Available via license: CC BY-NC-ND 4.0
Content may be subject to copyright.
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
49
DOI 10.1515/vjes-2017-0018
The Promotion of Young Entrepreneurs for Development
Small and Medium Business
Mariana DOGA-MÎRZAC
State University of Moldova, Moldova
mariana.mirzac@yahoo.com
Abstract
Promoting entrepreneurship is an essential component to ensure economic
development at the national and the regional level. Entrepreneurship in young people may
directly stimulate them and positively influence the generations and communities in which
it operates.
Successful young entrepreneurs in identifying those aspects hold ideas that will
contribute to the success of the business and have availability to conquer niches of
business that other entrepreneurs have ignored them or have them watched in disbelief.
Over the past few years, employment of young remains one of the main problems
that persist, problem on the development of market economy has boosted it and deepened
it, emphasizing the correlation between the supply and demand of labour force as a whole.
Keywords: young entrepreneurs, business, influencing factors, CUSTOMER
model, small and medium business
JEL Classification: M130
Introduction
Young people give the pulse of a country: they are the cadence to promote positive
changes, innovativeness scale, and size of work capacity, performance and desire to
succeed. We trust that young people - energetic, enthusiastic, with entrepreneurial spirit -
can make a difference in this time of profound international disorder. [Paul A. M., 2013]
We can put the question, why envisage expressly the young? Because young
people are creative, confident, have good business ideas, sometimes brilliant ones, but they
have lack of funding and are scared by the bureaucracy. Because they see the target, but
the adults – the travel.
They are the first that need the state support to achieve a well-defined purpose.
Because the young people are the most vulnerable group. Because the young have been
neglected so far by the public debates and decisions as they have poorly participated both
in economic and social activity of the country.
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
50
The young have already shown that they do better with technology, they are more
involved in social networks, and able to start a business compared to the older ones. But
there is one more difference between the two generations, the young are not attached and
can easily leave the idea or business they have created.
A study realized by The Guardian Life Small Business Research Institute, shows
that the probability that those born after the year 80, called Generation Y, to sell their
businesses to 100%. Young entrepreneurs form the category who are not as emotionally
attached to their businesses that they do not sell them to a big company or another
contractor, if there is the case. This is not the only researchers finding, the Generation Y is
the "generation of ideas" because only 8% of young people are the inheritors of a business.
The main reasons for young entrepreneurs who start their own business is the
challenge to control their own destiny and to put ideas into practice but not the financial
gains. Successful young entrepreneurs have the talent to identify aspects for business
success and willingness to take business niche that other entrepreneurs have ignored or
considered in disbelief.
The most important strategy to stimulate the growth of jobs number is to expand
the number of employers. Promote the entrepreneurship is an essential component to
ensure the economic development both at national and regional levels. Promote
entrepreneurship among young people may directly stimulate them and positively
influence the generations they belong to and the communities where they operate.
"Young people will be able to exploit more effectively their potential at work if
they have entrepreneurial education, since expanding the financial literacy and
entrepreneurship they can focus better on organization needs, on understanding the need
for initiative and creative problem solutions, need in teamwork and cooperation."
[Csiminga D., 2013, p.8]
During the last years, the employment of young remains one of the main problems
that persist in Moldova, the problem that the transition to a market economy has amplified
and deepened, emphasizing the mismatch between the labor supply and demand as a
whole.
The strategic objectives of achieving a high degree of employment are set out in
the National Strategy on employment policies for the period 2007-2015, approved by
Government Decision no. 605 from 31 May 2007.
According to a study performed by the National Bureau of Statistics on the
distribution of entrepreneurs by age, it showed that the largest share of entrepreneurs
consists of two age groups - 45-54 years old (30.7%) and 35-44 years old (29.5%). These
two groups together make up 60.2% of total responders. The group of young people with
the greatest potential - from 15 to 34 years, represents only 22.7% , of which only 2.4% are
young men and women aged up to 24. The eldest group (55 years old and above) is 17.1%
of respondents. [BNS, 2009, p.17]
The analysis of distribution by age of entrepreneurs during the years showed that
the average number of entrepreneurs consists of two age groups - 35-44 years old (3,000
people) and 45-54 years old (3,300 people). These two groups make up together 66.6% of
the total number of entrepreneurs.
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
51
The group of young people with the greatest potential - from 15 to 34 years,
representing on average of only 2200 persons or 23.2%, of which only 3.2% are young
people aged up to 24 years.
The eldest group (55 years and above) is 11.6% of all entrepreneurs. Also we can
mention that the average age of entrepreneurs is quite advanced - 45 years.
Table 1
Evolution of employees and employers divided by age groups, thousands people.
Age group
Period
15-24 25-34 35-44 45-54 55-64 65 + Total
employees and
employers
2003 0,3 1,4 2,7 3,8 0,3 - 8,5
2004 0,5 1,0 3,3 3,4 0,4 - 8,6
2005 0,1 2,0 3,5 2,6 0,5 0,1 8,8
2006 0,3 4,9 2,6 3,5 1,4 0,2 12,9
2007 0,6 3,1 2,7 3,7 1,3 - 11,4
2008 0,3 2,1 4,3 4,0 1,2 0,1 12,0
2009 0,1 1,6 3,9 3,5 1,3 0,1 10,5
2010 0,1 1,0 2,7 2,8 0,8 - 7,4
2011 0,3 0,9 2,2 3,4 1,2 0,0 8,0
2012 - 0,9 2,1 2,2 1,2 0,1 6,5
2013 - 0,8 3,1 3,3 1,3 0,1 8,5
2014 - 0,6 2,7 3,7 1,4 0,1 8,5
2015 - 1,0 2,1 2,8 1,3 0,1 7,2
(Source: calculated by the author according to www.statistica.md)
The entrepreneurship deserves to be promoted as an alternative option for youth
employment and the state entrepreneurship policies must be the same as in the European
Union, based on entrepreneurship education at all levels, on a simple predictable
regulatory framework, on certain support programs oriented towards competitiveness and
economic efficiency in a world that is becoming more competitive. [www.odimm.md]
In Moldova the young entrepreneur business development is very difficult and there
are many obstacles that we present in schematic form:
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
52
Figure 1.
Factors influencing the poor young entrepreneur activity.
(Source: elaborated by the author)
In order that the mentioned (negative) factors do not directly influence the
entrepreneurial activity, we will use the holistic model CUSTOMER created by Michael E.
Gordon that would allow to form a "partial" shield or barriers that would incompletely stop
the factors influencing directly on entrepreneurship activity and at the same time would
have a positive influence on business performance. These factors will allow young people
to face easier the barriers when they start their own business and work competitively to
obtain success.
The American scientist uses nine positive factors in his model that interconnect
between them, they are not independent and influence the performance of young
entrepreneurs.
To start the entrepreneurial activity, it is necessary to include the factors used by
Michael E. Gord in the composition of the business plan, and, by their prognosis, it would
help to avoid the influence of negative factors listed in Figure 2, and will allow the
entrepreneurs to focus on the problems that may occur spontaneously, to solve or remove
them as soon as possible.
In addition, before launching a business, it is necessary that the entrepreneur
performs a detailed study of the barriers and opportunities for small and medium
businesses.
The SME sector has a number of strengths and weaknesses: a successful
entrepreneur will amplify the strengths effect and will try to minimize the disadvantages
impact.
Activity
of young
entrepreneurs
Weakly developed
business
infrastructure
Insufficient skills
for entrepreneurship
activity
Lack of
capital
Limited access
to financial
sources and
programs
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
53
Figure 2.
CUSTOMER model
(Source:https://books.google.md/books?id=t9_KjVKEa7EC&pg=PA29&lpg=PA29&dq=CUSTOM
ER+Model+to+Michael+E.Gordon&source=bl&ots=Bukh0jJWQ9&sig=FJSNmtELcGiTTNjhMeo
i5lOMb0o&hl=ru&sa=X&redir_esc=y#v=onepage&q=CUSTOMER%20Model%20to%20Michael
%20E.Gordon&f=false)
In turn, the activity of ODIMM encourages and supports the potential young
entrepreneurs through the following Government programs – the National Programme
for Youth Economic Empowerment, Program for Attracting Remittances in Economics
«PARE 1 +1», a project for young people “Young Experience a Smart Solution". These
programs increase the accessibility and availability of microfinancing those who want to
start or develop a business, but who have difficulties in accessing financial resources. It
must be said that over 30 000 entrepreneurs were consulted and tutored through these
projects, most of them were trained in entrepreneurship and supported financially. Thus,
small businesses have become partners of the existing companies, new activities have been
developed, area and range of collaboration between large and small businesses have been
enlarged. [www.odimm.md]
The basic objectives of financial assistance is to promote economic activity from
the private agricultural sector and create opportunities to sell high value products, by
liquidating the infrastructure constraints and attracting investments that will contribute to
poverty reduction.
It is necessary to mention that ODIMM joined the Enterprise Europe Network as a
member, which is a European network that brings together over 580 supporting business
organizations from 49 countries. Due to this fact, a Center of excellence in business will be
created, developed with the support of cross-border project "Lead Your Way to Business"
within the project "Support the implementation of the migration and development
component within the EU-Moldova Mobility Partnership", financed by the European
Union.
The entrepreneurship for young people may be a key policy by involving them in
the economy. The ways of involvement are the most diverse as developing the
entrepreneurial capabilities through quality education, free access to information and
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
54
knowledge transfer through academic exchange programs and trainings. Young people are
the future of social and institutional capital of the country, who must have technical and
analytical skills, be informed, able to run a business and find new segments to invest in the
economy.
But according to NBS, the young entrepreneurs (aged between 15-34 years) who
have started their own business during 2003 – 2012, are only 0,3 thousand people and they
represent on average 0.02% of all age groups for the category 15-24 years old, but the age
category 25-34 years old, the number of employers 1,89 persons which is equivalent to
0.15%.
Table 2
Evolution of emploied young people according to professional status and age groupe,
thousand people
Age
groupe 15 - 24 25 - 34 Total on all
age groupes
Thousand
people % Thousand people % Thousand
people
Period S P S P S P S P
1 2 3 4 5 6 7 8 9 10
2003 91,8 0,3 6,77 0,02 173,7 1,4 12,81 0,10 1 356,5
2004 87,3 0,5 6,63 0,04 171,4 1,0 13,02 0,07 1 316,0
2005 81,8 0,1 6,20 0.01 172,9 2,0 13,11 0,15 1 318,7
2006 91,2 0,3 7,25 0,02 181,3 4,9 14,42 0,39 1 257,3
2007 88,8 0,6 7,12 0,05 177,3 3,1 14,21 0,25 1 247,2
2008 91,9 0,3 7,35 0,02 183,8 2,1 14,69 0,17 1 251,0
2009 87,8 0,1 7,41 0,01 180,7 1,6 15,26 0,13 1 184,4
2010 85,9 0,1 7,51 0,01 204,3 1,0 17,87 0,09 1 143,4
2011 88,1 0,3 7,51 0,02 210,9 0,9 17,97 0,08 1 173,5
2012 78,3 - 6,83 - 217,1 0,9 18,93 0,08 1 146,8
2013 74,4 - 6,34 - 222,3 0,8 18,95 0,07 1 172,8
2014 65,5 - 8,22 - 226,4 0,6 28,39 0,08 797,6
2015 59,0 - 7,40 - 215,2 1,0 27,33 0,13 787,6
1*S- employees, P-employers
2*% relation between age groups emphasized in the table at all age groups (columns 4, 5 and 8, 9)
(Source: calculated according to www.statistica.md)
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
55
The best results were achieved in 2007, from the age group 15-24 there were
registered 0,6 thousand young people who started their own business, and from the age
group 25-34 there were 4,9 thousand during 2006. We have to notice that the number of
young people involved in entrepreneurial activity for the first age group drops up to 0, 1
thousand people in 2010.
We could mention that during 2012 there were not registered startups of youth
aged 15-24, which would worry the state organizations that support and promote
entrepreneurship among young people. Also we could note that the average share of total
employment by professional status according to age groups listed in Table 3 represents
70.7% - employees and 2.2% - employers.
Conclusions
Therefore, it is important to pursue over the years the continuous and thorough
analysis of the youth engaged in the business sector, needs and barriers and monitor the
impact of assistance provided to young people in business.
Thus, at the governmental level, the State may give up the start-ups programs that
do not promote the young entrepreneurs, also it may turn over towards the existing
companies by improving the quality of education programs and entrepreneurial activity. In
this respect, it is important to have a close relationship between the education and business,
and the curricula has to be adapted to the business market conditions. Additionally, the
educational system should focus on selecting and creating leaders who will be responsible
and independent, who understand the entrepreneurship and realize its benefits.
On the other hand, the private sector could significantly contribute to the
development of young entrepreneurs by implementing quality programs: training sessions,
events and competitions for beginning entrepreneurs, mentoring programs and support for
start- ups or information sessions about the existing funding opportunities. Both, the public
and private sectors have the potential to contribute significantly to the development of
entrepreneurship through the active involvement of the young generation.
References
Condițiile de creare și dezvoltare a întreprinderilor: analiză prin prisma de gen, (2009),
BNS, Chișinău, p. 91.
Csiminga D.,(2013) ,,Generația tînără, succesul economiei de mîine’’, available on-line at
https://candidate.manpower.com/wps/wcm/connect/64568f804b8143159fb4bf1abe
efe959/Generatia+tanara+-succesul+economiei+de+maine.pdf?MOD=AJPERES
Forumul naţional al tinerilor antreprenori cu genericul „Tinerii în Acţiune”, available on-
line at http://www.civic.md/comunicate/22691-forumul-national-al-tinerilor-
antreprenori-tinerii-in-actiune.html
Paul A. M., (2013) ,,Susținerea tinerilor antreprenori”,available on-line at
www.andreeavass.ro/susţinerea-tinerilor-antreprenori.
Valahian Journal of Economic Studies Volume 8 (22) Issue 22017
56
Modelul CUSTOMERS https://books.google.md/books?id=t9_KjVKEa7EC&pg
=PA29&lpg=PA29&dq=CUSTOMER+Model+to+Michael+E.Gordon&source=bl
&ots=Bukh0jJWQ9&sig=FJSNmtELcGiTTNjhMeoi5lOMb0o&hl=ru&sa=X&redi
r_esc=y#v=onepage&q=CUSTOMER%20Model%20to%20Michael%20E.Gordon
&f=false
Organizația pentru Dezvoltarea Întreprinderilor Mici și Mijlocii. www.odimm.md
