On May 12, 2020, Stepan Zemtsov, Senior Researcher of the Innovation Economy Department, Gaidar Institute delivered a report on “The Arctic Entrepreneurship Before and After the Crisis and the Pandemic: Myths, Barriers and Prospects of Development” within the framework of the “Entrepreneurship in the Arctic. The Condition and Prospects of the Development in Modern Realities” online conference. 
In his report, Stepan Zemtsov dismissed popular myths about the development of small and mid-sized business in the Arctic and Russia and highlighted the following issues:

  • Why is the small and mid-sized business needed in the Arctic? 

  • Why should the small and mid-sized business be rescued if it has no effect on economic growth and its share in GDP is insignificant?

  • Why should the small and mid-sized business be supported if it does not facilitate the progress?

In his report, Stepan Zemtsov touched upon the key barriers and limitations on the way of development of small and mid-sized business in the Arctic: remoteness of markets, surplus costs and unfavorable institutional conditions and development of information and communications technologies.
Also, the risks and prospects of the development of the small and mid-sized business in the Arctic were discussed. Stepan Zemtsov identified a few important issues:

A decrease in the revenues and outflow of temporary labor migrants will increase risks related to the development of the small and mid-sized business in the Arctic regions;

A high role of access to the capital, but amid the crisis the access can become limited;

State support has a weak effect and with a lag (over 90% of companies do not use it), the most effective instruments are tax benefits and deferrals of payments;

Institutes and sociocultural norms limit the adaptability through the entrepreneurship;

The most serious social implications should be expected in the North Caucasus and the Crimea where workers of small and mid-sized businesses and the self-employed account for over a half of the employed and the level of digital inequality is high;

In the Arctic, the risks are high, too, but the density of the small and mid-sized businesses was already minimal.

In the framework of the debates, a particular attention was paid to the issue of short-term and long-term support measures to small and mid-sized businesses:

As short-term measures, the presenter puts forward the idea of rendering further support to the demand for small and mid-sized businesses (subsidies to low-income people and families with children; direct support and loans to the badly-hit enterprises which preserved jobs; consulting), promoting the digitalization of state services and speeding up the transformation of the business climate which factors are crucially important to the post-crisis development.  Also, an important factor is business training and job retraining efforts taken by the authorities and residents.

According to Stepan Zemtsov, the long-term support measures include:

Reduction of digital inequality: development of the information and communications infrastructure, training of people and entrepreneurs and consulting;
Development of the entrepreneurial model of universities;
Support of technological creativity and entrepreneurship: fab labs, centers for young innovation creativity, business incubators and other.
 The online conference was attended by: A. Krutikov, Deputy Minister of Finance for the Development of the Far East and the Arctic; I. Neverov, Member of the Coordination Council of the Delovaya Rossia All-Russian Non-Government Organization,  Chairman of the Delovaya Rossia’s Committee on Management  of Natural Resources and Ecology, Public Business Ombudsman on Ecology and Management  of Natural Resources at the Office of the Entrepreneurs’ Rights Commissioner for the President of the Russian Federation, Member of the State Commission on Development of the Arctic Zone of the Russian Federation; M. Arslanova, Director of the Department of the Investment Policy  and Development of the Entrepreneurship of the RF Ministry of Economic Development.

The debating club is held under the auspices of the Project Office of the Arctic Development, Center of Expertise jointly with the Delovaya Rossia, All-Russian Non-Government Organization.