Diversification and small business as the factor of economic development

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Diversification and small business as the factor of economic development

The article considers the opportunities of diversification and small business in assistance of economic development reveal. The comparative analysis of a condition of development of small business in subjects NWFD the Russian Federation is resulted.

Small businesses, factors and target development, mechanisms of state regulation.

Galina P.

SMIRNOVA

Ph.D. in Economics, Senior scientific associate of the Institute of Regional

Economy’s Problems of RAS

Alexey G.

STRELNIKOV

The post-graduate student of the Institute of Regional Economy’s Problems of RAS

The global financial crisis objectively causes the necessity both to find the ways of the Russian economy’s protection and to think over the prospects of its development. The crisis showed up in almost all countries. Our country also didn’t avoid this misfortune.

The signs of the financial crisis in Russia are as follows: the inflation growth, the rise in the credit price, the industrial growth inhibition, the drop in rouble exchange rate to dollar, the stock market collapse, the outflow of the capital from the country, and the growth of unemployment.

Such crisis development on a global scale causes the strengthening of globalization.

As the world practice shows, globalization is a process of the world economic, political and cultural integration. Its main displays are: the creation of the united world market based on the free exchange of goods and capital, and the wide access of consumers to foreign goods; the proactive development of international financial, trading and industrial relations; the extended cultural exchange; the increase of information streams between geographically distant regions; the distribution of technologies. As some experts believe, globalization means a qualitatively new stage of the modern civilization’s development and performs its closed character caused by the concentration of intellectual resources and high technologies in a few countries which are the leaders of globalization [1, 2].

As a result, the limited amount of the globalization centers in the world is being formed and the number of the countries which have not been included in these processes is constantly increasing. Some of them become monopolistic developers and new scientific ideas’ and high technologies’ creators, and the others play the role of raw stuff appendages or consumers of products received on the high technologies basis. The key question of the competition among countries and civilizations is the factor of the so-called ” gap ” ideas’ formation and their realization on the basis of high technologies [3].

In the conditions of the economic globalization the competitive activity causes the objective necessity of the innovational approach towards the Russian economy in an effort to increase its competitiveness and high economic growth.

On a global scale the characteristic feature of the modern economic growth is the transition to a steady innovational process. Carrying out scientific researches ranks high in investments, it exceeds in the high technology branches the purchase charges for equipment and construction. At the same time the value of the state scientific and technical, innovational and educational policy, determining the basic conditions of scientific and technical progress, rises. Gradually the share of charges on science and socio-economic development in gross national product of the advanced countries grows, reaching the rate of 3% of gross national product, over one third from which are financed by the state. Nowadays the intensity of scientific research and the quality of human potential determine the ways and the results of economic development.

It is obvious, that the formation of the in-novational economy within the contemporary situation has become a key condition for our country to be rated highly on the world scene. At the same time it is not enough to consider this condition just as an ultimate aim. For the successful realization of this process the necessary requirements are: precisely set problems, competently formulated tasks on their overcoming, the methods and the ways of these tasks decision, and the mechanism of their realization.

In these conditions the only direction providing any opportunities for the accelerated economic growth and for the rise of living standards of the population is the diversity of economic structures, for instance, the outstripping development of processing sectors, and of sphere of services at the relative reduction of the extractive industry’s share in the economic structure and in the structure of export.

Diversity (from Latin diversus – different, and fасеrе – to do/make) means the distribution of invested or lent monetary capitals among various objects of investments with the purpose of risk reduction of possible capital or incomes losses. In banking activities the principle of diversity is realized in distribution of the loanable funds among the number of clients [4].

The industrial diversity is the simultaneous development of many kinds of production, not connected with each other; the expansion of the products’ assortment made within one enterprise, concern, etc. Diversity is applied for the purpose of the productive efficiency’s increase, getting the economic gain and the prevention of bankruptcy. There can be observed the assortment expansion, the change of the production kind made by an enterprise or a firm, the development of the new kinds of production for the purpose of its efficiency’s increase, getting the economic gain, and the prevention of bankruptcy.

Diversity falls into two types; they are the connected diversity and the untied one. The connected diversity represents the new sphere of some company’s activity connected to the existing areas of business (for example, in production, marketing, material supplies or technology). The untied diversity represents the new sphere of activity which does not have evident connections with the existing spheres of business.

The connected diversity can be divided into the vertical diversity and the horizontal diversity. The vertical diversity means manufacturing products and services either at the previous or the following step of production (of the industrial chain). In this case the manufacturer of the finished commodity either starts to make component parts for it (back along the chain; for example, the manufacturer of computers starts to make and sell LC-matrixes) or enters the market of production or services with a higher depth of processing (forward along the chain) to start manufacturing processors on the following step of the industrial chain. The other example is when the computers’ manufacturer starts to make TVs. The new product or service can be offered either within the existing brand or within the new one [5].

It is obvious, that the choice of the diversity directions of an enterprise’s activity with a view of the maintenance of its development’s success demands to take into account both negative and positive consequences of each direction. Here we should consider the expediency of economic-mathematical methods’ use for the choice of optimum or efficient diversity variants. In this case it is possible to reveal the “risk” area on the limited resources’ use.

The efficient choice of the industrial diversity directions for the native economy’s enterprises is actual in connection with the following circumstances.

Firstly, the development of the Soviet economy on the principles of specialization in the conditions of competition for one of the first places in the world had such a consequence as the huge developed monoproductional industrial enterprises. In the modern conditions it became inefficient to use the developed industrial potential based on the same principles. It is necessary to develop a tactical and strategic policy of diversity for the search of more efficient variants of the available enterprise potential’s use with the transition to the multitype production.

Secondly, the industrial diversity is the tool of the interbranch capital exchange and the method of optimization in the economy’s structural transformations.

The idea of diversity has a long-term history. Historically diversity started its developing in the middle of the XX century when the relative exhaustion of the internal sources of the production efficiency’s growth and the falling of the capital return rate became apparent for the first time.

Before getting its modern features, diversity within the framework of the firms’ global strategy passed a long way of its development, varying both under the influence of external circumstances and intrafirm criteria. The history of such evolution can be divided into four stages, and at each of them there was the development of the basic elements, such as the commodity set; the branch set; the set of branches and the fields of activity; the set of the countries. Each subsequent stage was a separate step in the achievement of the production purposes and it changed the priorities in the enterprise activity’s development. Diversity gets its special value in the conditions of globalization and because of the objective necessity of the transition to the innovational way of development [5].

The intensive diversity development was caused by the market economy dynamism’s increase, by the fast changes of demand, by the occurrence of new branches and production markets. In these conditions the industrial diversity allowed to compensate the selling fall at one market due to its increase at the other markets. Owing to this the diversity enterprises became steadier and more competitive in comparison with the highly specialized ones as they enter into the new fields of activity and expand the assortment of the produced goods.

A striking example of the versatile untied diversity is the activity of the public corporation “Almetyevsk’s Pump Factory” (ALNAS), which is the largest manufacturer of subsurface pumps for the oil production. The first step was the service expansion. On the basis of the branches and representations of the public corporation ”ALNAS” independent affiliated companies were founded in Surgut, Nizhnev- artovsk, Usinsk, Kogalym, Nefteyugansk; they were combined into a network of the centers specializing on the service of the equipment made by the factory. The second service direction is the production of ground stations for operating downhole mountings. The cost for repair of a downhole power-plant (the rise from a well, work on repair, immersion into a well) is equal to the price of a new one. Therefore it is more favourable to spend a lump sum for the ground equipment produced by the public corporation “ALNAS” then further to save the money for repair and to reduce this item of expenses. The third direction is the production of water pumps. It is relevant in connection with the gradual transition to the independent system of the water supply to newly-built apartment houses and enterprises that is cheaper and more convenient than the centralized system. The fourth planned direction is the production of half-finished ventilated brake disks for the “AUTOVAZ” and for foreign automobile companies. The fifth direction is the organization of pavement bars’ production which can be made of the used forming sand from the foundry [6].

For example, in the USA the industrial diversity and pooling resulted in the formation of firms-conglomerates within which enterprises carry out their separate functions and have no industrial relations. For instance, at the period of 1950 – 1970s among the 500 largest corporations the number of the companies which offered one-profile production reduced from 30 to 8. The majority of them were of the conglomeratic character. Then in the diversity concept there were some changes, its idea was replaced by the idea about the necessity of efforts’ concentration on the basic spheres of business. The cause was the processes of the industrial globalization and other phenomena caused by the economy effect on an industrial scale [6].

Recently diversity has obtained its paramount value, but nowadays the reasons of its importance are absolutely different. Many companies possess great volumes of the capitals received in the basic spheres of business; and as the opportunities of the further expansion in them are rather limited, diversity is considered the most suitable way for capitals’ investments and for the risk degree’ reduction. The character of diversity is determined by social and economic features of one or another country.

At the same time the diversity’s development is also influenced by some general factors, such as the scientific and technical revolution, the competition for high profits, the necessity of finding the spheres for the enclosure of the savings, the militarization of economy, the competitive activity, the fear to lag behind the technical progress.

While speaking about financial cataclysms’ influence on the real sector of economy, we can note, that in Russia it is necessary to take advantage of the crisis as a “jumping-off place” for the beginning of the new serious structural changes in economy in the directions of using nanotechnologies, cellular technologies, etc. The economy based on the exhaustible natural resources can fail; but the human idea finds new ways of alternative raw and fuel sources’ creation.

Russia being involved into the financial crisis has an opportunity not only to lower the high level monopolization and the raw orientation of the economy, but also to begin its diversity, carrying out the following steps:

• •    to generate its independent financial system;

• •    by the constant monitoring results on the enterprises’ activity in the of economy real sector to direct “long-term” credits into the industrial (innovational) sphere;

• •    to support the creation of the real market competitive business sphere for the development of the innovational directions of activity, and first of all by means of supporting smallscale business and medium-scale business as they slightly depend on the financial market.

At the crisis times such disadvantages of small-scale business, as low credit availability and slight integration with the large enterprises can turn into advantages when large-scale business experiences serious “credit famine”.

So the crisis raises the importance of support and expansion of the business initiative in a format of small-scale business.

It is small-scale business that can protect the Russian economy during this difficult period and undertake the functions on the new workplaces’ creation; decrease of the social distemper and the unemployment rate; the formation of the competitive relations as the bases for using innovational technologies in manufacturing various products (works, services).

In the market economy the basic cause both of traditional and new sectors’ development and of the innovational orientation of the economic development is the business initiative. So the main condition of the economy’s diversity and of the increase of the economic growth’s rates is removal of obstacles, constraining business activity.

Diversity affected a significant number of the Russian small-scale enterprises. As a whole the diversity’s activity is economically advantageous for the small-scale enterprises. According to the All-Russian interrogation, the share of small-scale enterprises with a steady economic situation is maximal (32%), with an unstable one is minimal (10%) [7].

The businessmen’s interrogation in Krasnodar territory and in Udmurtiya allowed analyzing the interrelation between the dynamics of the number of activity kinds and the annual volume of firms’ production. The majority of the small-scale enterprises (60%), which didn’t change the form of their activity from the moment of their foundation, the volume of production remained at a level of the previous year. But there is some positive dynamics, for instance, 25% of respondents noted the substantial growth, and 14% of them noted the reduction. 53% of the firms which have expanded their “zones of presence” have essentially increased the volume of production. Those enterprises which reduced the number of activity kinds have the worst dynamics of the production volume.

The economic efficiency of diversity makes it one of the basic purposes of the small-scale enterprises’ activity. According to the AllRussian survey, diversity is one of the main purposes.

The results of interrogation in Krasnodar territory and in Udmurtiya expanded the account submitted above. The newly-founded small-scale enterprises planned diversity two times more often, than the earlier formed. The small-scale enterprises planned diversity three times less often than the large-scale ones. Micro business is more strongly adhered to the already developed market because of the financial restrictions. It causes the increasing requirements to the correctness of the initial choice of the activity’s direction. The industrial small-scale enterprises under the influence of the market distinctions 1.5 times more often aspired to diversity, than the trading ones.

As a whole the reduction of the activity kinds is less popular among businessmen than the increase of it. As the reduction of presence at the market frequently serves as a parameter of the business problematical character, it is necessary to admit that the purpose of the growth of the number of activity kinds is the policy of more successful firms.

The branch peculiarity of diversity, according to the same interrogation, is that the smallscale enterprises engaged in retail trade, services and construction changed the number of the activity kinds less often. From the moment of the foundation there were no serious changes at 71, 67 and 65% of firms. More often than the others the industrial enterprises changed the activity kinds (there were no changes at 43% of them). Thus the manufacturers of the end production mainly increased the number of the final kinds of activity, and reduced the number of the intermediate ones [7].

The branch changes in the specialization of the small-scale enterprises are caused by the purposes of an enterprise, according to the data of the All-Russian interrogation. The firms directed to the maximization of the profit, in one case from three completely refused manufacturing and only in one of ten cases completed the commercial activity by the industrial one. As for the firms where the main aim is to survive, the characteristic feature is the active “dump” of manufacturing (25% of the respondents) and the insignificant relocation of the capital into industry (10%). Here diversity is combined with relocation of the trading capital into manufacturing (22% of the respondents). The expansion of the activity field by a smallscale enterprise is a sign of its stable position.

Nowadays the market gives enough opportunities for changing of the activity kinds. The results of monitoring of the private sector’s development allow approving, that there is no significant dependence of the commodity markets’ geographical segmentation on diversity. The main share of goods and services provided by small-scale enterprises is realized at the local level. The number of their consumers also does not depend on diversity.

Nevertheless diversity predetermines smallscale enterprises’ marketing policy. Diversifica-tors focus attention on the marketing researches. The share of the enterprises, which refused carrying out marketing researches, is 2,5 times higher among the firms which didn’t change their activity directions. Taking into consideration small-scale enterprises where such researches are carried out, we can note that 25% of the firms has a special office and constantly use their service that is 1,3 times more, than in the other group. 82% of small-scale enterprises carry out the market researches occasionally.

Going out to the new markets is quite often accompanied by the high pressure from the side of business rivals. The competition degree is higher in the group of diversificators. 39% of respondents from the group “diversity” estimated the competition as “very high and high”. Taking into account that the basic commodity markets remains local, it is necessary to admit that the growth of competition does not mean the final division of the markets. The raised competition does not lead to the deterioration of the enterprise activity, just the opposite the raised competition leads to a more active market policy.

Alongside with the patterns peculiar for the majority of the enterprises, having used the diversity activity, the distinctions in their conduct are observed according to the fact if diversity was the point of the business development strategy or it was just a spontaneous reaction to the firm position’s deterioration.

This subjective factor’s influence can be clearly demonstrated by the example of comparison of the monitoring results in the private sectors in Tula Region and in Republic Udmurtiya [7].

The financial condition of the small-scale enterprises can be characterized by their addressing to various financial sources of development. In Tula Region among diversificators there are a lot of firms, which depend on their own means for the development; their number 8 times exceeds the number of the firms from the opposite group. The diversificators from the group of the small-scale enterprises using the external financing more often chose the means of their partners and short-term bank credits. In 40% of cases diversity was not used due to the short-term credits under the turnover means. These results indirectly prove that the financial condition of the small-scale enterprises of the group “diversity” is better in Tula region.

In Udmurtiya the picture is different. Only one third of the Heads, having changed the activity kinds at their enterprises, answered, that they do not need additional attraction of the financial assets. Diversificators more often tried to involve means due to the short-term state credits. The financial position of the firms from the group “diversity” is not better, than of the others.

Recently the small-scale business has carried weight in the economy of Saint Petersburg. In 2007 the quantity of the small-scale enterprises increased on 47,055 (26%). For 01.01.2008 the turnover of the small-scale enterprises was 927,793 million roubles, that is 34% higher than the similar parameter in 2006. The share of the small-scale enterprises’ turnover in the general turnover of the organi-

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zations in Saint Petersburg was 29%, but a year earlier it was only 22%. The average number of workers at the small-scale enterprises was 707 493 persons, that is 8,338 persons more than the similar parameter in 2006. The volume of the tax proceeds from the small-scale enterprises made 25% of the total amount of the tax proceeds in the budget of the city. 29.5% of the whole volumes of the Saint Petersburg’s government work have been fulfilled at the enterprises of the small-scale business.

While considering the structure of the small-scale business we can note that almost 50% of its subjects are involved into the sphere of trade and catering. So as to change this situation considerably the outstripping growth of the small-scale enterprises’ number is necessary in industry, in the high technology sectors, in the sphere of services and housing and communal services [8].

In 2007 in Saint Petersburg, according to the governmental data, 187 thousand subjects of the small-scale business carried out their activity [9]. The primary position in this structure (52.4%) is occupied by the branch “Trade and Catering”.

For the comparative analysis we shall give the data on the other subjects of the Russian Federation (tab. 1) [10].

According to the table’s data, in the general branch structure the branch “Trade, Catering” has advantage. The branches “Industry” and “Construction” take the third and the forth positions in this hierarchy. It is possible to assume, that in the crisis conditions diversity will influence this structure by the increase of the quantity of the small-scale enterprises in these branches.

The National Institute of the System Researches on the Business Problems carries out the complex analysis of the small-scale business condition in the subjects of the Russian Federation. By the results of monitoring in 2008 the number of the registered smallscale enterprises was 281.7 thousand units in the country. The quantity of the small-scale enterprises reached the rate of 198. 4 units for 100 thousand people [11].

The most considerable part of the registered small-scale enterprises are situated in the North-West federal district, it’s 231.8 units, that is 16.9% more than the average level in the Russian Federation (fig. 2.) .

Siberian federal district almost reached the leading position (231.7 units). The least number of the small-scale enterprises to 100 thousand person is Ural federal district, that is 46.1% of the average level in Russia.

Figure 1. The branch structure of the small-scale enterprises in Saint Petersburg, %

Table 1. The branch structure of the small-scale enterprises in some regions of the North-West federal district, %

The branches of economy	Leningrad region	Kaluga region	Vologda region	Sverdlovsk region	Khabarovsk territory	Saint Petersburg
1. Trade, catering	35.4	36.9	37	51.1	46.1	52.4
2. Hotels, restaurants	3.3	2.9	12.3
3. Industry	14.5	17.7	13	10.0	7.5	12.3
4. Construction	11.7	10.8	15	11.1	14.4	12.1
5. Scientific activity						3.6
6. Transport and communications	7.7	5.0	8.2	5.0	5.6	3.4
7. Real property business	13.7	16.0		15.0	13.9	2.7
8. Health services	1.0					2.5
9. Services	2.8	2.	3.7			2.2
10. Agriculture (wood, fishery)	7.6	5.3		1.3
11. Other branches	2.3	3.6	10.8 (+lines 7, 8, 10)	6.5	12.5 (+lines 8. 9. 10)	4.3
12. General commercial activity						4.5

Figure 2. Distribution of the small-scale enterprises in the districts of the Russian Federations in 2008

□The number of the registered small-scale enterprises to 100 thousand people

□The number of the registered small-scale enterprises to 100 thousand people, in % to the average level in the Russian Federation

According to the monitoring carried out by the National Institute of the System Researches on the Business Problems, it is possible to draw a conclusion about the level of the development in the sphere of the small-scale enterprises in 2008 in Russia [11].

The monitoring data were used for the comparative analysis of this sphere’s condition in the subjects of the North-West federal district in 2008.

In table 2 there are the data on 10 parameters in eleven subjects of the Russian Federation and in Moscow. Along with the numeral data on each parameter we also placed the subjects according to the value of parameters in each group of parameters.

The data submitted in table 2 can be useful for those subjects of the North-West federal district which are interested in the small-scale business development. These data allow estimating the general situation in the mentioned area and a concrete subject’s position in the system.

According to the results of the analysis, the greatest quantity of small-scale enterprises to 100 thousand inhabitants is in Saint Petersburg (337.1 units), it is 22.5% more than the param-

Table 2. The parameters representing a comparative level of the small-scale enterprises’ development in the subjects of the North-West federal district in 2008

о "сл CD СЛ CD CD aS < "cd CD 05 CD О О "cd CD "ci CD _o "cd CD "ci CD C ________________________1 _o "cd CD СЛ 05 E 1 СЛ о E о ! § o5 ° СЛ CD CD Z _o "cd CD "o о CD о _o "cd CD О c^ "o5 o5 "o E о "о S’ CD "сл CD CD 00 5 о сл о 1. The quantity of the small-scale enterprises to 100 thousand inhabitants for 1 October, 2008 117.9 261.7 288.0 146.9 199.8 0 1 138.0 127.6 101.3 196.2 337.1 275.1 The place in the parameter 10 1 4 1 2 1 7 5 1 12 1 8 1 9 1 11 6 1 3 2. The quantity of the small-scale enterprises to 100 thousand inhabitants, in % of the average level in the RF 59.5 131.9 145.2 74.1 1 100.7 0 1 69.5 64.3 51.1 1 98.9 169.9 138.7 The place in the parameter 10 1 4 1 2 1 7 5 1 12 1 8 1 9 1 11 1 6 1 1 3 3. The average number of workers from January – September 2008, thousand people 51.7 71.5 1 45.7 58.7 25.8 1.6 1 34.5 31.8 22.8 45.3 428.4 424.6 The place in the parameter 5 1 3 1 6 1 4 1 10 1 12 1 8 1 9 1 11 1 7 1 2 4. The share of workers at the small-scale enterprises to the average number of workers in 2008, % 11.0 15.4 13.2 10.7 1 8.0 1 5.2 1 15.0 14.1 1 9.2 1 11.5 1 20.8 7.9 The place in the parameter 7 1 2 1 5 1 8 1 10 1 12 1 3 1 4 1 9 1 6 1 1 11 5. The volume of the small-scale enterprises’ turnover in January – September, 2008, million roubles 23,960 50,531 54 688.0 101 945.5 41 954.5 1,201 35,463 19,879 21,256 42 411.2 745 455.9 752 905.9 The place in the parameter 9 1 5 1 4 1 3 1 7 12 1 8 1 11 1 10 1 6 1 2 1 1 6. The volume of the small-scale enterprises’ turnover in January – September, 2008, roubles 23,939 41,321 58 340.1 62 416.9 49,306 28,604 64,359 28,186 30,775 43 804.2 163 187.3 71 908.7 The place in the parameter 12 1 8 1 5 1 4 1 6 1 10 1 3 1 9 1 10 1 7 1 2 7. The volume of the small-scale enterprises’ turnover per capita taking into account the cost of the fixed set of consumer goods and services for inter-regional comparison of purchasing capacity at the period from January – September 2008, in % of the average level in the RF 51.8 78.0 103.1 120.2 74.2 35.1 109.0 59.6 58.7 72.7 1 291.0 97.5 The place in the parameter 11 1 6 1 4 1 2 1 7 12 1 3 1 9 1 10 1 8 1 1 5 8. Investments into the small-scale enterprises’ fixed capital at the period from January to September 2008, million roubles 705.1 2 965.2 3 488.4 1 862.0 577.4 23.2 613.0 507.3 379.7 2 149.0 2 742.5 2 625.4 The place in the parameter 7 1 2 1 1 6 1 9 1 12 1 8 1 10 1 11 1 5 1 3 1 4 9. The volume of investments into the small-scale enterprises’ fixed capital per capita at the period from January – September 2008, roubles 554.4 2 424.7 3 721.4 1 140.0 678.6 552.4 939.6 719.3 549.7 2 219.6 600.4 250.7 The place in the parameter 9 1 2 1 1 4 1 6 1 10 1 5 1 7 11 1 3 1 8 1 12 10. The volume of the small-scale enterprises’ investments per capita taking into account the cost of the fixed set of consumer goods and services for inter-regional comparison of purchasing capacity at the period from January to September 2008, in % of the average level in the RF 34.3 109.7 228.3 76.2 35.5 23.5 65.4 52.9 36.4 128.0 37.2 11.8 The place in the parameter 10 1 3 1 1 4 1 9 1 11 1 5 1 6 1 8 1 2 1 7 12 eter of Moscow (275.1 units). Saint Petersburg is followed by Kaliningrad region (288 units), Vologda region (261.7 units), Murmansk region (199.8), the Republic of Komi (196.2 units).

The same subjects are the leaders on the number of small-scale enterprises to 100 thousand inhabitants in percentage to the average level in the Russian Federation. The lowest parameters can be observed in the Republic of Komi (51.1%) and in Arkhangelsk region (59.3%). As for the Nenets autonomous county, there are no data on the both parameters. But this does not mean that there are no smallscale enterprises there. The low rates in both researched parameters are caused by the fact that in 2007 the population of the Nenets autonomous county was about 41,546 persons, including 27,147 city-dwellers. But both mentioned parameters refer to 100 thousand persons [12].

It is necessary to note, that these parameters do not allow considering that the high parameter is well, and the low one is bad. Such conclusions can be either confirmed or denied by the other, even more significant parameters, such as the rate of employment and the volume of turnover.

The average number of workers is the absolute parameter; it has information character and does not give the idea about the best or the worst subject. But the parameter “The share of the workers at the small-scale enterprises to the average number of the employed people” allows comparing the number of the enterprises and the number of the workers at them. The analysis of the data allows drawing some conclusions. Saint Petersburg has the highest parameter of the quantity of small-scale enterprises (337.1) and of the average number of workers (428.4 thousand people). Moscow has the highest parameter of the quantity of small-scale enterprises (275.1) of the “The share of the workers at the small-scale enterprises to the average number of the employed people” (7.9%). The other example is that in Pskov region the quantity of small-scale enterprises is twice less, than in Moscow, but the share of the workers at the small-scale enterprises is almost twice higher than the Moscow parameters.

It is possible to give more examples. The conclusion is that the quantity of small-scale enterprises is not enough to give an idea of the sphere’s development; it is necessary to take into account what are the volumes of employment at these enterprises and what contribution to the regional development they bring in.

We can also judge about the activity in this sphere by the parameter “The volume of the small-scale enterprises’ turnover per capita, roubles”. As it follows from table 2, the highest parameter belongs to Saint Petersburg, that is 163 187.3 roubles per capita in comparison with the Moscow’s parameters (71 908.7 roubles) and Pskov’s region (28,186 roubles).

In our opinion, one of the most important parameter is “The volume of the small-scale enterprises’ investments per capita”. According to the results of the analysis, there is a great “variation” of values within this parameter. The highest parameter in the North-West federal district is 3 721.4 roubles belongs to Kaliningrad region and the lowest one (which makes 549.7 roubles) belongs to Karelia. (For comparison: in Moscow this parameter makes 250.7 roubles.)

The data on the parameter “The volume of the small-scale enterprises’ investments per capita taking into account the cost of the fixed set of consumer goods and services for interregional comparison of purchasing capacity at the period from January to September 2008, in % of the average level in the Russian Federation” confirm the situation existing in this area. The highest parameter of investments per capita in Kaliningrad region also has the highest “rating” in comparison with the average index in the Russian Federation which makes 228%. In Moscow the parameter makes 11.8% of the average level in the Russian Federation, in Saint Petersburg it makes 37.2%. The Komi Republic and Vologda region also have a high parameter in comparison with the average index in the Russian Federation (128% and 109.7% accordingly). In the other subjects the variation in the values of parameters can be observed; from the lowest point which makes 34.3% (in Arkhangelsk region) up to the highest one in this group of subjects which makes 76.2% (in Leningrad region).

In our opinion, such comparative analysis of the situation in the North-West federal district can serve as a “launching pad” for carrying out the more deep analysis in the subjects for revealing the positive experience in one group of them and the unexercised opportunities in the other group of them.

Table 3 contains the information about the rating places from the first place to the twelfth one, among the subjects on 9 parameters.

In figure 3 representing these data, it is possible to judge about the position of the subject in the analyzed system. For example, the prior position of Saint Petersburg on the majority of parameters is obvious. The situation in Kaliningrad region is rather stable. Vologda region follows it. Nenets autonomous county ans Karelia have the lowest rating. However we should note that the data is of the year 2008 and they don’t give the idea about the developments in the sphere of the small-scale enterprises in each subject. The submitted analysis shows the comparative characteristic of the situation existing in 2008, and the approaches to carrying out the dynamic economic analysis.

Table 3. The parameters representing the comparative rating of the development level among the small-scale enterprises in the subjects of the North-West federative district

The quantity of the smallscale enterprises to 100 thousand inhabitants, 1 October, 2008	The quantity of the smallscale enterprises to 100 thousand inhabitants, in % from the average level in the RF	The average number of workers in January – September 2008, thousand people	The share of workers at the small-scale enterprises to the average number of workers in 2008, %	The volume of the smallscale enterprises’ turnover in January – September, 2008, million roubles	The volume of the small-scale enterprises’ turnover in January – September, 2008, million roubles	The volume of the small-scale enterprises’ turnover per capita taking into account the cost of the fixed set of consumer goods and services for inter-regional comparison of purchasing capacity at the period from January – September 2008, in % of the average level in the RF	Investments into the smallscale enterprises’ fixed capital at the period from January to September 2008, million roubles	The volume of investments into the small-scale enterprises’ fixed capital per capita at the period from January – September 2008, roubles
Moscow
3	3	2	11	1 1	2	5	4	12
				Saint Petersburg
1	1	1	1	2 1	1	1	3	8
				Arkhangelsk region
10	10	5	7	9 1	12	11	7	9
				Vologda region
4	4	3	2	5 1	8	6	2	2
				Kaliningrad region
2	2	6	5	4 1	5	4	1	1
				Leningrad region
7	7	4	8	3 1	4	2	6	4
				Murmansk region
5	5	10	10	7 1	6	7	9	6
				Nenets autonomous count		y
12	12	12	12	12        1	10	12	12	10
				Novgorod region
8	8	8	3	8 1	3	3	8	5
				Pskov region
9	9	9	4	11         1	11	9	10	7
				Republic of Karelia
11	11	11	9	10       1	9	10	11	11
				Republic of Komi
6	6	7	6	6 1	7	8	5	3

Figure 3. Levels of the small-scale enterprises’ development in the subjects of the North-West federal district (according to the parameters)

In figure 3 the places are occupied by each subject on 9 parameters:

• 1.    The quantity of the small-scale enterprises to 100 thousand inhabitants, October, 1, 2008.

• 2.    The quantity of the small-scale enterprises to 100 thousand inhabitants.

• 3.    The average number of workers.

• 4.    The share of workers at the small-scale enterprises to the average number of workers in January – September, 2008.

• 5.    The volume of the small-scale enterprises’ turnover.

• 6.    The volume of the small-scale enterprises’ turnover in January – September, 2008.

• 7.    The volume of the small-scale enterprises’ turnover per capita taking into account the cost of the fixed set.

• 8.    Investments into the small-scale enterprises’ fixed capital.

• 9.    The volume of investments into the small-scale enterprises’ fixed capital per capita at the period from January to September 2008.

Diversity as the approach for searching the effective ways and variants of the economy development at the expense of the more rational use of all the developed potential resources, including investment, for the small-scale business first means redistribution of investments for its advantage, and, secondly, the change of the structural ratio of activity. These both changes can have the consequence such as the growth of the small-scale enterprises’ number, and the expansion of the field and the volumes of activity, that finally will positively affect the social development.

As for the latest estimations of the tendencies noted in the small-scale business in Russia they are as follows. According to the published in October, 2008 data of the joint researches of the holding “Romir” and the bank “Trust” the representatives of the small-scale business in Russia think positively. Almost 60% of the interrogated persons mention the growth of the market segments; the number of businessmen, marking improvements of the current business condition, increased from 46% to 51%. 48% respondents

(in comparison to 44% of the previous interrogation) expect the investment growth in the near future. The share of the small-scale enterprises, planning to increase the credit volumes for the business development, increased from 22% to 33%, the share of the medium-scale ones increased from 29% to 52% [13].

We would like to hope, that the consolidated efforts of the state, of the business-community and of the population will allow promptly and competently estimate the global financial crisis’ dangers and use a maximum of favorable opportunities, for the Russian economy’s development.