Small business and living standards of the population: mutual influence and management issues

Small entrepreneurship is an important element of the socio-economic system of the region, because it contributes to the creation of competitive environment, the consumer’s market saturation and stimulation of aggregate demand, as well as to structural changes, etc. As a systemically important element of the municipal units’ economy, it has an impact on developing the infrastructure and filling the budget of local territories. It contributes to solving one of the main tasks of the social state - to increase the population’s living standards in the country. The high significance of small business determines the demand and necessity of its development. However, at present the aspects of its interconnection with the population’s living standards remain insufficiently elaborated, which makes it difficult to implement effective public policy on managing these categories. The researchers have presented two main approaches to defining this interaction. In the first variant, the functioning of small business contributes to improving the population’s living standards. In the second variant, the availability of capital and consumer demand, provided with people’s high revenues, are the main factors of small business development. Under the conditions of limited resources, the ambiguity of such dependence confirms the relevance and necessity of elaborating scientifically based directions of state influence and the system of measures for stimulating the development of these categories. Therefore, the aim of the study is to assess dependence of small business and the population’s living standards, as well as to establish mainstreaming scientifically based directions of public management and the system of measures, contributing to the development of the small business sector and the improvement of the population’s living standards as a whole. In order to achieve the goal, the empirical assessment of interconnection between the development of small business and the population’s living standards has been carried out, which allows to determine the specific characteristics of their mutual influence. The recommendations on improving the existing system of public management regarding the development processes of small business and improving the population’s living standards in the Russian Federation’s entities have been scientifically justified. The empirical basis of the study includes the data from the Federal State Statistics Service and the results of monitorings, conducted by Vologda Research Center of the Russian Academy of Sciences. The materials of the article can be used by the federal and regional government bodies and administrative authorities for adjusting public policy in the field of developing the regional economy.