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Wednesday 23.08.2017 | Name days: Valgudis, Ralfs, Vitālijs

Lithuania maps out its entrepreneurialism

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

 

Linas Jegelevičius for the BNN

In a small county like Lithuania, the scope of entrepreneurialism varies tremendously from one region to another. The most people that do not fear business risks dwell in largest cities, but some of the otherwise agricultural and touristy regions in the hinterlands can also boast of a decent number of private business initiatives.

Map sizing up entrepreneurialism in the country

Unsurprisingly, on top of the scale sits the Lithuanian capital Vilnius, with the resort towns of Neringa and Palanga being runner-ups. The latter are followed by the second-largest Lithuanian city Kaunas, Šilutė region.Unexpectedly, the seaport city of Klaipėdа wraps up the list of the six most business active municipalities.

Meanwhile, Radviliškio, Šalčininkų, Joanvos and Varėnos regions ended among the country’s least business-minded municipalities.

«We definitely believe that many folks, including politicians, businessmen and state officials, can benefit from the entrepreneurialism map we’ve drawn up. As it well reflects the spread of businesses activities across the country one can decide according it, for example, where to channel the EU structural funds’ money, where shortage of certain companies is and where the highest competition is,» said Tomas Valauskas, an analyst at Lithuania’s Central Credit Union (LCCU).

The business exuberance in the touristy regions of Utena, Molėtai and Šilutė doesn’t catch anyone off guard, but the sluggishness in some regions on the bottom of the ranking make even experts scratch their heads over the reasons of the drift.

As regards allocation of EU funds, Lithuania’s high-echelon authorities had said in the past that the EU money first will be funneled to regions, where the economic growth is desired to be higher.

Hence, the entrepreneurialism map – says Dalia Matukienė – chairwoman of Lithuania‘s Small and Medium-sized Business Council – should be made available to every politician locally.

«Indeed, there’s a good deal of various statistical information on the scope and level of business in the regions. But it may be hard to believe it is not that easy to obtain that kind of information, particularly that is concise and targeted,» she said.

For now, the e-map will be posted on the LCCU website only, but soon it should turn up on other websites too.

So look it up if you’re eager to find out who is who in courting and fleshing out business ideas in Lithuania!

Five criteria

The map’s compilers have researched business activities in the country between January 2013 and October 2014. In assessing the entrepreneurialism level, five criteria have been taken into account.

The actual number of operating ventures per one thousand people in every municipality, the number of natural bodies engaged in business activities, the growth of local businesses, also the loan portfolio for start-ups and the local inhabitants’ intentions to start a private business.

The research has pegged the general figure of the country’s private business owners at 202,000, but experts are convinced it is way larger as those toiling in the shadowy economics remain unaccounted.

According to the data, there are 68,200 active enterprises in the country, i.e. 23 business undertakings per 1,000 people in the country.

In that regard, the largest concentration of active businesses is seen in the resort town of Neringa, which boasts 51 enterprises per 1000 residents, followed by Vinius and Palanga, respectively 45 and 34 operational companies for 1000 inhabitants.

In a stark contrast, in the border town of Kalvarija in southern Lithuania, only a mere 7 businesses fall for 1000 local residents. Ignalina and Lazdijai regions surpass Kalvarija by a single business.

Interestingly, over the last year, Vilnius has seen the largest growth of entrepreneurialism, up by 12,5 new start-ups from the previous year, while the private sector has shrunken, again, in Kalvarija most.

Statistically, every second start-up pops up in the Lithuanian capital.

Meanwhile, when it came to bank loans, Kaunas residents have been the most active in signing loan papers.

Another recent report showed that some 10% of Lithuanians are willing to take on their own business in the years to come, with Klaipėda and Utena residents, at 12%, cherishing own business thoughts most.

«More likely than unlikely every fourth Lithuanian is willing to start own business, but many of the respondents have pointed out that they are devoid of the necessary skills and information on business support measures,» Valauskas, from the LCCU, noted.

Lithuanians lack zest for own business

But, obviously, there’s much to exert towards a business in Lithuania. In terms of entrepreneurialism, Eurostat throws it to the very bottom of the EU ranking – only a meager 9.7% of Lithuanians work for themselves. The actual level of the self-employed, some Lithuanian economists insist, is a lot higher, but is overshadowed by black economy.

«The pretty low numbers reflecting the level of entrepreneurship in the country shouldn’t catch anyone off guard. Only for a couple dozen years, since the restoration of independence in 1990, Lithuanians are able to run their own business. The respective figure in Western Europe hovers around 30%, but let’s do have in mind most of the businesses there are being handed over from one generation to another,» Romas Apulskis, president of Lithuania’s Legal Business Alliance, told BNN.

Obviously, the local business peculiarities should also be taken into account, he agreed, and Lithuania by no means is a business heaven.

«We still lack the skills, know-how and business ethics in comparison with the West. The shortage of initial capital to take business off the ground, comparably small market and the inconsistency of business legislation are among the other drawbacks. But I reckon all of them can be overcome over time,» said the LLBA president.

Yet many Lithuanians are becoming more business-friendly and are ready to take on a private initiative.

«Ten years ago, a start-up wouldn’t even think of foreign markets. Now the expectations are that a new business will be able to make inroads into exterior markets within the first years of the operation.  Establishing the small business crediting systems aiming to support entrepreneurial initiatives has been a big leap forward in spurring entrepreneurialism in the country,» said Mindaugas Busila, executive director of the project «Verslauk».

Ref: 020/111.111.111.1955

 


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