Digital Transformation of Small and Medium Enterprises: Institutional Analysis

The UN Sustainable Development Goals establish the need for the development of micro, small and medium-sized enterprises. In world practice, it has been proven that there is a direct relationship between the digitalization of a business and its profitability. According to the McKinsey Global Institute, data-driven business models significantly increase productivity in digitalized industries. Unfortunately, in terms of business digitalization, the Russian Federation and other EAEU countries still lag behind technologically leading countries. To move more dynamically along the path of digital transformation, entrepreneurs need institutional support. This conclusion was drawn based on the results of the research “Institutional regulation of the digital transformation of small and medium-sized businesses” under an internal grant at the Siberian Institute of Management, a branch of the RANEPA under the President of the Russian Federation in 2022. The study uses a multidisciplinary approach. A survey was conducted among representatives of small businesses in the Novosibirsk Region, the Chelyabinsk Region and the Republic of Kabardino-Balkaria. Expert interviews were received from heads of business associations, representatives of the scientific community, and government authorities. On the basis of Russian and foreign best practices of institutional support for digital transformation, the program "Accelerator of Digital Transformation of Small Business" was proposed, which should be implemented at the level of regions and municipalities. The introduction of the developed recommendations into the practice of institutional regulation in the EAEU countries will contribute to the digital transformation of small businesses. Ultimately, this will improve countries' entrepreneurial ecosystems.