Small entrepreneurship is a crucial element of many very big economies. Entrepreneurship is increasingly recognized around the world as an important force to create a strong, stable economy and society. Countries having good small businesses with light ideas are ahead by one step and the most developed ones. Volatile situation is a period in which so many things can happen. During a volatile situation countries have high probability to lose their temper suddenly and violently. There can emerge a lot of problems due to this situation. Today Azerbaijan is facing with severe recession which leads to such problems as devaluation of our national currency, in this way the prices of our many products have been increased so inflation is taking place right now. This volatile situation has happened, mainly, because of decrease in oil prices which after leads to such problems as devaluation of national currency and inflation.
During the last years government’s interest in developing small businesses and entrepreneurship in the country in order to solve unemployment and to stimulate the economic growth has increased. Now, here is the question how Azerbaijan should stimulate small entrepreneurship in current situation. In my sense of understanding, there are several ways by using which the government can stimulate small businesses. There are 5 ways of doing that.
1) Increasing scope of finance- perhaps the most crucial factor governing the ability of small entrepreneurship is to raise sufficient capital for their specific project which is the power of the local capital markets. This power of capital markets is a starting point for funding new capital-intensive projects. As we know in Azerbaijan it is not easy to get funding from any financial institution. Government can provide early stage financing when banks are unwilling to give out a loan. Even if the success of every new small business is not so reliable, but we should know that without risk there is no success. So as a government Azerbaijan should provide an opportunity to the most bright business ideas in order to show their future actions for the economy by financing.
Azerbaijan can involve in financing activity not only local investors and banks, but also investors and banks from other countries. As an outcome our country can get at least several well-developed entrepreneurial businesses by which economy of Azerbaijan will be able to compete not only in the region but also in a global sphere. And truly said without financing problem it is getting less hard to start and develop business.
2) Promoting cooperation between researchers from Azerbaijan and other countries and the private sector- Researchers from different universities know main needs in the economy of a particular country, so that they can provide our SMEs with information about demand of a certain products. For example which product is crucial for our country to be more competitive and more flexible to such severe situation? The government could work with the private sector and knowledge institutions to improve public-private partnership. Open access universities in Azerbaijan and other universities around the globe will publish their own work, so that owners of small businesses (entrepreneurs) will be able to directly apply to the knowledge generated by those knowledgeable people. 3) Reducing the regulatory burden on entrepreneurs- As we know, so many businesses has given up because of regulatory burden on entrepreneurs. But during a recession government should not act simply as it has acted in the past. In this way, government should reduce the regulatory burden on entrepreneurs. This could be done by granting permits in order to make it simpler to start a new business, as this regulatory burden (permits, licenses) leaves business with less time and money for their own business activities.
The government of Azerbaijan could ease the burden by cutting a number of compulsory permits, by making it easier to interact between the government and business (for example, online). The government can also provide some subsidies in order to make business more competitive in the market with other local or foreign businesses. 4) Overcoming monopoly turning to more market based economy- Nowadays there are a lot of monopolies in Azerbaijan, this situation does not let economy grow faster and with better results. True market economy helps the country to have much more competitive environment which suggest much better results, but monopoly case prevents those actions. Our government can help to build such system in the country. Truly said, today as small businesses do not have access to the same things (scope of finance, access networks) as monopolies do, small business leave an economy. 5) Helping entrepreneurs’ (small business owners) access networks- good network helps business grow faster. The government can use the following way to help small businesses build strong networks.
This way will make it easy access to various markets in the world, or by making it possible to access various services around the globe. Having businesses which can access foreign markets is a priority case. It helps country to be known much better worldwide. As we know new market means new opportunities for the country, and we could see many businesses in the world succeeded in this way. Azerbaijan lacks a single strategy on SME development.
Those 5 ways of doing which government can at least get rid of many problem related with recession. But here arises one problem, as we know there are many agencies involved in small business enterprise regulation those are for example Ministry of Taxes, Ministry of Economy Development, Ministry of Agriculture etc. There is no any special agency dealing with entrepreneurial activities, by having such an agency government will be able to implement its strategies very easily.
This special agency will have an opportunity to engage with other government agencies to make a strategy more perfect. The success of developing small businesses in Azerbaijan will end by having more goods to export. During such a volatile situation and because of this situation having devalued currency does not let the country to import goods from other countries as it did before. So, as we see our GDP and GNP will be increased by improving small businesses which will lead to overcome this hard situation in our country. At last I want to tell a country having young people who are willing to create their own job is developing much faster than a country having young people who are willing to work in already created job. So, youth of Azerbaijan can change future of this very potential country and that is in our hands.
As me I will do whatever is required from me in order to create new opportunities for my country and I think this action will be repeated by every person who wants to improve life here. Thank you very much for giving me chance to share my thoughts about this topic!