STEPAN ZEMTSOV: LOW LEVEL OF TRUST HAS A NEGATIVE IMPACT ON BUSINESS DEVELOPMENT
On March 3rd, 2020, Stepan Zemtsov, Senior researcher, Innovation Economic Department, took part at the scientific/methodological seminar aimed at preparation of the meeting of the Expert advisory Council under the Federation Council Speaker on the subject “Trust as a critical factor for achieving strategic goals of social and economic development of Russia”.
Stepan Zemtsov delivered a presentation on the topic “Trust as a factor of business development in Russia”. The expert noted that a low level of generalized trust is typical for Russia compared to majority of the countries. Thus, only thirds believe that they can trust other people while the global average exceeds 50%. In our opinion, low level of trust has the greatest negative impact on business development. Actually, if you do not trust anyone, you will not be able to establish a business company, you do not trust contractors, employees, etc.
We can observe that the level of trust and entrepreneurial activity is higher in countries marked by high level and rates of economic growth, such as India, China, Vietnam, South Korea, etc.
Entrepreneurs do not trust the government. In this situation, it is impossible to render support. According to a survey of small and medium-sized companies, 91% have never received any of the support tools, most of them never heard anything about support measures and 45% do not trust the government (checks, reports, etc.).
Community does not trust entrepreneurs. This is related to the image of the 1990s, the attitude of local residents to entrepreneurs, perceiving them as grabbers or bandits who do not pay taxes. Nevertheless, they generally trust small businesses more than large corporations, and this trust was even higher in particular years than trust in the state. The share of respondents distrusting entrepreneurs decreased from 45% in 2010 to 27%.
Actual entrepreneurs do not trust other institutions (universities, academic organizations, etc.). This fact is critical for sophisticated technologies as it is impossible to invent a compound product that requires interaction of a large number of different contractors.
Lack of trust results in high unofficial employment, lower tax collection and inability to develop non-resource sectors of the economy.
Sergey Postnikov, Deputy Head of Analytical Department, Central Office of the Federation Council; Alexander Nekipelov, RAS Academician, Director, Lomonosov MSE MSU; Antonina Selezneva, Professor, Lomonosov MSU Faculty of Political Science, delivered their presentations within the frame of the seminar.
Related publication:
M.P. Antonova, Vera A. Barinova, Vladimir V. Gromov, Stepan P. Zemtsov, Alexander N. Krasnoselskikh, Nikolay S. Milogolov, A.A. Potapova, Yulia V. Tsareva, Development of small and medium-sized business in Russia in the context of implementation of the national project. – М. Delo Publishers RANEPA, 2020, p. 88