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Business role in national economy

 

Transition to market economy demands the radical transformations of structure of production directed on overcoming of monopolism and development of the competition. The solution of this task is impossible as confirms world experience, without development of the business based on various forms of ownership.

Today many began to understand what exactly business moves development of production, the market, so, and societies in general. The country prospers thanks to businessmen, and businessmen thanks to support of the states[1].

In the conditions of any economic system there are forces which are leaders in realization of the main economic strategy of this system. In a planned economy are the state enterprises, in the conditions of the market is a business and business of various forms of ownership, differentiable also on outputs on small, average and large types of business. The leading role is played here by small forms of business because of their large number and high-efficiency[2].

Business and business – the most important elements of market economy without which the state which stepped into a way of market transformations in economy can't harmoniously develop. Business and business in many respects defines rates of economic growth, structure and quality of a gross national product of the country, their participation in economic activity is great[3].

Development of business is one of the most exact indicators of economic and social level of the state.

Business provides:

1. Creation of new workplaces, employment of able-bodied population and, as a result, reduction of number of the people needing the social help.

This role is represented significant at instability functioning of labor market, in the presence of a significant amount of jobless and other similar social problems. Business involves distribution of secondary employment. In general distribution of secondary forms of employment is more characteristic for a services sector (except for trade and public catering), the share of secondary employment at the enterprises of the financial and credit sphere and a welfare complex is especially high.

2. Ensuring social stability and decrease in level of poverty.

The question of social stability is always actual with a growth of social tension in society. Development of business promotes growth of monetary receipts in the budget, to some decrease in unemployment, etc.

3. Opportunity to open for vigorous and enterprising people the matter in production, scientific and other activity, realizing in it the abilities.

4. Increase in tax revenues.

5. Growth of the share of GDP created by the organizations occupied in the sphere of business.

6. Increase in number of middle class, therefore, improvement of social and political stability.

7. The interaction of small and large business promoting to survive in modern market conditions to the giant enterprises, and to get on feet to again created private and small enterprises. Business is constructed on the principle of cooperation of large and small enterprises, and the large enterprises are guided not by suppression of small business, and, on the contrary, by mutually beneficial cooperation with it. Therefore large and small enterprises complement each other, especially in the sphere of specialization of separate productions and in innovative development.

Small enterprises and their hardware in many respects depend on large production and economic complexes. In relation to them small enterprises act as suppliers of components that allows them to use specialization and cooperation not only in the field of production, but also in the sphere of sales of products and its maintenance. Small and medium-sized enterprises - subcontractors of the large companies work at a basis of podetalny, pouzlovy, modular or other specialization where they reach good results due to effect of technological division of labor[4]. They often assume performance by one - two operations in difficult technological process which in a complex is carried out by the large company. Within technical cooperation the large firms customers which are letting out expensive finished goods on the basis of components provide to the subsuppliers-performers in a tenancy, initial means of production, deliver them on favorable terms raw materials and materials, provide realization of the most part of the completing production at the assembly plants, grant permission for use of the trademark[5].

The wide circulation in cooperation of large and small enterprises was received in modern conditions by system of the contract relations on the basis of franchizing. Its essence consists that the major company grants to small firm an exclusive right to make use of the technological experience and knowledge, and also a trademark. The major company usually grants also the loan on favorable terms, renders different consulting services and leases the equipment. The franchizing promotes development of new technologies by small firms[6].

8. Participation in development of infrastructure of the cities and areas.

9. Charity.

10. Increase of level of knowledge, qualifications, retraining of shots

11. Environmental protection (establishment of treatment facilities, utilization of toxic waste, upclassing of adjacent territories).

12. Globalization of national and international economy, stability of the economic relations between them.

The enterprises for expansion of a sales market and a gain of new territories for implementation of business activity create the branches and representations in the neighboring, and also remote regions, thereby start participating in development of these regions.

13. Business carries out the stimulating function, that is improving an economic and social situation in one territory of the enterprise cause desire of nearby areas to follow their example.

Business takes the special place in the economic relations, introducing in them, first of all non-standard and innovative approaches and decisions. Along with it it promotes formation and strengthening of middle class. There are special communications and the directions of interaction of business and power structures. Undoubtedly, impact of business activity on formation of a number of positive lines and valuable orientations of the personality, especially younger generation.

Thus, business carries out not only economic functions, it is closely connected with all spheres of activity of society.

References:

1. Business: studies. / V. Ya. Gorfinkel, G. B. Polyak, V.A. Shvandar's edition. – M.: UNITY-DANA, 2011 – 581 pages.

2. Business: studies. / M. G. Lapusta's edition. – M.: INFRA-M, 2009. – 667 pages.

3. Samarina V.P. Business bases/ V.P. Samarina. – M.: KNORUS, 2009. – 224 pages.

4. Turenko T.A. Small business and its role in a sustainable development of economy/T.A. Turenko//News of Irkutsk state economic academy. – 2010. – No. 5. – Page 223-227

5. Chepurenko A.Yu. Small business in the market environment / A. Yu. Chepurenko. – M.: Publishing house of the International university in Moscow, 2009. – 324 pages.

6. Economic dictionary / Otv. edition A.I. Arkhipov. – M.; Shopping Mall Velbi, Publishing house Prospectus, 2011. – 486 pages.