What Does a Startup Need? Regional Factors of Small Technology Business Development in Russia

The article is devoted to the identification of factors that have a significant impact on the development of startups in the regions of Russia. Based on a system review of the academic literature, a theoretical framework for research has been developed, which include general (economic development, labour market, consumer market, financial stability) and specific (R&D and technological potential, human capital, level of digitalisation) factors in the context of innovative business growth. Using Data Envelope Analysis (DEA), we analyzed the impact of certain factors on startups that had passed specialized expertise reviews and received government support, according to data from StartupID. As a result, specific factors such as the research and technological potential of the region and its level of digitalization most strongly affect the activities of startups in the regions of Russia. Moreover, the consumer market, as well as economic development are essential for startups too; the financial provision of the region, its human capital and the labor market turned out to be insignificant for the successful activities of startups. The findings of the study have allowed us to identify regions that make the most successful use of existing conditions for the growth of innovative entrepreneurship. Based on this research, we have developed recommendations for improving government policies to support startups at the federal and regional levels. These include the development of local innovation ecosystems, which bring together key participants in the innovation process; stimulating cooperation between science and business; supporting interregional migration; and creating innovative and digital infrastructures. The findings of this study can also serve as a basis for business decisions by startup founders as they implement innovative projects.

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