the case of albania · region 1 (kukes, lezha, shkodra) regional overview and opportunities for...

Self-employment as a viable solution for youth integration in the labor market

Kseniia Oleneva

The case of Albania

DEFINING SELF-EMPLOYMENT

Self‐employed person is a individual who own sole or joint business of the

unincorporated enterprise in which he/she works.

European System of Accounts (ESA)

Self‐employed individual is someone who does some work for profit or

family gains, in cash. A person can be an employer, own-account worker

or a person in the production of goods/services and household

consumption.

Organization for Economic Co‐Operation and Development (OECD)

DEFINING ENTREPRENEURSHIP

Entrepreneurship is the process of pursuing opportunities and mobilizing resources

needed to bring new ventures to reality

(Stevenson, 1990; Ireland, Hitt, and Sirmon, 2003)

Entrepreneurs - individuals who create new or explore existing market opportunities

and pursue their goals while bearing personal, professional and financial risk.

Entrepreneurship is a process of using private initiative to transform a business

concept into a new venture or to grow and diversify an existing venture or enterprise

with high growth potential. Entrepreneurs identify an innovation to seize an

opportunity, mobilize money and management skills, and take calculated risks to

open markets for new products, processes and services

(UNDP, 1999:1)

SELF-EMPLOYMENT

Opportunities vs

risks?

22% of GDP

34% of total employment

contribute to labor

market flexibility

higher employment

lead to less unemployment

work within the

informal sector

low wages

limited access to social

protection or social

insurance coverage

Agriculture sector

THE LABOR MARKET IN ALBANIA AND YOUTH UNEMPLOYMENT

39.8

28.3

15.4

11.2

0

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 1: Unemployment rate by age group (%)

15-24 25-54 55-64 25-29 15+

Source of data: Instat

THE LABOR MARKET IN ALBANIA AND YOUTH UNEMPLOYMENT

25.7

50.4

36.6

7.9

16.4

11.7

37.9

2.2

22

28.5

31

29.6

0 10 20 30 40 50 60 70 80 90 100

Female

Male

Total

Figure 2: Youth NEET (15 -29) by status (%)

Unemployed Discouraged Fulfilling family duties Other reasons

Source of data: Instat (2018)

EDUCATION DIMENSION

21.4

39.134

15.3

21.6

28

0

5

10

15

20

25

30

35

40

45

Low education Secondary education High education

F igure 3 : Employment rate by educat ion leve l for yout h 15-24 (%)

Male Female

28.2 29.633.6

18.8

24.1

33.9

0

5

10

15

20

25

30

35

40

Low education Secondary education High education

F igure 4 : Unemployment rate by educat ion leve l for yout h 15 -24 (%)

Male Female


SELF-EMPLOYMENT IN ALBANIA

29.8

21.2

12.2

0

5

10

15

20

25

30

35

40

Low education Secondary education Higher education

Figure 5: Percentage of self -employed in total employment by gender and education level

for youth (15-24)

Male Female Total



38.635.8

34.232.4 32.8

37.8

42 42.6 41.6

19.121.8

17.7 17.6 17.2 17.6

25.7 26.824.3

0

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 6: Percentage of self -employed in total employment by gender

Male Female Total



15.5 15.213.3

11.4

14.415.8

20.321.7

25

5.8

18.2 17.7

11.513.1

7.7

10.612.7

17.7

0

5

10

15

20

25

30

2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 7: Percentage of self -employed in total employment by gender (15-24)

Male Female


MEASURES FOR REDUCING THE HIDDEN ECONOMY

Reducing taxes;

Reducing/tackling corruption;

Increasing effectiveness of business stimulations;

Increasing efficiency of the court system;

Implementing stricter laws.

Monitoring the Hidden Economy in Macedonia, Albania and Kosovo:

Trends, Policies and Options” (2018)

MAIN CHALLENGES FOR SELF-EMPLOYMENT

Lack of enabling policy, regulatory and institutional environments

Weak entrepreneurial environments, limited entrepreneurship and networking

opportunities, and limited access to markets;

Limited access to finance and investment opportunities;

Limited skills and knowledge.

REGIONAL OVERVIEW AND OPPORTUNITIES FOR SELF-EMPLOYMENT

39.9

9.86.82.5

24.1

16.9

Figure 8: Employment by sector (2015 -2017)

Agriculture

Manufacturing

Construction

Other Industries

Market services

Non-market services

Source of data: Instat

85,670

72,835

178,271

119,745

31,688

123,976

37,007

38,590

62,673

274,833

89,468

80,126

0 100,000 200,000 300,000 400,000 500,000

R1

R2

R3

R4

Figure 9: Employment by regions and sectors

Agriculture Manufacturing Services



AGRICULTURE,

FORESTRY AND

FISHERIES SECTOR

33.1

TRADE, TRANSPORT AND

CATERING SECTOR

13.7

EXTRACTIVE,

PROCESSING, ENERGY

AND WATER INDUSTRIES

13.9

REGION 1 (KUKES, LEZHA, SHKODRA)


OTHER

COMMERCE,

TRANSPORT AND

CATERING

21.2

EXTRACTIVE, PROCESSING,

ENERGY AND WATER

INDUSTRIES

13.6

SCIENTIFIC,

PROFESSIONAL AND

TECHNICAL ACTIVITIES

10.4

11.8

CONSTRUCTION


REGION 2 (DIBRA, DURRES, TIRANA)

OTHER

COMMERCE,

TRANSPORT AND

CATERING

43.112.3

13.4

AGRICULTURE,

FORESTRY AND

FISHERIES SECTOR


ENERGY AND WATER

INDUSTRIES


REGION 3 (BERAT, ELBASAN, KORCA)

OTHER

COMMERCE,

TRANSPORT AND

CATERING

37.1

16.216.1

8

CONSTRUCTION AGRICULTURE,

FORESTRY AND

FISHERIES SECTOR


ENERGY AND WATER

INDUSTRIES


REGION 4 (FIER, GJIROKASTRA, VLORA)

OTHER

CONCLUDING REMARKS AND RECOMMENDATIONS

Livelihood self-employment Innovative entrepreneurship

• business incubators

and accelerators• trainings,

• access to finance,

• advisory and

mentoring services

• value chains


Livelihood and self-employment

• Labor policies need to have a specific focus on the most vulnerable groups of youth in low-income Regions

• Programs should aim to improve pricing mechanisms, product quality, and production technologies to reduce

costs and/or increase output and/or quality. Such interventions include efforts to improve knowledge and

upgrade technology, facilitate better access to equipment.

• To facilitate engagement of entrepreneurs in more transformative activities and/or to be integrated into value

chains. Bringing young entrepreneurs into local, regional and global value chains for increasing their access to

markets and generating new business opportunities ( involving in a processing of their basic produce, unite

small farmers into associations or cooperatives and increasing production volumes)


Innovative entrepreneurship

• Online and offline platforms, networks, hubs, and communities should provide support

services specific to youth, to facilitate the exchange of knowledge and to build business

relationships.

• Information and communication technologies (ICTs) can significantly support young

women and men in realizing entrepreneurial opportunities

• business incubators and accelerators to support entrepreneurship

ACTION ON YOUTH ENTREPRENEURSHIP AND SELF-EMPLOYMENT:

Engaging the public sector and

young people in the

promotion of youth

entrepreneurship and self-

employment

Facilitating access to markets,

networks, knowledge and skills

Facilitating access to

finance

Promoting an inclusive

environment for

entrepreneurship


• Special attention should be paid to eligibility, targeting, and profiling mechanisms;

adaptation of core interventions (training, access to finance, advisory and mentoring

services, and networking)

• Youth entrepreneurship promotion requires increased access to credit, business

regulation reform, and entrepreneurship programs that combine different types of skills

training advisory and mentoring services

• The role of the public sector would be to facilitate the emergence of business that

integrates livelihood entrepreneurs into more lucrative and transformative activities

In essence, self-employment is very much about human capital and the prime prerequisite above all should be to solidify the healthy

basis of a talent pool for growth in key systemic economic sectors…

24

THANK YOU

the case of albania · region 1 (kukes, lezha, shkodra) regional overview and opportunities for...

Documents