our methodology

8/12/2019 Our methodology

1/12

Ljubljana, January 3rd2014

Our methodology and impact

This document includes more information about our work and impact. We preparedthem to better explain the rationale behind our activities.

The document consists of:

1. Background information on youth unemployment in Slovenia and the EU,summary of relevant studies and research

2. The story of Ustvarjalnik3. Letter of the Office of the President of Slovenia, accepting honorary patronage

of our project

4. Outline of the methodology of Ustvarjalniks entrepreneurship clubs

Ustvarjalniks mentors with the President of Slovenia, October 2013


2/12

Background information on youth unemployment in Slovenia and the

EU, summary of relevant studies and research

A recent government-funded independent study (Youth 2010 Mladina 2010; Lavri!etal.) that is conducted every decade in Slovenia showed a bleak picture for Sloveneyouth.

The percentage of young people (aged 15-30) that were employed full time was 60% in2000, but only 48% in 2010.

In 2010, 25% of young people (aged 15-30) were unemployed, according to said study.This is more than double than the rate of unemployment among the entire population,a trend that is seen throughout the developed world. Furlong and Cartmel (2007; 36-37) suggest this is a logical result of a general shortage of jobs due to demographic and

technological changes in the western society. However, the situation in Slovenia isparticularly difficult due to two additional factors that need to be considered:

1. Slovenia has the highest percentage of youth employed in precarious (shortterm) and part time jobs in the EU. 65,5% of the youth was working short-termjobs in 2010, compared to the EU average of 40,2% (Eurostat Population andsocial conditions/Employment and unemployment, Labour force survey).The number of young people working part time in 2010 was 36,6%, also abovethe EU average.Both numbers have more than doubled in the last decade, showing a trend ofinstability for the Slovene youth.

2. The percentage of Slovene youth enrolled in formal education has increasedin the last decade. In 2000,21,3% of youth aged 15 to 30, were enrolled intertiary education. A decade later this number rose to 32,5%, according to thebefore mentioned study.A full 71% of youth (15-24) were enrolled in formal education, compared to theEU average of just below 60%.Young people have a hard time finding a permanent job, so they resortthemselves to enroll in tertiary education in order to be eligible for studentwelfare, while accepting any part-time job available.

The amount of young people that are at least partly economically dependent onsomebody else (parents, family, welfare, stipends) in the age group 15-30 is higher inSlovenia than in the rest of Europe.

This can also be confirmed by analyzing the unemployment rate measured not by aformal definition (a person that has not received payment, money or otherwise, forwork in the last 7 days) but rather by self-perceived status. Such a survey consistentlyputs the actual unemployment rate between 10 to 15 percentage points higher.

Despite official statistical information showing a moderately stable rate of youth

unemployment in Slovenia, the actual rate of self-perceived unemployment hasskyrocketed and has reached a record high in 2010.


3/12

Although popular belief suggests that a college graduate has better chances ofemployment, this is disproven in the Youth 2010 study. In 2000, 3% of collegegraduates were unemployed, compared to 9% of youth that did not have tertiary

education. A decade later 13,9% of college graduates were unemployed, compared to14,8% of youth that did not have tertiary education. A college degree is not a keyfactor for a safe job anymore.

Particularly high numbers of unemployed graduates are the results of two trends: ahuge increase in the number of new graduates among the 20-29 year old age bracket(from 25,2% to 36% in the last decade) and a substantial decline in demand for jobsrequiring tertiary education. Local trade union estimates outline that there were52.000 new graduates between 2007 and 2009, while only about 8.000 new suitablejobs are created in the Slovene economy.

The education system produces about 9.000 more graduates than the labour marketcan handle. This compounds year after year and for this reason we can predict withconfidence that the problem is going to deepen.

The situation in Slovenia is perhaps the worst among the countries in the EU, butrecent trends show we are facing a similar situation throughout the developed world.The generation that is in school today faces one of the worst situations on the labourmarket in the last decades.

Some additional findings of the Youth 2010 study:

Young people that are working part time or short-term are significantly lesssatisfied with all the aspects of their work conditions compared with those in fulltime permanent jobs.

The most important factors in the eyes of young people when they areconsidering a job are: 1st is the work interesting for them; 2nd is the job wellpaid; 3rd is the job secure.

It seems increasing entrepreneurial activity of the young people might be a realisticanswer to the issues this generation is facing.

Entrepreneurship among Slovene youth

The issue of entrepreneurship among youth is very important, particularly because ahigher level of entrepreneurial activity is connected with an increase in economicgrowth, a more competitive market and increased levels of innovation (Blanchflowerand Oswald, 2009) as well as the fact that entrepreneurship can mean a viable solutionfor youth that are otherwise unable to secure a job.

Furthermore, self-employed persons are uncommonly satisfied with their life andwork (Blanchflower and Oswald, 2009) and have a higher sense of self-actualization.

The current level of self-employment among youth in Slovenia is only 2,6%, which ismuch lower than the European average (4,2%). It is important to note that the level of


4/12

self-employment across other age groups in Slovenia is dramatically higher (10,6% inthe 25-49 age group Global Entrepreneurship Monitor). This means that the currentgenerations are particularly unlikely to consider entrepreneurial activities.

Multiple researches done in recent years (Rebernik et al. 2010, Toplak, 2004, FlashEurobarometer 283, 2009) have shown that the majority of Europeans and Sloveneshave favorable opinions about entrepreneurship, but with a certain personaldetachment. Youth in particular see entrepreneurs as innovators, adaptable peoplethat are daring and therefore successful. But they do not perceive those traits exist inthemselves, they do not consider entrepreneurship as a realistic career path.

Where are the barriers?

The Youth 2010 research surveyed a representative sample of youth aged 15-30 what isthe main reason they would prefer to be employed instead of self-employed. Theresults show:

Less responsibility 36,8% Less stress and worries 12,4% More job security 10,7% Too high costs of starting a company 9,7% Dont have enough experience for running a company 7,4% Too much work with my own company 5,5% Running a business does not leave enough free time 4,3% I do not feel capable of running a business, no ambition 2,9% Hard to start a business difficult economic situation 1,2% Do not wish to be self-employed 0,9% Fear of failure 0,8% More chance of promotion and personal growth 0,6% Do not have a business idea 0,3%

This shows a deviation from the European average (Flash Eurobarometer 283, 2009),which shows the leading reason Europeans do not consider entrepreneurship is lack ofinitial capital as a result of a bad economy (33% of respondents), and other majorreasons are fear of failure, possibility of financial loss and unstable income.

The results of the study suggest that on one hand Slovene youth respect and admireentrepreneurs and would actually like to own a business, but on the other hand thebarriers that exist mainly in their perceptions(they do not want to takeresponsibility, they do not want to feel stress, they do not want to work as much,)make it highly unlikely for them to consider entrepreneurship as a careerpath.

The research concludes out of information obtained by personal interviews with arepresentative sample that the main reasons young people do not considerentrepreneurship actually are:

lack of personal confidence among young people,

lack of experience in business, a lack of business skills.


5/12

Young people surveyed are of the opinion this is the responsibility of the educationalsystem that does not promote entrepreneurship, does not teach the necessary skillsfor starting a business and that it does not cover enough economic topics. The young

people are well aware they are lacking these skills and they themselves are calling forreform of the educational system to include entrepreneurship in the curriculums.(Mladina 2010, p.170; 2010)

Young people that are already entrepreneurs, meanwhile, see main barriers forentrepreneurship in the present system inefficient institutional support and pooraccess to capital, not enough consulting support for early stage ventures, deficiency ofthe educational system in this area and bad fiscal policy. (Mladina 2010, p.171; 2010)

This, coupled with the fact that recent graduates are statistically not particularlyadvantaged compared to young people without a degree when it comes to findingemployment, we can claim with good certainty that skills taught in schools at themoment are not as relevant on the job market as they were a decade ago.

A uniquely European problem

For the before mentioned reasons the situation of the Slovene youth is getting worse.More importantly, the recent danger signs are the first indicators for what is to becomea major problem throughout Europe. Unless we act now, this problem is going tocompound as new generations graduate and the generation that is currently active

retires, resulting in a severe social crisis in the entire continent.

Together with the well-documented issue of ageing population in Europe with all itsconsequences, this is the biggest welfare crisis in Europe since World War II. The 2008economic crisis was a tipping point that clearly showed governments are not able tosustain the welfare state Europeans have grown accustomed to. Pension reforms anddrastic cuts in social security have been proposed to prevent immediate collapse, butthese measures are only reactions and root issues need to be addressed.

Sources

Lavri!et al. (2010). Mladina 2010, Youth 2010, government-sponsored indepnendentstudyBlanchflower, David G. and Oswald, A. (2009). What makes a young entrepreneur?


6/12

The story of Ustvarjalnik

Meet Peter.

Peter was a model student. He did everything the way he was told. He dotted the isand crossed the ts. Had great marks, went to college, studied civil engineeringbecause that was what his father studied and he graduated with honors.

To do that, he had to sacrifice a lot of his spare time. He wanted to be top of his classand to achieve it, he put aside all of his hobbies.

Flash forward two years later, Peter is now unemployed. First he tried to get a job as aconstruction site manager, then as a common construction worker. With no luck helater started applying to any and all available positions that he is only remotely

qualified for.

He is frustrated at everyone telling him he had to ignore everything and focus on hiseducation. He is frustrated because he was told by all the authorities in his life, fromthe minister of education to his parents, that if he graduates, this will be his ticket tosuccess. He is angry with himself for believing this and ignoring his hobbies andneglecting all his other skills. He was a good illustrator in primary school, he even madea comic book at one point... But that does not help him, because he graduated twoyears ago, and is still looking for a first real job. He bartends in the evening and lives athome with his parents. He is 30 years old.

This is Peters story, but he is not alone. In fact, several studies (see appendix) clearlyshow there is an enormous number of young people in Europe facing similar situations.As much as a third of the Europeans, aged 15 to 30, are dealing with youthunemployment, are underemployed or are what we might consider the working poor.They feel left behind. Along with Peter they might be the first generation that becamestructurally unemployed before they even entered the job market.

Peter knows what his mistake was. He had a passion, but did not pursue it as a career.Opting for a safe path that meant if all else fails, he will still have a steady job, he didnot want to take the risk and try to be a graphic artist.

He now realizes that because of the technological and societal advancements in thelast decades, massive changes happened in the labor market, so his safe profession isnot any safer at all if we compare it to his passion. And he is kicking himself for notrealizing this sooner.

For nowadays, Europeans live in an economy, where the most money can be made inthe service sector, in design, in innovation. In the past it was enough just to learn atrade to prosper, but today one needs to be entrepreneurial and creative. One needsto be able to become a creator of added value.

Peter never realized that he was doing just that when he was creating his comic books.He often thinks what would have happened if he had the guts to pursue his passion.


7/12

Well, he might have been just as poor as he is today, but for sure he would have beenmuch, much happier.

Contrast his story with that of Helen.

Helen was also a good student. Not great, but never problematic. She got along wellwith everybody, didnt really stand out, and did not have a clue what she wanted to doin the future. Her grades were okay, and she was thinking about what college to applyto.

I joined the entrepreneurship club for no particular reason, together with two otherclassmates. I liked the presentation they gave us in school and thought it might be funto go to a meeting and see how it looks like. Helen ended up attending the clubmeetings every week for the remainder of her two years in high school.

The club was completely different than school. Right from the start the mentors toldmembers to list what they like to do, what they are good at, and what are the thingsthey would like to learn and later do. This was the basis for figuring out what careersthe students want to choose for themselves.

Then came the part that changed her mindset forever. The members of the club weretold to actually do it - to take the thing they like the most and earn some money fromit. The reason being: if they are able to earn at least one dollar with their skills alone,they get two very important things.

1) They know how to set about monetizing anything. They know how to start abusiness, how to pick a good idea and how to execute it.

2) They have done it before, so it is not just a far-away dream, but it is actuallyachievable for them.

Helen loved painting and had secretly hoped to be an artist, having exhibitions ingalleries and museums. So she first tried selling paintings, but was not particularlysuccessful. Nevertheless she tried her best and pivoted her business idea a couple oftimes.

She was also the photographer of the club, taking pictures of all the activities. She hadto learn image editing for this and instantly felt a pull towards digital graphics. In hersecond year attending the club she started doing web graphics and earned a decentrevenue from it.

She graduated in multimedia two years later and is now trying to become a successfulfreelance designer.

I am struggling, it is not easy to run a business and I am only just beginning. But I haveconfidence I will succeed because I am good at what I do and I do what I really like.

For Helen the entrepreneurship club gave her two crucial things. This was a time whenshe was surrounded with people that tried their best to start a small business, and


8/12

more importantly, those people believed they are going to succeed. It gave her thedetermination to try and create something instead of waiting for others to help her.

Secondly, Helen actually tried running several businesses while still in high school. This

gave her invaluable experience, both by learning how to start a business and by actuallysucceeding on her own, even if on a small scale.

The tipping point for me was when I realized that it is not impossible to earn money bydoing what you love. That really motivated me to set ambitious goals for myself, I hopeone day to run an international design agency.

Helen said that she came about to this realization because she has already triedrunning a business in high school and earning revenue then. She believes that she cando it again because she became more entrepreneurial - she learned many skills andgained a much more positive mindset.

Without the experience I got during the entrepreneurship club, I doubt I would havehad the courage to pursue a career in design. But I figure, finding a job in this economyis hard enough as it is, and I feel I have a real advantage if I do what I love and am goodat it.

Both Peter and Helen are trying their best to secure a future for themselves, and havebasically come to the same conclusion. The young generation needs to takeresponsibility for their economic prosperity in their own hands and needs to be muchmore entrepreneurial than their parents.

Perhaps for the first time in history, Europe today is the time and the place where ayoung person can realistically hope that she will be able to earn a living by doingsomething she would have been doing for free anyways because she likes it so much.

Empowering the young generation with the insight that pursuing ones passions is aviable career path will without a doubt result in much higher financial security for theEuropean youth, but more than that, it will also result in a much higher rate ofinnovation and creativity and should stimulate the economy.

Not to mention the fact that levels of personal happiness will increase dramatically.

This is the impact Ustvarjalnik wishes to have. We measure it in two ways - short termand long term.

1) Long term impact

Measuring long term impact is very straightforward. We simply compare the amount ofmoney earned by the members of our clubs after they finished high school andhopefully started their own businesses with the rest of the population.

However, to get concrete and objective figures, we need to wait at least a decade. For

this reason, such measurement only serves as an end-of-year report card. We need


9/12

some methods of testing that are actionable for us, therefore we are also monitoringour short term impact.

2) Short term impact

The key behavior change that we wish to set about among our entrepreneurs-to-be istheir ability to articulate their life goals. This does not mean that they are merely ableto provide an answer to the question what do you want to do in your life but toactually be confident enough to express this in public. For this to happen one must bea) aware of what he or she would like to do in life and b) be confident in his or herabilities to actually make it happen.

We also expect our entrepreneurs to set a game plan and start working towardsrealizing their goals. Our belief is that vision without execution is merely hallucination.For that reason our entrepreneurship clubs always end with a concrete project that themembers finish. Usually this is a venture they undertake together.

Our goal is to provide every student with the experience of conceiving a business idea,outlining its business model, validating it on the market and earning some revenue.Revenue is not our goal at this point - we consider it is more important that ourstudents experience first hand the process that brings them towards this first incomeso they a) know how to do it again themselves and b) are confident in their abilities todo so.


10/12

Letter of support from the Office of the President of Slovenia


11/12

English translation:

Number: 081-05-347/2013-3Ljubljana, August 12th2013

Ustvarjalnik, youth entrepreneurship acceleratorMr. Matija Goljar, head of Ustvarjalnik

Email address: [email protected]

Dear mr. Goljar,

in the name of the President of the Republic of Slovenia, Mr. Borut Pahor, I would liketo express my thanks for your letter in which you invited the President to become anhonorary patron of Ustvarjalniks activities promoting entrepreneurship amongSlovene youth in high schools.

I would like to inform you that the President will gladly accept the honorary patronageof your endeavor.

In the name of the President of the Republic, as well as in my own name, I wish you luckand many successes in the promotion of creativity, innovation and entrepreneurshipamong young people.

With kind regards,Alja Brglez, PhD.

Chief of Staff

Seal of the PresidentSignature

Sent to:

- the recipient- archive of outgoing mail


12/12

Outline of the methodology of Ustvarjalniks entrepreneurship clubs

our methodology

Documents