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Monday 19.03.2018 | Name days: Jāzeps

Small companies save labour market

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Supporting and encouraging small and medium-sized enterprises could be the solution of reducing unemployment and creating new long-term job positions, this opinion was maintained in the discussion Mazie uzņēmumi vs. lielās eksportspējīgās kompānijas – plusi un mīnusi ekonomikai.

The State Secretary of the Ministry of Economics (ME) Juris Pūce (Juris Pūce) told there was a synergistic relationship between small and large companies. However he also added the world experience shows that increase of job openings usually can be witnessed in small and medium-sized enterprises, while large companies mostly concentrate on productivity by reducing job positions.

This is the reason why ME has proposed to launch a support program for starting business and micro-enterprises (companies with not more than five employees and a turnover of 70 00 lats per year). The fees of registering a micro-enterprise have been reduced, as well as, replacing of all taxes (except VAT and excise duty) and introducing a 9% rate of the overall turnover have taken place. To facilitate micro-enterprise managers bureaucratic issues, simple entry bookkeeping is offered. The program has gathered relatively great response, as in ten days time since the Micro-enterprise tax law adoption – 87 applications have been received, adds Puce and forecasts that the number of applications could reach 100 by the end of the year.

When commenting upon the labour market of the country, Puce indicates that the decrease in domestic consumption was expected given that 17% of the population were unemployed in March. The growing number of job positions in summer might not be an objective indicator, because of seasonal work. However, taking into consideration the drop of the unemployment rate also in the second half of September, the State Secretary of ME is convinced about positive tendencies in the labour market.

DnB NORD Bank Companies’ Service Administration Manager Raimo Smukais agrees the small and medium-sized companies are very important players of the market. The number of job positions in small enterprises fell until 2001; whereas it grew in large companies. Whereas after 2001 the tendency is that the drop rate of job vacancies is lower for small companies. It should be noted that the large enterprises are the ones ensuring competitiveness also in foreign markets, thus enhancing favourable costs.

DnB NORD representative maintains that the government should focus more on education of businessmen rather than creating easy ways to financing. Entrepreneurs lack knowledge of how to link their ideas with all the necessary, for example, a hairdresser might come with a wish to establish his or her own beauty salon even not knowing the costs of scissors or chairs. When comparing business to fishing, Smukais says, «The government needs neither fish nor a rod. It should be explained where the lakes are and where the fish live.»

The Chairman of the Board of the new company Travel Jam Edgars Lielausis emphasizes that «the small companies are the ones to turn into the big ones,» while the press secretary of Maxima Ivars Andins (Ivars Andiņš) adds that along with the extension of the large companies, they also become the clients of the small ones, that way the businesses are collaborating, they are not separated.

Latvian Chamber of Commerce and Industry member of the Board Jānis Endzins (Jānis Endziņš) was glad, «We are small, that is our advantage – the large countries are not capable of introducing reforms of such scale in a short period of time.»

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