Small And Medium-sized Enterprises Sector Research Articles

The role of competitor orientation and proactiveness in competitive advantage for small- and medium-sized enterprises performance

Background: As small- and medium-sized enterprises (SMEs) are the primary source of job creation in Nigeria and contribute 48% of the country’s gross domestic product (GDP), their performance must be enhanced and sustainability ensured. The article suggests that through competitor orientation and proactiveness, SME managers and owners can achieve competitive advantage which ultimately promotes firm performance.Aim: The article aims to examine how competitor orientation and proactiveness in competitive advantage enhance the performance of SMEs in Nigeria.Setting: The study focused on registered SME owners and managers who are operating in Nigeria, using Lagos State as a case study.Methods: This study was conducted through administering questionnaires to owners and/or managers of SMEs as the unit of analysis. A quantitative research design was used with stratified and simple random sampling as the sampling method, with the sample comprising 100 SME owners and/or managers.Results: The results of the study indicated that competitive advantage mediates the relationship between competitor orientation, proactiveness and SMEs’ performance indirectly. It further revealed that competitor orientation and proactiveness have significant effects on SMEs’ performance.Conclusion and contribution: The article reveals how competitive advantage, which is influenced by competitor orientation and proactiveness, contributes to increased SMEs’ performance in SME sectors. Thus, to gain a competitive edge over their rivals, the study recommends that SME owners and managers consider competitor orientation and proactiveness more seriously, as these factors ultimately boost their performance.

Relationships between Sustainable Operations and the Resilience of SMEs

In the 21st century, the primary concerns within our society and economic framework revolve around securing a sustainable future and ensuring our future prospects. The crises witnessed in recent years have both introduced new challenges and revived existing difficulties. The crucial question emerges: can societies and economies demonstrate the resilience necessary to avert impending dangers during such circumstances? This consideration holds particular significance for small and medium-sized enterprises (SMEs) operating in the global economy. SMEs play a vital role in national economies, and their importance is even more pronounced within our national societies. Addressing threats and challenges in the SME sector proves to be more challenging due to their compact size, which lacks the protective shield against various environmental impacts enjoyed by larger enterprises with their greater size and capabilities. On the other hand, due to their smaller size, SMEs may be able to overcome these obstacles more successfully than large enterprises by using the appropriate tools and investing in opportunities. The aim of this article is to investigate to what extent environmental protection investments and other sustainability-related developments increase the resilience of SMEs. In connection with the above mentioned, it was investigated how the combination of marketing communication and sustainability goals, and how appropriate communication of sustainability, contributes to increasing the resilience of Hungarian SMEs. The analysis is based on a grouping of 266 small and medium-sized enterprises using the variables created based on the literature review and expert interviews.

Assessing the Effectiveness of Local and International Food Safety Standards in Small and Medium‐Sized Enterprises (SMEs) of Pakistan

Pakistani small and medium‐sized enterprises (SMEs) have an important role and contribute less than other countries, yet their significance cannot be denied. The SME sector is confronted with multiple problems, including export issues because of the trust factor and least knowledge of the latest food safety standards, which have made it difficult to contribute to the GDP of the nation. Various standards such as Food Safety, HACCP, GGAP YUM GAP, MacDonald’s GAP, ISO 9001, and ISO 14001 are being implemented in Pakistan for decades. This study was designed to highlight the critical issues of Pakistani SMEs in adopting management systems, i.e., food safety management systems. Data from 107 SMEs from different fields (beverages, baking, meat, postharvest processing, etc.) of Pakistan were collected through a detailed questionnaire and fed to SPSS V 26.0 for statistical illustration and articulation of the results. In this study, SME company profiles were analyzed and showed that 43% had 6–20 employees, 78.5% were manufacturers, and 68.2% were in business for 7–15 years. The focus was on sales growth (35.5%), profit growth (38.3%), return on assets (42.1%), gross revenues (47.7%), net cash flow (46.7%), customer satisfaction (47.7%), and customer satisfaction relative to competitors (46.7%). A total of 21.5% of SMEs implemented local standards, 23.4% implemented international standards, and 54.2% implemented both local and international standards. Certification benefits included establishing an effective system (62.6% agreed), understanding roles and responsibilities (76.6% agreed), and more efficient documentation (60.7% agreed). However, 29.9% and 24.3% of respondents found international standards such as FSSC 22000 and BRC challenging to apply in local organizations due to language and cost barriers. Above all, the current study implies the dire need for the development of Pakistan’s food safety management system (PFSMS) standard. The PFSMS should be easy to understand, low in cost, and highly applicable in different sectors of the SMEs in Pakistan.

CHALLENGES AND FACTORS AFFECTING THE SUSTAINABLE DEVELOPMENT OF SME-s IN ALBANIA

Small and medium-sized enterprises (SMEs) are crucial for the economic development of a country, playing an important role in job creation, poverty alleviation and economic growth. SMEs play a major role in most economies, particularly in developing countries. SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. In Albania, SMEs represent more than 99% of the total number of enterprises and the percentage of employees in this sector is 82% (INSTAT, 2023). For this reason, identifying factors affecting the development of SMEs in Albania is very important, in order to take all the necessary steps to reduce barriers as well as create opportunities and facilities for supporting this sector. Small and medium-sized enterprises play an important role in the development of the national economy, influencing sustainable growth in the agriculture, services, trade, and production sectors. They are major contributors to value creation across all sectors. The development of SMEs, especially in transition countries faces several difficulties such as limited access to finance, increased competition, low research and development costs, high levels of exposure to risk, technological change, and capacity constraints related to knowledge and innovation. As an important factor for economic growth and employment, it is important to evaluate the performance of SMEs in the country as well as the constraints and challenges they face. The purpose of this study is to analyze and evaluate the factors that affect the sustainable development of the SMEs sector. The findings of the study are relevant to government, policymakers and managers to address these challenges, to encourage and offer support to SMEs’ development through their strategies.

What drives the performance of the SME sector? Evidence from selected European countries

Small and medium-sized enterprises (SME) are highly important for economic development of every nation. Recently, many experts and policymakers have been trying to measure the performance and efficiency of these businesses. However, the methods used so far are often idiosyncratic, subjective, or static. This paper suggests a new way to measure the success of these businesses using a data-driven method. More specifically, we combine decision-making techniques (namely, TOPSIS) and preference learning techniques. This innovative approach is flexible and can adapt to changes over time by iterative preference elicitation and TOPSIS calculation. As a part of the case-study of the proposed approach, we found that Ireland is a great example to follow and that the ?think-small-first? principle is the most important driver of the SME growth. The findings can help government officials and analysts, especially when they are planning policies for small and medium-sized enterprises.

Application of BSC and EFQM models in small and medium-sized enterprises

Research background: The BSC and EFQM models are important tools to help SMEs to improve their performance through strategic initiatives in cooperation with operational activities, through the essential elements of these models. Purpose of the article: The objective of the research presented in this paper is to analyse and compare the existence of Balanced Scorecard and EFQM models in small and medium-sized enterprises (SMEs), and to suggest possibilities of applying these models to a wider range of SMEs. Methods: The process of evaluating research aim was based on a questionnaire survey. The number of respondents was 378. Both small and medium-sized enterprises participated in the survey, with the number of their employees being as follows: from 1 to 9 a total of 28.6% enterprises (28.6%), from 10 to 49 a total of 38.1% enterprises (38.1%) and from 50 to 249 a total of 33.3% enterprises. The methods of descriptive statistics and correlation and regression analysis were used to test the scientific hypotheses. Findings & Value added: Since the research results point to a relatively high dependence, it can be concluded that implementing the models in the SME sector has its justification. In terms of their management practice, the authors of this paper have used the findings directly in their consulting and research activities, and have incorporated the models into strategic management systems of particular enterprises. Recommendations presented here are therefore based on the research as well as conclusions of the hypotheses tested regarding the above two models and their larger introduction to SMEs. The rate of use of the BSC model in SMEs has a statistically significant positive effect on the model performance measurement system. Our results also confirmed that the rate of use of the EFQM models (H3B) in SMEs has not a statistically significant positive effect on the performance measurement system (PMS).

Mobile Money and SME Growth: A Zambian Perspective

Purpose: An in-depth analysis of how mobile money services influence the growth and development of Small and Medium-sized Enterprises (SMEs) in Zambia. This research explores the expanding realm of mobile money in Zambia, a region experiencing swift technological uptake alongside the growing small and medium-sized enterprise (SME) industry.
 Methodology: Using a blend of qualitative and quantitative research methods, data was gathered from 150 SMEs across various industries in Lusaka. The study examines key factors such as transactional efficiency, access to financial services, cost reduction, and enhanced financial management facilitated by mobile money platforms. It also explores the challenges faced by SMEs in adopting these digital financial tools.
 Findings: The findings reveal a significant correlation between the use of mobile money services and SME growth, characterized by increased operational efficiency, broader market access, and improved financial management.
 Unique contributor to theory, policy and practice: This study not only underscores the important role of mobile money in transforming the economic structure for SMEs in Zambia but also provides valuable insights for policymakers and financial service providers aiming to boost the SME sector through technological innovation. The research contributes to the growing body of knowledge on digital finance and its impact on emerging economies, highlighting the unique dynamics and opportunities within the Zambian context.

Sustainable performance management in the EU SME sector. A review and analysis of concepts and methods of strategic management accounting

Purpose: The paper’s main objective is to structure the knowledge of the existing regulatory frameworks, projects and actions that support sustainable performance management (SPM) in small and medium-sized enterprises (SMEs) against the backdrop of the growing significance of the circular economy. The paper will also evidence how strategic management accounting (SMA) assists this process, what individual metrics, dashboards or scorecard concepts have been proposed and how their use may be assessed. Methodology/approach: The research methods include (1) a descriptive systematic analysis of the policies established by the policymakers and regulators in the EU, (2) a comparative analysis of various organisations’ initiatives, actions, delivered toolkits and their outputs, and (3) a literature review of the essential works and research studies on sustainable business models (SBMs), circular business models (CBMs) and SPM in the context of SMEs. Findings: The policies established in the EU support SPM by encouraging SMEs to be involved in sustainable business practices and indicating how to embark on a green transition. Recently, multiple initiatives have been aimed at indicating the opportunities the closed-loop economy system offers SMEs. Many toolkits have also been developed to help SMEs measure their sustainable performance. Although this measurement is vital for SMEs, the business practice falls behind the regulatory framework. Therefore, internal initiatives from the SME sector are needed to popularise the sustainability concept. Research limitations/implications: SMEs show lower levels of compliance with environmental requirements and are unaware of how their activities affect the environment. A limitation of the research is that, in many cases, SMEs are not ready to respond properly to the ESG requirements imposed by regulators. The reason may be a lack of knowledge, experience and limited funds. Therefore, future research should focus on recognizing the gaps in this area and identifying what may be impeding the development of sustainability performance management in SMEs. Originality/value: The work presents the evolution path from the traditional business models (TBMs) through the SBMs to innovative CBMs and addresses their distinctive features. It contributes to the existing knowledge about SMA in SMEs by analysing its links with SPM.

ADDRESSING CLIMATE CHANGE THROUGH ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) INITIATIVES: A PRAGMATIC OUTLOOK IN PRESENT ERA

The research explores the pivotal role of Environmental, Social, and Governance (ESG) initiatives in addressing the pressing issue of climate change. As global awareness of environmental challenges grows, businesses, investors, and policymakers increasingly recognize the significance of integrating ESG principles into their strategies. This paper examines how ESG initiatives contribute to mitigating climate change through a holistic approach that encompasses environmental stewardship, social responsibility, and effective corporate governance. This study investigates climate change mitigation through Environmental, Social, and Governance (ESG) initiatives in the context of Small and Medium-sized Enterprises (SMEs) in Rajasthan, India. With a sample size of 370 SMEs, the research employs the Smart-PLS software for comprehensive analysis. Our study explores the pragmatic role of ESG practices in addressing climate change challenges SMEs face in the present era. The findings underscore the significance of integrating sustainability strategies to ensure environmental resilience, social responsibility, and effective governance. While offering valuable insights, the study acknowledges limitations in the scope of ESG factors and the evolving nature of climate change dynamics. Ultimately, the study underscores the importance of collective efforts among stakeholders to foster sustainable practices and combat climate change impacts in Rajasthan's SME sector.

The Nexus Between Working Capital Management Practices and the Financial Performance of Service Sector Small and Medium-sized Enterprises (SMEs) in Nairobi City County, Kenya

The Nexus Between Working Capital Management Practices and the Financial Performance of Service Sector Small and Medium-sized Enterprises (SMEs) in Nairobi City County, Kenya

The impact of digital inclusive finance on SMEs' technological innovation activities-Empirical analysis based on the data of new third board enterprises.

The landscape of financial technology is undergoing a continuous evolution, driven by the relentless advancement of information technology. In this transformative milieu, digital finance has emerged as a novel financial paradigm, offering a blueprint for fostering inclusive finance. With a particular emphasis on its implications for Small and Medium-sized Enterprises (SMEs), this article harnesses a comprehensive dataset spanning the years 2011 to 2021, encompassing digital inclusive finance and SMEs listed on the SME board. Employing fixed effects models, this study performs a regression analysis to verify the driving effect of digital inclusive finance on SMEs' innovation activities. The findings unequivocally affirm the potency of inclusive finance in ameliorating the longstanding financing constraints that have historically constrained the growth trajectory of SMEs. Furthermore, the study elucidated the nuanced nature of the promotional impact of digital inclusive finance on SMEs, contingent upon their distinct property rights and technological attributes. Specifically, the empirical findings unveil a discernible pattern wherein digital inclusive finance exerts a conspicuously stronger promotional effect on non-state-owned enterprises and high-tech SMEs' endeavors in technological innovation. The conclusions derived from this research furnish a salient point of reference for governmental authorities engaged in the formulation and advancement of digital inclusive finance strategies, thereby imparting strategic guidance for the cultivation of innovation and holistic development within the SME sector.

Unlocking sustainable competitive advantage: exploring the impact of technological innovations on performance in Mexican SMEs within the tourism sector

AbstractThis research inquiry explores the interplay between environmentally sustainable practices, technological innovations and small- and medium-sized enterprises (SMEs) performance in Mexico's tourism sector. The tourism industry in Mexico holds immense economic significance, contributing significantly to employment and revenue generation. However, the sector also faces challenges related to environmental sustainability. Thus, the objective of this research is to assess how the integration of sustainable environmental practices influences the operational outcomes of SMEs. Furthermore, it also aims to conclude the role of technological innovation, Information and Communication Technology (ICT), digitalization and gender in this relationship. A structural equation modeling approach was applied to a sample of 797 Mexican SMEs in the tourism sector. Our findings provide evidence of several contributions: first, environmental sustainability practices improve performance; second, technological innovation, ICT and digitalization play a critical mediating role in specific relationships to foster performance; finally, incentives encourage sustainable practices related to environmental improvement, especially when the SME's CEO is a woman. The results of this study hold practical significance for the SME sector, as it demonstrates that by adopting sustainable practices, SMEs can strengthen their market position, improve technological innovativeness, minimize environmental impact and capitalize on emerging business prospects.

Strategic Diversity and Organisational Resilience among Small and Medium-sized Enterprises in Lagos State

This study delves into the relationship between strategic diversity and organisational resilience among Small and Medium-sized Enterprises (SMEs) operating in Lagos State, Nigeria. SMEs are pivotal drivers of economic development, particularly in regions like Lagos State, where they contribute significantly to economic growth and employment opportunities. Resilience, the ability to weather disruptions and adapt swiftly, is paramount for SMEs facing a dynamic and often challenging business environment. Strategic diversity, encompassing various approaches and tactics, emerges as a crucial factor influencing resilience. Despite the importance of this relationship, there is a notable research gap regarding Lagos State SMEs. This study, based on a sample of 500 individuals from diverse SME sectors, employs a structured questionnaire to gather primary data. Findings reveal a robust and positive correlation between strategic diversity and organisational resilience, signifying the significance of strategic planning for SMEs. This aligns with previous research emphasising the role of long-term strategic diversity planning in achieving SME growth and success. The study underscores the importance of effective diversity management, including demographic, cultural, educational, functional, cognitive, experience, and innovation diversity. Overall, it provides valuable insights for policymakers, entrepreneurs, and stakeholders aiming to enhance SMEs resilience, thus driving economic growth and employment opportunities in Lagos State.

LEADERSHIP STYLES AND SUSTAINABLE COMPETITIVE PERFORMANCE IN PAKISTANI SMES: AN INDUSTRY 4.0 PERSPECTIVE

Previous research has primarily concentrated on the technological and operational aspects of Industry 4.0 in SMEs, leaving a significant gap in our understanding of the leadership's role in this context. This article aforesaid gap by empirically investigating impact of entrepreneurial leadership, transformational leadership, transactional leadership, and ethical leadership on the sustainable competitive performance of Small and Medium-sized Enterprises (SMEs) in Pakistan within the context of Industry 4.0. The study adopts a quantitative approach and collects data from Pakistani SMEs sector, including manufacturing sports, and textiles, using purposive sampling. A total of 500 questionnaires were distributed. The study's findings reveal that entrepreneurial leadership and ethical leadership significantly influence organizational learning. Furthermore, a significant relationship is observed between organizational learning and sustainable competitive performance. However, the study does not find a significant relationship between transactional leadership and organizational learning. Moreover, the research highlights a significant mediating relationship between organizational learning and the impact of entrepreneurial leadership, ethical leadership, and transformational leadership on sustainable competitive performance. However, transactional leadership does not exhibit a significant mediating effect. The study's contributions to the existing literature on Industry 4.0 are valuable as they shed light on the role of leadership styles in the context of SMEs in Pakistan. In the era of Industry 4.0, where technological advancements are transforming industries, understanding the impact of leadership on sustainable competitive performance is crucial. This research offers insights into which leadership styles are most effective in this rapidly changing landscape.

Smart Technologies and Transition to the Circular Economy: A European Scenario in SMEs

AbstractThe transition toward the circular economy of European small and medium‐sized enterprises (SMEs) is one of the focuses of the Agenda in Europe. The paper aims to evaluate if this drive should transform the SMEs and keep European production sustainable and competitive. The paper offers a comparative analysis of the circular economy SMEs shift within the 13 sectors of EU Member States, that have involved innovative SMEs and have begun to use or have long adopted smart technologies for the needs of control, effectiveness, efficiency, and environmental protection and energy aspect. The study highlights and evaluates the transition in 13 sectors with the highest SMEs performance with a major specialization in Smart Technologies. Five key points are identified and evaluated to analyze, the transition degree of every sector toward the circular economy. The research shows a heterogeneous transition with both sectors and countries during which the existence of best practices, are discovered, but cannot be transmitted to other sectors. A series of deterrents to the transition from a linear to a circular economy is composed within the SMEs sectors, specifically technical, commercial, and regulatory.

Influence of Government Intervention towards Industry 4.0 Adoption among Service Sector SMEs: Perspective from an emerging economy

Small and medium-sized enterprises (SMEs) have the potential to leverage emerging technologies during the Industry 4.0 era. However, their adoption of these technologies remains challenging. The target population consists of service sector SMEs in Kuala Lumpur and Selangor, registered under SME Corporation Malaysia. In this study, we gathered data through a combination of self-distributed questionnaires and online surveys. We obtained a total of 142 responses from in-person visits and an additional 106 responses from online questionnaires. Thus, a total of 248 usable surveys were collected and analysed using SPSS version 28 and SmartPLS version 4. We employed PLS-SEM analysis to examine the impact of four factors on the adoption of Industry 4.0 in SMEs. These factors include relative advantage, compatibility, complexity and cost. Additionally, we explored the moderating effect of government intervention on the relationships between these factors and Industry 4.0 adoption. This research makes a valuable contribution to our understanding of technological implementation in small-scale enterprises by proposing a new moderating variable in framework.

Does CSR digitalization improve the sustainable competitive performance of SMEs? Evidence from an emerging economy

PurposeThis study aims to investigate the influence of the digitalization of corporate social responsibility (CSR) on the sustainable competitive performance (SCP) of small- and medium-sized enterprises (SMEs) in an emerging economy and to examine the moderating effect of digital organizational culture on this relationship.Design/methodology/approachData collection was conducted through a survey completed by 311 owners and top managers operating in service, trading and manufacturing sector SMEs positioned within the twin cities of Pakistan. A convenient purposively sampling technique and snowball method were used for data collection, and structural equation modeling was used for data analysis.FindingsThe results of this study suggest that CSR digitalization has a markedly positive influence on the SCP. Digital organizational culture appears to moderate these relationships.Practical implicationsThis study highlights the importance of considering CSR digitalization and fostering a digital organizational culture for SMEs to achieve SCP. The findings provide valuable insights for strategic decision-makers, including owners, CEOs and senior management of SMEs, to enhance their knowledge concerning how and why a digital organizational culture makes it easier to digitalize CSR activities, with the ultimate objective of ensuring SCP and SME growth. Overall, the findings of this study have practical implications for policymakers and managers in SMEs as they can promote the adoption of digital technologies in CSR initiatives and develop a digital organizational culture within the organization. This would contribute to enhancing the SCP of SMEs. Thus, this research is beneficial for business actors, policymakers and researchers seeking to enhance SMEs’ SCP.Social implicationsThis study provides valuable guidance to the senior management of SMEs regarding successfully adopting and integrating digital technologies into their CSR practices. This integration can lead to increased social and environmental benefits, which positively impact both business and society. Policymakers can use these findings to develop policies and initiatives to encourage CSR digitalization among SMEs. By providing support and incentives for digital transformation, policymakers can help SMEs adopt digital tools to improve their CSR performance, contributing to economic growth and sustainability.Originality/valueThis study pioneers research on the links between CSR digitalization, digital organizational culture and the SCP of SMEs. This study contributes to the literature by defining CSR digitalization as an antecedent to the SCP of SMEs. In addition, this study underlines the significance of CSR digitalization for the achievement of SMEs’ SCP of SMEs with the moderating role of digital organizational culture. Overall, this study enriches the resource base view literature through empirical evidence.

Testing Occupational Hazard Self-Evaluation Module (OHSEM) Intervention among Workers of SME (Manufacturing) in Northern Malaysia

Introduction: Workplace accidents have been a persistent problem in Malaysia’s manufacturing industry, particularly for small and medium-sized enterprises (SMEs). Employee behavior has been identified as a significant contributing factor to these accidents, and research has suggested that improving safety knowledge and attitudes can enhance safety behavior. Despite this, there have been no empirical intervention studies in Malaysia to investigate the effectiveness of safety intervention programs aimed at improving SME worker safety behavior. Therefore, this study aimed to assess the efficacy of the Occupational Hazard Self-Evaluation Module (OHSEM) intervention in enhancing safety knowledge, attitudes, and behavior (KAB) among SME workers in the manufacturing sector. Methods: A quasi-experimental design with control group was utilized to evaluate the effectiveness of the OHSEM intervention. The intervention was implemented over a 12-week period on production workers in the experimental group, while the control group received no intervention. A self-administered questionnaire was distributed to 88 production workers in both groups before and after the intervention to measure the improvement of safety KAB. Descriptive analysis and an independent t-test were used to analyse the data. Results: The post-test results showed that safety KAB for the control group was moderate (mean = 2.11), while the mean score in the experimental group was high (m=4.17). Furthermore, the t-test result revealed a significant difference in safety KAB mean scores between the experimental and control groups. Conclusion: This study provides empirical evidence on the effectiveness of the OHSEM intervention in enhancing safety KAB in SMEs in the Malaysian SME (manufacturing) sector.

Investigating Factors Affecting Solar Photovoltaic (PV) Adoption among Malaysian SMEs

This study investigates the factors affecting solar PV adoption among Malaysian small and medium-sized enterprises (SMEs), focusing specifically on manufacturing. The study employed Technology-Organisational-Environmental (TOE) model as a research framework. The study hypothesised that owners’/managers’ technology readiness (innovativeness and optimism), relative advantage, organisational readiness, and government support play a significant role in the adoption of solar PV. Data were gathered from 69 manufacturing SMEs and analysed using Partial Least Squares (PLS) Structural Equation Modelling (SEM). The findings demonstrate a significant influence of owner’s/managers’ technology readiness (innovativeness and optimism) and relative advantage on a firm’s adoption of solar PV. Meanwhile, organisational readiness and government support were not significant predictors of the adoption. The study’s findings can be helpful to policymakers (e.g., the government) and solar authority bodies [e.g., Sustainable Energy Development Authority (SEDA)] in Malaysia to design effective strategies, programs, and incentives to promote solar PV adoption in the manufacturing sector. The study further suggests that the efforts to promote greater adoption of solar PV among firms should be capitalised on its perceived benefits. In short, consistent with the government initiative to promote a more sustainable environment using renewable energy sources such as solar PV, this study offers an insightful perspective to understand the acceptance of this renewable energy solution among the industry players, specifically the SME sector.

BUSINESS ACTIVITY IN THE REGIONS OF THE RUSSIAN FEDERATION

Small and medium-sized enterprises (SMEs) in the socio-economic development of any country serve as a kind of trigger and generator of structural changes in the economy and society. Small businesses are the most receptive to innovative ideas and are ready to implement them. On the one hand, small and medium-sized businesses act as a catalyst for the economic growth of the entire country, on the other hand, they implement a number of social tasks, the key of which is to promote employment and ensure a decent standard of living for citizens. The SME sector employs more than 25 % of the country's able-bodied population. At the same time, the constituent entities of the Russian Federation are seriously differentiated in terms of the level of development of SMEs, in some regions the potential of the SMEs is used inefficiently.
 Given the current conditions for the functioning of the Russian economy and the fact that small and mediumsized businesses play an important role in its development, the study of the level of entrepreneurial activity in the constituent entities of the Russian Federation and the search for ways to increase it is very relevant.
 The article carried out the clustering of the constituent entities of the Russian Federation according to indicators of business demography (“birth rate”, liquidation of organizations), entrepreneurial activity, as well as an indicator reflecting the current opportunities for expanding entrepreneurial potential in the constituent entities of the Russian Federation. The place of the Republic of Bashkortostan among other subjects of the Russian Federation in terms of the level of entrepreneurial activity has been determined.