“In USA, 95.1% of small-business owners have at least bachelor’s degrees or higher. In Romania, only 53.3% of entrepreneurs are college and high-school graduates. However, starting with 2010-2011 school year, entrepreneurial education has been introduced at high schools (10tyh grade), expecting to raise awareness of entrepreneurship among teenagers as an alternative career path,” reads E&Y’s Entrepreneurs Speak Out – The Barometer of Entrepreneurship Romania 2012.
According to E&Y, the current economic context, with few and unstable jobs, “led to a change in the traditional perception of the ideal career valuing stability, towards a more entrepreneurial mindset.”
“Trying something on your own has begun to be considered acceptable. This trend should be further supported by educating pupils and students about entrepreneurship as a valid career option through internships, conferences and dissemination of success stories,” believes the source.
Romanian entrepreneurs lack relevant information regarding financing sources, the organizations that support entrepreneurship and the education programs meant for them. Moreover, the negative image of business failure and the difficult business context are seen as major obstacles by entrepreneurs.
“Although 50% of respondent entrepreneurs think that the Romanian culture and society are supportive for them, their answers regarding how they think business failure is perceived by the business environment and society as a whole are not at all encouraging: only 12% of them answered that failure is perceived as a learning opportunity, while 32% of them see it as a barrier to future business projects and 24% as an indicator of lack of necessary skills. The magnitude of these answers show that Romania is far from becoming a supportive society for entrepreneurs, indicating its tendency to discourage risk-taking in start-ups,” reads the survey.
Some 92% of respondents said young entrepreneurs face difficulties in obtaining financing.
Romanian entrepreneurs believe that EU funds (63%) and bank loans (52%) have the strongest impact in supporting start-ups in the next three years. Private equity, business angels and venture capital are seen to have only medium impact.
“These answers do not necessarily show that development of financing instruments like private equity, venture capital and business angels would not have a great impact on entrepreneurship, but show rather a troubling lack of information. It becomes clear that these types of investors and financing sources are still little known on the Romanian market,” according to E&Y.
Moreover, entrepreneurs have limited access to business angels and venture capitals, as these financing sources are not adequately represented or diversified locally.
Also, entrepreneurs are not satisfied with the regulatory and taxation systems. Only 36% believe that Romania offers an efficient legislation for starting a business, compared with 51% of EU entrepreneurs.
“Romania cannot progress without strong entrepreneurship. We need this internal growth engine, in order to stimulate the sustainable development of our local economy, we needd successive generations of entrepreneurs, who can contribute to harnessing our internal resources, generating more jobs and to increasing the added value of Romanian products and services,” said Bogdan Ion, managing partner at Ernst&Young Romania.
The survey was conducted between June 1 and August 15, 2012, and polled several local entrepreneurs.