Every second entrepreneur is skeptical about the future; however most of them do not want to abandon business.
MOSCOW, July 11, 2019. Russian Public Opinion Research Center (VCIOM) presents the findings of a survey about modern Russian business, factors and risks affecting the conduct of business in Russia and prospects for business development.
Most of Russian entrepreneurs say that conditions for business operations in Russia are unfavorable (71%). Just 15% consider that the government is taking active measures to support business. Despite that, most of respondents (76%) would choose to run their own business in case they had a choice.
Entrepreneurs mention both macroeconomic and institutional problems as negative factors affecting business operations in Russia. They are as follows: financial well-being of Russians (81%), corruption levels (72%), and oil prices (71%). Certain negative factors refer to justice system: the level of legal protection of the business owners, justice system functioning (62%), legal regulations in business (62%), regulatory and supervisory authorities (63%). However entrepreneurs say that domestic market competition (47%), stable political system and internal political situation (35%), and availability of credits (28%) positively shape business activities.
Decreased demand for goods and services (72%) is the most likely risk mentioned by entrepreneurs. The key risks involve growth of taxes (70%), unpredictable changes in legislation (64%), and high costs (63%). Every second respondent (52%) has concerns related to justice system imperfections and low rate of not guilty verdicts. Problems with law-enforcement bodies (41%) and illegal seizure (25%) also pose high risks. The least probable risks involve national default and economic system destabilization (20%) and changes in political situation (22%).
More than half of respondents (51%) are skeptical about the future; they expect deterioration in the business conditions in a five-year plan perspective. Only 23% of Russian businessmen think they will be able to implement their long-term strategies. Every third entrepreneur intends to keep the business operations at the current level; about the same share of respondents (26%) prefers to get short-term returns. A further 10% ponder over closing down their businesses; 6% would like to sell them.
The national survey was commissioned by “Platforma” Social Design Center and conducted June 11 through 17, 2019. The survey was telephone-based and involved 500 respondents representing Russian large, medium and small enterprises. The margin of error at a 95% confidence level does not exceed 4.5%. In addition to sampling error, minor changes in question wording and different circumstances arising during the fieldwork can introduce bias into the survey.
In your opinion, are the conditions for business operations favorable or unfavorable in Russia today? (closed-ended question, one answer, %) | |
| Total respondents |
Definitely favorable | 2 |
Likely favorable | 25 |
Likely unfavorable | 36 |
Definitely unfavorable | 35 |
Don’t know | 2 |
Which of the statement do you most agree with? (closed-ended question, one answer, % of total respondents) | |
The government takes active measures to support entrepreneurs and business development | 15 |
The government does not take enough measures to help entrepreneurs and business | 80 |
Don’t know | 5 |
Some time ago you took a decision to start your own business. If you had a choice today again – to work for a company or to run your own business – what would you do? ( closed-ended question, one answer, % of total respondents) | |
I would choose my own business | 76 |
I would prefer to work for a company | 16 |
Even given a lower income, I would prefer to work a company | 4 |
Don’t know | 4 |
In your opinion, what are the key factors affecting business operations in Russia today? Are those factors positive or negative? (closed-ended question, one answer per line, % of total respondents) | ||||||
| Definitely negative | Likely negative | Likely positive | Definitely positive | No impact | Don’t know |
People’s financial well-being | 50 | 31 | 9 | 4 | 4 | 2 |
Corruption | 48 | 24 | 4 | 3 | 17 | 4 |
Monopolization | 41 | 29 | 7 | 2 | 16 | 5 |
Oil prices | 36 | 35 | 6 | 2 | 19 | 2 |
Legal protection of business owner, justice system functioning | 32 | 30 | 13 | 2 | 16 | 7 |
Legal regulations | 29 | 33 | 14 | 2 | 16 | 6 |
Work of regulatory and supervisory bodies | 27 | 36 | 17 | 2 | 14 | 4 |
Financial situation, available credits | 25 | 24 | 23 | 5 | 15 | 8 |
Education system, level of personnel training | 22 | 36 | 19 | 6 | 13 | 4 |
Political situation, sanctions | 21 | 30 | 12 | 5 | 30 | 2 |
Internal political situation, stable political system | 20 | 23 | 23 | 12 | 16 | 6 |
Situation in the labor market, staffing | 19 | 36 | 20 | 6 | 17 | 2 |
Competition in the domestic market | 12 | 20 | 39 | 8 | 17 | 4 |
Level of corporate administration | 5 | 16 | 21 | 5 | 30 | 23 |
Level of inter-state interaction | 5 | 13 | 22 | 4 | 41 | 15 |
Speaking about Russian entrepreneurs, what risks do you consider as high/small? (closed-ended question, one answer per line, % of total respondents) | ||||||
| Very high | High | Average | Low | Don’t know | No such risks |
Decrease in purchasing power, decrease in demand | 39 | 33 | 17 | 7 | 3 | 1 |
Tax level | 34 | 36 | 22 | 5 | 2 | 1 |
Unpredictable changes in legislation | 32 | 32 | 21 | 9 | 4 | 2 |
Imperfections of justice system, low rate of not guilty verdicts, lack of protection of entrepreneurs | 28 | 24 | 24 | 10 | 10 | 4 |
Corrupt payments to tackle administrative matters | 22 | 26 | 20 | 11 | 13 | 8 |
Increase of costs | 21 | 42 | 25 | 5 | 5 | 2 |
Market monopolization | 19 | 30 | 31 | 6 | 9 | 5 |
Problems with law enforcement bodies | 19 | 22 | 26 | 11 | 20 | 2 |
Frequent inspections, high activity of regularity and supervisory bodies | 17 | 22 | 36 | 14 | 9 | 2 |
Unstable economy, possible national default | 15 | 26 | 24 | 20 | 10 | 5 |
Decrease in investment | 14 | 25 | 26 | 11 | 14 | 10 |
Competition from the shadow market | 13 | 16 | 26 | 19 | 21 | 5 |
Risks of illegal seizure | 9 | 16 | 28 | 26 | 19 | 2 |
Changes in political situation | 7 | 19 | 24 | 22 | 22 | 6 |
In your opinion, how will the business conditions change in a five-year perspective - will they deteriorate/improve/stay the same? (closed-ended question, one answer, %) | |
| Total respondents |
They will definitely improve | 3 |
They are likely to improve | 17 |
They will not change | 23 |
They are likely to deteriorate | 30 |
They will definitely deteriorate | 21 |
Don’t know | 6 |
Which of the following business strategies best meets the business plan goals of your company within the next three years? (closed-ended question, one answer, %) | |
| Total respondents |
Investing in long-term business development | 23 |
Steady development with short-term returns | 26 |
Keeping business operations at the current level | 33 |
Closing up of business | 10 |
Sale of business | 6 |
Don’t know | 2 |
Note: Using materials from the site www.wciom.ru or wciom.com, as well as distributed by VCIOM, the reference to the source (or hyperlink for the electronic media) is obligatory.