The overall entrepreneurial activity in Russia (the share of entrepreneurs among the working-age population) reached a record high of 11.3% in 2017, the US-Russia Business Council reported, citing the new Global Entrepreneurship Monitor 2016/17, which is produced by several global economic schools including Babson College and the London Business School.
More than 5% of working-age Russians run established businesses (those generating revenues for more than 42 months), which puts Russia in the 46th place among the 64 economies surveyed for the report. The share of firms that closed down in the past 12 months stood at 6.7% in Russia, 44th place in the global ranking.
Entrepreneurial intentions (the share of working-age Russians planning to start a business in the next three years) were measured at 2.1%, the lowest in ten years.
The report noted that low entrepreneurial intention levels were common in economies with high employment rates. At the same time, as many as 31% of Russia’s new entrepreneurs started their businesses after losing a job, similar to India and countries in Central America. Entrepreneurs in this category easily abandon their businesses in favor of stable employment, often have insufficient management skills, do not try to expand their market share, and avoid using innovations.
Only 5.4% of Russian entrepreneurs regard their products as new to the market and their respective industries, putting Russia in the 63rd place in the global ranking.
The report suggested that SMEs were unlikely to drive Russia’s economic growth in the mid-term, with the economy’s prospects primarily tied to the government’s ability to encourage innovation and exports by large companies.