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The Challenges and Prospects of Youth Entrepreneurship

8 June 2019
Экономическая активность молодежи: проблемы  и перспективы развития


Russia has successful practices of supporting young entrepreneurs 

“I would mention a whole range of events implemented by the Agency [Federal Agency for Youth Affairs (Rosmolodezh), – Ed.] and our key regional partners. These events aim to develop young people’s initiatives, to create opportunities for their self-fulfillment – it is a whole set of forum platforms. We collaborate with a whole constellation of forums that strive to support young people’s economic and professional activity. These are engineering forums, such as ‘Engineers of the Future’ and ‘Forsage’, and subject-matter shifts for industry-specific professionals at the TIM ‘Biryusa’,” Alexander Bugaev, Head, Federal Agency for Youth Affairs (Rosmolodezh).

“’Russia – the Land of Opportunities’ is an unprecedented project implemented in our country. It engulfs 18 projects and 1.6 million people, and we believe there will be more. Eighteen projects address various areas, but they function under the umbrella idea of helping young people. This help is not only about self-fulfillment. The afore-mentioned 1.6 million people include 600 thousand school students. The biggest project of the platform is the ‘My first business’ contest, where first, school students went through training and famous Russian bloggers told them in plain language about creating business. The students presented their ideas and later were supposed to bring their entrepreneurial projects to life. I can tell you that it is thousands of implemented projects, it is thousands of new companies in the span of two years,” Vladislav Davankov, Deputy Chief Executive Officer, Russia – the Land of Opportunities.

Russia has a potential to raise the number of entrepreneurs 

“Together with St. Petersburg State University, we have presented the so-called GEM – it is an index of entrepreneurial activity based on measurements taken in 112 countries. So, it says that Russia has only 5% of people willing to open a business. The question is whether 5% is a lot.    Half of them are the people who already own a business, and half of them do not have one. Imagine that it is 2.5% of active age population – and that is 84 million people – it makes it about 2 million companies. It means an increment of 30 per cent compared to today’s number. This number has a good potential for growth,” Andrey Sharov, Vice-President, Head of GR Directorate, Sberbank.


Society demonstrates mixed feelings towards entrepreneurship 

“Unfortunately, this is another thing we will have to live with for a long time: people in our country demonstrate mixed feelings towards entrepreneurship. Frequently, people of different generations treat entrepreneurs as some kind of bloodsuckers that are a burden for working people. While this is completely untrue. An entrepreneur, a young business person, an innovator is the most valuable type of person in my opinion, it is the person who is not afraid of making mistakes and helps our country move forward,” Alexander Bugaev, Head, Federal Agency for Youth Affairs (Rosmolodezh).

Lack of education 

“We noted that Russia does not offer enough education that would help not just become an entrepreneur, but at least avoid the mistakes that all entrepreneurs make,” Vladislav Davankov, Deputy Chief Executive Officer, Russia – the Land of Opportunities.

“This is not just Russia’s problem – it is a global one: it is a big gap between the skills that people obtain through education and the ones that the market really needs. For the last decade, this topic has been discussed by the G20 Young Entrepreneurs’ Alliance. <…> One of the recommendations is to make sure that students of all majors received specific practical entrepreneurial skills during their training. It does not mean everyone should become an entrepreneur, but they should have the skills for it,” Victor Sedov, Founding Member of the G20 YEA. 


Forming a positive image of the entrepreneur 

“Our task is to tell about the people who do it [are involved in entrepreneurial activity, – Ed.] and make them popular.  <…> We must create an environment that would be accepting and supportive for entrepreneurial initiatives. It cannot be the merit of a single governmental agency or even several ones. This is a joint effort of the civil society, the government and the entrepreneurs to build a positive image of an active young person that helps their country to move forward,” Alexander Bugaev, Head, Federal Agency for Youth Affairs (Rosmolodezh).

Creating training programmes for entrepreneurs 

“Educational platforms already give the basic knowledge. I really enjoyed the picture I saw at Business Molodost [the company that offers training for entrepreneurs, – Ed.], when six thousand people were sitting in a big hall watching how to install 1C software. These are ultra-useful platforms that provide important knowledge, and this knowledge is one’s big advantage.   Even before starting your own business, you will know how to do internet marketing and how to set management processes in your company,” Boris Titov, Presidential Commissioner of the Russian Federation for the Protection of Entrepreneurs’ Rights.

“We are confident that entrepreneurship is a skill that needs to be trained and developed at the school level. It is important to develop critical thinking, decision making, communication skills, financial literacy, and other skills that are crucial both for team work and for developing one’s own company. It is essential for young people to have digital skills to help them truly unleash their entrepreneurial potential. Governments should come up with adequate school programmes, but entrepreneurial skills should also be developed through private training programmes,” Afshan Khan, Regional Director for Europe and Central Asia, United Nations Children's Fund (UNICEF).

Developing digital services for entrepreneurs 

“We are gradually making our activities digital. <…> There will be a single information window that will combine all support measures for SMEs in all industries and spheres, and offer a customized approach. Your profile, your TIN, your code from the Russian Classifier of Economic Activities will get the specific support measures that you will actually find useful, which will help spread the information about available support measures and help your existing business or any future business grow faster. We would also like to create a unified space that we call ‘ecospace’. <…> [personal web office] will bring together best platforms and solutions business has today: from education platforms to business environment to retail, we’re planning everything up to export platforms,” Milena Arslanova, Director, Investment Policy and Entrepreneurship Development Department, Ministry of Economic Development of the Russian Federation 

“Our mission is to provide digital services to both experienced and beginner entrepreneurs. We develop our services within the Sberbank ecosystem. Our idea is that through Sberbank, through its partners, business should get quality services – starting with opening a business through your phone. Eight thousand companies have already been launched and opened accounts without people ever leaving the comfort of their homes. The second this is getting credit. Our ambition here is to reach 50% of small business loans through pre-approved applications. <…> These services are those that the very livelihood of the company depends on: from cloud accounting to remote legal consultant to getting a doctor’s appointment,” Andrey Sharov, Vice-President, Head of GR Directorate, Sberbank

Simplifying reporting documentation for entrepreneurs

“Interacting with government, tax agencies, with reports – it all is very inconvenient. Please, simplify everything. Make it as transpaert as possible, so that the our interactions are clear and positive, not the type of thing where we need to look for an accounting specialist just to figure out every little paper we need to file and how to do that,” Pavel Lenets, Director, Sapphire

Nurturing youth entrepreneurial communities 

“We need more youth communities. We have three suggestions. First: Create tools to nurture youth communities within youth forums. We would like people positively inspired people to go back home and spread the word. Second: we unite 200 business communities all over the country. We need to give them a meeting space. It would help the business community expand. Third: some form of methodology, community development curriculum, courses on civic engagement. There’s a problem that young people are very creative and independent, yet this creativity stands in the way of making actual agreements,” Maxim Nikitinsky, Founder, Delo Business Cluster  

Perfecting state financial support mechanisms for the youth 

“I go around Russia a lot and I talk to local public administrators. They keep saying that we don’t support young people in any other way but through education. The administrators are afraid that if a young entrepreneur gets any other form of support and shuts down, this administrator is going to get punished. I think there’s a way to lift this responsibility off of their shoulders. What are banks doing today? There are unified scoring centres, where an entrepreneur can file all the paperwork. If everything is in place, then the administrator is not personally responsible for what happens to those funds after they been granted,” Sergey Brykov, Director, Business Broker

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