The document discusses promoting entrepreneurship and self-employment as an opportunity for unemployed youth. It notes high youth unemployment in Europe and describes Slovenia's economic challenges and declining demographics. Self-employment programs can help unemployed youth start businesses, though over 23,000 participated in Slovenia's 2007-2013 self-employment subsidy with uncertain effectiveness due to a lack of program evaluation culture. Promoting entrepreneurship through supportive environments and active labor market policies is important to create jobs and exit unemployment.

1. HR Conference2015
Savremenitrendoviikvalitetuupravljanjuljudskimresursima
Paper presentation
Entrepreneurship and self-employment: opportunity for
youth unemployed people
Doc. dr. Laura Južnik Rotar
(laura.juznik-rotar@guest.arnes.si)

2. Overview of presentation
• The problem of youth unemployment
• Economic and demographic picture
• Promotion of entrepreneurship through self-employment
program
• Conclusion

3. The problem of youth
unemployment
• Europe is facing with a huge number of unemployed,
especially great problem is youth unemployment.
• Figure 1: Unemployment rate for youth aged 25 year and less

4. Economic and demographic
picture
• Within the members states of the EU the effects of the most severe
economic crisis are still present.
• The economic situation in Slovenia is still not yet very promising.
• GDP has decreased in the year 2009 for 7,8 % and in the year 2012
for 2,3 %. In the years between 2009 and 2012 Slovenia has been
facing weak economic growth.
• In the first years of the crisis negative influences of the decreased
foreign demand was especially important and hit mostly the export
activities and with export activities connected branches of industry,
like manufacturing, transportation and storage.
• In the last years Slovenia has been faced with internal factors of
crisis, which greatly affect the economy.
• In the light of these internal factors the difficulties of financial sector
and downturn of construction can be highlighted.
• To exit from the crisis Slovenia has to carry out number of structural
reforms, among others also the reform of the labour market.

5. Economic and demographic
picture
• On the other hand, also demographic picture in Slovenia is not
very promising since the number of births is decreasing for
several decades.
• From the year 2008 onwards, the number of births each year
is again over 20.000 children.
• This increase in the number of births is mainly due to the birth
of large-scale generation of women born in the 70s and 80s of
the last century, while in the period of giving birth are entering
women of very weak generation born in the nineties.
• According to the demographic projections the fertility is soon
to start declining again.

6. Economic and demographic
picture
• Within the slovenian population also share of young people
aged 15-29 years is falling.
• Table 1: Number and percentage of young aged 15-29 years in
the total population for Slovenia
YEAR NUMBER PERCENTAGE
1990 450982 22,6
1995 442416 22,2
2000 435801 21,9
2005 420483 21,0
2006 415044 20,7
2007 408452 20,3
2008 404399 20,0
2009 394428 19,4
2010 387493 18,9
2011 375365 18,3
2012 364714 17,7
2020 315691 14,7
2030 331324 15,4
2040 338231 15,8
2050 300870 14,2
2060 306898 14,9

7. Economic and demographic
picture
• Without a shadow of a doubt, the future demographic trends will
have a strong effect in the labour market.
• In the coming decades the number and share of young people aged
15-29 years is not expected to significantly decline, whereas great
increases in the number and subsequently the share of elderly
people aged 65 years and more is expected on the other hand.
• The group of elderly people aged 65 years and more in the year
2012 represented 16,6% of the total population, whereas by the
year 2060 their share is expected to grow to 31,6%, which is almost
one third of population.
• Because the number of young people will not considerably fall, the
number and share of elderly people will grow mainly at the expense
of the working age population (persons aged 15 to 64 years).

8. Economic and demographic
picture
• The share of working age population is projected to decline by
the year 2060 to 54,8% (in the year 2012 the share was
69,1%).
• These demographic changes will increase the pressure on the
public finances, especially pension and health fund.
• For this reason the Slovenia will have to encourage active
aging as well as prolonging working activity in the future,
increase the inclusion of working age population in work
activity. It will be necessary to increase the labour
participation of elderly people, women and of course young
people.

9. Promotion of entrepreneurship
through self-employment program
• What is more, small and medium sized enterprises have not yet
been able to restore to their pre-crisis levels.
• The Europe 2020 Strategy responded to this by setting the
foundations for future growth and competitiveness that will be
smart, sustainable and inclusive and which will address major
societal challenges.
• The reasonable conclusion is, that to bring Europe back to growth
and higher levels of employment, Europe needs more
entrepreneurs.
• New companies, especially small and medium sized enterprises,
represent the most important source of new employment.
• Micro, small and medium sized enterprises (SMEs) represent 99% of
all companies in Europe and two thirds of all employment.

10. Promotion of entrepreneurship
through self-employment program
• But, on the other hand, the problem is that motivation for
self-employment and choosing entrepreneurial career has
dropped on average.
• Figure 2: Enterprise births in the EU in the year 2010 and 2012

11. Promotion of entrepreneurship
through self-employment program
• Of course, the level of entrepreneurship varies between EU
Member States and the reasons for low enthusiasm for
entrepreneurial career are therefore diverse.
• In general, the environment for would-be entrepreneur, is not
very encouraging: education does not offer the right
foundation for an entrepreneurial career, difficult access to
credits and markets, difficulty in transferring businesses,
burdensome administrative procedures.
• On top of that, the problem is also seen in culture that does
not recognise or reward entrepreneurial endeavours enough
and also does not celebrate successful entrepreneurs as role
models who create jobs and income.

12. Promotion of entrepreneurship
through self-employment program
• According to the Global Entrepreneurship Monitor research
the major weakness for the development of entrepreneurship
in Slovenia is seen in:
• cultural and social norms;
• access to finance for start-ups and for the growth of
companies;
• bureaucracy and long administrative procedures.

13. Promotion of entrepreneurship
through self-employment program
• Active labour market policies play important role in promoting
entrepreneurship, but on the other hand the share of start-up
incentives is relatively low.
• Table 2: Expenditure by labour market policy measures for
Slovenia, mio EUR
Time 2005 2006 2007 2008 2009 2010 2011 2012 2013
Training 14,24 17,53 11,72 9,37 30,74 43,96 29,30 15,67 18,07
Employment incentives 11,41 8,61 6,56 2,54 16,51 32,36 14,38 11,21 21,01
Supported employment
and rehabilitation
3,46 na na na na na na na na
Direct job creation 22,21 22,47 18,84 16,00 21,89 46,05 25,74 20,37 45,13
Start-up incentives 4,58 5,77 1,21 6,80 19,89 20,09 22,28 15,58 17,42
Total LMP measures
(categories 2-7)
55,91 54,38 38,33 34,72 89,03 142,46 91,70 62,83 101,64

14. Promotion of entrepreneurship
through self-employment program
• The most important program that Slovenia implemented for
promoting entrepreneurship in the period 2007-2013 was self-
employment subsidy. The aim of self-employment subsidy is to
maintain self-employment for the contractual period.
• In the period 2007-2013 more than 23 thousand unemployed
persons participated in the program self-employment subsidy.
• The number shows that self-employment subsidy was well accepted
among unemployed persons and if nothing else it raised awareness
about the importance of entrepreneurship and starting
entrepreneurial career.
• The question that remains somehow open is connected with
monitoring the effectiveness of such programs .
• With a critical perspective we can write that there is no serious
development of culture of evaluation of such programs, although
the recommendations come from the EU

15. Conclusion
• The entrepreneurship as a route out of unemployment should
be promoted.
• It is necessary to strengthen the environment that will
encourage and support entrepreneurs.
• Additional opportunity for youth unemployed people can be
seen within ALMP (start-up incentives, self-employment
program).
• The culture of evaluation of such programs should constantly
develop since there is a lack of scientific based methodological
approach toward evaluation of the effectiveness of such
interventions.
• Consequently, there might be a risk of overestimation of the
results and inadequate distribution of resources.