Regional Cluster Analysis as Approach for Sme Development Models

Abstract

The study analyzes the SME development regional trends in terms of key indicators. Using K-means clustering techniques, 4 groups were identified. Data show that the largest gap between the most and least developed clusters is observed in terms of spending on business innovation expenditures per capita, at the same time the average wage is the most consistent indicator. The obtained results allow to form recommendations for the intensification of innovation and investment development of small and medium-sized businesses, taking into account regional specifics. The set of recommendations was divided into financial and non-financial support measures. It is proposed to use mainly direct support aimed at stimulating individual projects for more developed regions, while for less developed regions it is advisable to use indirect tools. Non-financial support measures should be aimed primarily at eliminating institutional and systemic failures in business.