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Conditions for the development and experiences in the implementation of entrepreneurship support instruments in rural ar

Conditions for the development and experiences in the implementation of entrepreneurship support instruments in rural areas in Poland Dr Iwona Nurzyńska Institute of Rural and Agricultural Development Polish Academy of Sciences ( IRWiR PAN). Structure of the presentation :

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Conditions for the development and experiences in the implementation of entrepreneurship support instruments in rural ar

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  1. Conditions for the development and experiences in the implementation of entrepreneurship support instruments in rural areas in Poland DrIwonaNurzyńska Institute of Rural and Agricultural Development Polish Academy of Sciences (IRWiR PAN)

  2. Structure of the presentation: • Rural and agricultural economy - need for off-farm jobs • Rural entrepreneurial ecosystem - strengths and weaknesses of rural areas as place to run a business • Barriers for the rural entrepreneurship development in Poland • Institutional system of the EU CAP implementation in Poland • EU support programs for job creation in rural areas • Lessons learnt

  3. Rural and agricultural economy in Poland Why do we need non-farm jobs in Poland? • Decreasing role of agriculture in the national economy – a 3,3% contribution to Poland’s GDP • Agriculture as „a reservoir” of the labor force - still12,8% (2,0 million people in 2011) of the employed work in agriculture but the agricultural productivity accounts only for 30% of the EU27 average productivity (hidden unemployment • Decreasing number of farms but only some 100-150 thou. competitive farms (> 30 ha and 16 ESU) • Rural households income disparity – disposal income per capita in urban areas over 41% higher than in rural areas (2009) • Unemployment among non-farming populationon in rural areas 12,9% • Deagrarization - some 60% of rural population has no links with farming land and only 1/3 • of rural population lives on agriculture • Entrepreneurship index lower than in urban areas (only 25% of the registered enterprises in RAs) • Depopulation of rural areas (migration of the young) and land abandonment Source: RDR 2012, FDPA, Nurzynska & Wilkin (editors)

  4. Farm structural change in Poland over 2002-2010 Source: National agricultural census. 2010, GUS, Warszawa 2011

  5. Number of farms in 1990-2010 by size (in ’000 ha)

  6. Socio-economic groups in rural areas

  7. Weaknesses of rural entrepreneurial ecosystem 1. Low level of development of the local market: insufficient local demand resulting from lower rural households’ income (income disparity = ~40% ); 2. Difficult access to the final customer and users of services and products – lower population density; peripheral location 3. Lower qualifications and education level of rural people which limits the access to the qualified specialists (lower willingness to commute to rural areas for jobs); 4. Underdeveloped technical infrastructure compared to urban areas (roads, water supply and sewage system, energy and telecommunication networks - Internet), which implies higher costs for potential investors; 5. Hindered access to financial infrastructure in rural areas – difficulties to acquire capital for start ups

  8. Weaknesses of rural entrepreneurial ecosystem 6. Hindered access to training and advise for rural entrepreneurship development (often inadequacy of entrepreneurship support) 7. Underdeveloped entrepreneurship culture (attitudes, perception, roles); 8. Low level of social capital (trust, cooperation). 9. Lack of more targeted policies differentiated between potential entrepreneurs and existing enterprises.

  9. Strengths of RAs • Natural resources for the development of on-farm food processing (local, regional and traditional food) • Lower labor costs - access to relatively low-paid employees (key for start-ups) • Potentially easier access to investment areas • Informal human relations; • Individual and friendly approach of local public authorities • Dedicated EU-funded aid programs for rural areas Source: Institutional barriers for rural entrepreneurship development (2011), Nurzynska and others, EFRWP

  10. Rural entrepreneurship development barriers in Poland • Complicated, costly and time-consuming regulations and implementation procedures; • Inadequate regulations to the small and micro-enterprise scale of operation (Think Small First, KE); • Insufficient number of advise and training organizations (access) • „Overregulation” – not proportional to the problem addressed • Administrative barriers „red tape” (elimination of redundant regulations: one in – one out; sunset clauses) • Need for better educational system promoting „entrepreneurship” attitude and economic education

  11. Institutional framework of EU CAP support implementation in Poland

  12. EU CAP budget transfers over 2004-2011

  13. EU Cohesion Policy and the CAP in Poland in 2007-2013 in MEUR

  14. EU-funded aid for rural job creation

  15. Polish RDP 2007-2013 (Share of Axes in %)

  16. RDP 2007-2013 Axis 3 Objective – improvement of quality of life and job creation in rural areas via: • Access to capital for start-ups and development of rural SMEs ; • Access to training and advise services; • Improvement of rural technical infrastructure; • Village renewal • Creation of support network for enterprises and local development (LEADER approach)

  17. Some business ideas under the measure „Establishment and development of micro-enterprises” of RDP 2007-2013: • Hospital for horses, Wielkopolska region, 2 jobs • Hotel modernization and equipment purchase „Dwór KoronaKarkonoszy”, Dolnośląskie region, 2 jobs • Polish-English artistic kindergarten, Małopolska region, 1 job • Purchase of modern equipment (3D laser scanner with software), Świętokrzyskie region, 2 jobs • Cosmetic and SPA services – expansion of existing business , Lubelskie region, 2 jobs • Textile business expansion (purchase of machinery and transportation means), Pomorskie 2 jobs • Rural sport and recreation center (Factory Fitness Club ) under LEADER, 1 job

  18. RDP 2007-2013 Job creation measures

  19. Rural Development Program Off-farm jobs 2007-2013 Objective: off-farm jobs (start-ups, micro-firms creation and development, LEADER) Target groups: farmers and farmer family members, SMEs, Share in RDP budget: 7,9% 2014-2020 Objective:off-farm jobs (start-ups, existing SMEs support under LEADER) Target groups: farmers and farmer family members, existing SMEs (2 years), LAGs Share in RDP budget: 8,06%

  20. Conclusions: • More integrated approach towards programming of the EU funds (CSF 2014-2020) for job creation at regional level • Less money under RDP 2014-2020 for job creation • Need for domestic policy more targeted at job creation in rural areas. • Need for the complex entrepreneurial ecosystem – „tailored” composition of information sources, training and advice institutions supporting nascent entrepreneurs, suppliers of goods and services, local demand, technologies, financial support, access to external capital etc. • Role of NRDN (KSOW) in 2014-2020

  21. Thank you for your attention

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