Frontiers of Entrepreneurship Research
1997 Edition

SUMMARIES

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SELF-EMPLOYMENT PROGRAMME IN SLOVENIA: EVALUATION OF RESULTS AND AN AGENDA FOR IMPROVEMENT 

Miroslav Glas
Metka Cerar

University of Ljubljana, Faculty of Economics
Kardeljeva ploscad 17, 1000 Ljubljana, Slovenia

Telephone: 386-61-1892-400
Fax: 386-61-1892-698
E-mail: miroslav.glas@uni-lj.si

Principal Topics

The results of an extensive self-employment programme in Slovenia that had sponsored the foundation of over 14.000 new business units during the 1991-1995 period were studied, following a pilot research undertaken two years ago. The results of the programme were measured in terms of employment, assessment of financial results (sales and profits), the amount of the own equity capital participants invested in new units. The efficiency of the assistance offered by the staff at the Employment Offices as well as by the external counsellors was assessed.

Method

A random sample of 205 self-employed units that entered the business during the year 1993 were examined through a questionnaire in 1996. The results were compared to the pilot research undertaken in the most active region of the Regional Employment Office at Celje. Additional 99 persons leaving the programme after the awareness course were contacted through a short interview by phone. The units were grouped according to the modality of assistance chosen: different amount of founding capital provided by the Employment Office and the availability of training and counselling support.

Major Findings

The self-employment programme attracted the unemployed with the relevant education and experience far above the average for unemployed and the employed people in Slovenia as well. However, their level of education was considerably lower than for owner-managers of growing businesses or dynamic entrepreneurs (see: EFER Study).  Without the structured assistance many self-employed persons would never start their own businesses.  Nonetheless, the self-employment was primarily the way to ensure economic existence facing the probability of long-term unemployment. The majority of participants opted for the exclusive ownership of the venture, with females far more inclined to embrace other family members. The economic contribution of self-employment units  was  assessed rather favourably considering following findings:
 



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the considerable commitment of private financial and other resources, particularly  business premises and some equipment; 
the number of new jobs created: in the average 2 full-time jobs per venture and 0.5  part-time jobs, although there were hardly any fast growing businesses involved; 
the net value added increasing steadily; 
the level of satisfaction of local customers, focusing on services; 
the upgrading of the business expertise among participants. 
Despite the amount of the founding capital ensured by the programme the ventures have experienced the problem of the capital shortage related to some extent to the wide-spread problem of delayed payments of customers.

The self-employed have evaluated favourably the support of the staff at Employment Offices, particularly in the field of information and advice. External counsellors fared slightly worse in the evaluation, mostly due to the high expectations of self-employed persons.

Implications

The self-employment programme is far from being a panacea for the problem of acute unemployment in Slovenia. However, it has been a valuable option for many unemployed with almost 80 % of participants in the questionnaire that would make the same choice again. There is room for some improvements:

1 to increase the amount of financial assistance by turning it into a credit scheme instead  of a modest one-time subsidy (the scheme has already been proposed);
2 to improve the assistance of counsellors with more specialised services;
3 to offer more flexible choice of type of ventures to answer for different needs of  participants (there is a novel programme for cooperatives);
4 to ensure long-term monitoring of new ventures and the development of clusters of  ventures.
 

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