COMPETITIVENESS OF SMALL ENTERPRISES IN THE DIGITAL ECONOMY AND INSTITUTIONALIZATION OF BUSINESS - Scientific conference
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Рік заснування видання - 2011

COMPETITIVENESS OF SMALL ENTERPRISES IN THE DIGITAL ECONOMY AND INSTITUTIONALIZATION OF BUSINESS

01.04.2022 22:46

[2. Economic sciences]

Author: Kravchenko S.A., Sc.D., professor, Leading Researcher of the Department of Entrepreneurship, Cooperation and Agro-Industrial Integration, NSC “Institute of Agrarian Economics” NAAS, Ukraine, Kyiv; Malik L.M., Ph.D., docent, Leading Researcher of the Department of Entrepreneurship, Cooperation and Agro-Industrial Integration, NSC “Institute of Agrarian Economics” NAAS, Ukraine, Kyiv


Increasing the competitiveness of small businesses depends on the coordinated work of the triad - the state (government), society and the business community. To obtain a positive result, it is necessary to have an initiative of all parties to the triad, as well as the readiness of this triad to implement these initiatives. If the response speed of one of the elements of the system will differ, then the effect of the transformations will be negative. Each stage of small business development involves similar reactions. Now we need to talk about development in the context of digitalization, where the way of production is completely changing to information technology. This method of production involves strengthening the role of human creativity [1, p. 107-125].

The competitiveness of small businesses is the main direction of the domestic economy, since dynamically developing enterprises are becoming the only entities that, according to modern socio-economic development, can meet the differentiated demand that determines the trend of economic growth and innovative development. Competitiveness of entrepreneurial structures of small and medium-sized businesses can be defined as the ability of entrepreneurial structures to show flexibility, adaptability to constant changes in the external environment in order to increase, decrease or maintain the market share occupied, depending on the strategy of the enterprise.

In the economy, the development of digital technologies based on the information revolution has put digitalization among the main competitive advantages for small businesses. In the process of management, information becomes knowledge, and socio-economic relations are transferred to the virtual space, to the Internet. Business opportunities are growing: on the one hand, through cost optimization through electronic banking, Online advertising, process automation, on the other hand, the possibility of expanding the market through the use of network resources.

For small businesses, the development of digital culture, presence in the Internet space, the use of digital technologies in the process of producing a product or service is a significant factor in increasing competitiveness. Increasing competitiveness in the domestic and foreign markets requires the development of an innovation economy, which implies the availability of high-tech industries, the growth of knowledge, competencies and technologies. But the level of innovative development of small business does not meet the demand for the development of a new economy of an innovative type. To increase the innovative activity of entrepreneurship, it is necessary to introduce "digital" into the activities of small businesses.

Given the institutional weakness of small business in Ukraine, it may lose its positions to a greater extent and with greater speed if it does not join the innovative digital field as quickly as possible, using the opportunities provided by the "digital" to develop and increase its own competitiveness. For the successful implementation of the program for the development of the digital economy in Ukraine, it is necessary to prepare a personnel reserve capable of making a qualitative technological breakthrough. It is necessary to eliminate the digital ignorance of managers and owners of small and medium-sized businesses, to ensure strategic planning of digitalization in small businesses [2, p. 293-309].

We need effective state support for small business, the creation of a right-wing field, clear rules, the possibility of protecting the rights and interests of small entrepreneurs in the field of the digital economy. Then small and medium-sized businesses will be able to reach a qualitatively new stage of development, including through the creation of start-ups in innovative technologies, to increase competitiveness through the development of a digitalization strategy, the introduction and use of digital technologies.

Small businesses should constantly search for innovative solutions and business models that are based on digital technologies. Product development needs to become more flexible. It is necessary to experiment with new business models, products, ideas and technologies. A passive position can lead to a loss of competitiveness. Responsibility for the results of large-scale transformations lies with all participants in the triad (government, business, society), but the state must set or adjust the trajectory of development. This can be done through completely standard levers – regulations, infrastructure, strengthening of network interaction and attitudes towards entrepreneurs.

Attempts have been made by the authorities to enter the platforms (E-government, Electronic Budget, public service portals, portals with information about state and municipal institutions, the Public Procurement Portal, etc.), which should increase efficiency in the field of public administration, and in addition increase the transparency of this sphere.

Thus, in the process of the study, it was found that the development and implementation of the digital economy in relation to small and medium-sized businesses can significantly increase its competitiveness. Now this is not facilitated: the lack of public platforms for discussing the problems of small business; their underestimation of the speed of digital diffusion; certain declarativeness and inaccessibility of support measures; inertia of thinking of business owners; lack of strategies for the development of digitalization of own business; lack of attention and support of the state.

References:

1. Welter F., Smallbone D. (2011). Institutional Perspectives on Entrepreneurial Behavior in Challenging Environment. Journal of Small Menegment. 2011. №49 (1). pp. 107-125.

2. Wennekers, S., Van Wennekers, A., Thurik, R., & Reynolds, P. (2008). Nascent entrepreneurship and the level of economic development. Small business economics. 24 (3). pp. 293-309.



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