By April 2024, the number of small and medium-sized enterprises (SMEs) and self-employed had reached record values of 6.5 million and 10 million respectively. These categories account for a third of the country ' s employment - 28 million. However, in the face of shortages, the sector ' s further quantitative growth is limited, SMEs ' reliance is focused on qualitative development and priority industries, manufacturing, IT, tourism. As official statistics show, new SMEs are more likely to be found in trade.

According to the Federal Tax Service, as at 10 April 2024, the number of SMEs and self-employed in Russia had reached 16.5 million, the maximum value of the Single SME Register since 2016. The largest contribution has been made by a rapid increase in the number of wage earners in the professional income tax, with 7.4 million as early as April 2023 and 10 million in April this year. However, in April 2023 there were 6.2 million SME entities, this year, 6.5 million.

The emergence of new SMEs remained unnoticed for business. According to the survey " The Russian Federation " , when 51.3 per cent of entrepreneurs reported increased competition in 2022, 60 per cent (59.1 per cent) were reported in 2023. SME representatives are more likely to note the increase in competition within the sector: for example, 31 per cent of respondents consider the main competitors of large businesses, 36 per cent are small and medium-sized businesses, 11 per cent reported competition from self-employed persons.

Total self-employed and SMEs already account for more than one third of the employed in the economy, 28 million out of 76 million. Tax payments and insurance contributions to the treasury of SMEs are also estimated to be almost one third of the federal budget, more than 9 trillion roubles in 2023, excluding the oil and gas sector. The increase in the tax contributions of SMEs compared to 2019 was 78 per cent, compared with 2022, 23 per cent. The tax remittances for self-employed in 2023 amounted to 63 billion roubles. The taxpayers were able to earn 1.4 trillion roubles against 0.9 trillion rubles in 2022.

Let us recall that self-employment is considered by the Government, including as the point of entry of the Russians into entrepreneurship, through easier conditions of administration and low tax rates. Subsequent self-employed persons are expected to be partially " converted " into small and medium-sized businesses. In order to develop entrepreneurship, the authorities have set up a business support system at every stage of its life cycle, ranging from assistance in market analysis and documentation in the launch of a new case to grant and concessional loans for its expansion.

According to the SME focal area, Tatiana Ilumshnikova, the sector ' s growth provided well-established support to business during the pandemic and the sanctions.

" In the context of the coronavirus, the State provided cheap money to the business, in return, the entrepreneurs undertook to maintain jobs. Companies were compensated for employees ' salaries, extended their tax periods, etc. In 2022, we developed anti-sanction support measures - concessional loans for priority industries, a moratorium on verification, extension of licences and many others " - from the Deputy Minister.

Further numerical expansion of the sector, however, is no longer a priority for the Government to support SMEs. This decision is made against the backdrop of the strongest human hunger in the FM: small and medium-sized businesses are unable to compete for staff with large companies because of lack of resources. The Ministry of Economy seeks to attract the non-inclusive population: youth, women, socially vulnerable groups.

To that end, we are improving the grant support mechanisms for young and social entrepreneurs, special education programmes for women, social contract, to which Tatiana Ilushnikov speaks.

However, high-productivity enterprises are required in the context of staffing constraints. Therefore, from the idea of massive support to SMEs, the Government is shifting to its concentration in industries, areas, projects. For example, dominance is already being constructed for priority industries, i.e. those with the most profits, show strong growth and provide high-paid jobs. It's manufacturing, IT, domestic tourism.

Meanwhile, according to official statistics, trade is contributing to the growth of the SME sector. By April 2023, 550,000 new SMEs had been established in the area of trade and 615,600 by April 2024. The share of these enterprises among all new SMEs is estimated at 42 per cent and 43 per cent. Further, the construction sector is 161,600 and 154,800 new enterprises (to 12.5 per cent and 11 per cent), transport and storage - 118.5 thousand and 136,600 (9% and 9.5 per cent). In science and technology, by April 2024, 88,900 enterprises had been established, 774,000 had been established last year, and 6 per cent of the total number of new SMEs had remained. In April of this year, 73,000 businesses were established, 69,000 of the past, and 5 per cent remained unchanged. The survey " The Russian Federation " confirms that more competition has been reported by trade representatives and the weakening of the productive sector.

The Government was concerned about the current quality of the SME sector, and therefore another priority was to support SME+ companies that had evolved from ICP Income or Staff.

" Such enterprises are in a situation where they are no longer useful: they will not have access to support measures, concessional loans and tax preferences. We should encourage their qualitative growth by expanding the range of support tools - for example, umbrella sponsorship, concessional investment programmes " - to be added to the Min-Economy.

In part, however, the sector was adapted to covid and sanction shocks: the profits of SMEs increased by 40 per cent by 2022 to 25.8 trillion roubles in 2023. That's from 2019 tops.

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The national project " Maloye and Middle Entrepreneurship " has been initiated by the President of the Russian Federation and is being co-chaired by the First Vice-Prime of the Government of the Russian Federation, Andrei Belousov.