Spain EQUAL National Thematic Network

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SPAIN – STARTING ON THE GROUND FLOOR WITH GOOD PRACTICE ACHIEVEMENTS

The Spanish National Thematic Network on business creation was mainly composed of the relevant Development Partnerships and focussed on two key issues: poor access to finance and the lack of integrated business support itineraries. It achieved important results in both areas.

Contents

Microfinance

"Sant Cosme Innova is the only case of EQUAL funds being directly invested in microcredit in Europe"

Several types of microcredit already existed in Spain before EQUAL (19) but take-up was poor.

A number of Spanish EQUAL projects (Sant Cosme Innova in Cataluña, Fides in Rioja, Regenta in Asturias, EQUAL Granada in Andalusia) showed that a condition for success was that the loan should be accompanied by a tailor-made itinerary of financial capacity building and better communication. They also showed how important it was to reach general agreements with mainstream financial institutions.

For example, the main financial partner in the Sant Cosme Innova is the Fundació Un Sol Món, part of the Caixa Catalunya savings bank, Spain’s seventh largest financial institution. Through the project, the foundation has shown how financial engineering and financial expertise can be brought in to strengthen policies for the comprehensive redevelopment of urban communities facing multiple forms of deprivation. The same project also provided insights into how the European Social Fund (ESF) can work in tandem with financial institutions, local authorities and NGOs to build more sustainable jobs for groups such as women and ethnic minorities. This is the only case of EQUAL funds being directly invested in microcredit in Europe and it thus provides important lessons for the future. The findings of partnerships like Un Sol Món were discussed and enriched by other partnerships in the working group on Microfinance. The Confederation of Spanish Savings Banks has now set up a working group to study the development of microfinance for disadvantaged groups along the lines recommended by EQUAL.

Integrated business support itineraries for disadvantaged groups

The EQUAL partnerships were also able to develop a series of methods for providing integrated business support to disadvantaged groups. These have been taken up by a number of regional governments. The National Thematic Group (Grupo Temático Nacional de Creación de Empresas y Adaptabilidad - GTN2) has identified and analysed these experiences in a report on good practice in business creation and in a major national conference for policy-makers and practitioners. In Andalucía, for example, the new regional employment regulation for self-employment(20) incorporates a series of lessons from EQUAL projects. The regulation makes all grants conditional on having have followed personalised itineraries into self-employment. At present beneficiaries are eligible for a lump sum grant – but the possibilities of adopting the more flexible monthly grant tested in one EQUAL partnership is being studied carefully. In the Basque country, the main channel for mainstreaming has been through 23 local development agencies linked into a network, called Garapen, which covers three-quarters of the population. The core of Garapen’s activities has been to create an IT-based learning platform to share lessons and develop common methodologies for business creation, with a particular concern for young people and women(19)

There is a programme of microcredits for women run by the Spanish Women’s Institute and a national programme of microcredits run by the Official Credit Institute (ICO).

The platform has also allowed the partners to identify gaps in business support and develop new solutions in areas such as creating an entrepreneurial culture in schools, finance and increasing the sustainability of start-ups. On this basis the network started to provide a series of joint services for the whole region. For example, Garapen jointly developed the Basque government’s internet portal for entrepreneurs http://www.lanbide.net and provides a system of on-line business support and advice. The portal called Lanbide receives about 4,000 visits per month. The site allowed Garapen to launch the first on-line initiative to improve entrepreneurship skills in the Basque region. One hundred and seven participants took part in this programme leading to the creation of 65 companies.

WOMEN AND YOUNG PEOPLE – TWO UNDERUSED RESOURCES IN A GROWING ECONOMY

The Spanish economy has been growing faster than many of the “old” EU Member States and the labour market situation has improved dramatically over the last 8 years. Unemployment has been nearly halved over this period - from over 20% to just above 11%. However, the aggregate statistics still hide important disparities. Women, in particular, continue to carry the brunt of the burden. The rate of unemployment among women is twice the EU average and almost double the national rate for men. Even worse, the employment rate among women is just 45% - a full ten points below the EU average and way off course for meeting the Lisbon targets. Young people and ethnic minorities are also particularly hard hit by lack of alternative sources of paid employment - both in the countryside and in the most deprived urban neighbourhoods. In many of these areas, self-employment and business creation, has been, and still is, one of the main routes for getting a job.

The situation in Andalusía provides a graphic example of this situation. During round 1, EQUAL managed to get 2,027 people into a job, but over 65% of these were self-employed. EQUAL shows that the barriers facing disadvantaged groups when trying to create a business are even more severe than when they try to find a paid job. For example, only one third of entrepreneurs are women – even less than the proportion of women in the labour force as a whole. Some of the main obstacles for disadvantaged groups are seen as being low levels of collateral and the difficulties of obtaining finance, low levels of training and education in the skills required for running a business and the administrative complexity of starting a business. Women face the additional burden of a very unequal distribution of caring responsibilities. On the other hand, over 50% of start-ups fail within the first four years so one-off actions to increase the rate of new business creations is definitely not seen as sufficient.

Mainstreaming EQUAL is made more complicated in Spain by the fact that nearly all the powers for designing and implementing policies for entrepreneurship and self-employment are divided between the 17 autonomous regions. At national level, the General Directorate for Small and Medium Sized Enterprises at the Ministry for the Economy is responsible for a series of policies and programmes but these tend to focus on promoting high growth, innovatory SMEs.

THE NATIONAL BUILDING BLOCKS

The National Thematic Network in Spain got off to a slightly later start than in other countries like the UK and Germany. The network was launched at a large-scale event for the 25 DPs in Business Creation and the 23 DPs in the Adaptability theme on 14 March 2003. They were organised into two parallel subgroups – one for business creation and one for adaptability (in the 2nd round these two were separated). The main purpose of the thematic network for business creation was “to implement a plan of action for the mainstreaming of the good practices coming out of EQUAL in Spain”. At the launch of the network, Aurora Saeta, the subdirector responsible for the ESF at the Ministry of Employment, argued that the major priorities for the work on business creation were:

“the need to take account of women entrepreneurs, the need for continuity in support services, the lack of cooperation and networking between firms, the need to consolidate firms after the initial start-up phase and help them adapt to changing circumstance, the importance of integrating the social economy into the business creation process and corporate social responsibility”.

A steering group was created to cover both the business creation and adaptability themes which was jointly chaired by the Social Fund Division at the Ministry of Employment and the Regional Government of Andalusia. Its membership was made up of the representatives of eight regional governments on the EQUAL monitoring committee and a selection of 9 development partnerships from different regions (for business creation). Technical support was provided by the National Support Structure and the Andalusían Support Structure who brought in external experts to help with the analysis of good practice. The Regional Government of Andalucía produced a website for GTN2 with links to the main documentation and activities at a European Level (site now taken down).

The steering group was responsible for designing and coordinating much of the work which was then discussed with all the DPs in the theme in a series of joint meetings. In June 2003, the NTG set about the task of identifying good practice using a methodology based upon the different phases of setting up a business: engagement and motivation, information and advice, start-up and consolidation. Two experts were appointed - one for integrated business services and one for finance. In October 2003, they sent out a questionnaire to all nine DPs on the steering group asking them to provide information on difficulties, possible solutions and promising practices at each of these stages. They considered the results of each practice, its degree of innovation (with references mainly to the local context) and its potential for transfer. Their replies were presented and discussed in considerable detail at a general meeting of all the partnerships in the theme in December 2003. After this a further questionnaire was sent out to all DPs and followed up with telephone interviews. These were used to produce a final report(1) which provided the basic information for the production of two-side summary good practice fiches on each of the 23 partnerships in business creation. Apart from summarising the content of each project, the fiches highlighted the main innovations and their potential for transfer. The report was presented at a major conference in Seville one year later in December 2004.

INNOVATIONS AND THEIR POTENTIAL FOR TRANSFER

The Spanish NTG concludes that the five most promising lines for mainstreaming EQUAL good practice are:

  • Methods for creating an entrepreneurial culture: particularly in secondary schools by the development of materials and training modules for both teachers and students. Some DPs also had considerable success in local campaigns to promote an entrepreneurial culture.
  • Specially adapted and integrated training for entrepreneurs: going from the first stages of building capacity and self-esteem to management and marketing. Distance learning and other solutions involving new technology have been used extensively. The quality of training can be greatly improved by combining it with practical experience in both simulated and real companies.
  • Tailored and integrated advice and after-care: This has included advisors who spend time working alongside new entrepreneurs
  • Combining microfinance with specially adapted training and advice: Reaching general agreements with financial institutions so that they integrate these methods into their general practice.
  • The use of new more flexible grant instruments together with training and advice:

The guide provides examples of good practice and recommendations in each of these areas. On the other hand, they found that the minimum investments required for the functioning of business angels and mutual guarantee funds limited their use with the most disadvantaged groups.

Finally, the NTG pointed out that most transfer took place at local level. In order to improve the potential for vertical mainstreaming it was necessary to build far better channels of communication with the responsible departments – especially in the autonomous regions – but also in certain central government institutions. This is then one of the priorities for the next round of EQUAL. At the closing conference of the Thematic Network in Seville, Esperanza Perea, the Director General of Employment of the Regional Government of Andalusia, pointed the way for the regions in Spain by saying that: “The Directorate of Employment of the Regional Government of Andalusia, as the body responsible for employment policy in the region and as a member of a large number of EQUAL Development Partnerships, guarantees that the results of the partnerships will be communicated and evaluated and will eventually be used for benefit of the whole region and all the people of Andalucía.”

Notes and references

(1) 22 Buenas prácticas en creación de empresas y adaptabilidad - International meeting on EQUAL Best Practices in business creation and adaptability, December 2004. See http://www.juntadeandalucia.es/empleo/equal/npe/www/doc/43.pdf

Contact: Guzman Garcia, UAFSE. mailto://ggarcia@mtas.es Website: http://www.equal-gtn2.net Success stories

20 Orden de 6 de Mayo de 2005 por la que se desarrollan y convocan determinadas líneas de ayuda al autoempleo al amparo de los dispuestos en el decreto 141/2002 de 7 de Mayo