The Entrepreneurship Youth Magazine #1

THE ENTREPRENEURSHIP YOUTH MAGAZINE NUMBER 1

Entrepreneurial Education for Youth Project FUNDED BY THE EUROPEAN UNION THROUGH ERASMUS+ PROGRAMME Sprijin si Dezvoltare Association

The content of this magazine does not reflect the official opinion of the European Union.

Responsibility for the information and views expressed in the magazine lies entirely with the author(s).

Sprijin si Dezvoltare Association Romania – Project Coordinator and Applicant Sorina Carmen Vacariu – Project manager Gabriela Rimbu – Intellectual output expert sprijinsidezvoltare@yahoo.com https://sprijinsidezvoltare.wordpress.com/ https://www.facebook.com/SprijinSiDezvoltare/

Inercia Digital – Project Partner

CEFE Macedonia – Project Partner

Project period February 2017 – January 2019

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Dear readers,

Welcome to our first magazine number! We are honoured to write about entrepreneurship for young people who wants to open a business, and for all the people around the world.

The magazine will help you to learn and know more about entrepreneurship and social entrepreneurship, as well as to identify based on examples a business idea. The articles will also explain the social, political and economic context from Romania, Spain, Macedonia and Europe and how this context can influence a business.

The articles from this number are about: ✓ Information regarding youth, employment and labour market at EU28 level ✓ Employment policies at the European level and the Public expenditures for Employment Policies ✓ European Instruments for Employment Policy ✓ Entrepreneurship Policy in Romania, Macedonia and Spain ✓ Strategy for innovation of the Republic of Macedonia and the Macedonian entrepreneurship ecosystem ✓ What is a social business? ✓ Example of social businesses and businesses from Romania, from Macedonia, from Spain, from Europe and across the world ✓ Instruments for entrepreneurs and social entrepreneurs ✓ Interviews with entrepreneurs and case studies ✓ What means to be self-employed and an entrepreneur, and the procedures to start the selfemployed activity This magazine can be used for personal reading and self-education or as an educational instrument and material in non-governmental organisations, schools, universities, vocational education and training organisations or any other organisation and freelancer.

Enjoy, Sorina Carmen Vacariu - Project manager

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Dragi cititori,

Ne bucurăm că citiți primul număr al revistei noastre. Suntem onorați să scriem articole despre antreprenoriat atât pentru tinerii care vor să își deschidă o afacere, cât și pentru toți oamenii din întreaga lume.

Revista vă va ajuta să învățați și să aflați mai multe despre antreprenoriat și antreprenorial social, precum și să identificați o idee de afaceri inspirându-vă din exemple oferite. De asemenea, articolele vor explica contextul social, politic și economic din România, Spania, Macedonia și Europa dar și modul în care acest context poate influența o afacere.

Articolele din acest număr conțin: ✓ Informații despre tineret, ocuparea forței de muncă și piața forței de muncă la nivelul UE28 ✓ Politicile de ocupare a forței de muncă la nivel european și cheltuielile publice pentru politicile de ocupare a forței de muncă ✓ Instrumentele Europene pentru politica de ocupare a forței de muncă ✓ Politica antreprenorială din România, Macedonia și Spania ✓ Strategia de inovare a Macedoniei și a ecosistemul antreprenorial macedonean ✓ Ce este o afacere socială ✓ Exemple de afaceri sociale și alte afaceri din România, Macedonia, Spania, Europa și din întreaga lume ✓ Instrumente pentru antreprenori și antreprenori sociali ✓ Interviuri cu antreprenori și studii de caz ✓ Ce înseamnă a fi antreprenor și pașii necesari a fi parcurși pentru a desfășura o activitate independentă Această revistă poate fi utilizată pentru lectură personală sau ca instrument educațional în cadrul unor organizații non-guvernamentale, școli, universități, furnizori de profesională sau de către liberi profesioniști și oricare altă organizație pentru formare.

Lectură plăcută, Sorina Carmen Văcariu - Project manager 3|Page

formare

Estimados lectores,

¡Bienvenidos al primer número de nuestra revista! Para nosotros es un honor el escribir para gente joven que quieran abrir su propio negocio, y para todos los ciudadanos del mundo, acerca del emprendimiento.

Esta revista te ayudará a aprender y a conocer más sobre el emprendimiento y el emprendimiento social, así como a identificar una idea de negocio basada en ejemplos. Los artículos también explicarán el contexto social, político y económico de Rumanía, España, Macedonia y toda Europa y como el contexto puede influenciar en un negocio.

Los artículos de este número son sobre: ✓ Información acerca de la juventud, el empleo y el mercado laboral a nivel europeo ✓ Políticas de empleo a nivel europeo y el gasto público para las Políticas de Empleo ✓ Instrumentos Europeos para la Política de Empleo ✓ Política de Emprendimiento en Rumanía, Macedonia y España ✓ Estrategia de innovación de la República de Macedonia y el ecosistema de emprendimiento en Macedonia ✓ ¿Qué es un negocio social? ✓ Ejemplo de negocios sociales y negocios de Rumanía, Macedonia, España, Europa y de todo el mundo ✓ Instrumentos de emprendedores y emprendedores sociales ✓ Entrevistas con emprendedores y emprendedores sociales ✓ Qué significa ser autónomo y emprendedor y los procedimientos para comenzar la actividad como autónomo Esta revista puede ser utilizada como lectura personal para la autoeducación o como un instrumento educacional y material educativo para organizaciones no-gubernamentales, escuelas, universidades, organizaciones de educación y formación profesional, así como para cualquier otra organización y para profesionales independientes. ¡Disfrutad!

Sorina Carmen Văcariu - Gerente de proyecto 4|Page

Драги читатели,

Добредојдовте во првиот број на нашето списание! Чест ни е да пишуваме за младите луѓе кои сакаат да отворат бизнис, како и за сите луѓе ширум светот, за претприемништвото. Списанието ќе ви помогне да дознаете повеќе за претприемништвото и социјалното претприемништво, како и да идентификувате бизнис идеја врз основа на примери. Во прилозите се објаснува и социјалниот, политичкиот и економскиот контекст од Романија, Шпанија, Македонија и Европа и како контекстот може да влијае на бизнисот. Во овој број ќе читате за: ✓ Информации за младите, вработувањето и пазарот на трудот на ниво на ЕУ28 ✓ Политики за вработување на европско ниво и јавни трошоци за политики за вработување ✓ Европски инструменти за политики за вработување ✓ Политика за претприемништво во Романија, Македонија и Шпанија ✓ Стратегија за иновации на Република Македонија и македонскиот претприемачки екосистем ✓ Што е социјален бизнис? ✓ Пример за социјални бизниси и бизниси од Романија, од Македонија, од Шпанија, од Европа и од целиот свет ✓ Инструменти за претприемачи и социјални претприемачи ✓ Интервју со претприемачи и студии на случај ✓ Што значи да се биде самовработен и претприемач и процедурите за започнување на активноста како самовработени Ова списание може да се користи за лично читање и самообразование или како едукативен инструмент и материјал во невладини организации, училишта, универзитети, организации за стручно образование и обука или било која друга организација и слободна пракса. Уживајте, Сорина Кармен Вакариу - проект менаџер

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Contents Youth, employment and the labour market..................................................................................... 8 Employment policies at the European Level ................................................................................ 10 EUROPEAN INSTRUMENTS FOR EMPLOYMENT POLICY ........................................ 12 Entrepreneurship Policy in Romania ............................................................................................ 14 Public expenditures for Employment Policies .............................................................................. 17 Social business .............................................................................................................................. 19 Concordia Bakery and Concordia Agriculture ............................................................................. 21 Made in Rosia Montana – Merino Wool Knitwear ...................................................................... 22 Puravida bracelets ......................................................................................................................... 24 The 4Ocean Company................................................................................................................... 25 TOMS ........................................................................................................................................... 26 BioLite .......................................................................................................................................... 28 WoodJoy – Timural Group SRL ................................................................................................... 29 CUIB ............................................................................................................................................. 30 Entrepreneurship in the Republic of Macedonia .......................................................................... 31 Strategy for innovation of the Republic of Macedonia ................................................................. 34 SWOT analysis of the Macedonian start-up and innovation ecosystem....................................... 36 What’s next for the Macedonian entrepreneurship ecosystem? ................................................... 37 What instruments do entrepreneurs in Macedonia have on their disposal.................................... 38 Social entrepreneurship in Macedonia .......................................................................................... 41 Social Impact Award..................................................................................................................... 41 Case study www.sozdadi.mk, How the winners of SIA Award 2017 is changing the socio economical context in Macedonia ................................................................................................ 45 Arno and case study - coolinari.mk- Social enterprise who is changing the way specialised schools in Macedonia are offering their services to the business sector....................................... 46 Small and medium companies, the core of Spanish business. ...................................................... 53 Entrepreneurship policy in Spain .................................................................................................. 55 Self-employment survival guide ................................................................................................... 56 Javier Carril, co-founder of ExeCoach ......................................................................................... 59 David Pérez García, founder of Damtec ....................................................................................... 60 Pablo Sanagustín, founder of Arelux ............................................................................................ 60 Ignacio Bao, founder of Bao & Partners ....................................................................................... 60 6|Page

José Castillo Navarro, founder of Xul Comunicación Social ....................................................... 61 Alejandro Barquero, founder of Consoltic.................................................................................... 61 Javier García and Miguel Ángel Lubián, founders of Instituto CIES........................................... 62 Juan Alejandro Goñi Uriarte, founder of Klicstudio Arquitectura y Diseño ................................ 62 Gerard Martret, founder of Drivania ............................................................................................. 63 Fernando Vilches Guijarro, founder of viajeconnosotros.com ..................................................... 63 Álvaro Cuadrado Jiménez, founder of Producciones 28 Norte .................................................... 63 Social businesses in Spain ........................................................................................................... 64 La Colmena dice sí ................................................................................................................ 64 La Bolsa Social ...................................................................................................................... 65 Impact on Integrity ................................................................................................................ 65 Fundación Sanders ................................................................................................................. 65 Too Good To Go.................................................................................................................... 66 Gawa Capital ......................................................................................................................... 66 MICROWD ........................................................................................................................... 67 Insulclock............................................................................................................................... 67 Planeta Huerto ....................................................................................................................... 67 Koiki ...................................................................................................................................... 68

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Youth, employment and the labour market Gabriela Rimbu, Sprijin si Dezvoltare Association

The youth employment represents a priority for the European Union. Youth unemployment is currently an issue in the EU because the youth unemployment rates are very high in some of the member states. In 2015 there were high gaps between the country with the lowest unemployment rate, Germany and the countries with the highest unemployment rate, Greece and Spain, with more than 40 percentage points.

Over the years there where a lot of changes in the economy structure and industries. These changes affect the young people, the search for a new job is more difficult and, in many cases, they are forced to work on a low payed job or to occupy part time jobs. There are many situations were the young people are forced to occupy a job which doesn’t correspond to the educational background because they cannot find a job to match, or even more inconvenient they are forced to occupy jobs that requires a lower educational level than they have.

The changes are not only at the economic and industrial level. There are changes in the demography also. At the EU28 level (the 28 member states of the European Union), during 20062015 the young population number decreased, as a result of their aging and declining birth rates.

But how we can describe the young people situation? Could we know more about it from the existent statistics and researches? Yes, we can! But why it is important to know about the young people? Because you can understand better your situation, you can understand if you are following the trend or if you not, and the most important: you can understand the social, political and economic context.

I will describe the young people current situation on the EU, considering the statistics and indicators used to describe the average of the 28 member states of the European Union from Eurostat database. For a young people to leave the parents household means independence, means to take life in his hands and be responsible for his own person and existence. You can leave your parents’ home obviously if you have a job, or if you have money from your own business or a selfemployment activity. To live an independent life requires money. During 2006-2015 the average age of men in whom they choose to leave their parent households is about 2 years higher than the 8|Page

women average age. The man chooses to leave the parents’ house at 27 years and the woman 25 years. Over half of young people aged 15-29 live with their parents (considering the available data from 2010-2013). During 2006-2015 the highest youth employment rate at EU28 was in 2008 with 50.9% (this was before the financial crisis) and the lowest youth unemployment rate was in 2013, 45.9%. To make a comparation with these rates, I choose the data from Romania for the same

The man chooses to leave the parents’ house in average at 27 years and the woman 25 years.

period, where the lowest rate was 39.5% in 2009 and the highest rate was 43.1% in 2015. In 2015 the average youth unemployment rate for EU28 was 47.2%, so we can see that Romania had no major deviations from the average. On the other hand, the rate in Spain for 2015 was 33.7% and here we can see a bigger difference compared with the EU28. In the period 2006-2015, the highest youth employment rates were recorded by Denmark 70.8% and Ireland 62.9% in 2017, UK 62.5% in 2006.

But why it is important to know this data? Because you can see and understand how the youth employment and unemployment respond to the economic changes and it will make you understand the impact on your future business, acting differently according with the economic cycle.

For a lot of young people, the idea to carry out independent economic activities represents a way to integrate themselves into the labour market. During 2006 – 2014 period the number of young people self-employed EU level decreased in the period 2006 to 2014, in 2015 increased by 20.7 thousand persons compared with 2014. Thus, if in 2006 3085.9 thousand youngsters carried out economic activities, in 2015 only 2630.5 thousand people where self-employed.

The young people can work on the labour market under part-time contracts. In 2015, 32,4% of the young people population aged between 15-29 years old were employed part-time at EU28 level.

These young people represent 23.2% of total employment for young people aged 15-29. There are a lot of different reasons why a young people have labour part-time jobs, but the main reasons are: they couldn’t find a full-time job, they are studying, they have kids or uncapable-to-work-adults to care for, their own illness or disability or they have other personal responsibilities. Of course, there are many other reasons why a youth can choose to have a part-time job, but the main ones are included in these categories. A young people can be employed voluntary or involuntary (involuntary because they have a part-time job not because they wanted to, but because they had 9|Page

to). The involuntary part-time employment rate in the EU-28, calculated as a percentage of total part-time workforce, was 34.5% in 2007 and decreased in 2015 compared to 2007 to 33.8%.

The youth unemployment rate is different in each country, and its fluctuation depends on the social, economic and political context of it. Considering the age group of 15-29 years, it is noticeable that between 2006-2015 the lowest number of young people unemployed registered at EU-28 level was in the 25-29 age group. On the other side the highest number of young people unemployed were the young people aged between 20-24 years old. In 2015 the male unemployment rate of 15-29 age group at EU28 level was bigger than the female unemployment group for the same age group, that means that are more male young people than female that did not had a job.

The young population is facing important economic changes, and these changes have an influence on the employment and unemployment rate. How can the young people adapt to these changes? Is the social policy a response to the challenges that young people are facing? Is the policy designed in an effective way? Is the entrepreneurship and self-employment a way to increase the employment rate? Most of the questions have different questions depending the country where you, my dear reader, are from. But one thing is for sure, entrepreneurship and self-employment increase the employment rate, if you are self-employed you create just one new job, your job, and if you are an entrepreneur you can create at least one new job. So‌ START A BUSINESS! You are doing for yourself!

Employment policies at the European Level Gabriela Rimbu, Sprijin si Dezvoltare Association

The European Employment Strategy was first introduced in 1992 by European Union Treaty, as a respond to the youth unemployment situation. In 2009 the European Commission elaborated three key priorities that should be considered as a base for the EU Member States in the development and implementation of 10 | P a g e

employment policies: increase and maintain employment, create jobs and promote mobility; improve skills and fulfil the labour market needs; improve access to the labour market.

In 2009 the European Commissions developed An EU Strategy for Youth – Investing and Empowering - A renewed open method of coordination to address youth challenges and opportunities. Through this strategy the European Commission aims to invest and empower young people by creating as many opportunities as possible for young people in the fields of education and employment, improving their social inclusion, full participation of all young people in society, and fostering mutual solidarity between society and young people.

EU Strategy for Youth – Investing and Empowering - A renewed open method of coordination to address youth challenges and opportunities

One of the most known employment measures is Youth Guarantee, where all the Member States are committed to ensure that all young people under the age of 25 years receive a good quality offer of: employment, continuing education, apprenticeship or traineeship within a period of four months of becoming unemployed or leaving formal education.

Through this measure the government will develop policies and action plans in order to ensure opportunities for young people at an early age.

In 2015 the European Union Council adopted the Europe 2020 Integrated guidelines for the economic and employment policies of the Member States to stimulate labour demand, improve labour supply, skills and competences, improve the functioning of labour markets and foster social inclusion, fight against poverty and promote equality.

Youth on the move is a Europe 2020 initiative aiming to improve the level of education and employment of young people and to reduce the unemployment rate among young people by implementing various actions.

On June 2016 the European Commission adopted the new Skills Agenda for Europe, launching 10 actions to make that the right training, skills and support are available to people in the EU. Starting from 2010, the Council of the European Union provides exact directions and guidelines to Member States for the development and implementation of their National Reform Programs.

These guidelines refers to: Increasing labour market participation among women and men, reducing structural unemployment and promoting job quality; Develop a skilled workforce that 11 | P a g e

responds to the needs of the labour market and promote lifelong learning; Improving the quality and performance of education and training systems at all levels and increasing participation in tertiary or equivalent education; Promoting social inclusion and combating poverty.

Since 2006 the EU elaborate European Alliance for Corporate Social Responsibility where the business sector is engaged in order to reach the social policies aims and priorities. I can imagine that you are thinking now how can a company can help to raise the employment rate? Well they can do it, especially through different action as: integrate into the labour market and ensure social inclusion of disadvantaged groups of people, contribute to a positive image of the business and entrepreneurial environment or develop labour market quality standards.

Flexicurity is one of the approaches of the European Union to achieving the objectives of the renewed Lisbon Strategy. Flexicurity enhance the flexibility and security in the labour market in the same time. But why was important to develop this kind of measures? Because it is important for an employee to have a flexible workforce and in the same time it is important for the employers to feel secured and to not fear of long periods of unemployment.

EUROPEAN INSTRUMENTS FOR EMPLOYMENT POLICY The European Union developed and used different instruments to develop and implement the employment policies. I am wondering if you, our dear reader, know these instruments?!

The European Employment Observatory was set up in 1989 by the Council of the European Union,

an observer through which the European

Commission and the EU Member States analysed and gather information on changes in jobs and qualifications, analysed changes which occur in each sector of the labour market and, last but not least, to distributed the analysis and the information gathered to the economic and social stakeholders, in particular the European social partners. During the same period the Council also decided to set up a network where the Commission, together with representatives of the EU Member States, cooperate to provide information and conduct studies.

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In 1994, the EURES network (The European Job Mobility Portal) was launched. In 2012, this network was strengthened as a key instrument for monitoring mobility, supporting the free movement of workers and their integration in the European labour markets, as well as informing citizens about applicable legislation. The EURES network provides support for citizens who want a job and employers who are searching for work force and aims to develop a European labour market open and accessible to all. The network also provides ways to meet and support

EURES network - The European Job Mobility Portal

labour mobility through cross-border exchange of labour and demand.

EURES also promotes transparency and exchange of information at the level of European labour markets. In 2016, the EURES network was re-established and reorganized and the roles and responsibilities of the various organizations participating in the network were defined.

As there was a need to ensure better transparency of the skills and competences of the citizens of the European Union, a single toolbox, a personal and coordinated document portfolio called "Europass" was developed to increase transparency in vocational education and training. Europass documents are: Europass Curriculum Vitae, Europass Mobility, Europass Diploma Supplement, Europass Language Portfolio, Europass Certificate Supplement, and other documents authorized as Europass documents by the Commission.

The European microfinance instrument Progress was developed by the European Parliament and the Council of the European Union in order to extends access to microfinance, raise the number of jobs and ensure social inclusion. The target group of this program are unemployed people or people who are unable to integrate themselves into the labour market, as well as vulnerable or socially excluded people, and micro-enterprises, especially social enterprises.

In 2017, the European Parliament and the Council of the European Union addressed the need to develop a Youth Employment Initiatives (YEI) in the most affected regions of the EU to address the issue of youth unemployment. The target group of this initiative

Youth Employment Initiatives

are young people who do not have a job, do not follow an education or training program (NEET) who are unemployed or inactive. The European Structural Funds represent a source of income for this

initiative, but also national sources, including the implementation of the "Youth Guarantee". The European Structural Funds 2014-2020 must facilitate the achievement of the thematic objective 13 | P a g e

"Promoting sustainable and quality jobs and supporting the mobility of workers" and facilitated the implementation of measures that ensure access to the labour market for young people by integrating them into the labour market thorough self-employment, entrepreneurship and business start-ups.

The Employment Committee was set up on 11 May 2015 to promote coordination between Member States on national employment and labour market policies.

The member states of the European Union are encouraged to cooperate and exchange good practice through a Mutual Learning Program using a database of labour market practices. Basically, there is no need to innovate every time, you can also learn and apply other country innovation.

In 2013 was adopted the Entrepreneurship 2020 Action Plan developing actions in order to promote entrepreneurial spirit through entrepreneurship education, simplifying administrative requirements, attract investors easier, enhance opportunities for vulnerable groups.

Entrepreneurship Policy in Romania Gabriela Rimbu, Sprijin si Dezvoltare Association

Romania had developed the National Employment Strategy 2014-2020 aimed to boost efforts to meet the 2020 employment target set by Romania, a 70% employment rate for the 20-64-year-old population. There are a lot of specific objectives and measures in this strategy. The aim of this article is to highlight the measures relevant for entrepreneurship.

The first specific objective of the strategy is to increase employment among young people by reducing youth unemployment and the number

National Employment Strategy 2014-2020

of young people in the NEETs category. The implemented actions aim to increase investment in youth entrepreneurship development, especially in high added-value sectors.

The second specific objective of the strategy is to improve the occupational structure and labour market participation of women and vulnerable groups. The Government propose a series of 14 | P a g e

measures and action in order to reach these goals and to enhance entrepreneurship in the same time. These measures are supporting entrepreneurship activities, especially for young people, granting tax incentives to entrepreneurs who start rural businesses in secondary and tertiary sectors and those who create jobs for disadvantaged groups. The incentives are a great support if you do not have enough money for your business. Or even if you have money, you can save money by receiving incentives, it is all about finding and take every opportunity that life (in this case, the government) give you! These actions will also support women to return to the labour market after the maternity leave by promoting entrepreneurship among these women.

The strategy also aims to enhance social economy and social entrepreneurship.

The strategy set up the aims, specific objectives and general measures and actions to be implemented during 2014 – 2020 in Romania. Each year Romanian Government develops the National Reform Program, and through this Program Romania set up its priorities in order to achieve the Europe 2020 objectives.

The National Reform Program from 2017 the government aims are: -

Increasing the number of active SMEs (small and medium enterprises) by developing support services to boost entrepreneurship. The Romania HUB Program aims at developing entrepreneurial skills.

-

Increasing the level of employment of NEET young people by promoting entrepreneurship.

-

Encouraging entrepreneurship by creating new non-agricultural enterprises in the urban area in less developed regions

-

Encourage self-employment, creating new businesses

The Ministry for Business, Commerce and Entrepreneurship publishes the medium-term budgetary policies and programs of the main loan officers for 2017 and the 2018-2020 perspective.

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LIST OF SME Programs and Start-up for 2017: Program

Total budget

Export stimulation – aim to increase exports

69 million RON

Female entrepreneur (manager) - women who do or want 1 million RON to do business will be able to attend entrepreneurship courses, seminars and workshops.

Craftsmanship, program for craft and handicraft

890,000 RON

Trade Program, sustain the trade of products and services 50 million RON on the market The UNCTAD / EMPRETEC Program - to support the 476,000 RON development of small and medium sized enterprises Fair of Small and Medium Enterprises - organizing the 5 million RON Small and Medium Enterprises Fair Microindustrialisation

74.3 million EURO (up to EUR 100,000 to SMEs)

Internationalization

–

aim

to

support

the 18 million RON

internationalization of Romanian economic operators Start-up Nation Romania - Romania Small Business Start- 500 million RON up Program

The programs usually remain the same every year, some of them may not be fund from year to year, or some of them may be cancelled. If you want to obtain funds in Romania you should always look at the Ministry for Business, Commerce and Entrepreneurship new and updated. And if you will apply for funds, we wish you good luck!

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Public expenditures for Employment Policies Gabriela Rimbu, Sprijin si Dezvoltare Association

Each country has its own Employment Policies. Each EU member state allocates pubic money to support these policies. The public expenditures depend on the social, economic and political context of each country. Public expenditures mean the public money that the government use in order to sustain the employment policies. Of course, the number of young people benefiting from these policies is an indicator of its effectiveness.

The public expenditures are allocated on different type of measures. The most relevant type of action in the labour market policies are: Labour market services, Training, Employment incentives, Support employment and rehabilitation, Direct job creation, Start-up incentives, Out-of-work income maintenance and support and Early retirement.

As an entrepreneur your attention should be focused not only on the start-up incentives, but also on the Labour market services, Employment incentives, Support employment and rehabilitation and Direct job creation.

Why are important? Because will help your business to grow. The labour market services are not only for the unemployed people, are also for the employees, it can provide services to put you in contact with possible employers, such as: online platform or job fairs. The

Labour market services, Training, Employment incentives, Supported employment and rehabilitation, Direct job creation, Start-up incentives, Out-of-work income maintenance and support and Early retirement.

Employment incentives can help your business because you can receive incentives if you employ for example unemployed people. Take in mind and be aware on all the labour market policies. The target group of these policies are indeed the unemployed people, but it has impact also on the business sector.

I have analysed the Public expenditure on labour market policies from Romania during 2007-2015 period. During 2009 and 2010, Romania has spent more money compared to the other years. This is another example where we can see the impact of the economic context to the labour market.

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Because of the financial crisis the public expenditure was used to sustain the unemployment and to increase the employment. During the entire period Romania used public money for measures that soften the negative impact of the unemployment. Unfortunately, the largest spending on public money has been spent on implementing social policies that provide income for people who are not working, for their maintenance and support, and for labour market services.

Basically, the major part of the financial resources has been provided to support the unemployment situation, not to improve it. The third place in the expenditure classification was the expenditure for social policies that provide incentives for employment, followed by direct new jobs development, training and incentives for start-ups.

In Romania during 2007-2015 period the number of young people aged under 25 years old that had benefit from out-of-work income maintenance and support was bigger than any other participants in other measures. If we do a classification of the number of young people who have participated in the labour market policies, it will look like that: 1. Young people participate in the out-of-work income maintenance and support measures 2. Training 3. Employment incentives 4. Start-up incentives 5. Direct job creation Still, Romania is not the only country that most of the total labour market expenditures goes to policies that provides out-of-work income maintenance and support for unemployed young people. Most of the country are in the same situation, especially because it is the most important measure and needs a lot of money to sustain it. It is true that the other measures don’t require the same amount of money as this one.

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Social business Gabriela Rimbu, Sprijin si Dezvoltare Association

What means social entrepreneurship? What is the difference from a social enterprise and a regular enterprise? What is the difference between a social enterprise and corporate social responsibility? There are important differences, but not big differences, therefore these concepts can create confusions. To understand better the aim and structure of the social entrepreneurship we recommend you watch the Module 19 from the Entrepreneurship Online course from the Entrepreneurial Education for Youth Project and to read the entire module 19. This module will give you a global understanding about the concepts. In this article we will focus on the social business.

There are a few countries in Europe that have a specific legal form or statutes for social enterprises, such as: Finland, Latvia, Lithuania, Poland, Slovakia, Hungary, Slovenia, Croatia, Greece, Malta, Luxembourg, United Kingdom, Belgium, Czech Republic, France, Italy, Portugal, Spain.

To open a social business, you will follow the same steps as opening a business. The economy and the financial instruments aren’t change for a social business, just because it has a social cause. Yes, it is very important the social cause of the social business, but you need to make sure that your product or service is competitive and that you can maintain it on the market.

A social business will not be successful because is a social business, a business will be successful because of the product or services that you will provide, and because you run the social business as any other

To open a social business, you will follow the same steps as opening a business

regular business. The fact that it has a social cause will help you on your marketing strategy and you will always have an advantage over other businesses, but it will not guarantee your success. If you don’t run the social business as a business, then it will not work, even though the social cause is an important one. So, if you what to open a social business then you should know how to open a business.

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And yet, what is the difference between a social business and a regular business? A social business distinguished by a regular business by its aim. The aim of a social business is social transformation by fighting for social causes and tackling social, cultural or environmental issues. On the other hand, the aim of a regular business is profit and wealth maximisation. This doesn’t mean that you will not care if you make profit or not, because you will need the money to reach your aim, to produce social transformation. Let’s say that the money will be on the second place. And because the money is on the second place, we have differences on how a social business manage the money and the profits. Unlike a regular business, a social business doesn’t have a policy dividend, this means that they don’t give money to the owners through dividends. The profit is always reinvested, and the performance is measured through the produced social impact and transformation and not through profits. For example, your fixed costs will increase, and you will make less profits if you choose to create organic packages and not plastic packages. A social business is always environmental conscious. Another important aspect is that the investors will receive their investment without interest. Usually this thing cannot happen in a regular business (of course can happen occasionally, but it is well known that the investors take their money back with interest).

Corporate social responsibility is different than a social business. Through corporate social responsibility a company respond to the community needs and problems, the main objective of the firm will be profit and wealth maximisation and with

Corporate social responsibility is different than social business

some of the profits the company will develop their own social and environmental projects. Basically, it is a regular

business

that

aims

profit

and

wealth

maximisation, that generates profits and has a dividend policy, where the investors receive their investment with

interest and beside all that, occasionally the company develops social projects and programmes.

It doesn’t matter if you want to open a social business or a regular business, the only thing that matters is to solve the client needs. Having a social business is not equal with having a more ethical business. Aiming for profit and wealth maximisation is an important aspect of a business and you can still solve community problems through corporate social responsibility. It all depends on the business idea that you have. You can identify a need or a problem, to develop a business and to get involved in the community through corporate social responsibility. You can also identify a community need, to aim for social transformation and open a social business, but remember that a 20 | P a g e

social business is a business, and you still need to have a product or a service that you need to sell.

If you identified a community need and you aim for social transformation, but you could not find a product or a service to sell, then you should open a non-profit organisation.

To understand better the social business in the following articles we will present various social businesses across Europe and the globe. Every social business begins with a story. What will be your story?

Concordia Bakery and Concordia Agriculture Gabriela Rimbu, Sprijin si Dezvoltare Association

Concordia Bakery and Concordia Agriculture are the social businesses of the Humanitarian Organisation Concordia. The bakeries are in Ploiesti and Bucharest Romania. The aim is to help disadvantaged young people by selling bakery products and pastry. The bakery is a successful social business and during its existence won different rewards from: ERSTE Foundation Award for Social Integration (2011), NESsT Romania Social Enterprise Competition (2013) and METRO - The Star of the Community (2014).

What is their social cause?

Their aim is to help disadvantage young people through education. By selling the bakery and pastry products the business is helping young people to follow professionalization courses. They are also helping young people to remain and go to school.

They offer job opportunities for the disadvantaged young people to stay and work at their bakery or at their agriculture activity after they finish the professionalisation courses.

Basically, they are selling products in order to educate disadvantaged young people and they are hiring also disadvantaged youth to work in the bakery.

What they promote?

Concordia Bakery and Concordia Agriculture is in the line with the international trend of healthy food and healthy lifestyle and they are promoting a healthy lifestyle thorough natural ingredient.

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CONCORDIA bakery is endowed with European standards and has implemented the ISO 9001/2008 and ISO 22000/2005 food quality and safety management system.

CONCORDIA Agriculture vegetables are produced without pesticides and with natural fertilizer.

What they offer?

They are offering bread products and pastry products. For Easter and Christmas Holidays the Bakery creates special products that can be bought or ordered. These special products also include traditional products specific for each holiday.

The social businesses are also offering vegetables, cultivated in 3 hectares, six solariums and one greenhouse.

The bakery products and pastry can be bought directly from the bakery store Bucharest. They also make daily delivery in Ploiesti and Bucharest. One innovative approach is the monthly subscription for companies. An individual can pay for a monthly subscription and the bakery will deliver the products at the company office. The monthly subscription is payed at the end of month and it requires minimum order. The bakery is making special offers for big orders.

The vegetables can be bought through orders. The vegetables are listed in an online catalogue on the official website of the social enterprise. The orders are made by e-mail or by telephone. The delivery is made in Ploiesti and Bucharest.

Made in Rosia Montana – Merino Wool Knitwear Gabriela Rimbu, Sprijin si Dezvoltare Association

The Made in Rosia Montana social enterprise was created by the Tica Darie in Rosia Montana, Romania in 2015. The company was made to to help the local community from Rosia Montana. The idea of the business starts from a pair of knitted socks that the owner of the business received from a local lady. Tica Darie express interest the interest on the

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Rosia Montana community since the beginning of the mining project that could had a negative impact on Rosia Montana.

What is the business social cause?

Their social cause is the development of the community through sustainable income and education.

The company give jobs to woman from vulnerable groups who live in Rosia Montana village.

Because the village in in a mono-industrial area, where mining is the most common occupation, there are not so many job opportunities, especially for the woman. The company offers to woman a sustainable income and in the same time is promoting Romanian traditions and culture. The women can increase their living standard and can have an occupation in the same time. Currently there are 35 women from vulnerable groups that work in the company.

The company is also promoting education through children and young people.

The company has several impacts on the community: promote the artisan and knitting, ensure an income for vulnerable women, give the opportunities for vulnerable woman to be active, support the young people and children through education.

What they promote?

The company promotes artisan and crafting. They are using premium wool called Merino, the finest and slimmest type of wool in the world, natural, renewable and biodegradable. The women from this community know very well to knit, and for them it is a possibility to make money from their competences and in the same time to be active.

What they offer?

The company offers knitted beans, socks, scarfs, mittens and sweater for woman, kids and men.

How can you buy?

The company has an online shop on their official website, where a client can create an account and buy directly from the company. They have special offers if a client chooses to subscribe to their newsletter. The products are shipped worldwide.

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Puravida bracelets Gabriela Rimbu, Sprijin si Dezvoltare Association

Puravida bracelets company was develop by the Americans Griffin Thall and Paul Goodman on a trip in Costa Rica, where they have discovered the artisan bracelets. “Pura vida” means “pure life” in Spanish. Pura vida company is not a social business, but they have a corporate social

“Pura vida” means “pure life”

responsibility programme that is very powerful and meaningful to the world community. When you read about them, you can almost create a confusion between a social business and their regular business. They said that

“giving back has always been core belief at Pura Vida, which is why we started the Charity Collection”. The company impact is very big and until now they have been partners with over 174 different charities around the world and have donated more than $1,534,879.20.

To create the bracelets the company collaborates with more than 350 artisans all over the world, and the most important, they work with artisans from emergent economies. The company provides these artisans a steady income and the possibility to work for a company from their home town.

On their products portfolio they have bracelets, jewellery (ring, necklace, earrings), accessories and anklets. You can shop their products directly from their website. You can also join the club and become a member. To become a member, you need to pay a monthly/ yearly fee and you will receive a monthly package with exclusive bracelets available only for the members. The products are shipped worldwide.

The most innovative approach of the corporate social responsibility is that the company gave to clients the possibility to support a cause in which they believe in. The company support different causes, such as: cancer awareness, education and children, memorial causes, animal awareness (turtle, dolphins), condition (suicide prevention, mental health awareness, anxiety disorder, Alzheimer awareness, autism awareness, depression awareness), environment causes (save the ocean, save the turtles, beach, save the dolphins, planet), women’s causes (breast cancer, baby loss 24 | P a g e

awareness). As a client you can buy a specific bracelet and part of the money, or all the money will go to that specific cause.

It is a unique approach because not only involves more than 350 artisans from different countries, including poor and emergent countries, they also funded more the 174 charity projects around the world, and they give the people from all over the world the possibility to get involved in charity actions and support causes that they believe in by buying bracelets. The geographical impact is big for this company.

The 4Ocean Company Gabriela Rimbu, Sprijin si Dezvoltare Association

All the business starts from a community need and try to solve community problems. The 4Ocean story begin in Bali Indonesia with Andrew Cooper and Alex Schulze on a surf trip. They were impressed by the amount of the plastic that threatened the ocean and the fisherman community. The desire to clean up the ocean gave them the idea to develop a product, a bracelet to be sold in order to fund their activities.

What is their social cause?

The company want to end the plastic pollution crisis by cleaning the ocean and the coastline. This is their main social cause. The company has also previous causes which are related with the ocean an save the ocean activities.

They have the latest technology to prevent, intercept, and remove trash from the ocean and coastlines, full time personnel working 24h/ day.

They are also involved in education and awareness activities with individuals, corporations and even governments. The aim of these activity is to raise awareness on the negative impact produces by the plastic to the ocean and to educate the individual in order to change their behaviour in regards of throwing plastic.

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The company also have a positive impact on the local community by offering jobs and stable incomes, creating opportunities for growth. A clean coastline creates also a safer living condition for the individuals.

What they offer?

They are selling hand assembled bracelets. The bracelets are made with recycled materials collected from the ocean. The company is committed to

The bracelets are made with recycled materials collected from the ocean

remove 1 pound of trash from the ocean or from the coastlines for each sold bracelet. The cost of the bracelet funds the removal of the pound. The company developed an innovative circle: the client buys a bracelet and fund the trash removal, the company remove the trash from the ocean and coastlines, from the collected trash the

company select recycle materials and produce the bracelets, and it arrives again to the client through the bracelet. The company not only sell bracelets, they sell the promise to clean one pound of trash along with the bracelet. They also gave value to the plastic removed from the ocean, through the bracelets, transforming what once was trash in value.

How can you buy?

The bracelets are selling through the company’s online shop and they ship the product worldwide.

TOMS Gabriela Rimbu, Sprijin si Dezvoltare Association

TOMS social business starts from a need, from a trip to Argentina were Tom notice that the children must play football without shoes. Tom created a social business that produce shoes and introduced the “One for One� principle, buy a pair of shoes and one person in need will receive a pair of shoes. Until now TOMS has given more that 86 million pairs of new shoes to children in need. In this European society, where the shoes 26 | P a g e

don’t represent a problem, maybe you are struggling to understand the impact of a pair of shoes on an individual. Well you can imagine how your life will be without a pair of shoes. How will be for you to go to work, school, out without shoes? I have the feeling that you cannot imagine a life without shoes. Through the bought pair of shoes TOMS aims to improve health, build confidence and increase the access of the education.

The company target group are children, their families and the community in need. TOMS is not working alone; it has partners that helps reach its goals in the countries where they have activity.

The first model of shoes was gives since 2007 in more than 70 countries across the globe and its produces in China, Ethiopia, Haiti and Kenya. Since 2012 TOMS started to develop more type of product to respond better to the community needs and the climatic conditions. In 2012 TOMS also give winter boots in Central and East Asia, Eastern Europe, Middle East,

Since 2012 TOMS started to develop more type of products to respond better to the community needs and the climatic conditions

South America and the United Stated. The company starts given sports shoes since 2013 in Africa, Middle East, India, Southeast Asia and United stated. Starting 2014 they have created wet-weather slip-on given in Africa, Central America and Southeast Asia. The winter boots, the wet-weather slip-on are produced in China. The sorts shoes are produced in China and India.

TOMS also produce one third of the giving shoes in the regions where the donate the shoes. In this way the company not only give shoes but also create and supports jobs in Argentina, Ethiopia, Haiti, India and Kenya, helping the local community and ensure a stable income for their workers.

The company had diversified their products and is producing also Eyewear. It kept the concept on one on one also to the eyewear products. For each purchased eyewear the company provides a person in need with a full eye exam, or treatment if needed. Through its partners TOMS provides treatments for prescription glasses, sight-saving surgery and medical treatment. More than 600 thousand people in need restore sight through the supported treatment in 13 countries. Beside the medical help that TOMS give, the company social cause also focus on gender equality, access to education and restored independence of the beneficiaries.

The model one to one was very successful for TOMS company and they had developed other products to respond to the community needs and help it. TOMS also sell coffee, TOMS Roasting 27 | P a g e

Co. Coffee and in return the company give 140 litters of safe water to a person in need. The 140 litter of water is considered the appropriate quantity for a week for a person. The social enterprise provided 600,000 weeks of safe water to people in need in 7 countries, the countries where the coffee beans are collected. The action improves health, give access to education and create new jobs for the communities in need.

Through its partners TOMS also support safe birth through safe birth kits, training for skilled birth attendance and ensure healthy delivery for the mother and baby. Using the same principle, one to one, TOMS sells bags to support their mission and helped more than 175,000 mothers.

Another social cause that TOMS is involved through its partners is preventing bullying by providing training on how to respond to bullying for school staff and crisis counsellors. The causes are financially supported by selling the TOMS High Road Backpack.

The products are sold online through the online shop on TOMS official website. The products are shipped worldwide.

The impact of this social enterprise is very big and covers a lot of countries around the globe.

TOMS is also involved in different awareness campaigns depending on the community needs and problem to be solved.

BioLite Gabriela Rimbu, Sprijin si Dezvoltare Association

BioLite is a social enterprise who wants to bring energy everywhere.

The company is engaged in two distinct customer segments: off-grid households in emerging markets and outdoor recreation users seeking fuel-independent cooking and charging.

The need of energy is everywhere, it doesn’t matter if you are a person that is engaged in an outdoor recreation activity or if you are an off-grid household in emerging markets.

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The BioLite enterprise products are stoves: smokeless campfire, Cook Meals, Boil Water, and Charge Device, Large Format Cooking, Make Wood-Fired Meals and Charge Devices, Solar Panels, Battery Banks, Solar-Powered Light, Charging & Radio, Head Lamp, Solar Lighting, USB Lanterns, Overhead String Lights, Lighting Kits.

The company established a permanent in-country operation in East Africa with over 35 full-time staff. The main problems that the social enterprise is engaged to solve is the open fire cooking and the access to electricity. The designed home stove solves this problem by reducing the smoke by 90%, by using 50% less wood and by generating electricity from its fire. The Solar Home is designed to generate electricity from sun at to have up to 24 hours of light if it is fully charged.

In 2017 BioLite reached 467,570 people, generated 381,976,739 Wh of electricity and offset 216,425 tons of CO2.

The company has employees on Kenya, Uganda and the United States.

BioLite is an innovative company that offered affordable and feasible solutions for off-grid households in emerging markets to a problem that doesn’t have yet solutions. To bring electricity off-the grid is very expensive and for the emerging countries, even though it should be a priority there is not enough money for this and it doesn’t represent a priority.

WoodJoy – Timural Group SRL Gabriela Rimbu, Sprijin si Dezvoltare Association

Timural Group is a social enterprise from Targu-Mures Romania opened in 2003. The company opens as a response to the unemployment situation of the people with disabilities. The founders have developed the brand WoodJoy. The company hired disability people that manufacture educational toys and small wooden furniture.

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The company produce standard wood products but also provides personalised products. The offered products are educational toys, small wooden furniture, mode decorations and multifunctional furniture.

The company profits are invested in the people with disabilities income. The impact produced by this company is made at the employer’s level, at the people with disabilities. They offer them the chance to be active in the community, they ensure a monthly income, they fight against social exclusion and increase the people with disability living standards. The profits are used for the people with disability incomes, to support a non-profit organization and used to expand the company in order to hire more people with disabilities.

CUIB Gabriela Rimbu, Sprijin si Dezvoltare Association

CUIB social enterprise sells fair-trade and eco-friendly products from local producers who have limited access to markets. CUIB promotes sustainable consumption to build a better community and to decrease the negative impact on the environment. The company is the winner of the NESsT National Competition for Social Entrepreneurship, as well as the winner of the National Competition "Your Choice, Your Project".

CUIB is an urban centre for good initiative. The centre also sells food, coffee and drinks, as a restaurant, and organise different social events.

The company sells food products made by using local products, promoting also bio and healthy products and ingredients.

CUIB has impact especially at regional level. Working and sustaining the local producers the social enterprise ensured sustainable income for more than 30 small producers. The company sold more than 4000 products and create 10 jobs for people mist in need of work.

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Entrepreneurship in the Republic of Macedonia Igor Izotov – CEFE Macedonia

Macedonia is a landlocked country located in the Balkan Peninsula.

According to the world bank Macedonia is ranked in upper middleincome countries with GDP per capita of 5,237.15 $ with total population of 2.081 Million. The unemployment rate stands at 28.4% according the state employment agency, however this number is doubtable as many people work in grey economy.

In general the country has experience growth of its GDP with the major increases around the periods of 92 till 2000 and from 2001 till 2010 , when the annual gross domestic product (GDP) growth rate averaged 7.63%. Nevertheless, from there on there is a tendency of decrease with annual growth rate of 2.4% in 2017.

The Global Competitiveness Index12016-2017, which defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country and covers over 100 indicators, divided in 12 pillars, ranks Macedonia as 68 country out of 138 countries taken in consideration for this index. The figure bellow, taken from GCI report 2016-2017, shows all 12 pillars and ranking of the country in each of them.

The same index puts Macedonia in the stage 2 or efficiency-driven country, stage where countries must begin to develop more efficient production processes and increase product quality because wages have risen, and they cannot increase prices. At this stage, competitiveness is increasingly driven by higher education and training, efficient goods markets, well-functioning labour markets,

1

https://www.weforum.org/reports/the-global-competitiveness-report-2017-2018

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Print screen from https://www.weforum.org/reports/the-global-competitiveness-report-2016-2017 developed financial markets, the ability to harness the benefits of existing technologies, and a large domestic or foreign market.

The global innovation index (GII) for 2016 ranks Macedonia 2 58th out of 142 countries whereas the annual Innovation Union Scoreboard (IUS), which provides a comparative assessment of the research and innovation performance of European countries and the relative strengths and weaknesses of their research and innovation systems, ranks Macedonia as a modest innovative country 4 with bellow average

“This country could be extremely attractive to digital nomads and international entrepreneurs due to a low cost of living

performances. Compared to neighbouring countries, Macedonia has

associated with high-

largely underperformed in terms of R&D expenditures.

quality commodities.�

In terms of start-up and entrepreneurial activity Macedonia is far behind other similar countries like Slovenia, Serbia, Latvia, Iceland and Estonia. As seen in the table below3 which highlights population, 2 3

Franck Nouyrigat, co-founder @Startup Weekend

The Global Innovation Index (GII) is an annual ranking of countries by their capacity for, and success in, innovation.

Franck Nouyrigat’s report on the Macedonian startup ecosystem for SecoEP project 2016

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number of start-ups on angel list and GDP per capita, Macedonia can produce 3 times the start-ups it currently has. Ultimately, the investments in the start-up eco-system will lead to job creation and increase of GDP per capita.

Table1: Franck Nouyrigat’s report on the Macedonian start-up ecosystem for SecoEP project 2016

Table 2: Franck Nouyrigat’s report on the Macedonian start-up ecosystem for SecoEP project 2016

Entrepreneurship in early phase in Macedonia is very low at 6.63% and had tendency to decrease in comparison with previous years. The rate of established business in the county varies, but in general it is on the average of 7%.

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Nonetheless, the current state in the country should not be negative, instead, it should be observed as opportunity for potential business support organisations and investors, having in mind that growth in the sector must happen in the upcoming years.

Strategy for innovation of the Republic of Macedonia Igor Izotov – CEFE Macedonia

The situation of innovation and entrepreneurship in Macedonia in 2018 looks promising. On strategic level the government has initiated national committee for innovation and entrepreneurship under the direct supervision of the prime-minister of the country, whereas the deputy minister for economic affairs works on operative level. There is a sector for innovative support within SKILLS4 project of the World bank and is in the later stages of implementation.

4

http://www.mon.gov.mk/images/documents/SDIS_project/01814_ToR_TA_for_curriculums_for_innovation_and_enterpreneurship_NOL_22_Dec_14.pdf

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Furthermore, the national innovative strategy 2012 - 20205 with action plan was adopted and is being implemented with small delays. Under this strategy a national fund for innovation and technological development6 was established in 2014. In February 2018 the Fund for innovation finished its fourth call for supporting innovative companies and startups. The total amount of money being spend on innovative entrepreneurial project exceeds 4 million and total 60 companies have received investment from the fund so far.

On the other hand, the National strategy Entrepreneurial learning 2014 - 20207. The Innovation Strategy pays attention to increasing the innovative capabilities of SMEs complements the existing Government programme on Research and development. This Strategy considers the country’s current state of development to ensure that policies to promote innovation are both focused and relevant for the country given that what works well in the context of an elaborate research and innovation system may not be so effective in the Republic of Macedonia In the previous years, additional sources of funding become available for Macedonian start-ups and SME companies from institutional donors such as the World Bank, European Investment Bank which have culminated with significant governmental funding for equipping 80 laboratories in public institutions such as universities, hospitals, state institutes totalling 60 million euros.

On educational level courses like Entrepreneurship, small business management, innovation management etc are present in the curricula of the state Universities especially at the economic and technical facilitates. However, there is no specialised programs and most of the professionals working on the topic got their education abroad.

5 6 7

http://www.seecel.hr/UserDocsImages/Documents/InnovationStrategy%20EN%20version.pdf www.fitr.mk http://www.mon.gov.mk/images/Artic-zDOC/Macedonian%20EL%20Strategy%202014-2020%20ENG%202.12.2014.pdf

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SWOT analysis of the Macedonian start-up and innovation ecosystem The following paragraph summarises the Strengths, Weaknesses, Opportunities and Threats of the Macedonian start-up and innovation ecosystem.

1. The state fund for innovation has more money to give than applications for those money 2. New programming IPA funds are directed to education, research and innovation 3. Horizon 2020 program are under-utilised with 7Million $ 4. Faster access to money via establishing of new financial platforms (Business angel and private equity funds) 5. Macedonian diaspora is under-utilised 6. Continuous donor-support from various entities (USAID; Swissconntact) in terms of infrastructure and capacity building of entrepreneurial enablers

1. Strong commitment from the government to build innovation and entrepreneurial society 2. Series of strategies adopted by the government that complement the entrepreneurial ecosystem 3. Doing business ranks Macedonia as the 11th country in the world by the ease of doing business 4. In the country entity can open a company in less than 24h 5. Relatively cheap yet educated labor force (highly skilled workforce).

6. Increasing participation ofSMEs to EU- funded projects 7. Closeness to European markets

1. Lack of institutional dialogue between key stakeholders in the entrepreneurial eco-system 2. Lack of monitoring system that would evaluate impact of interventions, laws and policies.

3. No dialogue between private companies and the industry and entrepreneurs and startups 4. Very limited R&D investment from the business side 5. High unemployment, low productivity 6. University Research is limited by scope and numbers 7. Very limited access to finance for SMEs and start-ups 36 | P a g e

Strengths

Weaknesses

Opportunities

1. Skilled workforce leaves the country (brain drain) 2. Not enough skilled entrepreneurs to implement the Innovation Strategy 3. The number of qualified researchers in both the academia and business sector has been steadily decreasing.

4. Business angel network not active in support of entrepreneurs 5. No private equity funds available for entrepreneurs 6. Not enough senior level programers to implement digital and software strategies.

Threats

What’s next for the Macedonian entrepreneurship ecosystem?

Igor Izotov – CEFE Macedonia

According to various entities and the research conducted prior, all actors in entrepreneurial ecosystem in Macedonia should focus on 5 strategic topics in the following period: 1. Strengthening the entrepreneurial learning in formal education - opening specialised institutes, that will teach and research the entrepreneurship performance and train future entrepreneurs and innovators on bachelor, master and PhD level. This should be done in addition to putting compulsory subjects both on primary and secondary education.

2. Intensifying the creation of additional support mechanisms like hubs, incubators, accelerators, technology parks, start-up centres (both in formal and in/non-formal education and learning).

The national strategy for innovation 2012-2020 plans opening of 3 private-state accelerators with $1.5Mil financing from the government.

3. Increase the capacities and investment funds for development of start-ups, innovation and technology development.

4. Strengthen or open business angel networks and introduce new Venture capital and private equity funds. The innovation strategy 2012-2020 plans opening a state equity/ mezzanine financing fund, that will support later stage companies and start-ups.

5. Link with international networks and organisations, in order to get best case practices.

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What instruments do entrepreneurs in Macedonia have on their disposal.

Igor Izotov – CEFE Macedonia

What kinds of businesses can be started with very little capital and what types of low-budget resources are available to those who are interested in pursuing a new line of work is difficult to be understood in Macedonia, due to the infancy of the entrepreneurship and start-up ecosystem that is still developing. The smart specialisation process and entrepreneurial thinking courses are about to be implemented in the state universities. However, the following table was created to work as a road map to new entrepreneurs in Macedonia and moreover, we have asked various Entrepreneurs to try explaining us this question. The following table summarises all the institutions, think thanks, organisations, investment funds and so-called entrepreneurial enablers that work and offer some kind of help to early stage start-ups, entrepreneurs, innovators, later stage start-ups and companies.

There might be other actors, but this are the ones that have made impact in the previous period on the Macedonian entrepreneurship ecosystem.

Organization (web page)

What they offer

Business Startup Center UKIM Mentorship support

Seavus Incubator

and

Additional Comments start

up The University St. Cyril and Methodius Business Start-up Centre for students from the University

Co-working space, office and They are backed by the biggest Incubator space; Mentorship ICT company in Macedonia. and start up support

The Agency for promotion of Support of entrepreneurship – The Agency for promotion of entrepreneurship no special entrepreneurship of the Republic of Macedonia represents a central state institution for support of the entrepreneurship and development of small business in the Republic of Macedonia.

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MASIT

IT chamber that offers The Macedonian Chamber of support to IT companies Information and Communication Technologies — MASIT was founded in 2000 as an initiative of the top fifteen Macedonian IT companies and is operating as an Association within the Economic Chamber of Macedonia.

Youth Entrepreneurship Co-working space, office and Business incubator with own Service YES - Incubator Incubator space; Mentorship office space with of more than and start up support 600m2 in Gazi Baba, Skopje.

The organisation is also known as YES Business Incubator Foundation for management Foundation that is supporting Closely connected with YES and industrial research - MIR entrepreneurship research Incubator Business Startup Center Bitola

Consultation, co-working status of this organisation in space, and micro credits for unknown at this moment. small and medium innovative companies.

CEED Macedonia

Centre for executive entrepreneurship education Mentorship and networking organisation for more advanced start-up companies

Social innovation Lab

Organisation supporting Supported by UNDP Social entrepreneurship project at the Electro technical faculties in Skopje

Part of the entrepreneurial centres network in Southeast Europe. As part of the CEED HUB Skopje there is business angel club that can provide CEED investment to interested entrepreneurs

New Man's Business Academy Business accelerator, offering organisers of NASA space apps courses and mentorship for challenge- hackathon startups SEAF – Small assistance funds

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enterprise Investment fund for more Closely connected with CEED advanced SME and startups and MFRP. providing risk investments in more advanced companies

Small Investment Fund SIF

Investment fund

Established in July 2007 and until now has made three investments in Macedonia.

Current stage unknown

Macedonian Enterprise Think tank; investment fund The Macedonian Enterprise Development Foundation with no investments Development Foundation was founded in 1998 as a result of a collaboration between the Macedonian Center for International Cooperation and the Kingdom of the Netherlands.

Fond for innovation and State Investment fund Technology development

South Venture capital

Investing in pre-seed and seed stage. World bank money to be spend on improving the innovation and competitiveness of the country

Only Venture capital fund VC fund established by the EIB opened to support startup’s in accordance with the growth stage Enterprise Innovation Fund (ENIF). Investing in later stage startups in Western Balkans

The National Centre for Think thank organization for Organisers of “Get in the ring Development of Innovation and entrepreneurship policies competition” Entrepreneurial LearningNCDIEL SWT

Startup academy, pre- Present with programs and acceleration programs for activities in Strumica, Skopje early stage startups and Bitola

Hub Skopje

Co-working space, office and Offering acceleration and preIncubator space; Mentorship acceleration programs to and start up support startups and SMEs. Backed by USAID and Swiss embassy

Superfounders

organising startup around Balkans

CEFE

Entrepreneurship courses and NGO offering entrepreneurship support courses

Public room

Co-working space + “coffee with an expert” events restaurant; some startup are happening at this place events are happening here

Let’s fund it

crowdfunding platform

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events organisers of Balkan venture forum

Opened and operated by SWT

Coffice

Co-working space

First co-working space opened in 2015. 13 co-working places available

Veloso Hub

ICT outsourcing company Organizing meetups with hackathon space

Skopje Lab

centre for social innovation operated by UNDP and the city and social policies of city of of Skopje Skopje

SEEU Tech Park – Tetovo

Co-working space, office Offering wide range of services space, mentorship advice to companies, startups and SMEs.

Social entrepreneurship in Macedonia Igor Izotov – CEFE Macedonia

Social entrepreneurship in Macedonia is new. Till now there is not a single scientific or academic paper written about it, nor the impact social entrepreneurship has made in Macedonia. In the following pages a dialogue will be opened with the actors in the Social entrepreneurship scene in Macedonia, we will see how social entrepreneurship is developing and developed through the eyes of the organisations that made Social Entrepreneurship in Macedonia what it is today.

Social Impact Award Igor Izotov – CEFE Macedonia

One of those organisations that single handedly changed the view of Social entrepreneurship in Macedonia is the Social Impact award, implemented by Social Impact Lab and Mladiinfo International. The social impact award supports young innovators that want to build social enterprises that address the challenging issues in the communities. They are hosting events and workshops to raise awareness for social entrepreneurship, teach the necessary skills to innovators 41 | P a g e

from idea stage to promising ventures, provide access to global network of mentors and promote the best teams in international conferences. Social Impact award is present in more than 20 countries and regions and today we have the coordinator of the award for Macedonia Ms Marija Matovska to tell us something more about SIA and the impact it has made on the lives of social entrepreneurs in Macedonia.

1. Hello Ms Matovska. Can you tell us something more about Social Impact award on global and local level. If I m not mistaken it started as an initiative at the WU University in Vienna but now has grown to a global social enterprises enabler?

Marija: The mission of the Social Impact Award (SIA) is to offer to young people and students one entrepreneurial journey that will make social difference. Established by the Erste Foundation, Impact Hub Vienna and Vienna University of Economic and business in 2009, SIA promotes the knowledge and practice the social entrepreneurship among youth in Europe and beyond.

The program

achieves its mission by raising awareness about social entrepreneurship, offering an educational program, giving access to peers and professionals and directly supporting the most promising ventures. In 2017, the SIA family was consisted of 18 different countries located in Europe, Eurasia and MEDA region. The most interesting

The mission of the Social Impact Award (SIA) is to offer to young people and students one entrepreneurial journey that will make social difference

component is that all 6 Western Balkan countries (Macedonia, Albania, Kosovo, Serbia, Bosnia and Herzegovina and Montenegro) are now part of this international initiative. Mladiinfo International and Social Impact Lab started the coordination of the Award in Macedonia in 2015.

Ever since we worked on the educational component, realized in the six different cities: Skopje, Tetovo, Gostivar, Ohrid, Bitola and Stip. The participants of the workshops had the opportunity to know their basics of social entrepreneurship to develop their business ideas from the beginning and bring them on stage where they can be implemented. During the summer period, every year, mentoring is taking place. With the help of the jury three winning ideas are selected. The total prize fund in Macedonia is 6000 euros, a trip to International SIA Summit for the best teams, mentoring, incubation period and many other opportunities.

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2. So you are present in many countries and territories. Can you tell us from your experience the differences that entrepreneurs in all these countries where SIA is present are facing?

Marija: There are of course many different local realities. The cultural norms, mentality, behaviour of people, organizational and legislation structures are influencing on the development of the ideas of the young people. You can find countries where they have better educational system, where entrepreneurship is part of the official school curricula from a very early age. In many countries there is more developed eco system for social entrepreneurship, including the well-established academia (as mentioned above), very active civil society organizations, business sector that is supportive, proper legislation, access to finance etc. That actually can make a difference in the mindset and the entrepreneurial spirit among the young people. They can be more ready to detect social challenge, to grasp the opportunity, to develop business model around the issue they are passionate about… But still, there are many points in which the young people are the same. They are eager to collaborate, tackle the social challenges in the local realities and no matter how cliché it might sound…to really change the world.

3. What are some good case practices from this award. I know in the last editions of the award the winning teams were solving social problems ranging from solar power plants to food waste management to pet shelters. Where are they now?

Marija: Talking about 2017 in Macedonia we had 3 winning solutions that were awarded with money and one as we are calling Community award that received additional mentoring support. In the SIA family we don’t limit the creativity of the young people, we let them explore the opportunities that are out there and find the thing they are most passionate about. That’s why we have so many different areas the young people are active in. The winners from last year covered the issues of unemployment, waste management (food and textile), street dogs… They worked with our team for a year, starting from participating in the workshops, incubation and mentoring, participation in the International SIA Summit…Now I can proudly say that all of they developed the concepts even more. Now, they are all part of our programs foe early start ups for investment readiness. They work on development of their on line platforms, physical facilities, prototypes…

And the most important their motivation and dedication is still very high.

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4. How do you see the future of social entrepreneurs in Macedonia? Do you think we will solve all our social problems?

Marija: Hahah… Hard to say…There will be always different social problems and challenges. The sociality is continuously changing and reshaping. It’s a bit unrealistic to think that we are able to solve all social challenges. The most important thing is to build sustainable structures that will be resilient enough to give proper response to the changing environment.

In Macedonia today there are so many structural and serious challenges: democracy, rule of law, inter – ethnic situation, corruption, high unemployment rates, domestic private sector, difficult access to finance, bad management of public finances and constantly growing public debt, skill gap, young people leaving the country… In this context the social entrepreneurship can be seen as a viable path for the young people and all citizens in general. The social entrepreneurship should serve as corrective factor to many challenges in the society and as a career

The social entrepreneurship should serve as corrective factor to many challenges in the society and as a career opportunity for the people

opportunity for the people. The social entrepreneurship in the country is developing, along with the whole eco system. But there are still some things that must be done immediately, like: better legislation, strategies, actions plans, more funding opportunities, improved capacities of the ventures, more skilled mentors and better networking and interconnection among all relevant players.

5. What does the future hold for SIA? I would say growth. SIA this year is expanding on different continents and regions (such as East Africa), meaning that our social entrepreneurs will have opportunities for different exchanges of knowledge, skills and realities that I believe will foster their creativity and motivation. As for SIA Macedonia we are having the opening on February 22nd. I hope that we will have even better application this year and bigger support from the rest of the community.

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Case study www.sozdadi.mk, How the winners of SIA Award 2017 is changing the socio - economical context in Macedonia Igor Izotov – CEFE Macedonia

Sozdadi.mk is the winning team of this year’s Social impact award. Ilina Veljanovska the founder of sozdadi.mk is an inspirational young person full with enthusiasm about social entrepreneurship and solving problems that impact us all. This was more than a reason to sit down with her and hear her story.

1. Hello Ilina. Can you please tell us you story of sozdadi.mk and how you got to the place you are now?

Ilina: I am a firm believer in the digital world and expressing creativity in today’s busy corporate oriented society. Sozdadi.com is community oriented and he idea behind Sozdadi.com is simple i decided to put together both my love towards creativity and my wish to support small businesses and regional entrepreneurs.

Sozdadi.com is designed to combat unemployment by using strategies that focus on creating new jobs and provide effective distributive channels, promotion, modern design for E-shops, simplicity and connection. The mission of the platform is to reimagine commerce in ways that build a more fulfilling and lasting world. We are committed to using the power of business to create a better world through our platform, our members, our employees and the communities we serve.

You may have heard the saying, “Give a man a fish, and he can eat for a day; teach a man to fish and he will eat for a lifetime.” I would argue, “Give a man the tools and resources to create a fishing business, and his whole village can thrive for generations.”

2. Is the entrepreneurship drive something that you were born with or you just saw a problem that needed fixing?

Ilina: I believe that all entrepreneurs are born into this world with a drive and need to succeed that most of humanity lacks, but they are shaped through education, experience and mentorship.

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3. How has SIA helped you grow your social business?

Ilina: SIA it was a life-changing experience for me, as a young entrepreneur. Social Impact Award does support young innovators in building social enterprises that address the most challenging issues of our time. We did play and experimented, we dream big, we work hard.

4. What are the future plans after SIA Ilina: Creating a supportive, non-competitive atmosphere where sellers can not only build relationships with customers, but with each other, in order to further support the handmade and shop local movement! We believe in providing the best experience and the best services for our clients!

Arno and case study - coolinari.mk- Social enterprise who is changing the way specialised schools in Macedonia are offering their services to the business sector Igor Izotov – CEFE Macedonia

Another bright example about organisation that supports social entrepreneurship and innovation, green ideas and social policy improvements is ARNO8. Arno is a Organisation for Social Innovation established in the Macedonian civil landscape with special mission of development and implementation of social innovation and promotion of new options and contemporary technological approaches for society change. Arno was created based on inspiration and need for change. Arno’s president Irena Janevska believes that with new interventions and social innovation, can make our world a better place. Based in Skopje, but always on the move around the Globe, I said down with Irena to hear her voice of social change and innovation.

8

http://www.arno.org.mk

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1. Irina, you just come back from Taiwan to explore their social entrepreneurs model, tell us something more about this experience?

Irina: In January 2018 I was invited to the Technical Visit to Taiwan by the EBRD who works on upcoming project on Social Entrepreneurship which will be implemented in partnership with the Taiwan Business-EBRD Technical Cooperation Fund. Their project is aimed at promoting the market development of social enterprises in the Western

Balkans

and

Croatia,

by

sharing

experiences and best practices with a well-developed and functioning ecosystem for social enterprises like the Taiwanese one.

And, indeed in Taiwan we have been exposed to amazing stories of Social Enterprises and we have seen such strong devotion by the Taiwanese government to the support of the infrastructure for SE. The 3-day technical visit to Taipei was very important for me, because it came in perfect timing in my life. Being strong advocate for SE in Macedonia, I’ve been losing voice and motivation in the past moths since its very complex ecosystem for moving from theory to practice: establishing fully operational social enterprise.

Promoting social enterprises in Taiwan is a top priority of the government .To create an ecosystem that nurtures innovation, growth of start-up businesses and the development of social enterprises in Taiwan, the government launched the Social Enterprises Action Plan in 2014 and invested 5 million EUR in the following three years to implement four major tasks in “deregulation, networking, financing and incubation.” With the visit we have seen some of the fruits of this Action Plan.

During the visit, we’ve visited different SEs and we have received presentations by different stakeholders that were powerful. I can pick few examples that made strong impression on me.

The first one would be the Taipei SE Square which is the 1st city-owned building both in Taiwan that aims at facilitating disability employment and social enterprises. There I was personally impressed by the story of Flow. Flow is the first social enterprise providing Building Information

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Modeling (BIM) services to construction and architecture design companies. It is a new business models developed to provide job alternatives to people with disability.

Another presentation from OurCityLove was impressive too. They are Social Enterprise that have created cloud-based platform that links data containing wheelchair- and disabledfriendly restaurants, transport and other facilities. Their aim is to create an inclusive, convenient and friendly environment for people to live in now and in the future.

During the visit we visited one of the restaurants of the Children Are Us Foundation which is famous in Taiwan for operating bakeries and restaurants that employ people with intellectual disabilities. The first Children Are Us bakery opened in Kaohsiung city in 1997, and the Foundation has since expanded, opening other branches in Taipei city and Hsinchu city.

Taiwan's economic development in the past 3 decades is impressive and technical education and economic development are closely linked together to create an economic miracle, as they state. Their

‘ARNO is a story’

government has placed great emphasis on Technological and Vocational Education (TVE). As a result, TVE has contributed greatly to Taiwan's economic prosperity over the years.

For me the biggest take-out was the visit to the Hujiang High School which is VET school with 62 years of tradition. Aside from the other technical departments, we have seen the fully equipped rooms for the future chefs, and since I have the personal story of Coolinari for me this was the biggest `A-ha` moment. We must invest in VET education. And the government has the crucial role in taking strong steps for it. In Macedonia it’s sad to see the state of VET. These two contrasting realities really hit my mind.

2. Irina can tell us something more about the initiative ARNO that you founded and successfully implementing in Macedonia the previous 4 years?

Irina: ARNO is a story. The beginning of this story is quite interesting. It starts from friends that wanted to use IT to make social good (and were about to register private entity) but then shifts to the concept of social innovation in general. The name is abbreviation that in Macedonians means “good”. We had funny challenges to register the organization with its full name “Association for Development of New Options” because the central registry officials asked if we were registering 48 | P a g e

a political party (lol). Thus, we had to put in front “Organization for…something.” and after going in circles and not giving up on our branded name we realized that we’ll focus on social innovation and put it in front. This decision was not easy. It’s demanding to have the word “innovation”. It requires full dedication to new approaches and bit more research to justify all our current and future projects and their social impacts.

In the past 4 years we have tried, and we are still not giving up on making positive social changes. As socially innovative organization ARNO has conducted projects and initiatives that highlight its commitment and ability to innovate to respond to social problems. Immediately after our very first project the organization became recognized as groundbreaking leader in the field of Social Entrepreneurship. In 2015, the project COOLINARY 2.0 was Awarded with Social Impact Award, media constantly contacts ARNO on information on Social Entrepreneurship and promotion of VET. One of the chefs from Coolinary received the USAID CEP Award for Individual Activists, and we can surely say we mostly love the happy human stories we create.

In March 2017 ARNO became implementing partner of the UNFPA CO for the youth component.

ARNO is also recognized as promoter of the UN agenda for sustainable development. In October 2017 , ARNO organized the first Men Fair with Workshops “Men Cook”, “Men Iron” and “Shadow theatre for dads and kids” and promoted the concept of engaging men and boys for gender equality. The MenEngage campaign got lot of public attention and we really love how we have opened a debate about the division of roles in the home.

Now we have an ongoing project tilted as Students Today-Responsible Entrepreneurs Tomorrow funded by the Erasmus + program. The project focuses on delivering tailored programs for promotion of Social Entrepreneurship and Corporate Social Responsibility to high school students that are enrolled in the school subject “Entrepreneurship” in three countries (Macedonia, Croatia and Lithuania). It’s really rewarding to see how young people can learn and be inspired. We really believe that we can contribute to better future by educating youngsters on ethics and philanthropy.

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If they are the future CEO’s they should know how to make strategic donations to help their communities, or if they are business leaders they should know of the concept of SE and maybe establish SEs instead of classic private companies that are mainly profit-oriented.

3. How to you help social entrepreneurs in Macedonia?

Irina: Since 2015 ARNO is administering the National Contest for Green Ideas known in Macedonia as “Philanthropy through Green Ideas” and is proud on the winning ideas at the Regional Contest: First cooperative of organic consumers “Nasha dobra zemja” (in 2015) , the initiative for reparation of old furniture that has grown into a small business “SPIN” run by a young architect (2016), the platform for sales and donation of leftover food from catering facilities “Food for Everyone”(2017), the green illusionist Kristian Shopov that raises awareness and educates through “ Eco-Illusions” (2017).

Philanthropy for Green Ideas is an Annual Competition that seeks to support the development of local and sustainable small business ideas in the Western Balkans.

Since 2015 ARNO is administering the National Contest for Green Ideas known in Macedonia as “Philanthropy through Green Ideas”

The contest works through structured and verified criteria and it is an initiative designed to reach out to the most marginalized rural areas and to inspire and encourage more communities, groups and individuals that have original and innovative ideas to start small, green businesses. The criteria in the Call are very much close to the basic values of Social Entrepreneurship and thus we believe that with this Competition we do help citizens in Macedonia to think and create small social business.

With this contest we have these 4 winners that we are very proud of. They are not projects; they are sustainable entities and “dreams come true” small businesses, which, we can call “social” because of the strong social and environmental component.

4. Can you tell us something more about coolinari.mk this first successful social entrepreneurship that you are?

Irina: Having a job and the income which comes from it, is crucial to young people's well-being and belonging. Students from the VET sector, especially one from the low image gastronomy school face barriers to employment. Any one barrier, such as a low motivation, lack of experience, 50 | P a g e

limited English language proficiency might only be a temporary setback. Combined however, they can make it almost impossible to find descent work. The result is that despite desire for work they remain long-term unemployed or they work at other positions remaining not integrated in the society.

In 2014, inspired by the power of change in VET and combining it with SE, we started cooperating with the VET School “Lazar Tanev” and we had great IT outputs: 2 webpages and 2 mobile apps (www.mojketering.mk and www.coolinari.mk). Than we won the Social Impact Award (2015) and we were first in the country to organize and sell Cooking Classes.

We sold the Cooking Classes to the general public, we got lot of publicity and we got new generation of 20 youth chefs that we included in the program. We made profit of approx. 500 euros and we reinvested it in the student chefs: through tailored

program:

they

got

workshops on writing CV, use of social media to self-promotion, professional photos for CV and tons of other activities.

Why we do all of this? Because VET has terrible image in the country, student go to school to get only diploma and remain without skills, they are not motivated to work in their profession. The most sad and disturbing fact is that after they finish school they don’t work as chefs but go to the army, work in betting stores, as waiters (because of the tip). And by this decision they remain low on the labour market or unemployed, while the irony is that every second job advertisement in the country is “we hire a chef” and cooking is a world trend (many tv shows now also in the Macedonian media space).

We have a successful track record of enabling VET students to boost their motivation for cooking and gain meaningful employment. We believe this is due to how our training differs from traditional models. i.e. by: 51 | P a g e

1. Providing flexible training that meets individual needs. (We try everything to be COOL for them, thus our slogan is “Its cool to be coolinary”.)

2. Providing people with real opportunities to take ownership of their situation (e.g. by trailing their own businesses-they were part of the cooking

‘Our current idea (and fundraising effort) is to establish and run a Food Truck as a Social Enterprise’

classes, some of them helped in Facebook promotion, some of them went to TV interviews with the team).

3. Having an established relationship that provides ongoing assistance and walks the person’s ‘start-up journey’ with them. (we want them to be co-owners of the food truck and to be inspired to run their own (Social) Enterprises).

Our current idea (and fundraising effort) is to establish

and run a Food Truck as a Social Enterprise. Our idea is to work long term with young people the 15-17 years old, chef students at the State Vocational School. The Food Truck will be selling food prepared by the student chefs at different locations around the city. In summer we will visit Festivals and Events to earn more profit. We got inspired by D-Fest where our chefs Jovan and Antonio had a stand to only demonstrate that “it’s cool to cook” but people thought they can buy their food).

4. And lastly what is the future of ARNO? Irina: With many constellations we would like to remain positive and committed to continuing our work. We plan to seriously fundraise for the Food Truck (we need 50 000 EUR to start the social business). We hope this year we’ll launch the contest for green ideas and inspire again people to apply. Since we already have full equipment (in our office we have 6 ironing boards, irons, pots, cutting boards etc.:) we are thinking of offering Ironing and Cooking Classes to men and boys.

Our intentions for the future are to recognize the needs in our local communities and try to offer “remedies” made by our own recipes where main ingredients are philanthropy and innovation.

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Small and medium companies, the core of Spanish business.

Inercia Digital

In Spain, 99% of all companies are SMEs and globally it’s estimated that thirty percent of GDP is generated by them. Whether offering goods and services or demanding products, they constitute the backbone for all local economies and employment generation.

Thanks to the fact that they absorb a significant portion of the economically active population, with reduced labour costs per worker, they contribute to stability in the labour market.

SMEs have great flexibility to adapt to the constant changes in the market and to undertake innovative projects due to their size.

In contrast to large companies, they promote individualization over standardization, although they also serve as an auxiliary fabric for them as minor subcontracted entities that provide large companies with maximization of time and cost reductions.

In an SME the value chain is composed of few links and, therefore, the lack of productivity of one can slow down the entire company. The commitment of employees and the knowledge that companies invest resources in their well-being becomes more important than in other business contexts.

The profile of the Spanish SMEs coincides with the European one. The European Commission defined valid criteria for the whole Community more than 10 years ago. The SME is a company with less than 250 employees and with an annual turnover equal to or less than 50 million euros.

In Spain, the bulk of the SME is concentrated in the microenterprise, with up to 9 employees, which account for just over one million. The explanation lies in the very constitution of our economy, very dependent on the services sector, especially tourism.

One of the main consequences of the crisis in Europe has been the increase in restrictions on financing: banks have stopped lending and if they have kept the tap open, it has been with droppers and higher interest rates. This interruption of the credit flow has been especially stressed with SMEs and more specifically with the smaller ones, so abundant in our country. This scenario has

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had two immediate consequences: the first, the disappearance of many small businesses.

According to data from the General Council of Economists, about 600,000 SMEs and micro-SMEs perished in Spain in the last decade. The second is the entry into the scene of alternative forms of financing, such as 'crowdfunding' or 'Business Angels', or the use of solutions to control cash flows and financing needs.

Aware of the importance of the diversification and internationalization of the business, small and medium-sized companies consider the exit abroad to be a priority in their strategic plans. Such is the case that Spanish companies already invoice more than 60% outside our borders. According to the Ministry of Industry, with data from 2017, 80% of companies carry out their activity in the services sector and, within this, 24.3% refers to trade; for its part, construction accounts for 13.6%, and industry, 6.4%.

Considering the sectorial distribution of Spanish SMEs, some

differences

are

observed

regarding

SMEs have been and are the big generators of employment in Spain

their

constitution. For example, 85.6% of industrial companies are micro-enterprises (1-9 workers), while 60% of construction companies and 50% of commercial companies are comprised of microenterprises without employees. SMEs have been and are the big generators of employment in Spain, above 80% of the total.

The General Sub-directorate of Support for SMEs underlines that companies with up to 9 employees account for 30% of national employment, and those that account for up to 49 workers, 17%. However, since the beginning of the crisis, in 2008, employment has fallen by 23.5% in small companies, 16% in medium-sized companies and 7.47% in larger companies. During this time, almost 600,000 SMEs and more than 400,000 self-employed workers have disappeared. The sector of retail trade, distribution and construction have been the biggest job destroyers in absolute terms. Spanish companies registered in the Social Security. In the last years, the self-employed has become the maximum representative of the Spanish SME. As a natural person, it is the predominant form of creation of companies, without employees in their charge, followed by the limited company.

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Entrepreneurship policy in Spain Inercia Digital

The how’s to become an entrepreneur and not die (in the process) It is well known that Spain is not versed in the entrepreneurial sector. There are few who enrol themselves into creating their own business. As said before, factors such the economy, the lack of knowledge and educational experience among with the vertiginous fear that starting an own business creates in people are some, among a wide variety of factors which lead to this state in Spain. According to El País, a famous Spanish newspaper, between 2012 and 2016 Spain is places as next to last country with entrepreneurs, only followed by Bulgaria.

What is shocking is that Spain, according to OECD is one of the countries where entrepreneurship tend to last longer and better once the business is stablished. According to the data provided by El PaĂ­s9

According to OECD, Spain is one of the countries where entrepreneurship tend to last longer and better once the business is stablished.

2,5% of entrepreneurs count with their business stablish in periods over 3 months and less than 42, being really close to the European standard (2,8%), whereas countries such as France only has 1,8% or Italy with only 1,6%.

In the next following lines, we are going to provide guidelines on how to start a new business and the procedures that it might entail, so you can be prepared for all the procedures and you can start your business with all the tricks under your sleeve. These guidelines will be given by some entrepreneurs, because there is no better base of knowledge than experience10.

9

https://elpais.com/economia/2017/12/19/actualidad/1513689726_884896.html

10

https://www.emprendedores.es/crear-una-empresa/a77307/50-consejos-para-emprendedores/

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Self-employment survival guide Inercia Digital

According to the Spanish law a self-employed person can be "any individual who performs habitually, personally, directly, on their own account and outside the scope of the direction and organization of another person, an economic or professional activity for a lucrative purpose, whether or not they are employed by employed persons."

The most usual is that the decision to be self-employed is taken freely by the worker, but there are some cases included in the Statute in which by law he is obliged to register as self-employed, as happens, for example, in the case of self-employed workers.

Advantages and disadvantages of being self-employed As we have seen, the most usual thing is that the decision to be self-employed is taken freely and it is not always the only alternative. One of the options can be to carry out a professional activity without doing it directly and on its own, but by creating a company, for example a Limited Liability Company. Each has its advantages and disadvantages.

Advantages of being self-employed •

It is a more appropriate business form for the operation of very small companies.

•

It is the option with less formalities and procedures necessary to start the activity and it’s cheaper than the constitution of a commercial company.

•

Although being self-employed has fiscal and accounting obligations, they are smaller and simpler than company’s obligations.

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Disadvantages of being self-employed: •

The main one is that the responsibility of the self-employed person, as an entrepreneur, is unlimited, that is, he / she responds with his personal assets of the debts and obligations that arise in the exercise of his / her activity.

•

In addition to providing the resources to start the activity, the self-employed also must attend to its management and administration.

•

If the self-employed person has no income, he will continue to be obliged to cover certain expenses, such as his fees in the Social Security self-employed regime.

•

When the autonomous activity generates a significant amount of benefits, as taxed as a natural person, you may have to pay more taxes than those paid by small companies.

Before signing up, make a business plan The decisions to register as self-employed, to form a mercantile society or to become a member of an already established company, are important. Sometimes it is not just about signing up, but the money you will invest in the project: constitution expenses, purchases, renting a place, etc. You can ask for the accumulated payment of unemployment benefits to finance expenses and Social Security contributions.

There is an instrument, called "Business Plan", which serves to put some order and detect in time if a project is unfeasible. It is necessary to take everything into account before embarking on the adventure. It is not about facing a blank sheet of paper, today there are excellent free online tools in which we can go simulating expenses and income so that the calculations are realistic and decide with the best information.

Procedures to start the activity as self-employed There are a series of mandatory procedures in any case you have to carry out: •

Register in the Treasury: Before even doing any procedure with Social Security, it is necessary to register in the Census of employers in the Tax Agency (AEAT). In this way it is communicated that a professional activity will begin.

•

Affiliation to Social Security: If you did not previously have an affiliate number, you must obtain it from the General Treasury of the Social Security (TGSS).

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•

Register for the Self-employed Regime: This procedure is also done in the Treasury (TGSS). Keep in mind that also, if you meet certain requirements, you can apply for the flat rate for self-employed, so you only pay 50 euros per month for the first twelve months.

•

It is essential that before going to Social Security study all the bonuses that are available, since this is the time to ask for them. If you request them later, when you have already registered, you will not be able to apply them.

•

You must also consider if you deserve or not pay the so-called "unemployment of the selfemployed", an additional fee in your quote that will allow you to have a benefit in case of cessation of activity.

•

Register personal files in the Spanish Data Protection Agency (AGPD). From the moment you go to manage personal data, such as customers or suppliers, you must have the file registered. The procedure is carried out from the Agency's website.

If you are going to hire workers: In this case, you must complete these procedures: •

Registration of the company, affiliation and registration of workers in the corresponding Social Security scheme.

•

Communication of opening of the work center in the Ministry of Labour of the corresponding Autonomous Community.

•

Registration in the real estate tax at the City Hall where the company is located.

•

Obtaining the labour calendar in the Provincial Labour Inspection.

•

Registration of employment contracts in the Public State Employment Service (SEPE).

Depending on the activity you are going to do: •

Obtain in your town hall the licenses of facilities and works, activity licenses and operating licenses. They are necessary depending on the activity, for example if it takes place in a commercial space, an office or a warehouse.

•

Enrol in official records that are mandatory for each activity.

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•

If you are going to work as a freelancer for a single client, on which at least 75% of your income will depend, there is a legal regime that provides you with greater protection: the economically dependent self-employed worker (TRADE).

Other recommended steps: •

Obtain the digital certificate: The electronic signature is essential to be able to quickly and without traveling manage all kinds of procedures before the Tax Agency, the Social Security, the Public Employment Service, the regional and municipal administration and many public and private institutions.

•

Register your trademarks, distinctive signs, trade name in the Spanish Patent and Trademark Office.

•

Counts with advice: The beginnings of activity are always difficult, and you have to control all expenses, but if there is one of them that is justified, it is the small monthly fee for a consultancy that helps you with accounting and tax obligations.

Javier Carril, co-founder of ExeCoach Inercia Digital

" If you're just thinking about getting rich, you're in the incorrect way. You must have a business vocation. Consider first what kind of company you want to create, and with what future. There are entrepreneurs who set up their business just because they are unemployed and do not have - or do not see - any other way out. It is a continuous source of problems. As much as you are associated with motivated people, if something goes wrong, you'll throw the towel with the first thing that goes wrong."

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David Pérez García, founder of Damtec Inercia Digital

"When you start your business, it is not as important to make a perfectly defined three-year business plan as it is knowing where your income will come from. If you want to do it well, it is not only a matter of accounting. Mora than that, you must go out and talk to potential customers and people in your sector. This will take you, most certainty, to redo your initial idea. A good plan and a market study made by the entrepreneur, door to door, is a good guarantee of success. "

Pablo Sanagustín, founder of Arelux Inercia Digital

"The obstacles you encounter are not usually what you anticipate.

There are issues that seem difficult and that are solved paying 170 euros to a notary. The real problems are others: fire regulations, licenses to handle hazardous substances or the need to develop a project before lifting an industrial unit. "

Ignacio Bao, founder of Bao & Partners Inercia Digital

"Plan and decide the creation of your company in advance, trying, whenever possible, that the start of your operations coincides with the calendar year. Do not think

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about subsidies as the basis of your company when you want to start a business ... the only thing you will achieve is to lose time. But, of course, find out about the exemptions and grants that exist for entrepreneurs ".

"In case you have not been told yet, you will always have competition! Before, during ... and after starting your business. A first sign to know if your business plan works (or not) is when you reflect on it that you have no competition, or you forget to mention how it is. And by competition I don't only mean direct competition, but also the indirect one. It's really hard to be alone in the market. "

JosĂŠ Castillo Navarro, founder of Xul ComunicaciĂłn Social Inercia Digital

"You cannot open your company and start thinking at that moment how to get clients. That's job, you should have it done before it all. The best thing to do is to have some clients that will ensure you a minimum income or, at least, having clear about how you are going to catch their attention. First-time businesses are usually undercapitalized and cannot empty their resources ahead of time."

Alejandro Barquero, founder of Consoltic Inercia Digital

"At first, employees get excited about the project, but as they see how the company is growing, they want more. Not all professionals have your same aspirations, even though in the selection processes they affirm they do and even define a commitment to the company's objectives... which many people later forget".

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Javier García and Miguel Ángel Lubián, founders of Instituto CIES Inercia Digital

"Let's be coherent, because if not, after a while remorse comes. If your company does not have volume yet to have one more employee on staff to oversee a specific area that needs support, outsource that service until you can pay an employee of your own. On the one hand, you will reduce expenses, without giving up on obtaining value services contracted to third parties. On the other hand, you're not going to waste your time ... and nobody's effort! It is essential to know the amount of human resources you should use in each department and not create false expectations when you are starting. Think twice before making this mistake. Do not confuse a production peak with a long-term need for your company."

Juan Alejandro Goñi Uriarte, founder of Klicstudio Arquitectura y Diseño Inercia Digital

"My company worked perfectly almost from the beginning, the office could not cope with all the work and I had to hire people (that's a good sign). However, when working with the Public Administration, I had enormous liquidity problems, since they made the payments very late, when my payments had to be made at the correct time (employee, copy shop, rent, insurance ...)."

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Gerard Martret, founder of Drivania Inercia Digital

"As the business grows, decisions become more complex. It is essential to have several sources of information before drawing to conclusions. Once you have reliable data, it is best to gather more than one opinion before making a decision. To do this, you must surround yourself with people capable of providing constructive advice ... and selflessly. The fewer mistakes you make, the less money you will lose."

Fernando Vilches Guijarro, founder of viajeconnosotros.com Inercia Digital

"Do not fool yourself. You cannot get it alone.

So, involve your employees in the success of your business. After all, this is a ship full of crew, even if you take the wheel and don’t sleep at night. If it sinks, you sink all. So, if things go well, let the crew find out. And if they go wrong, tell them to your pillow. "

Álvaro Cuadrado Jiménez, founder of Producciones 28 Norte Inercia Digital

"You cannot bet everything on a single card. If a project collapses due to issues unrelated to your professional work, you must have others on the waiting list. The deceptions, false dreams and mirages are constant, we must anticipate and not give up. The sooner you know that one out of every 20 projects comes out, the better. " 63 | P a g e

Social businesses in Spain

Social business is on top and it is getting more and more people interested on it and as said, even though Spain might find itself a little bit behind there also great examples of social businesses which work to make the world a better place. In this point we are going to present different social business which are really kicking off in Spain.

La Colmena dice sĂ­ Inercia Digital

This business is located in Madrid and its purpose is to be intermediary between local producers of goods, such as vegetables, fruits or beer, to name a few, and the costumers. It is created in order to avoid long procedures of distribution which normally end in a waist of goods, time and an important increase in pollution.

La Colmena dice sĂ­ provides a shorter way of distribution with a more sustainable production and fair trade for both, the costumer and the producer. It is base online, where you can buy anything you want and after that go and pick it up at one of the hundreds of places they have around the city.

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La Bolsa Social Inercia Digital

This business is a reinvention of the widespread and well-known Crowdfunding. Under the name of Crowdimpacting, La Bolsa Social stand up for a new perspective of getting financed not only being us the beneficiaries of that financing, but also society and the environment. La Bolsa Social provides an original selection method where they choose business who work according to their values of enriching the environment and being socially compromised. Their aim is to archive all the points present by the UN and ensure that the people who invest in a certain company is achieving that goal. They started in 2014 and they have had a great increase since then.

Impact on Integrity Inercia Digital

This is a Spanish social business with an important impact in different countries outside Spain. Their main objective is to educate or train directors of big and important business to practice their ethics, anticorruption ideals, transparency, integrity, loyal competence and social justice. Something that somethings might get lost along the way. They try to change the way of working of big enterprises where the real change can start and so, create a better working environment.

Fundaciรณn Sanders Inercia Digital

This business, places in Madrid fights against social exclusion. They are a scholar institution that provides extracurricular trainings to eradicate social exclusion. They achieve this by using new technologies, providing all necessary means in their classrooms for disadvantaged sectors. They 65 | P a g e

provide social and emotional training which have incurred in an improvement of academic results on children. They have volunteering, work with other business which are compromised with their views and provide a wide amount of training for children which is making a great social impact.

Too Good To Go Inercia Digital

This enterprise aims to provide a solution to a problem that is being more and more acknowledgeable every day. We all know and are told about the amount of food we waist every year, around 1/3 of the total are just waist and Spain count with the seventh position when contrasted with the rest of countries in the European Union, this is translated to more than 7,7 million of tons throng away every year. Too Good To Go aims to reduce the immense amount of food that it is waist and to make conscience among the Spanish population so we all make a change. Too Good To Go makes use of an app in order to achieve this and to get to all the citizens.

Gawa Capital Inercia Digital

This business works to help countries with a high rate of poverty.

They act as consultants to investors showing how investing in business and star ups from countries with less developed countries is very profitable and a good action. Gawa Capital positions itself as a great growing sector that counts with important influence in a way of business proven as reliable and lifechanging.

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MICROWD Inercia Digital

This enterprise connects investors from Spain with entrepreneurs from countries less developed, so they have chances to get funding for their business. It is focussed on women. MICROWD also provides a 7,70% profitability. Their proposal allows the investors have a direct contact with the beneficiaries. 98% of the people who invest once keep on doing it with this enterprise.

Insulclock Inercia Digital

This enterprise tries to help people with diabetes. Diabetes type II is getting, due to different reasons, more a more common among society, Insulclock provides smart insulin pens. It collects information, makes us have a better treatment and get in touch with our specialist, among other things. This method provides the patient with a better life style, as to safe money in expensive treatments. Patients can carry it everywhere and with the use of an app the patient can always know their state.

Planeta Huerto Inercia Digital

Born in 2011 this social business has become a complete reference as marketplace in the sector of ecological products. It is presented as a community that offer services of a wide variety of things, from counselling business to selling products and a great amount of news on alimentary innovation.

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Koiki Inercia Digital

This social business can be perfectly known as the best idea according to mailing companies in the world. Why? Simple, this company collects your deliveries when you are not home and then they send them to you whenever you can or want. Deliveries are made in bicycle or electric means of transport, this way the C02 emissions decreases. Not only is responsible with environment, they head of the company Aitor Ojanguren offers job opportunities to people with problems of inclusion.

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