Sub-optimal Scale: Factors Preventing Growth of Russian Small and Medium-sized Enterprises. Foresight and STI Governance
Russian manufacturing in comparison with other economies has an underdeveloped SME sector in terms of both employment and the contribution to GDP with evident signs of stagnation during last decades. Our work is motivated by the fact that relatively little is known about the capacity of SME sector, i.e. the possibility to grow and thus exploit benefits from the economy of scale. An increasing scale effect was revealed for many transition and developing countries. Serious constraints to SME growth in Russia (Yakovlev & Zchuravskaya, 2007; Chepurenko, 2012) de-motivate entrepreneurs and lead to sub-optimal decisions of owners like exploiting shadow schemes, formal exit from the market or growth like formally independent firms under informal “umbrella” of one owner (Golikova and Ermilova, 2006). We are trying to estimate the impact of internal and external factors on the perception of firm’s competitive position in the context of optimal production scale.