By Milos Djuricanin, Program Manager at Serbian Association of Managers. Duracanin was a 2014 ChamberLINKS participant.
“It is clear that youth unemployment is one of the biggest problems of our society. If we want to successfully solve the problem of unemployment, we have to listen more to the voice of the economy and private sector. This is the absolute priority of the Government of Serbia. That’s why we initiated conversations with businessmen, in order to get first-hand information on their personnel needs and to create a common set of measures which will enable increase of youth employment”– Vanja Udovicic, Minister of Youth and Sports.
The status and position of young people in the labor market in Serbia falls into the category of challenges with no quick fix. Year after year, we are faced with statistics that continue to confirm that every second, a young person is left without a job. According to data presented at the National Youth Strategy for 2015-2025, youth unemployment in August 2014 in the Republic of Serbia is 41.7 percent for people aged 15-24, and 33.27 percent for people aged 15-30 years. Young people are inactive in the labor market: last year the inactivity rate of young people aged 15-30 years was over 50 percent and in 2013, it was noted that 20 percent of young people ages 15-24 belonged to the category of young people NEET (not employed, in education or training).
One of the key issues affecting the high youth unemployment is a mismatch between the skills that young people acquire through formal education, and the knowledge and skills that employers expect them to have. According to research conducted by the Union of Employers of Serbia, young people throughout the formal education system receive and adopt only theoretical knowledge and only 4.12 percent of young people are considered to possess the knowledge and skills for real business. Eighty-six percent of young people reported that they felt they did not possess any practical knowledge.
Among the barriers for business development in Serbia, the lack of adequate staff is increasingly climbing on the list: from an 8th place ranking in 2006 to third place ranking in 2013. This is a clear indication of how difficult it is to find high quality staff.
Given this information, the Serbian Association of Managers (SAM) with the support of the Center for International Private Enterprise (CIPE) organized an event titled “Support for the youth – future for the country,” during which a Memorandum of Cooperation was signed between the Ministry of Youth and Sport and SAM aiming to increase opportunities for top university students in the country to intern for SAM’s member companies.
Recently I visited Serbia to attend events for a women’s mentorship program led by our partner, the Association of Business Women in Serbia (ABW). I was excited to speak with the local women entrepreneurs, because I had read literature on how women in business face serious barriers in Serbia despite the country’s history of socialist emphasis on gender equality. What I saw from Serbia’s women entrepreneurs was impressive.
In Serbia, men and women have similar levels of education and equal treatment in labor legislation. When it comes to access to economic opportunities, however, it’s a different story. The employment rate for working age women is over 20 percent lower than that of men. Women-owned enterprises (small businesses, limited liability companies, partnerships, etc.) make up only 26 percent of all registered businesses and companies active in the Serbian economy.
Economic growth has been anemic since 2009 and the country slipped into recession in 2014, due in part to severe floods. Despite overcoming the setbacks of the 1990s — conflict, international sanctions, and breakup of the former Yugoslavia — and being in negotiations to join the European Union, Serbia now faces an unemployment rate of nearly 17 percent. The unemployment rate is even higher among youth — 47 percent. Many economists have argued that the answer to revitalizing Serbia’s economy is encouraging more women into the private sector, especially to start small and medium enterprises. And ABW for the past 10 months has been doing exactly this: inspiring and supporting entrepreneurship among women throughout the country.
Children’s book and toys that were developed as a result of Association of Business Women in Serbia’s mentorship program.
Fear of failure. Lack of confidence. Aversion to risk. These are some of the biggest hurdles that one faces when starting a business. Around the world, these challenges are often far more pronounced for women entrepreneurs. The Global Entrepreneurship Monitor 2012 Women’s Report noted that one of the top reasons why there are significantly fewer female entrepreneurs than male entrepreneurs is because women simply believe they are incapable of launching their own businesses.
What can be done to reverse such beliefs?
One answer is fostering a network among women in business through mentorships.
The Association of Business Women in Serbia (ABW) and Red de Empresarias de Nicaragua (REN) both saw a pattern in their countries: women are reluctant to start businesses because they lack role models and the right skillsets to pursue entrepreneurship. To fill this gap, CIPE is supporting both organizations to empower and support aspiring or new women entrepreneurs in Serbia and Nicaragua.
By Olivera Popović
While the global economic crisis in 2008 affected many countries worldwide, the shock to Serbia’s society and economy was magnified due to the ongoing transition processes there. For the past fifty years, women in Serbia were most often employed in the public sector as part of Yugoslavia’s socialist planned economy. In the past two decades, the transition from socialism to liberal capitalism and an open market economy has initiated changes in approaches to work and ultimately led to a greater presence of women in business.
In making this transition, women face an uphill battle – in gaining greater access to capital, technology, networks, and acquiring the knowledge to start and grow their businesses. On top of those challenges, the social and economic landscape is characterized by poor labor market outcomes, a high youth unemployment rate, and large long-term unemployment. According to the Regional Cooperation Council (2013), the country’s per capita GDP is currently only 38 percent of the EU average.
Data from the International Labour Organization (ILO) shows that the overall unemployment rate in Serbia is 23.9 percent, with almost 25 of women unemployed. Youth unemployment is remarkably high (51 percent) and even more astonishing, 57 percent of young women are out of work. Equally important, universities in Serbia do not foster enough entrepreneurial spirit among students. Consequentially, students fail to fully consider entrepreneurship as a viable career option.
Recognizing this need for support to aspiring and established women entrepreneurs in a complex economic situation, the Association of Business Women in Serbia (ABW) created “Inspiring Women Entrepreneurship,” a project to strengthen the leadership and entrepreneurial capacity of young women in Serbia.
Recently there has been a lot of discussion surrounding the gender gap, especially when it comes to economic participation. For everyone who is interested in human rights and understands that involving women in all aspects of government and business only improves dialogue and strengthens democracy, while at the same time rapidly improving the living standards of these women and their families, this fact is frustrating.
No one can deny that women are industrious, innovative, and enterprising, and that given the opportunity and resources, women can be very successful in business and in democratic and economic reform processes. We’ve moved beyond the debate of whether women “can” to the debate of “If they can, why aren’t they? What’s preventing them?”
In Serbia, an inflexible and outdated labor code has been a major inhibitor for the competitiveness of domestic companies and, in turn, the Serbian economy as a whole. Reform of this legislation was the focus of a recent event hosted by CIPE partners the Serbian Association of Managers (SAM) and the Center for Liberal Democratic Studies (CLDS) in Belgrade.
The event gathered close to 100 participants from government, private sector, civil society, and media to discuss the key barriers and recommendations for possible solutions for improving labor legislation and reducing red tape.
In 2003, the Belgrade-based Center for Liberal-Democratic Studies (CLDS) partnered with CIPE to survey the state of corporate governance in Serbia. At that time, the predominant form of ownership was socialist, with all its associated inefficiencies and governance challenges. Management usually reported to the state/ruling party, employees, or self-reported, and the private sector had only begun to take root with onset of privatization. Whether public or private, large or small, firms lacked formal structures for ensuring accountability on a daily basis.
In 2008, CLDS conducted another survey to assess progress and to investigate what else could be done in this important area of the country’s transition. This Feature Service article takes a closer look at the survey results and gathers lessons learned. In the last five years, Serbia has seen the privatization of state-owned enterprises, introduction of regulatory innovations, and passage of new laws on corporate governance and business operations. Yet, firm-level implementation and understanding of these new laws remains incomplete and larger institutional and governance problems persist.
Like the 2003 survey, the 2008 survey also helped identify concrete reform recommendations to move corporate governance reform in Serbia to the next level – beyond simply introducing relevant corporate governance laws and structures and instead focuses on enforcement and compliance.
Article at a Glance
- Five years of corporate governance reforms in Serbia reveal a mixed picture of progress and persistent shortcomings.
- The Center for Liberal-Democratic Studies (CLDS) has been working with the Serbian private sector to gauge the current state of corporate governance and produce concrete reform recommendations.
- Corporate governance reforms at the company level can only succeed if they are a part of a larger systemic transformation that builds the institutions of good governance and market economy.