Research Article: 2020 Vol: 26 Issue: 1S
Maxim S. Sokolov, Plekhanov Russian University of Economics
Ruslan A. Abramov, Plekhanov Russian University of Economics
Ivan V. Morozov, Plekhanov Russian University of Economics
Meir N. Surilov, Plekhanov Russian University of Economics
Aim of the study: Integration is the most obvious process that characterizes changes in social development in the economic environment. This is also a stage of transition from regionalization to globalization, from the structuring of the economic space to the acquisition of universal signs of social relations, which deepens the interaction between the subjects of these relations at the interstate level, "ignoring" the continental space. Methodology: The purpose of integration is to unite individual national economic systems (at the interstate level) into a single economic space – a kind of model of global competitive integration that would ensure the strategic position of our state in the world's international markets. Now, creating a favorable environment for integration between large and small businesses, especially in the industrial sector of the economy, should be formed on the basis of optimizing the allocation of public finances and economic policy. Post-crisis economic conditions are not conducive to stabilizing development. Conclusion: Therefore, today the processes of integration interaction are able to provide a certain stabilization due to the production and implementation of joint mutually beneficial tasks of economic policy of business entities, reducing risks. It can be stated that basically the concept of integration involves the interaction of elements of the environment or its subjects on the basis of their mutual identification of common management principles.
Entrepreneurship, Innovation System, Risk Management, Stock, Component, Formation.
Despite the formation of a modern type of economy, the development of which is preceded by the emergence of new industries (international economy, e-Commerce, electronic banking, etc.), it must be recognized that its formation is also inextricably linked with new business models (Koellinger, 2009). For example, international experience positively characterizes those models of organization of production and economic activities that involve changing the structure of companies as a result of their Association to create new competitive and financial structures (Frederick, 2011). This process involves the concentration of capital, production capacity and mutual integration of enterprises with a diversified business profile and requires new mechanisms for restructuring the existing corporate sector of the country's economy (Wu, 2007). It is also due to current trends that have developed in various national business systems, in particular (Bosma, 2011):
1. Development Of Intra-Entrepreneurship-Entrepreneurial Activity Carried Out Within A Large Firm Or Other Business Enterprise (Williams, 2010);
2. Convergence – Convergence Of Different Economic Systems, Overcoming Differences Between Them Due To Common Socio-Economic Problems And The Presence Of Objective Patterns Of Development (Álvarez, 2011);
3. Activation Of Integration Interaction Between Large And Small Businesses As A Result Of Applying Such Forms Of Organization Of Their Activities As Sub-Agreements, Franchising, Leasing, Venture Entrepreneurship (Germany, Great Britain, Spain, Italy, France) (Acs, 2004);
4. Implementation Of State Programs To Enhance The Development Of Entrepreneurship (Belgium, Sweden, The Netherlands, Finland, Norway, Ireland) (Osoba, 2009).
Therefore, in modern economic conditions, in order to best solve problems related to the socio-economic development of the state and its regions, it is necessary to focus on stimulating entrepreneurial processes and creating an appropriate business environment for this purpose (Agboli, 2006). At the same time, it is necessary to take into account the specifics of the functioning of business entities: the structure of their capital and the organizational and legal form of the SPD for rights, for the status of the head and the degree of responsibility (Bosma, 2007). The diversity of these forms plays an important role in shaping the business environment (Vaillant, 2007). And given the specifics of the division of business entities by their quantitative characteristics, it is also necessary to take into account the role of each of them in the formation and use of various mechanisms of integration interaction (Galbraith, 2007). After all, the formation of an integration-oriented environment for enterprises of industrial sectors of the national economy is a prerequisite for the modern way of organizing the market (Álvarez, 2011).
Today, positive changes in the economy of European countries are mainly provided by such structural changes as: providing advantages of the service sector in the sectoral structure of national economies; integration interaction of enterprises; industrial reorganization due to production innovations and strengthening foreign economic relations with countries with a high level of STP (Driga, 2009). In our country, the results of studies of similar processes that took place in those countries that are characterized by the highest economic and entrepreneurial potential have not been further developed (Bosma, 2009). This is due to the fact that such a modern and dynamic form of business as entrepreneurship is a fragmented phenomenon and does not yet characterize the country as a full-fledged subject of market relations (Uhlaner, 2007). Taking this into account, integration processes that occur in the business environment require a detailed study of the causes that precede their occurrence; factors that have an impact on the formation of the features of integration of the PS and patterns of development of the integration-oriented business environment (Coduras, 2008).
Considering the integration interaction of economic entities at various levels of its organization and implementation, it is worth noting that the effectiveness of such processes will be evaluated at the first stages of its creation. And we note that the prospect of their development, although quite real, may not be realized at the global level (Luce, 2010). This is due to the specifics of the competitive environment in which monopolistic structures successfully operate. Therefore, the processes of integration interaction at the micro level should be considered with the perspective of creating a competitive advantage in the sector of functioning of integration entities due to the transnationalization of production, that is, as a form of organizing external relations of these entities (Stel, 2005).
In General, the performance of business entities depends on the business environment. This explains a significant number of scientific approaches to defining the functions of entrepreneurship as a system of market transformations. Despite its great influence on economic processes in our country and on all spheres of public life (economy, production, management, social sphere), we will consider these functions in more detail. This will take into account the specifics of the functioning of industrial enterprises, in order to determine the need for the formation and use of mechanisms for integration interaction, taking into account the business environment (Galbraith, 2009).
The ability to perform these functions determines the formation of the necessary conditions for their implementation. Taking into account the current priorities of the country's industrial development, for the effective flow of business processes, it is necessary to create new and revive existing production capacities, which is a prerequisite for the successful functioning of economically strong industrial administrative-territorial complexes. The range of advantages of international economic cooperation allows us to realize the scientific, technical and resource potential of domestic production. Under these conditions, the primary task of development of Ukrainian industry is to create a modern, integrated into the global production capable in terms of integration and globalization to solve the main tasks of socio-economic development of the industrial complex that will promote a position to state with a high level of innovation and technological development.
Therefore, determining the need to create a specific environment for industrial enterprises, all interrelated elements that affect the development of business processes in the country's economy, it is appropriate to consider in the context of kinship. Therefore, we are no longer talking about factors that directly or indirectly affect the business activity of enterprises, but about the means of influence that Orient the SPD to participate in the processes of integration interaction. In addition, changes in the business environment make it possible to create and successfully operate entities with various forms of business organization and its legal basis, for example, small and medium sized businesses. Various theoretical models can serve as a theoretical basis for these processes. However, entrepreneurship, as a functioning functional model for organizing various types of economic relations, mainly provides an assessment of the consequences of the functioning of enterprises in various industries, and does not consider their activities in theoretical terms. Therefore, the need to study the practical aspect of the functioning of enterprises in leading industries with their own specifics of activity in the business environment levels the application of applied theoretical models for evaluating such processes, taking into account the current situation.
In modern economic conditions, the competitiveness of products is one of the factors that liberalize the economy and strengthen its transnationalization. In modern conditions, the dynamics of economic development processes is characterized by a common global integration resource of the country, which is interpreted as a means of its effective functioning in conditions of increasing global integration. The global integration resource points to the integration advantages of the country due to the increase of its industrial sector competitiveness in the world market. It should be noted that the profitability of financial and industrial structures due to their participation in transnationalization processes is primarily associated with ensuring scientific and technological progress in production. In other words, the implementation of long-term economic development strategies of integrated integration structures requires a continuous innovation process, which includes the development and implementation of innovations and the implementation of new or improved products.
Today, the participation of industry in the processes of globalization is growing. Domestic multinational companies are already operating in global markets. However, the share of manufacturing enterprises is now insignificant and the level of international cooperation between foreign and domestic enterprises is low. The new economic model of development should be focused primarily on creating a competitive environment that will contribute to the development of integration processes in the economy. Integration-type structures can expand their functional activities in the future, turning into transnational associations with concentrated financial and industrial capital.
With the establishment of a market system of management, it is possible to increase the country's economic potential through the use of these structures. Today, this perspective concerns the business sector of the country's economy as the most mobile in the field of innovative development and investment support. Modern integration associations are ready to compete in industrial sectors of the economy, conquering new capital markets. These are structures with a high degree of adaptability to the economic situation in the state, since they use the advantages of the mobile business sector. In view of the state of functioning of the latter, the perspective of integration structures ' activities coordinates the following issues: property rights, transit capacity, demand and supply of commodity products and services, as well as industrial, intellectual, labor, and technological potential. So, for businesses, the integration effect, regardless of the type, can provide the same advantages as for large corporate structures:
Preservation of property;
1. Avoidance Of Double Taxation, Use Of Tax Incentives And Lower Tax Rates Due To International Legislation Supporting Holding Companies;
2. Expansion Of Activities In Foreign Markets With A Shortage Of Resources Produced By Integration-Type Structures, As A Result - Obtaining Superprofits;
3. Penetration Into New Markets With Cheap Production Resources, Transfer Of Individual Production Operations Outside The Company's Home Country.
As a result, the mutual advantages of integration development make it possible to improve the economic situation in the country by capitalizing its stock market. Consequently, the company's image is instead associated with the image of its home country: the market system, the spread of globalization processes of functioning of single - and multi-industry integration groups of national or transnational type, the corporate sector of the economy.
In General, small business is an important element of the market economy, without which the state cannot develop sustainably. Effective market economy is possible only if the economy will work a lot of business structures, whose activities can be objectively evaluated with effective indicators. The effect determined by the assessment of the process of formation of the business environment indicates the potential that can be used to strengthen the economic, social or environmental components of sustainable development of administrative-territorial units, while applying the capabilities of the business sector in the relevant sectors of the economy.
Modern business conditions cause the emergence of integration features of the business environment, which is a prerequisite for the formation of IOPS for the successful functioning of industrial production. This is facilitated by economic, social, and environmental components that characterize the balanced development of any object of market transformation. The choice of such factors is explained by the need to take into account the imbalances that exist in the environmental, social and environmental spheres of business development in order to ensure stable economic development.
The components of balanced development are considered in two aspects directly, as the conditions of economic activity of the enterprise and as the conditions of the business environment that affect the effectiveness of its economic activities, that is, as elements of external and internal business environments. The internal business environment of an enterprise is determined by the conditions for its economic activity based on the principles of balanced development. The environment, the influence of which creates the conditions for conducting business, and the environment, the conditions of which are determined by the enterprise itself in order to ensure profitability, together form a system of circulation.
The reported study was funded by RFBR and BRFBR, project number 20-514-00005.
Acs, Z. J., & Armington, C. (2004). Employment growth and entrepreneurial activity in cities. Regional Studies, 38(8), 911–927.
Agboli, M., & Ukaegbu, C.C. (2006). Business environment and entrepreneurial activity in Nigeria: Implications for industrial development. Journal of Modern African Studies, 44(1), 1–30.
Álvarez, C., & Urbano, D. (2011). Environment and entrepreneurial activity: A system dynamics approach [Entorno y actividad emprendedora: Un enfoque de dinámica de sistemas]. Dyna, 86(5), 594–600.
Álvarez, C., & Urbano, D. (2011). Environmental factors and entrepreneurial activity in Latin America [Factores del entorno y actividad emprendedora en américa latina]. Academia Revista Latinoamericana de Administracion, (48), 31–45.
Bosma, N., & Schutjens, V. (2007). Patterns of promising entrepreneurial activity in European regions. Tijdschrift Voor Economische En Sociale Geografie, 98(5), 675–686.
Bosma, N., & Schutjens, V. (2009). Mapping entrepreneurial activity and entrepreneurial attitudes in European regions. International Journal of Entrepreneurship and Small Business, 7(2), 191–213.
Bosma, N., & Schutjens, V. (2011). Understanding regional variation in entrepreneurial activity and entrepreneurial attitude in Europe. Annals of Regional Science, 47(3), 711–742.
Coduras, A., Urbano, D., Rojas, Á., & Martínez, S. (2008). The relationship between university support to entrepreneurship with entrepreneurial activity in Spain: A gem data based analysis. International Advances in Economic Research, 14(4), 395–406.
Driga, O., Lafuente, E., & Vaillant, Y. (2009). Reasons for the relatively lower entrepreneurial activity levels of rural women in Spain. Sociologia Ruralis, 49(1), 70–96.
Frederick, H., Haslett, S., Wolfgramm, T., & Finau, A. (2011). Measuring entrepreneurial activity in low-teledensity countries. International Journal of Business and Globalisation, 6(3–4), 251–291.
Galbraith, C.S., & Benitez-Galbraith, J.B. (2009). The impact of ethnolinguistic diversity on entrepreneurial activity: A cross-country study. International Journal of Entrepreneurship and Small Business, 8(3), 309–331.
Galbraith, C.S., & Galbraith, D.M. (2007). An empirical note on entrepreneurial activity, intrinsic religiosity and economic growth. Journal of Enterprising Communities: People and Places in the Global Economy, 1(2), 188–201.
Koellinger, P., & Minniti, M. (2009). Unemployment benefits crowd out nascent entrepreneurial activity. Economics Letters, 103(2), 96–98.
Luce, R.A. (2010). Developing entrepreneurial activity systems at the bottom of the pyramid. International Journal of Business and Globalisation, 5(1), 4–16.
Osoba, B.J. (2009). Culture and entrepreneurial activity in the united states: A quantitative analysis. Innovation, 22(3), 341–370.
Stel, A.V, Carree, M., & Thurik, R. (2005). The effect of entrepreneurial activity on national economic growth. Small Business Economics, 24(3), 311–321.
Uhlaner, L., & Thurik, R. (2007). Postmaterialism influencing total entrepreneurial activity across nations. Journal of Evolutionary Economics, 17(2), 161–185.
Vaillant, Y., & Lafuente, E. (2007). Do different institutional frameworks condition the influence of local fear of failure and entrepreneurial examples over entrepreneurial activity? Entrepreneurship and Regional Development, 19(4), 313–337.
Williams, M.G. (2010). Increasing philanthropic support through entrepreneurial activities at Historically Black Colleges and Universities. International Journal of Educational Advancement, 10(3), 216–229.
Wu, S. (2007). The relationship between national culture and national entrepreneurial activity. World Review of Entrepreneurship, Management and Sustainable Development, 3(2), 127–141.