“The future is already here. It’s inevitable and those who fit into digital services will be riding high. They will have a business, a workforce, and a decent salary, and our country’s wellbeing ultimately depends on this,” said Alexander Kalinin, President of the OPORA RUSSIA All-Russia Non-Governmental Public Organization of Small and Medium Business.
“The leaders in creating this environment are large structures that shape this environment independently of each other, but nevertheless they are the ones who form it overall. They are undoubtedly the largest digital companies such as Yandex, Mail.ru, Sberbank, and others. They are banks that create fintech, such as the Central Bank. [...] It’s Russian Post and Russian Railways, which are also shaping the digital environment. It’s Rosseti, which is now catching up with them […] and, of course, it’s the tax service, which, due to our special historical features, is probably going two steps or one step ahead of the others,” said Andrey Belousov, First Deputy Prime Minister of the Russian Federation.
Small businesses need to learn to work in a digital environment and take advantage of digital services, products, and opportunities.
“Small businesses ostensibly need to learn to work with these structures, whose capabilities are now being given to them, so to speak: [...] You just need to create some tools and resources for training,” said Andrey Belousov, First Deputy Prime Minister of the Russian Federation.
“For any industry, the digital channel is a reality and a challenge to the wrong people, with whom business will probably not exist. I’ll say it again: in any industry,” said Maxim Akimov, General Director of Russian Post.
PROBLEMS
Russia has no tax preferences or business infrastructure for technology companies that are capable of developing the digital segment
“For small and medium-sized businesses to be able to digitalize, they need access to funding, but companies sometimes don’t have the ability to provide collateral to obtain a bank loan. Today’s tech giants like Google were the first to invest in business angels. Last year, USD 2.4 billion was invested, and this is still in its infancy. Is it possible for business angels to receive tax preferences?” asked Yelena Volotovskaya, Vice President for Investments at Softline and CEO of Softline Venture Partners.
“Entrepreneurs should do business, and not waste time trying to understand and translate what they can get and how the state can help them. My position is that the state should remain behind the scenes. Entrepreneurs don’t care who provide the services. The main thing is to explain in clear Russian that, as entrepreneurs, they can take advantage of a particular measure of support,” said Alexander Isaevich, General Director and Chairman of the Board of SME Corporation.
A substantial share of SMEs still remain in the shadows
“Digitalization is always about transparency and getting out of the shadows. As soon as a company enters the digital environment, it becomes transparent to everyone who is interested in it,” said Andrey Belousov, First Deputy Prime Minister of the Russian Federation.
“The job for all of us, for entrepreneurship, for us, logisticians, and for those who provide electronic document management services and integration with government agencies, is to make this process seamless, so that the consumer gets the best experience in the world. But then, of course, you will have to become more transparent, because in the world of digital transactions there is less and less space for a grey zone, and this will greatly affect the logistics industry,” said Maxim Akimov, General Director of Russian Post.
SOLUTIONS
Russia needs to introduce a digital reputation institution and work on employee awareness
“In our opinion, it would be correct to introduce a digital reputation or integrity institution. The more you open up, the more the government knows you, including through these electronic services, and the lower your risk profile is. And the inspectors simply come to you less often or don’t at all,” said Anton Alikhanov, Governor of the Kaliningrad Region.
“A very effective tool, in my view, is individual certificates for increasing the digital awareness of employees; it has been implemented and continues as part of the ‘Human Resources for the Digital Economy’ project. I can see that these things were in great demand in 2020,” said Vladimir Solodov, Governor of the Kamchatka Territory.
Creations of new technology platforms to run business
“The development of factoring for small and medium-sized businesses. […] The use of factoring financing enables small and medium-sized businesses to avoid cash shortages and ensure business development. The Russian factoring market has a high level of concentration. At present, the five largest [Russian] companies account for more than three-quarters of the market. In such a divided market, the price for an entrepreneur for this essentially risk-free operation is quite high. This is why, together with the FinTech Association, the SME Corporation, and the government, the Central Bank will now develop an online factoring platform. [...] In our opinion, it will enhance competition between factoring companies, and most importantly, for small and medium-sized businesses, in order to simplify the process and reduce the cost of working capital. We plan to launch this platform (we are actively working on it) by the end of this year,” said Elvira Nabiullina, Chairwoman of the Central Bank of the Russian Federation (Bank of Russia).
“The more options and diversity, the more chances to survive. At present, we are seeing through the eyes of the tax authorities that the approach to the principle of common platforms will be reborn. It’s all about how one properly formulates the data so that it is processed in different places and is convenient for everyone. We are getting to the point where different people are working in their personal account and need different profiles,” said Daniil Yegorov, Director of the Federal Tax Service.
