The term entrepreneurship is commonly used to describe the starting of new organizations or businesses. It is a extremely important factor in each country because it helps to deal with many economic issues (e.g., unemployment). I believe that there are many ways how entrepreneurship is being promoted in Lithuania.
It is noticeable that it was created a new type of business called “small partnership” in 2012, in Lithuania. This leads to the idea that this kind of business specie was made by seeking to promote entrepreneurship in the country. It is the reason why there were made so convenient conditions to create your own company. For instance, a person who wants to start his own business does not need to have the initial capital. From this, it means that there are more people who can use this opportunity. Also it is applied a limited property liability. As a result of this, it reduces the risk taken by starting a business.
Another significant point to be made is that it was a great opportunity to manage with the crisis (in 2008-2012) and specially dealing with the unemployement issue. Regarding to the data based on Eurostat, unemployment in Lithuania has decreased from 14% to 11.4% from 2012 January to 2016 January. “Small partnership” was one of the instruments which helped to reduce it.
Furthermore, another way to promote entrepreneurship in Lithuania is preferential loans. For people who want to start their own business, interest rates of taking a loan were made lower. One of the conditions for taking this kind of loan is for financing the investments or working capital. The highest amount of money a person can lend is 25 000 euros. The interest rates are from 5.5% to 9.5%. This idea was created by Lithuanian Labor Exchange. Its aim was to create better conditions for small companies to start their own business. In fact, there were also made courses which main goal was to teach people how to manage a company. Despite of this, there was also made available the opportunity to attend private consultations, which help to create business plans.
Other European countries promote entrepreneurship in a similar way. For example, in Germany are provided financial supports to promote entrepreneurship. In this case, there is an amount of money which is given to a person to start his own business. This kind of tool is commonly called of “start-up” and it is important for the whole country’s macroeconomic indicators because it can help to extend the market and raise the export level of the country, although there is still a huge amount of people in Germany who do not prefer to have their own business. Just under 50% of Germans (according to the data of Global Entrepreneurship Monitor) agreed that starting a business was an attractive idea. In comparison, in Poland it is 68%, France 65% and in Netherlands 79%.
Another way to induce entrepreneurship is promoting cooperation between researchers and the private sector. This idea is being used in Netherlands. The government is working with the knowledge institutions and private sector to improve public-private partnerships.
On the other hand, there are also plenty of reasons why it is still hard to start your own business. There is always a probability that you can be not successful in the chosen area and go bankrupt. Another significant point to be made is that there are very big taxes in Lithuania. They are applied to the companies which want to end their business. That is the reason why people are not so excited to create their own firms in Lithuania.
To sum everything which was said up, entrepreneurship is important for country’s development. In my opinion, there is a huge amount of ways how it can be and is being promoted in Lithuania and other European countries.
1. Algimantas Misiūnas (2016). Entrepreneurship Impact to Economical Indicators. Interact: http://www.stat.gov.lt
2. Lithuanian Republic Finance Ministry (2012). Interact: http://www.esparama.lt/verslumo-skatinimo-priemone
3. Data of unemployment in Lithuania. Interact: http://ec.europa.eu/eurostat/web/main
4. Data of Global Entrepreneurship Monitor. Interact: http://www.gemconsortium.org
5. Netherlands Government (2014). Enterprise and Innovation. Interact: https://www.government.nl/topics/enterprise-and-innovation/contents/the-government-supports-entrepreneurs