THE ROLE OF SMALL BUSINESS AND ENTREPRENEURSHIP IN REGIONAL ECONOMIC DEVELOPMENT

Abstract

Small business and entrepreneurship occupy a central place in contemporary regional development theory and practice because they connect economic growth with territorial inclusion, employment creation, innovation, and institutional modernization. The significance of this topic has increased under conditions of globalization, technological transition, and growing interregional inequality, where the vitality of local economies increasingly depends on the density and adaptability of their enterprise base. This article examines the role of small firms and entrepreneurial activity in regional economic development through an integrated analytical framework that combines employment effects, local value creation, innovation dynamics, business ecosystem formation, and public policy instruments. The argument advanced is that small business contributes to regional development not merely through the number of firms created, but through the quality of the surrounding environment that enables firms to survive, scale, cooperate, formalize, and integrate into wider markets.