Rural Small And Medium-sized Enterprises Research Articles

Сельская локальная экономика: основные характеристики сельских малых и средних предприятий муниципальных районов в разрезе отраслей

As part of the continuation of the study of rural local economy, conducted by VIAPI named after A.A. Nikonov, the main financial and economic characteristics of rural small and medium-sized enterprises (SMEs) in municipal regions of Russia have been identified by industry based on SPARK-Interfax based on 2021 data. Despite the growing attention of authorities to the development of rural areas, including through SMEs, there is no open data to determine which sectors are most attractive specifically for rural SMEs, how efficient they are, what their productivity and wages are. It is widely believed that the main activity of rural enterprises is agriculture. The work shows that SMEs of non-agricultural activities generally predominate not only in numbers, but also in revenue, both on average for all municipal districts of Russia and in the vast majority of regions of the Russian Federation, although agriculture remains important for them and one of the most profitable industries. The work provides indicators of efficiency and labor productivity, debt burden of rural SMEs by industry, which can be used when forming decisions in the field of rural development.

Сельский несельскохозяйственный малый и средний бизнес как часть локальной сельской экономики Тамбовской области

As part of the study of the local rural economy, developed in 2022 by All-Russian Institute for Agrarian Issues and Informatics named after A.A. Nikonov, an analysis was made of the development of rural small and medium-sized enterprises (SMEs) in Tambov region based on SPARK-interfax database for 2018-2020. The most attractive non-agricultural businesses of rural SMEs have been identified, their contribution to the economic performance of all enterprises in the region has been determined. It is shown that the analyzed rural SMEs turned out to be more stable in terms of population dynamics and increased revenue faster in comparison with urban SMEs over the past three years. It is concluded that in terms of the main types of specialization activities of rural SMEs, they are competitive with urban enterprises in terms of profitability per ruble of revenue, capital productivity, and debt burden. Despite the attractiveness of trade, manufacturing, construction, and transportation for rural SMEs, agriculture remains one of the most significant for this category of farms in terms of revenue and profit.

ВОЗМОЖНОСТИ ДИВЕРСИФИКАЦИИ СЕЛЬСКОЙ ЭКОНОМИКИ В НОВЫХ ЭКОНОМИЧЕСКИХ РЕАЛИЯХ (НА ПРИМЕРЕ СЕЛЬСКИХ МСП ТАМБОВСКОЙ ОБЛАСТИ)

Based on the Spark-interfax data, small and medium-sized enterprises (SMEs) of the Tambov region were identified and the most attractive areas of their activity in recent years, occupying a significant share in their industry structure in terms of the number of businesses and revenue, were identified. It is concluded that rural SMEs are more resilient compared to urban enterprises and large rural businesses, which have been declining rapidly in recent years. The authors see opportunities for diversification in stimulating the development of various types of activities within industries that are already attractive for rural SMEs in the region, supporting unstable core industries (rural construction, transport and storage). The social sphere is not attractive for rural SMEs, unlike urban enterprises, so the authorities cannot count on these businesses to expand the access of the rural population to these services.

ИДЕНТИФИКАЦИЯ И ХАРАКТЕРИСТИКА СУБЪЕКТОВ МАЛОГО И СРЕДНЕГО ПРЕДПРИНИМАТЕЛЬСТВА НА СЕЛЬСКИХ ТЕРРИТОРИЯХ РОССИИ

One of the areas of public administration is a targeted and efficient use of budgetary funds allocated to support the population, businesses and infrastructure of the territories. It requires constant updating of the characteristics of the object of managerial influence and receiving feedback. Without accurate identification of the target management object, knowledge of its properties, as well as development trends, high-quality management is impossible. Currently, Russia is implementing state programs for the development of rural areas and the development of agriculture (“Comprehensive development of rural areas”, “Development of agriculture and regulation of markets in agricultural products, raw materials and foodstuffs”). In scientific works, the role of small business in economic development, in rural development as well as in ensuring food security is universally recognized. However, management bodies, business analysts, researchers do not have information about how small and medium-sized enterprises (SME)s are developing in rural areas of Russia. This work is one of the first to raise issues of identification of SMEs in rural areas. Based on the developed methodology, rural SMEs were identified from available open sources by category, their characteristics were given in terms of the dynamics of the number, density of businesses, sectoral and regional structure, and their support in the form of subsidies and grants was analyzed. State support failed to stabilize their number, which decreased from 2019 to 2021. Agriculture is not a leader in the sectoral structure of SMEs (in terms of the number of businesses), occupying a significant third place after trade and transport. However, it is this industry that accounts for the main support. The total share of trade, transport, agriculture in all regions is at least 40% of the total number of rural SMEs. Thus, support for these industries will have a beneficial effect on the development of most small businesses in rural areas.

Implications of the digital divide on rural SME resilience

This paper examines the implications of the ‘digital divide’ on the capabilities for Small and Medium Sized enterprises (SMEs) to operate in the face of challenging economic times, such as the Coronavirus pandemic. Previous research has shown that rural businesses, especially SMEs, are more impacted by lower levels of digital connectivity than those in urban areas, with this digital divide affecting business' entrepreneurial activity. Using data from a survey of 110 businesses in Wales, the paper investigates the barriers and opportunities associated with the accessibility of high-speed broadband services and its impact on business decisions. Findings show that digital connectivity across rural areas of Wales has improved due to infrastructure investments; however, many businesses were still without reliable digital connections. Logistic regression findings show that location and distance to urban areas are significant variables relating to satisfactory levels of digital connectivity, with the impact of these more evident in rural areas. The implications of which are reduced opportunities for businesses to pursue diversified activities, limiting the ability of these businesses to develop resilience in economically challenging times. Furthermore, the paper considers how the Coronavirus pandemic has driven many business activities online, therefore businesses with less reliable access to digital connectivity and lacking an online presence are likely to be more constrained in their ability to be resilient.

Does membership of local Chambers of Commerce networks enhance rural SME performance?: An empirical analysis

PurposeLocal Chambers of Commerce networks provide small- and medium-sized enterprises (SMEs) with an opportunity to access essential information and networking with other businesses, resulting in improved business performance. However, rural SMEs are less likely to participate in these networks and often possess lower performance. This paper aims to examine the relationship between being members of local Chambers of Commerce networks and rural SMEs’ performance by comparing business performance between rural SMEs who are members and non-members of local Chambers of Commerce networks. This paper also further explores difference in business growth plans between rural SMEs members and non-members.Design/methodology/approachThe empirical analysis draws on cross-sectional data of 3,769 rural SMEs in England and Wales from the UK's Government Longitudinal Small Business Survey 2015. Propensity score matching (PSM) is applied to control for selection bias and variations in business characteristics before comparing business performance, measured in terms of annual turnover, sale growth and profitability, between rural SMEs that are members and non-members of local Chambers of Commerce networks.FindingsOur results show that rural SME members of local Chambers of Commerce networks are more likely to grow their sales than non-members. However, they perform as good as non-members in terms of turnover and profitability. The results also emphasise that local Chambers of Commerce networks are crucial for rural SMEs to develop the skills of the workforce and leadership capability of managers, new product/service development and new working practices. Therefore, to enhance rural SMEs' performance, tailoring the services of local Chambers of Commerce to support rural businesses' needs and encouraging rural SMEs to make use of business networks are recommended.Practical implicationsThe paper unpacks the relationships between being local Chamber of Commerce membership and business performance, offering lessons for rural SMEs to boost their business performance and growth through participating in local business association networks.Originality/valueThis paper is the first study that explores the comparative analysis of business performance and growth plans between rural SMEs that are members and non-members of the local Chamber of Commerce networks. We provide an empirical evidence-based analysis to existing literature regarding the advantages of being local Chamber of Commerce memberships to enhance business performance in rural areas.

Social media business networks and SME performance: A rural–urban comparative analysis

AbstractSocial media business networks provide small‐ and medium‐sized enterprises (SMEs) with a modern platform to network, resulting in improved business performance. However, rural SMEs are less likely to access these networks and often underperform urban counterparts. This paper provides a rural–urban comparative analysis of business performance across SMEs for both members and non‐members of social media business networks. Empirically, the analysis draws on data of over 13,000 SMEs from the 2015‐UK Government's Small Business Survey. Inverse Probability Weighting is used to control for selection bias of firms selecting into a location and business network and for variations in business characteristics. The results reveal that rural SMEs that are members of social media business networks tend to register higher turnover and seek to grow sales compared to rural and urban SMEs that are non‐members. For turnover, rural firms that are members of these business networks perform as well as urban SMEs that are members. However, for sales growth, they underperform urban counterparts. Therefore, the development of SMEs’ performance in rural areas requires enhanced online business support environments, improved digital infrastructure and connectivity, the creation of online co‐working spaces, and increased digital and technological skills.

Together we are strong? A systematic literature review on how SMEs use relation-based collaboration to operate in rural areas

Small and medium-sized enterprises (SMEs) play an important role for growth and sustainable development, particularly for rural areas in which MNCs are absent. Despite this link, there is little systematic research that investigates how SMEs address the particularities, opportunities, and challenges of rural areas based on their strengths and weaknesses. To fill this gap, this article uses a systematic literature review (SLR) that analyses 228 articles published between 2003 and October 2020. Our descriptive analysis shows that research on this topic has increased over time. Based on our thematic results, we juxtapose typical strengths and weaknesses of SMEs (enterprise perspective) and the opportunities and challenges of rural areas (spatial perspective). A key finding is that SMEs use relation-based collaboration as a meta-strategy to respond to these specific conditions. Wedding the theoretical perspectives of the RBV and transaction cost economics, we develop a conceptual model that explains why rural SMEs are in a particular need and position to use collaboration as a tool to innovate and access critical resources in otherwise resource-scarce rural areas. We then discuss how digitalization impacts our results regarding SMEs in rural space.

Good workers, good firms? Rural SMEs legitimising immigrant workforce

The workforce potential offered by immigrants is perceived as one solution for the sustainable operation of many rural companies. Still, diversifying the workforce and recruiting immigrant employees represents not only a significant organizational change for rural small and medium-sized enterprises (SMEs) but can also reflect on their legitimacy in the eyes of the local community. In this study, we examine the legitimation strategies rural SMEs use in order to justify the decision to employ immigrant workers as socially accepted. The theoretical framework builds on the discussion concerning legitimacy and legitimation. By analysing the interviews with the representatives of 35 rural SMEs, we identified three legitimation strategies used to justify the decision to recruit immigrants, based on owner-managerial values, immigrants as good workers and the economic, demographic and social context consequent upon rural location. The aim of the legitimacy strategies is to convince rural community members in perceiving the recruitment of immigrant employees as favourable and preferable. Our study demonstrates that for rural SMEs, recruiting immigrant workers is not just an economic or bureaucratic procedure but entails social aspects as well. These social aspects need to be taken into consideration in order to maintain the business legitimacy.

The spatial implications of rural business digitalization: case studies from Wales

ABSTRACT The rural–urban digital divide literature addresses the digital inequalities experienced by rural communities. However, little attention has been paid to how rural small and medium-sized enterprises (SMEs) can use improved broadband connection to address spatial inequalities. Furthermore, the integration of digital technologies into SME business models can ultimately lead to productivity gains and potential regional development impacts. In seeking to explore how rural firms digitalize and the impact on spatial inequalities, the paper evaluates 14 case studies of Welsh rural SMEs. The findings highlight that adopting a dynamic business model that is increasingly digitalized is beneficial to all firms, and that there is a potential for digital technologies to address spatial inequalities for rural SMEs.

Self-service banking and financial literacy as prognosticators of business performance among rural small and medium-sized enterprises in Zimbabwe

Background: This investigation breaks new ground by examining an inventive monetary approach (the utilisation of technology-based self-service banking, borrowing financial literacy and budgeting financial literacy) that, if embraced by rural small and medium-sized enterprises (SMEs), can enhance business performance. Despite the expanded readiness of technology, the significance of rural SMEs has largely been overlooked, particularly in developing countries of Southern Africa. Therefore, the principal objective of this study is to fill this void. Aim: The current study aims to investigate the impact of technology-based self-service banking, borrowing financial literacy and budgeting financial literacy on the business performance of rural SMEs within the agricultural sector of Zimbabwe. Setting: In this study, data were collected in the rural area of Bindura, Zimbabwe. Method: The study utilised a quantitative research design using a structured questionnaire. Data was collected from 151 managers, SME owners and heads of accounting departments within rural SMEs that are operating in the rural area of Bindura. Smart partial least squares was used to analyse the data. Results: Technology-based self-service banking, borrowing financial literacy and budgeting financial literacy had a positive and a significant impact on business performance. Therefore, all three hypotheses were supported. Hence, the study’s findings validate the assertion that prognosticators such as technology-based self-service banking, borrowing financial literacy and budgeting financial literacy are instrumental in stimulating business performance among rural SMEs in Zimbabwe. A robust relationship was also found between budgeting financial literacy and business performance. Conclusion: This study offers fruitful implications to academics by making a significant contribution to finance, accounting and small business management literature by systematically exploring the impact of technology-based self-service banking, borrowing financial literacy and budgeting financial literacy on business performance. This study stands to add new knowledge to the present body of finance, accounting and small business management literature in Africa – a context that is often ignored by academics in developing countries.

Supporting rural Small and Medium-sized Enterprises to take up broadband-enabled technology: What works?

The last 15 years have seen major changes in the availability and usage of broadband in the UK. Despite these improvements, rural areas continue to lag behind urban areas for broadband connection speeds – a divide that is exacerbated by lower rates of broadband adoption among rural Small and Medium-sized Enterprises (SMEs). This paper examines the experiences of SMEs that have participated in a publicly funded programme designed to stimulate demand for broadband in the rural region of Lincolnshire, UK. Drawing on interviews conducted over two periods of policy intervention (2003–2006 and 2010–2015) it examines the variety of business support approaches used and identifies the effects of these on use of Information and Communication Technology (ICT) innovation, and sales within participating SMEs. The results show that while training events provide entry-level support for broadband use, more intensive support such as 1:1 advice and ICT grants leads to the significant changes within the business. Direct access to new technology in spaces such as Technology Hubs is identified as particularly important for rural SMEs. The paper concludes by identifying some common features of the business support that bring about the greatest benefits to SMEs in rural areas.

Analysis of energy efficiency practices of SMEs in rural Ghana: an application of product generational dematerialization method

Energy is a key input in industrial production, education and health and is one of the main drivers of economic growth in developing economies. However, expanding energy access in the rural areas is one of the key challenges faced by policy makers in developing countries such as Ghana. In this regard, small- and medium-sized enterprises (SMEs) in developing countries face the hydra-headed challenges of energy access, power outages, access to finance and access to market. In some cases, whilst energy efficiency appears to be improving at the national level, the story at the rural areas is different due to overdependence on biomass and other traditional forms of energy and relatively low access compared to urban areas. This research is structured in three steps. In the first step, the product generational dematerialization method is applied to examine the energy efficiency consumption of electricity and fossil fuels. In a second step, the energy efficiency practices of small and medium scale enterprises are investigated. In a third step, the general unrestricted model (GUM) is employed to investigate the relationship between energy efficiency, productivity and carbon emissions. The key findings of the study (i) confirm that the consumption of energy has not been efficient, (ii) show that the reduction in energy consumption among SMEs can be attributed mostly to blackouts and not efficiency and (iii) productivity is a major driver of energy efficiency. In a nutshell, the national analysis shows that improved productivity from more energy-efficient technologies is not responsible for energy reduction. Rather, an analysis of the rural energy situation shows that blackouts render energy reductions unintentionally. Moreover, energy-efficient practices are observed to be nearly non-existent within rural SMEs. The study recommends that public education on energy efficiency is increased and that new appliances rather than second-hand one are used to save energy.

The Relationship Between Entrepreneurial Orientation and Manufacturing Operations of Malaysian SMEs Rural Entrepreneurs

Despite numerous studies have been done on entrepreneurial orientation (EO), its relationship with manufacturing operations has yet to be determined. Thus, the purpose of this study is to identify the relationship between EO and the manufacturing operations of Malaysian rural entrepreneurs of small and medium-sized enterprises (SMEs). The survey questionnaires were distributed to 73 respondents who were rural entrepreneurs in Selangor, Malaysia. Pearson's correlation coefficient analysis was used to analyze the quantitative data obtained. The findings showed that the five dimensions of EO (innovativeness, proactiveness, risk-taking, competitive aggressiveness and autonomy) has positive relationship with manufacturing operations. Competitive aggressiveness has the highest value cfcorre~ationw ith manufacturing operations among the EO dimensions. It can be concluded that the EO has strong relationship with manufacturing operations of Malaysian SMEs rural entrepreneurs. This study provides new empirical evidence on EO and manufacturing operations relationship as well as some practical contributions to the rural SMEs entrepreneurs in Malaysia. Several recommendations have been proposed for further investigations in future studies

An online information system to support blended training of rural SMEs on e‐government

PurposeAway from central public authorities, regional (also called rural) enterprises do not have direct, physical access to all the services that governmental or public agencies offer. Very often, these services are essential for enterprises, mostly small and medium‐sized enterprises (SMEs), in such areas, in order to perform their business operations. This paper aims to present an example of how such types of information management and use took place in the case of familiarizing rural SMEs with the use of e‐government.Design/methodology/approachThis paper is a case study of how a practical application is designed and developed for the blended training of rural SMEs. First of all, an identification of the main information resources that will be stored, annotated, shared and accessed through the system took place. Then, an outline of the general architecture and user roles involved was developed. System analysis and specification using Unified Modeling Language (UML) then took place. This was accompanied by design and specification of the database, based on appropriate metadata schemas for describing the information resources. The whole process was completed by the design and prototype development of the interface, which was put into public operation and testing with a sample set of real users.FindingsAlthough there are several information management systems focusing on the education and training of rural stakeholders, their learning resources are not directly relevant to SMEs' needs. The main finding of this paper is that it shows a complete case study of designing, developing and evaluating an information technology application for rural businesses.Originality/valueThe value of the approach presented here is the combination of training resources in an information system with a blended training approach, so that it better matches the learning needs of SMEs. Through this web‐based environment, rural SMEs are able to find information on the e‐government services offered in their region, as well as gaining access to e‐learning content on how they can use such services.

Conceptualising the ‘competitive’ strategies of rural manufacturing SMEs

Recent research attributes rural industrialisation to the enhanced competitive performance of rural small and medium‐sized enterprises (SMEs). Central to much of this work has been a desire to acknowledge empirical diversity in business behaviour and performance between different rural spaces. Drawing on the tenets of critical realism the authors develop a conceptual framework which permits the diversity of behaviour exhibited by rural SMEs to be more fully recognised and understood. This highlights the role of generic ‘structural’ influences on the performance of rural enterprises, yet emphasises the need to investigate the precise ‘local’ conditions through which these mechanisms are mediated and experienced. In this way, the form of competitive behaviour exhibited by rural SMEs is posited as an outcome of the interplay of structural influences (or mechanisms) and the unique circumstances (or contingent conditions) prevailing at the level of the individual enterprise.

Rural industrialization, ‘quality’ and service: some findings from South Warwickshire and North Devon

Studies of UK rural industrialization have traditionally sought to explain the success of rural SMEs (Small and Medium‐sized Enterprises) in terms of their capacity for innovative or enterprising behaviour. In turn, this has led researchers to focus their attention on the material aspects of competitive behaviour, particularly those connected to technology and technological exploitation, at the expense of more intangible aspects such as the advantages gained from novel working practices and marketing strategies. In particular, the notion of ‘quality’ as a determinant of competitive behaviour, an idea gaining increased emphasis within literature concerning rural SMEs in the food, farming and craft sectors, has been neglected in wider studies of rural industrialization. However, this paper contends that both ‘formal’ and ‘informal’ constructions of quality are significant factors in the success of manufacturers outside these specific sectors.

The Innovativeness and Growth of Rural SMEs During the 1990s

NORTH D. and SMALLBONE D. (2000) The innovativeness and growth of rural SMEs during the 1990s, Reg Studies 34 , 145‐157. The paper summarizes the results of a study of innovation in rural small and medium sized enterprises (SMEs) in England over the 1991‐96 period. It is based on a survey of 330 firms drawn from 16 sectors and makes a comparison between similar SMEs in remote and accessible rural areas. Using a multi-dimensional index of innovation, relatively little overall difference is found in the level of innovation between SMEs in the different areas. A remote rural location is shown to influence innovation in different aspects of the business in different ways. The most innovative firms are shown to be those that have achieved the fastest growth and best employment creation during the 1990s. NORTH D. et SMALLBONE D. (2000) L'innovation et la croissance des PME rurales pendant les années 1990, Reg Studies 34 , 145‐157. Cet article cherche à faire le résumé d'une étude sur l'innovation des PME rurales en Angleterre de 1991 à 1996. Elle est fondée sur une enquête auprès de 330 entreprises sélectionnées parmi 16 secteurs et les compare à des PME similaires situées dans des zones rurales isolées et accessibles. A partir d'une indice d'innovation multidimensionnelle, il s'avère que l'écart global entre les niveaux d'innovation des PME situées dans des zones différentes est peu importante. On démontre qu'un emplacement rural isolé peut influer sur l'innovation de manière différente suivant les diverses fonctions de l'entreprise. Les entreprises les plus innovatrices sont celles qui ont atteint le taux de croissance et la création d'emplois les plus élevés pendant les années 1990. NORTH D. und SMALLBONE D. (2000) Ausmaß der Einführung von Innovationen und Wachstum kleiner und mittlerer Unternehmen (SMCs) in den neunziger Jahren, Reg Studies 34 , 145‐157. Dieser Aufsatz faßt die Ergebnisse einer Studie der Einführung von Neuerungen in kleinen und mittleren Firmen (SMEs) in ländlichen Gegenden Englands im Zeitraum 1991 ‐ 1996 zusammen. Er stützt sich auf eine Umfrage unter 330 Firmen in 16 Sektoren, und stellt einen Vergleich zwischen SMEs in abgelegenen und leicht zugänglichen ländlichen Gebieten an. Es wird ein mehrdimensionaler Innovationsindex benutzt, und allgemein weniger Unterschied im Umfang der Innovation in SMEs verschiedener Gebiete festgestellt. Es wird gezeigt, daß ein abgelegenes ländliches Gebiet Innovation in verschiedenen Aspekten des Betriebes auf unterschiedliche Art und Weise beeinflußt. Am innovationsfreudigsten waren jene, welche in den neunziger Jahren die größten Wachstumsleistungen und die beste Stellenbeschaffung aufzuweisen hatten.

Innovation and New Technology in Rural Small and Medium-Sized Enterprises: Some Policy Issues

The authors are concerned with innovation in rural small and medium-sized enterprises (SMEs), their support needs, and the types of policies required to encourage and support innovation; the authors draw on a national study of innovation and the use of new technology in rural firms. Their aims are to present recent evidence of the nature and extent of innovative activity in rural SMEs; to identify barriers to innovation in rural SMEs, together with any weaknesses with respect to their innovative performance that may affect their future competitiveness; and to contribute to the development of a policy agenda designed to support and strengthen the innovative performance of rural SMEs. Using a broadly based definition of innovation (including product, process, marketing, and new-market development) the authors demonstrate considerable sectoral variations in the nature and extent of innovative activity in rural SMEs. This is explained in terms of sectoral differences in the ways in which SMEs seek competitiveness and of the role of innovation in this process. Nevertheless, the authors demonstrate a strong correlation between the level of innovation shown by firms and their performance, in terms both of sales and of employment growth. With the exception of marketing and new-market development, only a minority of managers perceived their rural environment to be a constraint on their ability to innovate, although more detailed analysis showed SMEs in the more technology-based sectors to be disadvantaged in a number of respects. Support needs are identified in relation to marketing, the use of the Internet, process innovation, and access to specialised training. Emphasising the distinctive characteristics of the rural environment, the authors describe a policy agenda for the encouragement and support of innovation in rural SMEs which includes a recognition of the so-called ‘rural premium’.