Press release №2002
09.10.2017
RUSSIAN ENTREPRENEURSHIP: PUBLIC TRUST, OBSTACLES AND SUCCESS FACTORS

IN BRIEF

  • 90% perceive positively small businesses and 67% large businesses
  • 22% trust entrepreneurs, 27% distrust them
  • The top three success factors are start-up capital, professional team and entrepreneurial spirit

Russians treat entrepreneurs more favorably, though they trust them less than politicians. 

MOSCOW, October 9, 2017. The Russian Public Opinion Research Center (VCIOM), which celebrates its 30th anniversary this year, and the SKOLKOVO School of Management presents the data of two independent studies devoted to the Russian entrepreneurship.

Russian attitudes toward business differ according to the type of business: small and middle-sized enterprises are perceived more positively, whereas large businesses are often treated negatively (positive attitudes: 90% vs 67%). Compared to the previous periods, there is a tendency toward more favorable perceptions of small and middle-sized enterprises: the recent survey data show that 90% express favorable views (79% in 2009).

Russian people are still suspicious about entrepreneurship: despite a considerable decrease in distrust levels (from 45% in 2010 to 27% in 2017), the share of those who distrust entrepreneurs is still bigger than the share of those who trust them (27% vs 22%).

The level of entrepreneurial activity is changing: the share of those who want to start up a business is decreasing (from 32% in 2008 to 22% in 2017), whereas the share of those who think that this is not a positive trend is increasing (from 49% in 1991 to 68% in 2017). At the same time, 7% of Russians say that they run their own business (2% in 1991). Men, middle-aged respondents, persons who have higher education diplomas and inhabitants of the million cities tend to be more interested in business.

The key factor behind success in business is a start-up capital (53%); the main obstacle for those who start a business is the lack of capital (18%). What is important is also to have a good team (34%) and certain personal qualities (24%). Financial well-being and financial cushion are other factors that facilitate the starting up of businesses, according to respondents.

Whereas Russians share their opinion on factors that shape the business success, they are divided in the opinions on obstacles. Bureaucracy and administrative pressure are regarded to be the main things that hamper the development of business in Russia. Over the eight years of the measurement the administrative pressure on business entities has always been an important factor (27% in 2009 and 26% in 2017). According to the Skolkovo School study, lack of professional team (31%), lack of personal experience and knowledge (31%) and personal fears/barriers and lack of self-confidence (26%) are major obstacles. However, the top three obstacles do not include such problems as bureaucracy, administrative pressure or multiple checks.

When asked to propose an important state decision that would influence the development of entrepreneurship in Russia, the Skolkovo audience proposed to decrease taxes and to introduce tax holiday for new businesses (36%).

There are three main types of business community proposals addressed to the authorities: 1) financial support for entrepreneurs such as tax cuts (36%), decreased loan interest rates (12%), assistance and subsidies (7%); 2) administrative regulation, i.e. simplified reporting/less bureaucracy (10%), independent judiciary (7%) and reduced number of checks (5%); 3) educative support and advice, i.e. introduction of entrepreneurial studies in schools and universities (5%), educational programs and consultations for entrepreneurs  (5%, for each).

The role of business is assessed positively in the Russian society: three-quarters of Russians (74%) consider that entrepreneurial activities are beneficial for people. The main positive impacts of business are job creation (28%) budget replenishment (13%), increased accessibility (12%) and large range of goods and services (10%).

The VCIOM-Sputnik Russian nationwide survey was conducted on July 28-29, 2017. The survey involved 1,200 Russians aged 18 and over, and was carried out using stratified dual-frame random sample based on a complete list of landline and mobile phone numbers operating in Russia. The data were weighted for the probability of selection and reflect social and demographic characteristics. The margin of error at a 95% confidence level does not exceed 3.5%. In addition to sampling error, minor changes in question wording and different circumstances arising during the fieldwork can introduce bias into the survey.

The 2008-2016 studies are based on household surveys.

The SKOLKOVO School of Management study was conducted in September, 2017, using the online survey technique.  The sample is based on the SKOLKOVO school list of contacts. The target audience was entrepreneurs and business owners, top-level and middle-level managers. A total number of 479 persons took part in the survey. 

All-Russian survey

How do you generally perceive private entrepreneurs (small and medium-sized businesses)? (closed-ended, one answer, %)
  2009 2011 2013 VII.2017
Positively 41 45 41 56
Rather positively 38 36 42 34
Rather negatively 9 7 7 4
Negatively 4 5 2 4
Don’t know 8 7 8 2
How do you perceive the business owners? (closed-ended, one answer, %)
  Total respondents Aged 18-24 Aged 25-34 Aged 35-44 Aged 45-59 Aged 60 and over
Positively 32 30 40 33 29 27
Rather positively 35 58 39 39 36 20
Rather negatively 15 9 11 12 15 21
Negatively 13 3 6 11 15 20
Don’t know 5 0 4 5 5 12
How much do you trust the representatives of the following professions? Entrepreneur, businessman (closed-ended, one answer, %)
  2010 2012 2013 2015 2017
Likely /completely trust 21 21 26 32 22
Likely /completely distrust 45 50 43 36 27
Don’t know 34 29 31 32 51
Have you ever wanted to start your own business and become entrepreneur? (closed-ended, one answer, %)  
  1991 2008 2011 2013 2016 2017
No, I haven’t (I wanted in the past, now I don’t; I never wanted and don’t want it now) 49 59 57 64 60 68
Yes, I want it (I wanted it in the past and I want it now; I did not want it in the past but now I want it) 29 32 30 23 34 22
I have my own business 2 4 5 5 3 7
Don’t know 20 5 8 8 3 3
What could incite you to start up a business, what should d be changed to make it happen? Up to 5 answers are possible. (open-ended question, not more than 5 answers, %, answers of those who do not have their own business)  
  Total respondents
To improve living standards 12
Start-up capital / financial cushion 12
Tax system 6
Interest rate 5
Health/Age 5
Support from the state 4
Stability/Confidence in the future 4
Foreign policy/Domestic policy 4
Idea/Business plan 3
Unemployment/ a lose-lose situation 3
Simplification of administrative procedures/ administrative machine 3
Economic situation in the country 3
Ambitions 2
Elimination of corruption/banditry 2
Personal reasons 2
Education 2
Checks/authorities throw a monkey wrench in the works 1
Legislation 1
Communicative skills/Partnership relations 1
Goal setting 1
Inflation/Price increase 1
Social guarantees 1
No monopoly/competitiveness 1
Well-established distribution network/demand 1
None 34
Other 3
Don’t know 12
I will read the conditions for business activities. Choose three most important ones to achieve success in business today. (closed-ended, not more than 3 answers, %)  
  Total respondents
Money, start-up capital 53
Good team  34
Special personal traits, gift, entrepreneurial skills 24
Desire to serve people’s  interests 22
Ties  14
Experience 13
Knowledge and education 13
Ability to create a good product/services 13
Original business idea 12
Having partners 11
Luck 10
Belief in success 9
Other 6
Don’t know 6
In your opinion, what are the main difficulties that people face today when starting up their business? (open-ended question, not more than 5 answers, %, top ten answers)
  VII.2009 VII.2017
Bureaucracy/administrative obstacles and pressure 26 27
Lack of start-up capital, high financial costs 27 18
Difficult economic situation, crisis 2 13
High taxes 10 12
High competitiveness 4 10
Lack of skills and experience 6 9
Corruption 9 7
Staff/ partners 0 7
No ties 3 6
High interest rates, problems getting loans from banks 2 5
Racketeering 2 0
In your opinion, are the activities of Russian entrepreneurs and businessmen good or bad for society today?  (closed-ended, one answer, %)
  Total respondents Those who assess their financial well-being  as good or very good Those who assess their financial well-being as average Those who assess their financial well-being as bad or very bad
Definitely good 22 31 20 16
Rather good 52 51 56 41
Definitely bad 3 2 3 6
Rather bad 13 8 12 20
Don’t know 10 8 9 17
In your opinion, what are the main benefits that the activities of the Russian entrepreneurs bring to Russians? Name three of them, please. (open-ended question, not more than 3 answers, %, answers of those who think that the activities of entrepreneurs are good for society)  
  Total respondents
Jobs /employment / salary 28
Tax remission / budget replenishment 13
Availability of goods and services / provision / supply 12
Variety of goods and services / choice opportunity 10
Economic development / GDP 9
Domestic products / import substitution 7
Charity / philanthropists/ sponsorship 5
Lower prices due to competitiveness 5
Benefit to people / life improvements 5
High quality production 5
Production development, industrial development 4
Agricultural development 3
Competitiveness / absence of monopoly 3
New technologies / ideas / development of science 2
Green-labeled product 1
Attracting foreign investment 1
Development of infrastructure 2
Nothing 3
Other 2
Don’t know 31

Survey results of SKOLKOVO School

Conditions for successful business operations: opinions of entrepreneurs

A list of business conditions is presented below. Choose three conditions that you think are the most important to achieve success in business today. Up to three answers are possible
Conditions for successful business %
Good team 51
Ability to create a good product or service   41
Special personal traits, gift, entrepreneurial skills 39
Money, start-up capital 29
Original business idea 28
Ties 23
Belief in success 23
Desire to serve people’s  interests 15
Experience 13
Knowledge and education 11
Having partners 10
Luck 8

Database: 479 persons

Obstacles that hamper starting up a business: opinion of entrepreneurs  

What are the main obstacles that people face when starting up their business?  Up to 5 answers are possible (spontaneous answers)
Obstacles when starting up a business %
Creating a team/ finding personnel 31
Lack of experience/knowledge/ skills 31
Personal fears and barriers (lack of confidence, fear of risk, etc.) 26
Absence/ lack of start-up capital/ finance/ risks 24
Difficulties related to idea/ wrong idea/ problems with promotion and sales 23
Errors in planning/ business plan/ calculations 18
High taxes/ complicated tax system 17
Low demand/ search of clients/ high competitiveness 16
Bureaucracy/ administrative barriers 13
Checks/ interaction with supervisory bodies 11
Interaction with partners/ absence of connections 9
High loans’ interest rates/ difficulties getting loans 8
Legislation/ instability of law 7
Corruption 6
Non-market conditions/ non-transparent tenders 5
Absence of well-functioning judicial system / fear to lose business 5
Attitudes of people/ community towards entrepreneurs 5

Database: 313 persons (current and former entrepreneurs)

Proposals to prime-minister to support entrepreneurship  

If you were to decide issues related to the development of entrepreneurship in Russia/if you were an advisor to the prime-minister on entrepreneurship, what state-level decision would you take first? (spontaneous answers)
Proposals to support entrepreneurship, TOP 10 answers %
To reduce taxes/ to introduce tax holiday for the first and second years of activities / tax benefits 36
To reduce loan increase rate /to simplify access to funds / credit resources 12
To simplify reporting procedure/ registration procedure/ to reduce bureaucracy 10
Independent court / judicial system / protection of private property 7
To provide subsidies/ assistance depending on the activities 7
To introduce entrepreneurship education in schools  / to develop entrepreneurial mindset 6
Educational programs for entrepreneurs / availability of programs 5
To cut the number of checks/ supervisory bodies/ to decrease administrative pressure 5
Free consultation of tax  and finance experts, including supervisory bodies’ consultations   5
To change the public perceptions of entrepreneurship / to promote entrepreneurship 5

Database: 479 persons

 

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