This chapter identifies strong spatial variations in SME and entrepreneurship performance across the regions of the Russian Federation together with differences in the scope and nature of constraints in regional business environments. Some regional and municipal governments are active in improving their regulatory conditions for SMEs and entrepreneurship, but the progress is highly uneven across the country. Federal government ministries and agencies also operate some locally-differentiated actions such as in cluster and financing support. However, regional and municipal governments are not as active in SME and entrepreneurship promotion as they could be, reflecting constraints in their budgets and professional capacities for strategy making. This gap needs to be addressed if government objectives for growing the SME economy and achieving more balanced spatial development are to be met. The co-funding arrangements of the federal SME support programmes are critical in helping to secure local interventions and could increase participation further with greater flexibility and dialogue in design and implementation. The federal government also has a role to play in building the strategy-making capacities of regional and municipal governments.