The involvement of young people in entrepreneurial activity is becoming one of the key internal reserves for economic growth and social development, experts note.

In just six years, up to 60% of the workforce, along with millennials (Generation Y, born 1981-1996), will be Generation Z (1997-2012), Alexandra Engovatova, head of the analytical service of the committee of the Russian Union of Industrialists and Entrepreneurs (RSPP), recently stated.

In turn, sustainable economic growth is directly linked to the development of the small and medium-sized enterprise (SME) sector, note the authors of the HSE report "SMEs as a Driver of Structural Changes in the Russian Economy" (2023): "Here, technology startups are formed, breakthrough innovations and business models are tested, and fast-growing firms are formed."

In addition, small business is the most accessible form of professional self-realization for active youth, building career "elevators" between science and HSE analysts note that the steady growth of the digital economy and the expansion of flexible employment opportunities are only strengthening the potential of SMEs. Therefore, supporting and promoting youth entrepreneurship is a national priority today. How actively are young people involved in business? The Russian Ministry of Economic Development notes an overall increase in entrepreneurial activity and the particular initiative of young entrepreneurs. Today, 6.5 million SMEs are engaged in business, said Tatyana Ilyushnikova, Deputy Minister of Economic Development of Russia: "This is the highest figure since 2016." The number of private organizations with the status of newly created companies today reaches 1.5 million. In addition, according to Ilyushnikova, there are already over 10 million self-employed people in the country.

The number of entrepreneurs under the age of 25 increased by 20% in 2023, according to the Ministry of Economic Development, and by 1.5 times over the past four years, reaching 250 thousand today. Overall, every fourth individual entrepreneur in Russia is a representative of the youth, according to the SME Corporation: thus, there are approximately 1 million individual entrepreneurs in the country under the age of 35.

Formally, youth in the country are recognized as citizens between the ages of 14 and 35; up to this age, they can receive state support measures within the framework of youth policy. In 2020, the upper limit was raised from 30 years.

What contributes to youth entrepreneurship?

The younger generation is inquisitive and risk-taking, according to Deputy Minister Ilyushnikova: "Young people today are creators—they are not afraid to launch their own projects."

Indeed, young professionals aged 18–24 (19%) and 25–34 (13%) are more likely to plan to start a business, according to the results of a study by Avito Works, presented in June at the St. Petersburg International Economic Forum. In general, more than a third (36%) of Russians have thought about starting a business at least once, and 9% of respondents plan to launch it in the near future.

One of the main advantages of Generation Z for starting a business, according to the Avito Works study, is their digital literacy (37% of survey participants believe this).

In particular, technological development and the growth of platform employment contribute to the involvement of young people in business, according to the authors of the study “Platform Employment as a Tool for Labor Socialization of Generation Z Representatives” (2021) by the Russian State University for the Humanities (RSUH): “Starting with a small or microbusiness based on platform employment, which does not require either complex registration procedures or the attraction of significant start-up capital, representatives of Generation Z can try themselves as entrepreneurs.”

The average annual growth rate of the platform economy in our country from 2018 to 2021, according to RSUH, amounted to 17.4%.

The total number of people employed in the Russian platform economy, according to estimates by the HSE Institute for Social Policy, reached approximately 15.5 million in 2022, including 1.7 million employed as their primary job. Students were the most likely to report platform employment as their primary or occasional job.

Overall, Zoomers are actively participating in the labor market, including in traditional and tech businesses. According to the Russian Ministry of Education and Science, approximately 60% of graduating students are combining work and study this year.

When the Moscow-based FUN (find ur neighbor) project, a startup developing a mobile app for finding roommates for shared housing, launched in July 2023, for example, all of its participants were 20 years old and were students at HSE and Bauman Moscow State Technical University, said project director Anastasia Anisimova. The team, according to her, is focused on the long-term development of the project with the prospect of not only acquiring a significant market share, but also expanding the product line: “The demand for such services is growing due to the popularization of the sharing economy and the rise in rental housing costs.”

So far, the project The project is being developed using its own funds, but the students are hoping to attract investors and grant support: "We are currently participating in the Rosmolodezh (Federal Agency for Youth Affairs) 'Your Move' competition, and we are also awaiting the start of accepting applications for student programs from the Foundation for Assistance to Small Innovative Enterprises."

Analysts note that the modern generation is focused on solving global and social problems, among other issues.

For example, a team of students from the Moscow Technical University of Communications and Informatics (MTUCI) has developed a medical bracelet for monitoring patient health indicators, said Roman Grishin, one of the founders of the startup LifeLine. The project, which he founded with classmates Vasilisa Elina and Egor Korshunov, is in the development stage. Investment is needed for development, the developers say. They hope to attract resources, including through grant competitions—specifically, they have applied to the Foundation for Assistance to Small Innovative Enterprises' Student Startup Competition and generally count on state support for their project in this socially significant sector.

How government support helps young people

The Ministry of Economic Development is confident that the current system of government support is contributing to the growing involvement of young people in business. "Starting a business isn't so scary. Self-employment is available with preferential terms. There are grants. Various support can be obtained at My Business centers," says Ilyushnikova.

Indeed, over the past five years, the government has built a system of support for young entrepreneurs and is expanding its support measures annually. For example, thanks to the national project "Small and Medium Entrepreneurship," young people aged 14 to 25 can receive grants to implement their projects. Other entrepreneurs, for example, those aged 25 and older, have access to a full range of support at My Business centers and on the MSP.RF platform.

Grant support is provided through My Business centers, which are present in 88 regions of the country: they provide assistance with completing applications, writing a business plan, and explaining how to complete the training necessary to receive funding. Last year alone, more than 540,000 SMEs, self-employed citizens, and individuals planning to start a business received this support.

As a reminder, the MSP.RF digital platform was launched in February 2022. More than 30 services and 800 regional support measures are available online for entrepreneurs. These include business registration, consultations, educational courses, market assessment and business plan calculation, a document designer, a legislative digest, a tax reporting calendar, a pre-trial appeal service, a franchise catalog, a database of real estate suitable for business, and an application form for preferential loans. The platform's user base currently exceeds 900,000.

Kirill Tikhonov (21) from the village of Yarkovo in the Tyumen region, for example, opened a semi-finished meat production business with the support of the local "My Business" center. While still a student, he participated in the "ABCs of an Entrepreneur" educational project for beginners, where he received help drafting a business plan to qualify for social assistance, registering a business, choosing a tax regime, determining OKVED codes, and opening a bank account.

After completing training in the fundamentals of entrepreneurship, he successfully defended his project, received 350,000 rubles to purchase equipment, and opened a retail outlet. He then received an additional 500,000 rubles through the "Easy Start" program of the Tyumen Region Microfinance Fund to build a production facility. Kirill now produces and sells meat, semi-finished products, minced meat, and shashlik. He plans to participate in the regional government's grant competition for young entrepreneurs.

Alina Vilgotskaya (25) from Nizhnevartovsk used a youth grant to open a sewing studio last year, which had previously been a small home workshop. A subsidy—a social contract—was also initially helpful in launching the business. Unlike a benefit, it obliges the recipient to find a job, undergo training, or open a business (from 2022, the subsidy can reach 350,000 rubles). Alina used these funds to purchase sewing machines. The future entrepreneur then completed free training at the "My Business" center and opened a sole proprietorship: the courses helped her develop a sound financial model for the studio, establish pricing, and ultimately receive a youth grant of 500,000 rubles. Since opening her full-fledged workshop, Alina says her income has tripled. Currently, the studio sews to order, but plans to expand the workshop and sell ready-made collections. "It's difficult to find a professional seamstress. It's also very expensive to certify the product," the entrepreneur notes.

What risks do young entrepreneurs face?

Young people generally experience the greatest difficulties during their professional development and when starting a business. Ilyushnikova says that the first business projects are often the most popular: "Therefore, there are separate programs for them, such as a grant for starting or developing a business."

Self-employment or individual entrepreneurship are the most common choices for starting a business, and they often focus on trade, e-commerce, or monetizing personal skills, according to the Ministry of Economic Development.

For example, at the beginning of the year, according to Sberbank's subsidiary, Delovoy Sreda, the most popular field of activity for entrepreneurs aged 18–25 was retail: they launched 62% more projects here than the previous year.

At the same time, most small companies tend to close within the first two years, says Deputy Minister of Economy Ilyushnikova: "This is a general trend; it does not depend on the entrepreneur's age." The government's goal, she says, is not only to help start businesses but also to increase their survival rate. Indeed, entrepreneurs aged 30–35 are already more likely to have mature, successful projects, sometimes even extending beyond the small and medium business sector.

According to agency statistics, of the 1.5 million newly created companies, approximately 500,000 survive. Therefore, maintaining and developing support measures is important, says the expert: "We see a direct correlation between company survival and the use of development tools. SMEs that received support show higher performance after a year: revenue growth is twice as high, and employment growth is eight times higher. The risk of closure for SMEs that did not receive support is twice as high as for those receiving support.

Three years after receiving financial support, 80% of entrepreneurs continue to operate. "Companies that utilize support programs are transitioning to qualitative growth, embracing new technologies, expanding their workforce, and, as a result, delivering the greatest economic impact," the Ministry of Economic Development notes.

President Vladimir Putin previously stated in his address to the Federal Assembly that it is necessary to improve the efficiency and quality of youth businesses: "This creative energy must be supported so that the average income per employee employed in small and medium-sized businesses grows faster than the rate of GDP growth over the next six years."

Why Learn Business While You're Young

Overall, young entrepreneurs are actively interested in and taking advantage of government support measures, the Ministry of Economic Development notes. Moreover, in addition to financial assistance, consulting and educational support are often just as important for them, notes Ilyushnikova: "68% of the participants in our events aimed at developing skills, abilities, and competencies are entrepreneurs under 35."

The drum show DrumShow11 from Krasnoyarsk has been a success in its hometown over the past five years, says the group's leader, Sofia Grin: "Since 2019, we have held more than 700 performances and attracted over 1 million viewers." Upon entering the Moscow event market, the team of self-employed women in the industry faced stiff competition, she notes. This, according to Grin, forced them to pay closer attention to government support programs and opportunities for promotion in the capital's market.

The educational program "I'm in Business," in particular, helped the artists compile a detailed analysis of competitors, highlight their strengths, and calculate the project's risks. The Moscow team DrumShow11 is currently planning to expand its roster of performers and increase the number of performances.

As a reminder, the "I'm in Business" youth entrepreneurship educational program was launched by the "Captains" charitable foundation with the support of the Ministry of Education and Science, the Ministry of Education, and the Federal Agency for Youth Affairs in 2022. It aims to improve entrepreneurial literacy and is free for participants. Over the past 2.5 years, more than 235,000 students and high school students from 72 regions of the country have participated in it, creating 11,000 projects, some of which have become active businesses and startups.

Of the 123,000 university entrepreneurship tournament participants, 55,000 have graduated from the program. The winners completed a two-month in-person entrepreneurship training course, and the best of them took part in business intensives, where they refined their projects with the help of expert practitioners.

Student startup LifeLine took third place in the "I'm in Business" project competition in Moscow, said Grishin: "We managed to rework the project idea: in the future, we want to transform the medical bracelet into universal software for smart bracelets and watches, which will be able to connect devices with an electronic medical application."

Participants in the FUN project are also constantly looking for both financial and educational opportunities that contribute to the development of the project, skills, and experience in the IT business, says Anastasia Anisimova: "For example, my team and I took free training aimed at developing skills in digital product management from Innopolis University."

"The "I'm in Business" program teaches a full range of basic entrepreneurial competencies "We are assisted by experienced mentors and experts from a wide range of business sectors," said Maxim Anisimov, Deputy Director of the Federal Program for the Development of Youth Entrepreneurship in Moscow. Nonna Kagramanyan, Vice President of Delovaya Rossiya, notes that connections are important in business. The public organization, she says, also helps young entrepreneurs present their projects to experienced businessmen as part of the special project "Youth Investment Lift," who can then become investors, mentors, and market guides. Several other projects to support young entrepreneurs have been launched within the Rosmolodezh.Business track. One of them is "StartTech." It will be held at the Alabuga Special Economic Zone and will bring together 150 young people aged 14 to 35 and existing entrepreneurs. They will have the opportunity to exchange experiences and create innovative technological products. You can submit an application on the Rosmolodezh.Business website until September 22.

Source: rbc.ru

Photo source: freepik.com

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In the Yaroslavl Region, various assistance is provided to entrepreneurs within the framework of the national project "Small and Medium Entrepreneurship", as well as to industrial enterprises within the framework of the national project "Labor Productivity" and the national project "International Cooperation and Export".

You can learn more about all the support measures for small and medium businesses on the website moibiznes76.rf or at the My Business Center at Sverdlova 25D, or by calling the My Business Center: (4852) 594-754.

More information about all the support measures for industrial enterprises and investors is available on the website invest76.ru