In economic theory, there is the term "mesoeconomics", which is quite popular not only in the scientific literature, but also in the concepts of practical management. What does he mean? How to interpret it correctly depending on the context? To what extent is the term related to science?
The meaning of the term
There are several interpretations of the term in question. What is the first one? Mesoeconomics is (if we follow the theoretical concepts that are widespread in the Russian expert community) that has signs of close legal and, in some cases, territorial integration, a set of economic entities that are mainly attributed to medium and large businesses. The set of firms in question implies most often the commonality of property and assets.
The Greek word "mesos" means "intermediate." It should be understood as follows: firms form an alliance that can be described as occupying an “average” position between the totality of small enterprises and the national economy of a single country. That is, the "mesocompany", on the one hand, is large enough not to be considered small or medium-sized businesses, on the other hand, its scale is still not large enough to compare with the volume of GDP of the state in which it is located.
Scientific discipline?
There is a second interpretation of the term. Mesoeconomics is a scientific discipline. It is an integral part of economic theory. Mesoeconomics studies the activities of enterprises at the level of individual industries. For example, trade, the military-industrial complex, IT-technologies, etc. In this sense, “meso” means something in between macro- and microeconomics. That is, those disciplines that study the activities of individual firms or the national economy as a whole.
Of course, in some aspects, what the mesoeconomics is studying, and those firms that are characterized by consolidation within the framework of the system of the same name, can be considered in the same context. It all depends on the structure of a particular study. For example, if it studies, say, the economy of the central district of the city using the example of a set of firms operating in the same industry.
In a number of contexts, the term "mesoeconomics" is used to denote the subject of economic research when it comes to business processes at the level of individual regions - with the appropriate federal structure of state power, as, for example, in Russia or the United States. That is, the "meso" in this case is something in between the urban economy and the national economic system.
How did mesoeconomics come about?
If we talk about the first interpretation of the term, how long has it existed? As many experts believe, mesoeconomics is the result of the natural development of processes associated with the industrialization of national economies, which began to be observed especially intensively at the beginning of the 20th century. Then, in connection with the improvement of equipment, the concentration of capacities producing goods began to increase.
Production concentration
As a result, high-performance plants began to be built on relatively small areas. Settlements began to turn into large industrial centers. The city’s economy could now function on the basis of enterprises located only in it. The enlargement of production began to reach such proportions that individual groups of companies in terms of turnover began to exceed the budgets of some states.
What preceded mesoeconomics? Analysts usually call this period reflecting the realities of "microeconomics" - an environment of interaction between relatively small, independent industries - manufactories, private factories. They could be built, for example, in a rural economy , but not in a large metropolis - as it became possible after a phenomenon such as mesoeconomics arose.
Characteristics of Mesoeconomics
The main feature of the mesoeconomics, experts call centralization. It can occur in two versions - horizontal and vertical. In the first case, companies that produce the same type of product (or a group of goods) are combined; in the second, enterprises are consolidated within a set of different production steps. A mixed option is also possible. And in this case we will talk about diagonal centralization, the scale of which, meanwhile, can be very impressive, as well as the diversity of the areas within which enterprises operate. In fact, a local, small economy can be formed in the same diversified structure as the national one.
Impact of Mesoeconomics
The emergence of mesoeconomics has become a factor in significant changes in the forms of market relations. Sectoral mesosystems began to form, uniting firms within one sector of the economy. For example, banking or industrial. Many experts believe that mesoeconomics is the leading form of modern enterprise interaction, and not just a phenomenon characteristic of the beginning of the 20th century.
The structure of modern mesenterprises
How is the structure of interaction between firms consolidating within the framework of meso-economic systems organized today? As a rule, these are holdings in which there are two types of capital - real and speculative. The first is the actual (for example, balance sheet) assets of firms, the second is securities (usually rotating in the free market). In many cases, the mesoeconomics is the environment in which the largest companies operating in the state are consolidating (in this case, the industries where these companies operate are also leading). It happens that there are few such enterprises in quantitative terms, but they concentrate the bulk of capital in the entire national market.
There are frequent cases when firms, taking advantage of their position, set prices that suit them. But in this case, many states have developed antitrust mechanisms at the level of laws. Therefore, many modern experts believe that mesoeconomics is a phenomenon that is useful from the point of view of the development of economic systems of the countries of the world. First of all, from the point of view of social function. But not only.
Stability - In Consolidation
What kind of economic problems can enterprises that form mesosystems solve? Enterprises operating as part of large associations are generally more resilient to crises. They also create more jobs, regularly pay taxes. In addition, the stability of the combined firms contributes to solving economic problems such as, for example, the stability of the national financial system: more powerful business structures take more bank loans and repay them more stably than, for example, small enterprises.
Mesoeconomics and Business Relations
What characterizes the relationship of businesses that form the mesoeconomics? First of all, this is the desire to enter into long-term partnership contracts. This gives companies the opportunity to jointly respond to changes in market conditions, rising or falling prices in the field of sales or, conversely, supplies. The consolidation of efforts in some cases directly affects supply and demand, and also forms new markets. Contractual obligations are usually supported by a high level of responsibility. In case of default, the company, in accordance with the contract, is obliged to give part of the assets to the partner.
The role of mesenterprises for the state
We said above that companies that form a "mesostructures" fulfill a significant function for the state - they provide citizens with jobs and pay taxes. But the role of mesoeconomics is not limited to this. Among other important functions is the provision of the state with resources for conducting foreign economic and political activities. The scale of business consolidation can, of course, be larger than the economy of a district or city. As we have already said, the option is real when it is comparable to the GDP of a single country.
However, the national affiliation of the mesoeconomics is, as a rule, a big plus in the foreign policy arena. Especially when it comes to company representations abroad, the impact on foreign markets, brand recognition in other countries of the world. Mesoeconomics may be the face of the state in the external arena. Especially if they position themselves as a national company, not an international one.
Mesoeconomic management specifics
What is the management structure of companies that form the mesoeconomics? As a rule, there are those in them who own a controlling stake in companies or other assets. The peculiarity of the functioning of such enterprises is that management structures sometimes have nothing to do with the owners of the organization. In many cases, the General Director is an ordinary employee who does not have a share in the ownership of the company, or is a minority shareholder. This is sometimes connected with the fact that companies representing different sectors of the economy may be present in the structure of the mesoeconomics. The owner will most likely simply not be in time to manage all of them at the same time. And therefore, he is likely to invite a hired employee to the post of top manager.
Mesoeconomics and financial-industrial groups
The simplest (from the point of view of legal mechanisms for the consolidation of enterprises) form of business combination is a public joint-stock company. It contains, as we said above, real capital used to create added value, as well as speculative in which investors invest. What other forms of organization of mesoeconomics are there?
According to many experts, the largest implementations of the meso-economic association are financial and industrial groups. These structures are a set of firms capable of influencing not only certain sectors of the economy, but also the national (and in some cases international) economic system. Financial and industrial groups are called upon to unite the efforts of various companies in the technological aspect, in terms of consolidating capital, management resources, and expanding the market. The resources of such firms in terms of social function are also very significant. As a rule, financial and industrial groups are significant not only for domestic markets on a national scale, but also in the international arena.
The financial and industrial group usually includes companies representing different sectors of the economy. This may be industrial corporations, banks, insurance companies, retail chains, research organizations, in some cases, government agencies.
Mesoeconomic ownership structure
How are the mechanisms for determining ownership of enterprises forming mesoeconomics built? As a rule, here we are talking about the distribution of shares according to the holding principle. That is, there is a leading structure, which owns controlling stakes in subsidiaries. A phenomenon is quite rare in which the owner of a company is a person or organization that is not de jure part of the mesoeconomics. At the same time, each enterprise can conduct a fairly independent economic policy (however, within the powers stipulated in the relevant contracts).
Mesoeconomics and oligarchs
Who are the oligarchs in terms of Western economic theory? These are entrepreneurs who are the owners of the largest enterprises, the scale of which allows you to manage not only industry financial flows, but also bank capital, investments in national and international stock markets. That is, the oligarchs are actually the main actors in the global mesoeconomics.
Can famous Russian entrepreneurs with billions of dollars of assets be considered "classical" oligarchs? Experts believe that it is possible for them to acquire such a status in the near future. Since one of the main criteria of the oligarchy is independence from state-owned companies, doing business outside the national political course. The largest Russian entrepreneurs, in turn, made capital by using a political resource or taking advantage of the opportunities that the state opened during the years of privatization.