Speech by Angel Gurría
5 July 2019 - Poznan, Poland
(As prepared for delivery)
Dear Prime Minister Morawiecki, dear Leaders of the Berlin Process, Ladies and Gentlemen,
Let me begin by thanking Prime Minister Morawiecki and our Polish hosts for the invitation to this 2019 Western Balkans Summit.
Our gathering is a key milestone in the Berlin Process, which the OECD has supported since its inception in 2014. We share your ambition to nurture robust, sustainable and inclusive growth and to foster regional co-operation in the Western Balkans.
This Summit’s discussions can greatly contribute to releasing the economic potential of the region. Yesterday we discussed where the strategic and growth-enhancing sectors lie and how to build on the findings of the OECD publication Global South East Europe: Unleashing the Transformation Potential for Growth in the Western Balkans. We also discussed the importance of taking a strategic approach to creating a strong business ecosystem – in line with the results of the OECD 2019 SME Policy Index for the Western Balkans and Turkey.
Boosting youth entrepreneurship to unleash the region’s full economic potential
Our discussions have underscored once more that small and medium enterprises must be the very backbone of a prospering economy (in OECD countries, they account for over 95% of firms). This is why to make growth stronger and more inclusive, we must create an enabling market environment for SMEs and strengthen the entrepreneurial spirit in Southeast Europe.
This includes tailored reforms to tap into the full potential of youth entrepreneurship in the Western Balkans. Let me be clear: the region will only succeed if it offers a true perspective for its youth, allowing them to partake in society and pursue their own economic opportunities.
Currently, however, a whole generation sees its future compromised. As we meet, one in two young people in the region is neither in work nor in education. And this is an unmitigated tragedy pushing young people to emigrate. In fact, 30% of all Western Balkan nationals already live abroad. If we don’t provide the youth with a perspective, this drain of talent will amplify.
It is for us to act to unleash the full potential of youth entrepreneurship – including the essential contribution of women entrepreneurs to the Western Balkan economies and societies. We need to tap the creativity, the dynamism and the innovation of all our entrepreneurs. We need self-employed women to be designing ground breaking products and services, heading up companies and anticipating the trends and needs of the future.
So which reforms are most needed to foster young entrepreneurship?
First, Western Balkan youth do not often aspire to become entrepreneurs, as business is largely understood to be reserved for the well-connected with sufficient capital. The numbers support this statement. On average, there were only 35 enterprises in the region for every 1.000 inhabitants in 2017 – almost half of the levels observed in the EU.
First, governments need to create a business ecosystem that levels the playing field for young entrepreneurs. Policy makers should identify the special needs of youth, and offer tailored support services and structures such as incubators.
Second, accessing finance remains too difficult for young entrepreneurs. A staggering 70% of all new businesses view a lack of funding as the number one impediment for creating a business. You cannot expect young people to become entrepreneurs if you don’t equip them with the necessary resources.
We can and must act. Let us strengthen youth-friendly financial instruments such as venture capital, crowdfunding, business angel investment and credit guarantee schemes with special lines for young entrepreneurs. The OECD has a lot to offer concerning SME financing and can mobilise its Scoreboard on SME and Entrepreneurship Finance to support the region in this area.
Third, young people in the Western Balkans have substantially lower skills than their EU peers. The OECD PISA analysis shows a 20% gap in the student skills for science, reading and mathematics. What is more, almost half of all companies in the region see lacking employee skills as a major barrier to growth. This is especially true for digital skills. In fact, across the Western Balkans, only 70% of students have regular access to the internet, against close to 100% in the OECD.
Our OECD Skills Strategy gives us a clear direction to follow: let’s involve businesses in the design of learning curricula, making them more relevant. As the OECD Going Digital initiative has shown, developing IT skills is becoming more and more crucial. To that end, investing in teacher training and school equipment will be key. We also need to combat the digital divide within the region. This will require additional resources, but it will be even more costly if we don’t act.
Ladies and Gentlemen,
Today’s newly founded enterprises will be the economic champions of tomorrow. Investing in young entrepreneurs is investing in the future.
We are all aware of the challenges that the Western Balkans face. But if we succeed in addressing them together, we will not only boost growth and employment. We will also fulfil the promises that the Western Balkans hold for its young generation. Thank you.
Work by OECD's Centre for Entrepreneurship, SMEs, Regions and Cities