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- Young people in business: the number of sole proprietorships and self-employed under 25 years of age increased to 2.7 million
Young people in business: the number of sole proprietorships and self-employed under 25 years of age increased to 2.7 million
Young people in Russia are increasingly starting their own businesses. The number of sole proprietorships and self-employed under 25 years of age has grown to 2.7 million in 2024, according to Izvestia. Over the six years of the national project to support small and medium-sized enterprises (SME), their number has increased sixfold. The reasons are not only in the active assistance of the state, but also in the fact that niches have been freed up in the market, and there is a need for import substitution. Young people are launching IT businesses, their own clothing brands and even equipment manufacturing. The Izvestia article shows how high such figures are compared to other countries, what is the GPH and whether this will aggravate the shortage of personnel.
How many young sole proprietorships and self-employed are there in Russia?
The number of sole proprietorships and self-employed under 25 years of age in the first half of 2024 increased to 2.7 million people. Since 2019, when the national project to support SMEs was launched, their number has increased sixfold. Such data follow from the Ministry of Economic Development's report on the state of small and medium-sized enterprises, which also summarizes the results of the national project (Izvestia has it).
The indicators of young IEs and self-employed look impressive against the background of their total number - now in Russia there are about 4.2 million individual entrepreneurs and more than 11 million self-employed. "Izvestia" sent an inquiry to the Ministry of Energy about the reasons for the growing popularity of their business among young people.
In recent years, the authorities have begun to actively support SMEs, including young people. For example, in the middle of 2022 they introduced grants of 500 thousand rubles (up to 1 million rubles for the Arctic zone) for people up to 25 years old to create or develop their own business. In accordance with the National Project, they are also covered by other measures to support small companies, in particular, preferential lending.
Young people are more courageous in making decisions about starting their own business - they are not afraid, unlike the older generation, to make mistakes and gain their own experience, emphasized Alexander Isaevich, General Director of SME Corporation.
Starting a business in Russia as a whole is becoming easier - young people are attracted by the convenience of taxation, Alexander Isaevich added. This applies to both IEs and the self-employed - the latter interact online, literally from a smartphone, he added.
Higher education institutions, in turn, also support young people: for example, since 2020 Russia has been running the project "Startup as a diploma", recalled Alexander Arsky, a researcher at the Center for Strategic Studies of the Faculty of Economics of the RUDN. Thanks to this project, students can launch their own business as a graduation thesis instead of writing a traditional diploma.
Business associations have also become actively engaged in the development of career guidance programs and startup ideas, the "Support of Russia" noted.
What kind of business young entrepreneurs are opening in Russia
One of the catalysts for the development of youth entrepreneurship has become, oddly enough, covid restrictions, added Irina Myslivchik, general director of CargoSert LLC. Young men and girls, sitting at home, launched their business on the Internet - the key industries with an obvious growth of self-employed population were marketing, consulting in terms of industry training of various skills and trade on marketplaces.
Now the interest in business is fueled by the release of niches after the departure of Western players from Russia - they are gradually being filled by domestic manufacturers. The SME Corporation cited the example of 21-year-old Kamila Konakbiyeva from Moscow, who founded a company producing and selling corporate clothing.
And, for example, 27-year-old Ilya Epishin from Novosibirsk in 2022 opened his own business in the field of instrumentation - production of controllers (controls other devices or systems, and monitors their condition), told "Izvestia" in the ANO "National Priorities". This is relevant because of the need for import substitution.
19-year-old Pyotr Ptushkin has launched a business project in the field of digital construction services - he has developed software for managing construction structures. There is a demand for such a service against the background of active growth in housing construction. Vadim Kolesnikov from Astrakhan opened his own company at the age of 18, which creates web platforms, corporate portals and websites.
However, most often young entrepreneurs work in trade, transportation and storage, construction, manufacturing, as well as develop professional, scientific and technical activities, summarized Alexander Isaevich, General Director of SME Corporation.
Digital marketing services and content creation, information technologies, creative industries, fitness and healthy lifestyle are also popular among young businessmen, said Natalia Gromova, the founder of the company "HR-perezagruzagru", the chair of the HR Committee of the Moscow branch of "Business Russia".
However, there is a more trivial reason for the growing number of self-employed and IE at this age. Against the backdrop of staff shortages, minors began to look for work more often, but usually companies prefer to register them on a contract of employment, so as not to meet the requirements for working conditions. Then it is easier for teenagers to formalize self-employment to pay tax at a lower rate.
As Izvestia wrote earlier, the number of self-employed under the age of 18 in 2023 amounted to almost 150 thousand people - it is one and a half times more than it was in 2022.
What youth entrepreneurship means for the labor market
The development of youth entrepreneurship allows creating new final products and services, increases labor productivity and helps to use labor resources more efficiently, the Agency for Strategic Initiatives (ASI) told Izvestia. At the same time, the self-employed can adapt more quickly to changes in the market - this makes the economy more sustainable.
- Nevertheless, the involvement of young people in entrepreneurial initiatives is noticeably behind the similar level in the EU and the USA. High cost of financing and monopolization of sectoral markets act as barriers," said independent expert Andrei Barkhota.
In general, the increase in the number of IEs and self-employed up to 25 years of age changes the structure of industries, as young people, in particular, begin to conduct entrepreneurial activity in the IT-sector, online commerce. Self-employment and individual entrepreneurship draw labor resources away from the real sector of the economy, believes Lyudmila Ivanova-Shvets, Associate Professor of the Human Resource Management Department of the Russian Chamber of Commerce and Industry, Plekhanov Russian Economic University.
This is happening against the backdrop of an aggravated shortage of personnel - as Izvestia wrote, Russia now lacks about 2.7 million workers. And the greatest shortage of hands is in the construction segment and companies providing road freight transportation services. "Izvestia" asked the Ministry of Labor about how the growing number of young entrepreneurs affects the labor market.
In order to bring young people to the factory, organizations need to increase the attractiveness of such labor, believes independent expert Andrei Barkhota. This means increasing the variable part of labor remuneration, hybrid work schedule and comprehensive support of employees' initiatives.
According to the expert, the growth in the number of sole proprietorships and the self-employed will continue, but the rate of this growth will slow down.
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