Each fourth entrepreneur in Serbia under 30 – How to stimulate youth employment?

Each fourth entrepreneur and each 17th owner of an enterprise is younger than 30. The youth unemployment rate has dropped by nearly 8% in the past four years, whereas the employment rate has increased by 5%. Nevertheless, each fourth resident of Serbia in this age group is economically excluded – not in education, employment or training (the NEET rate). By comparison, the percentage in the EU is twice lower.

These are the main results of the research on the economic inclusion of the young in Serbia, carried out within the Western Balkans and Turkey Youth Fund Network program of the Ana and Vlade Divac Foundation.

The Youth Business Forum (PFM) also works on strengthening youth entrepreneurship in Serbia, and this NGO’s activities are also directed at reducing the youth unemployment rate, says Marijana Marinkovic, president of PFM, for eKapija.

– Through a range of various activities, we aim to stimulate the networking of the young, the economy, the state and the academic community in order to create a favorable business climate for starting one’s own business and become the main platform for the development of youth entrepreneurship in Serbia. Our programs are meant for the young who are planning to start their own business or have already done so – our interviewee says.

As part of its activities, PFM organizes five-day training programs, which gather 60 trainees in 30 teams with the idea of starting their own business. Fifteen lecturers from the world of entrepreneurship are employed in the programs. New training programs will be organized in April and December 2017, and the forum plans for this practice to continue in the coming years as well, Marinkovic explains.

– By working with mentors and interacting with successful entrepreneurs, the trainees are provided with an all-encompassing view of the steps necessary for starting and running a business, as well as a completed business plan. The lectures are also held by experts in marketing, finance, sales, administration. On the last day of training, the attendees present their ideas before the jury, and the aim is for them to get a clear idea of how much they’ve progressed during the training, as well as the feedback regarding what can be improved – Marinkovic says and adds that 120 young people have gone through the training so far, and that 30% of them have started their own business.

The Belgrade municipality of Savski Venac has recently started cooperating with PFM. Young entrepreneurs from the municipality who have gone through the PFM training are allowed to use the premises of the Youth Office over 6 months.

The research by the Youth Fund Network, which encompasses the period from 2008 till 2015 and young people aged 15 to 30, has pointed to a positive trend of youth self-employment in Serbia. Of the total number of employed young people, 11% have found the job this way.

PFM reminds that their work is oriented towards self-employment precisely, and the training program, as our interviewee says, aims to enable young people to start their own business, and not to look for jobs with other employers.

According to the data of the National Employment Service, there were 618,048 unemployed people aged 15 to 30 in December 2016. However, there are no data about how many young people are not registered at all. Furthermore, each fifth employee of up to 30 years of age is illegally employed, without an employment contract signed.

What are the biggest problems?

The Youth Fund Network has realized the need to assess and analyze the effects of the program and public youth employment and employability policies so that they could be better planned and more efficient.

One such analysis was carried out in 2016 by the Economics Institute of Belgrade. They focused on the regulations in ICT, creative industries and agriculture, which had been highlighted as the most promising fields, along with a proposal of simplifying the business for young entrepreneurs.

The general obstacles to the development of entrepreneurship were found to be undeveloped entrepreneurship culture and non-stimulating business environment in Serbia, lack of necessary entrepreneurship knowledge, lack of necessary financial means, excessive taxation and need for mentorship. The general suggestions for how to solve these problems are development of innovative economy, science and innovation management system change, increased investments in science and research, increased relevance of scientific research to development of economy, development of stimulating financial mechanisms and institutional framework for connecting science and economy, strengthening the capacities of the competent institutions, but also improving entrepreneurial education and carrying out student company programs.

(Photo: YanLev/shutterstock.com)

Around 150 student companies in Serbia

The program of student companies in high schools throughout Serbia has been carried out for several years now by the Junior Achievement organization. As Program Officer Nemanja Glavinic says for eKapija, around 220 secondary schools are included in the program, and around 150 student companies are currently operating within them. According to him, the plan is to have student companies operating in all high schools in Serbia by 2020.

– Students are founding their own companies in schools, making all the decisions, producing, dealing with administration, planning, doing everything a company needs in order to function. Depending on the field, they enter the market and sell their products – Glavinic explains.

The student companies operate in a wide range of fields, including production and service provision. They often produce food products, cosmetics, jewelry, consigned goods, but also software, IT services, training courses...

– Around 70 to 80 thousand students have gone through the program so far. There are no precise data on how many have continued dealing in entrepreneurship, as it’s too early to carry out such a survey – Glavinic says. He nevertheless adds that, according to the data available to them, 83% of students involved in student companies plan on staying in business, whereas 94% of them see themselves as owners of a business.

Student companies are present in high schools and their purpose is to have students develop their entrepreneurial skills by facing all the difficulties entrepreneurs face.

In addition to student companies, which are oriented towards vocational schools and high schools, the plan of the Government of Serbia is to develop dual education, encompassing vocational schools only. Last year, 14 vocational schools were included in dual education, with locksmith-welders, electricians, industrial mechanics and furniture manufacture operators included in the new model. By September 2017, when this type of education is to officially enter the school system, six additional dual education profiles should be ready: moulder, wildlife and fishery technician, logistics and forwarding technician, car mechanic, network and facility electrical fitter and shipfitter.

At the gathering dedicated to dual education held recently at the Chamber of Commerce of Serbia, Prime Minister Aleksandar Vucic said that long-term growth and development cannot be achieved without solving the problems in education. In order for the growth to be sustainable, we must take care to employ the young, he said and added that, if Serbia didn’t implement dual education, it wouldn’t continue growing beyond 2020.

Subsidies for youth employment in 2017

The year 2016 was pronounced the year of entrepreneurship in Serbia, and the decade of entrepreneurship began in early 2017. In the next ten years, businessmen will have a total of RSD 12.5 billion available to them through various programs aiming to increase employability.

The National Action Plan for Employment in 2017 has set aside around RSD 3.3 billion for incentives for employment. On February 7, the National Employment Service opened this year’s first public invitation for allocation of subsidies for self-employment and employment of persons from the hard-to-employ categories in newly created jobs (among which are the young of up to 30 years of age without qualifications or with low qualifications, the young who have been looking for a job for more than a year, the young with the status of children of fallen soldiers or those who have or used to have the status of children without parental care).

Katarina Stevanovic

Fondacija Ana i Vlade Divac

Vlada Republike Srbije

Gradska opština Savski venac

Ekonomski Institut a.d. Beograd

Privredni forum mladih Beograd

youth unemployment

youth employment

youth exlusion

NEET rate

youth economic inclusion

Western Balkans and Turkey Youth Fund Network

Ana and Vlade Divac Foundation

Youth Business Forum

PFM

National Employment Service

Junior Achievement

Marijana Marinkovic

youth entrepreneurship

entrepreneurship

self employment

Youth Office Savski Venac

PFM training program

Youth Fund Network

subsidies for employment

subsidies for self employment

student company

student companies in Serbia

Nemanja Glavinic

dual education

business plan

starting a business

Aleksandar Vucic