The impact of economic security on business

Abstract

For each country, self-development and progress means the ability to pursue and defend national interests independently, to create an environment conducive to investment and innovation, and to develop intellectual potential. An economy that is constantly evolving can withstand internal and external threats. The robustness and efficiency of economic processes can mitigate the impact of destabilizing processes. The aim of this paper is to highlight the impact of economic security on business. Economic security is the subject of the study. Study objectives: • to highlight the need for economic security; • to analyze theories of economic security; • to describe Lithuania’s concept of economic security; • to analyze Lithuania’s policy on small and medium-sized enterprise formation and its implementation. Research methods. The analysis of scientific literature was used to clarify the concept of economic security. The analysis of legislation was used to reveal the perception of economic security in Lithuania. The analysis of statistical data was used to reveal the importance of economic security in shaping the country’s competitiveness. Studies have shown that there is no consensus on the perception of economic security. Depending on what should be considered as the main threat to national economic security and how it should be tackled, three main schools of thought on economic security have emerged worldwide. Economic security in Lithuania is enshrined in legislation: the Lithuanian National Security Strategy and the Law on National Security Framework. The Lithuanian National Security Strategy (current version, 2021) identifies the following overriding national security interests: the state seeks to create the most favorable conditions for entrepreneurs to exploit their potential in the course of business regulation. The best example in analyzing the formulation and implementation of the State’s SME policy is the establishment of small partnerships (2012), which allowed new business enterprises to be established under simplified conditions. Studies have shown that the main problem in the formulation and implementation of SME policy lies in the complexity of the business environment and the lack of simple forms of company formation that are attractive to small businesses. The idea of the small partnership was a progressive, very welcome, and encouraging one, but it remains under the governmental control, and sole proprietorships are also unpopular because of high taxes.