2020 | 2 | 96-113
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The state of small business in Latvia
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Small business is currently vital for the development of any country. In the article, the term “small entrepreneurship” is an umbrella term that includes both small and micro enterprises. These two types of small enterprises, according to EU Regulation 364/2004, differ by several indicators, which given in the article. In Latvia, - just like, for example, in the USA, - small business employs about half of the workforce. The review of publications - including those of the SCOPUS database - by Latvia’s scientists and researchers shows that not enough attention paid to small business in Latvia. At the same time, in other regions of the world, for example, in Southeast Asia, where small business is also widely spread, more attention is devoted to it in scientific research. Therefore, the theme of the article is topical for Latvia. The object of the research: micro and small enterprises in the Latvia’s economy. The goal of the research: based on the analysis of the country’s socio-economic system, to test the hypothesis about the presence in the system of factors that impede the successful development of small business in Latvia, to identify and rank the most acute problems. Research methods: system analysis, expert assessment of the importance of the problems faced by enterprises, and modern mathematical methods for processing the results of the examination. A well-developed small business sector contributes to the growth of employment. The development of micro and small entreprises in Latvia is in line with global trends. However, Latvia is still lagging behind the highly developed EU countries. The socio-economic system that includes these enterprises is only partially balanced and is not stable enough. This shown in the article using mathematical model. Micro and small enterprises that differ in the number of employees have accordingly different problems. The problems are largely associated with insufficient state support for small business and an unstable tax policy. Due to the significant labour migration of young people to other EU countries, the search for qualified employees is an acute problem for all enterprises. The state programme aimed at helping the people return home, who have left their homeland to work abroad, is still ineffective. It is advisable to simplify the provision of loans by start-up entrepreneurs, to organise special courses for them, following the example of other countries.
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