CHARACTERISTICS OF SMALL BUSINESS IN LATVIA
CHARACTERISTICS OF SMALL BUSINESS IN LATVIA

Summary/Abstract: In developed countries, particular attention was devoted to small businesses. This was demonstrated by special conferences organized by the White House of the United States on the issues of small businesses in 1980 and 1986, thanks to which the Congress amended the law to facilitate the development of small businesses. Small and micro businesses are one of the leading sectors defining the rate of economic growth, the state of employment, structure and quality of the gross national product and, as a consequence, economic independence and security of the country. According to Eurostat data, about 99 % of the enterprises of the European Union are referred to the category of micro and small businesses, which provide two-thirds of jobs in the private sector. Small and micro companies make up 98–99 % of all enterprises in Latvia. The objectives of the article are to identify and specify the main features of the development of small business in Latvia. The novelty of the article is that the features of the functioning of micro and small enterprises in Latvia’s economy have been investigated for the first time under the conditions of the global financial crisis and its aftermath. The goal of the research is to analyze the functioning of small and micro businesses in Latvia, determine their impact on the main macroeconomic indicators of the national economy and develop recommendations for improving the business conditions of small companies. Methods of research: analysis of statistical data, mathematical modelling, correlation and regression analysis. The comparison of the main statistical indicators of small business functioning in Latvia with that of the EU developed countries indicates that small business is not given due attention in Latvia and this causes it to lag. To accelerate the pace of economic development, eliminate the imbalance in the development of territories, implement innovations and fight against poverty, it is necessary to stimulate the establishment of new small enterprises.

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