Abstract:

The present research is aimed at studying the effect of innovation transformation on the small and medium business sector and the possibilities of applying innovations for business development in the Russian Federation, taking into account the best international practices. The research is theoretically and methodologically based on the academic writings of national and foreign scientists on the global monitoring of business and innovation. Quantitative and qualitative methods, including statistical data analysis, were applied in the study in accordance with international standards. To assess the area of concern and determine developmental trends of small and medium businesses in the world and, particularly, in the Russian Federation comparing with other countries, a semantic analysis of scientific papers and foreign journals was undertaken. Furthermore, basic open-source data on the activity of small and medium businesses in more than 50 countries were collected; and the effect of innovation on the general level of business development in the countries and their entering external markets were analyzed. The research has revealed the effect of innovative technologies on the activity of the small and medium business sector, owing to the application of digital technology through deep transformations and fundamental reconsideration of business strategies, models, processes, operations, and products. In the authors’ opinion, it is impossible to develop the small and medium business sector in the economy of Russia as well as of other advanced countries in the present pandemic realities caused by the new coronavirus infection COVID-19 without innovative approaches. It is emphasized that in order to raise the level of its development it is significant to adopt innovative technologies, including digital and remote ones, in business activity; and the importance of developing these technologies to increase the national business context index is retraced in the article. The sector of small and medium businesses is especially crucial for the prosperous development of the country, as well as the implementation of such important socio-economic tasks as enlarging employment by increasing the number of jobs, enhancing the value-added share and exports in the production, creating conditions for economic growth and improving the competitiveness of the economic sector and new branches, economic diversification and personalization in satisfying consumer demand.