QUALITATIVE ANALYSIS “INFANT DEATH” OF SMALL BUSINESS

Abstract

The article, bearing a polemical nature, examines high “infant death” of small business. At present,
there is no integral picture of its objective necessity and a role in the evolutionary movement of the society.
As a rule, scholars mention many and various reasons, which should be resisted in order to raise the economic
and other security of small business, a survival rate of which is very low – about 3% during the first 3 years
from the establishment.
The author proposes a logical structure made of three interrelated elements: a model of business training;
social chaos and social selection; a model of social dynamics qualitatively describing a trajectory of the
system in the environment with resistance.
The model business training assumes the presence of fatal mistakes made by beginners and causing high
elimination when moving to the mastery of conducting business. These errors are caused not only by unpreparedness,
but also by resistance of the environment.
Due to the environmental resistance there are random, i.e. unstructured and unorganized, movements of
business entities, causing at the target level of its existence significant fluctuations of economic performances,
which can transfer risks from a normal level to critical, then to a catastrophic and cause death. The
social selection of business entities, which have the best abilities to adapt to the changeability of the environment
and as a result a greater subjective economic efficiency and leading to the evolution of the society
efficiency, is realized in such a way.
The model social dynamics, described by nonlinear differential equations of W. Weidlich, in the annex
to the phenomenon, shows the trajectory of profitability of small business entities, depending on the environment
resistance to move towards the ultimate goal, i.e. arrange the level of profitability. The movement
according to characteristics, mainly stiffness of the environment resistance (aggressive) can be cyclic (prosperity,
recession, depression, recovery), occurring in a converging spiral, i.e. oscillating with decreasing amplitude,
to the point of attraction; or in case of high interdependency of profitability and the environment resistance
become oscillating with a conversed amplitude.
General conclusions based on the results of the analysis are made.
Keywords: small business, economic security, “infant mortality” of small business, model of business
training, social chaos, social selection, model of social dynamics, trajectory of business development, resistance
to the development on the part of external environment, effectiveness of development.