autonomous Regionfor the period 2010 – 2012 years. [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

25 Thedevelopmentstrategyofscienceandinnovationsin the Russian Federation for the period until 2015 (Approved by Multiagency Commission concerning scientific and innovation policy (record from 15 February, 2006 № 1). [Electronic resource]: The document was not published. Accessfromthereferenceandlegalsystem “Consultantplus”.

26 Official Site of Russian Economic Development Ministry. [Electronic resource]. – Access mode: www.economy.gov.ru. – 21.03.2012.

27 Official Site ofthe Birobidzhan Mayor's office. [Electronic resource]. – Access mode: – www.biradm.ru. – 27.04.2012.

28 OfficialSiteofthe Jewish Autonomous Region Government. [Electronic resource]. – Access mode: – www.eao.ru. – 15.03.2012.