Digital Entrepreneurship
(How to encourage it?)
Assoc. Prof. Dr. Daniela Ilieva – Lecturer at VUZF University, Executive Director of Law and Internet Foundation
Dimislava Georgieva – Expert Strategic Development at Law and Internet Foundation
Digitalization is changing the way we live, work, and even learn. It is considered, however, that many people do not possess the necessary skills to respond to the emerging digital economy and society. As a result, the labour market, the business, and the organizations experience a shortage of qualified and educated workforce, which, in turn, leads to reduction in competitiveness and negatively affects the companies’ productivity.
Significance and importance of digital entrepreneurship skills
The availability of skills is extremely important to ensure the individual’s competitiveness and working capacity. The importance of skills derives from the structural changes caused by globalization and the subsequent technological advances, which require specific job skills stimulating productivity and guaranteeing better jobs.[1] The gap between the competences of young people, who are leaving the education system, and the employers’ demands is a well-known problem that could be solved by introducing an entrepreneurship training/course as part of the compulsory school curriculum. In fact, entrepreneurship is much more than simply creating your own business. For instance, it could be seen as a way of thinking, a culture of behaviour, an attitude, and a flexible approach to various issues by adapting to the constantly changing environment. Furthermore, entrepreneurship promotes social activities, accountability, cooperation with relevant stakeholders, awareness of different professional or career areas. By developing such skills people will become more prepared for the needs of the labour market while also acquire competences such as critical thinking, problem-solving alternatives, which would be valuable for their personal growth.
Trends in the field of digital and entrepreneurial skills
Digital skills
The Bulgarian economy is extremely dependent on the access and usage of information and communication technologies (ICT). Rapid changes and short-term ICT products require more experience and adaptivity in regard to the businesses and their employees. Having this in mind, national ICT strategies gravitate around the supply of digital skills to manage the demand and the digital potential of the industry.
The demand for digital skills
In order the demand for digital skills in Bulgaria to be studied, an analysis was made based on two indicators – the number of the employed ICT specialists and the number of the employed persons with education in the field of ICT. The aim is to track the number and identify the trends in the demand for digital skills on the Bulgarian labour market. The first indicator regards the different age groups (from 15 to 34 years and from 34 to 74 years), while due to the lack of available data, the second one focuses on a larger age range – between 15 and 74 years.
Chart 1. The number of the employed ICT specialists in Bulgaria between 15 and 34 years (2016-2019) (in thousands)[3]
Source: Eurostat Database
As could be seen from the chart, for the period 2016-2019 fluctuations in the values of the indicator have been registered. In 2017 the lowest value was reached (35,5 thousand) and in 2018 the number of the employed ICT specialists rose to 50,0 thousand. Nevertheless, the data for the past 2019 shows that the demand for ICT specialists between 15 and 34 years has decreased again (45,6 thousand).
Chart 2. Number of the employed ICT specialists between 34 and 74 years in Bulgaria (2016-2019) (in thousands)[4]
Source: Eurostat Database
In the number of the employed ICT specialists between 34 and 74 years again could be noticed fluctuations in the values. From 42,6 thousand in 2016, the indicator reached 35,5 thousand in 2017, thus registering its lowest value for the period. On the other hand, the highest value was reached in 2018 (45,9 thousand). When 2019 (43,6 thousand) is concerned, then the demand for ICT specialists significantly decreased.
The conclusion is that when both age groups are regarded, there were significant fluctuations in the number of employees.
Additionally, in order to be examined the demand for digital skills in Bulgaria, the analysis also addresses the number of employees with education in the field of ICT. In this case, the indicator used refers to a larger age group (from 15 to 74 years).
Chart 3. The number of the employed persons with education in the field of ICT in Bulgaria (between 15 and 74 years) (2016-2019) (in thousands)[5]
Source: Eurostat Database
As could be seen in the chart, the number of employees with education in the field of ICT has increased significantly for the period 2016-2019. The lowest value was in 2016 when only 28,1 thousand people with ICT education were registered as employed in the field. Given the obvious steady growth rate, the highest value of the indicator was reached in 2019 (42,8 thousand).
Supply of digital skills
In relation to the supply of digital/ICT skills in Bulgaria, universities play a key role. In fact, the efforts of higher education institutions are focused on the building partnerships with the industrial sector and the training of future workers. Under the European Programme “Human Resources Development” have been funded different projects aimed at adapting the universities’ curriculum to the needs of the industry. For instance, Sofia University “St. Kliment Ohridski” and the Faculty of Mathematics and Informatics (FMI), in particular, cooperates with the ICT industry to respond to the needs of the employers. The faculty has open Bachelor’s programmes harmonized with the qualified workforce required by the industry. Moreover, the aim of the FMI Master’s programmes is to provide a higher level of digital and interdisciplinary competencies, again in line with the needs of the business. In addition, the Ministry of Education and Science is participating in a student internships project in which employers are collaborating with universities on students’ practical training. The Ministry of Education and Science also prepares a system for evaluating the universities in Bulgaria, according to which subsidies receive these higher education institutions and programmes that offer the skills sought by the industry, provide high quality education and employment to their students corresponding to the qualification obtained.[6]
Entrepreneurial skills
Entrepreneurship is of major importance for the functioning of the Bulgarian economy. Actually, entrepreneurs stimulate the economic growth and the employment. Apart from that, business creation leads to higher incomes, which, on the other side, results in increasing tax profits and more government spending. In fact, the bigger the national income is, the greater is the chance of the government to invest in problematic sectors of the economy and the human resources. Entrepreneurship brings social transformation, raises the living standard of the population and the economic freedom.[7] Last but not least, entrepreneurs search for solutions when facing problems, which stimulates creative thinking and innovation.[8]
Demand for entrepreneurial skills
In order to analyze the demand for entrepreneurial skills in Bulgaria, the number of the self-employed persons in the country for the period 2016-2019 is presented below. Initially, the age group between 15 and 24 years is considered, and then the focus is on people between 25 and 74 years.
Chart 4. The number of the self-employed persons between 15 and 24 years in Bulgaria (2016-2019) (in thousands)[9]
Source: Eurostat Database
From the data shown, it becomes clear that there are significant fluctuations in the number of self-employed (between 15 and 24 years) for the period 2016-2019. The indicator’s value reaches its lowest level in 2018 (4,5 thousand), while the highest rate was registered in 2017 (6,1 thousand). In 2019 (5,6 thousand) there is a significant increase in the number of self-employed, but it does not exceed the levels of 2017.
Chart 5. The number of the self-employed persons between 25 and 74 years in Bulgaria (2016-2019) (in thousands)[10]
Source: Eurostat Database
From 329,5 thousand in 2016, the number of self-employed persons increased to 342,9 thousand in 2017. Regardless of this, the levels of the indicator start to decrease in 2018 (337,6 thousand) and reach 322,5 thousand in 2019.
The result of the analysis is that the number of self-employed persons between 25 and 74 years is bigger than the number of self-employed persons between 15 and 24 years.
Supply of entrepreneurial skills
As far as the supply of entrepreneurial skills in Bulgaria is concerned, the analysis focuses on the entrepreneurial education and training in the country. Indeed, entrepreneurial education affects all levels of the Bulgarian education – primary, secondary, and higher. Therefore, the main “providers” of entrepreneurial skills are schools, vocational schools, universities/colleges, educational institutions specialized in the business sphere and other professions. In practice, the highly qualified employees are the engine of economic prosperity, competitiveness, and productivity in a particular country. According to GEM’s (Global Entrepreneurship Monitor) report, people with secondary education are usually involved in the early stages of the entrepreneurial activities. In general, people with secondary education obtained in a vocational school exceed the number of entrepreneurs with ordinary secondary education. In addition, those who have completed secondary education in a professional institution, bachelors and masters represent 81% of the people motivated by the availability of options to start a business. On the other hand, entrepreneurs who have graduated from secondary schools and obtain a Master’s degree start their own business, both due to factors affected by opportunities and because of necessity. In fact, people with a secondary vocational education and a Bachelor’s degree are more motivated by opportunities rather than by a need to start their own business. In other words, their entrepreneurial endeavors are motivated by the available appropriate opportunities, while the poorly educated individuals are driven by necessity.[11]
The quality of entrepreneurship education in Bulgarian schools is not enough high, which shows that the national education system does not provide the necessary qualification. Entrepreneurship training in Bulgaria is not widespread and effective. This is due to the fact that teachers do not possess the necessary skills to teach students. Thus, experts believe that there are shortcomings in the primary and secondary education in the country, but highly appreciate the conditions of business training. The problems of the secondary education are indeed greater because this level of education is crucial for the integration of the individual into society.[12]
The link between digital and entrepreneurial skills
Although digital and entrepreneurial skills are usually looked at separately, they are interrelated. The interdependence between them is obvious when considering the concept of digital entrepreneurship. Generally, digital entrepreneurship refers to the creation of innovative enterprises, products or services realized through the Internet.[13] This is a subgroup of entrepreneurship that uses the tools and methods of digitalization in its activities. Studies show that this type of entrepreneurship plays a key role when it comes to economic prosperity and increasing employability. The latter stems from the fact that ICTs affect competitiveness and the way the business operates.[14] Further, skills are of great importance to digital entrepreneurs. Unlike traditional entrepreneurs, their digital counterparts must have ICT competencies, along with leadership, management, and communication skills.
In this respect, the DEEP project (Digital Entrepreneurship for Employability Paths)[15] is presently being implemented, the target group of which are current vocational education and training (VET) students and recent graduates, VET teachers, VET schools/institutions, companies, small and medium enterprises (SMEs) and social partners. DEEP’s goal is to improve professional success chances of VET students by developing not only their entrepreneurship skills, but also their digital competencies. The innovative element of the project is that digital and entrepreneurial skills will not be treated separately as usual, but in a holistic, integrated, and interdisciplinary manner. In particular, VET teachers and mentors will receive the necessary tools and knowledge to support learners and provide effective training. In its essence, the project raises questions about the meaning, importance, demand, and supply of digital and entrepreneurial skills in Bulgaria. DEEP is aimed at educational institutions, students and teachers in vocational schools, business, SMEs, and other social partners. The project’s goal is to provide more opportunities for students by developing their entrepreneurial and digital skills.
Conclusion
To conclude, digital and entrepreneurial skills are of great importance for the prosperity of the Bulgarian economy. The demand for digital skills has been growing in the last few years as the number of the employed ICT professionals and the people with ICT education has increased. On the other part, the supply of digital skills in Bulgaria is usually associated with higher education institutions and the programmes they offer.
As seen from the above, the number of self-employed persons between 25 and 74 is bigger than that of self-employed persons between 15 and 25 years. Entrepreneurial skills in Bulgaria are predominantly offered by vocational education and training schools, universities/colleges and educational institutions specialized in the business sphere. Nonetheless, the quality of entrepreneurship education in the country is not good, as teachers do not possess the necessary skills to teach students. And this could change.
[1] European Commission, European Semester – Thematic Factsheet: Skills for Labour Market, [online], available at: https://ec.europa.eu/info/sites/info/files/file_im... [accessed on 19 March 2020].
JA Bulgaria, 2018, Why is the subject of entrepreneurship necessary and why is it necessary to develop an entrepreneurial way of thinking from an early age?, [online], available at: https://www.jabulgaria.org/article/news/zashto_e_neobhodim_predmet_predpriemachestvo_i_zashto_e_neobhodimo_da_se_izgrazhda_predpriemacheski_nachin_na_mislene_ot_nay_ranna_vazrast[accessed on 20 March 2020].
[3] Eurostat, 2020, Database, [online], available at: https://ec.europa.eu/eurostat/data/database[accessed on 19 May 2020].
[4] Eurostat, 2020, Database, [online], available at: https://ec.europa.eu/eurostat/data/database[accessed on 19 May 2020].
[5] Eurostat, 2020, Database, [online], available at: https://ec.europa.eu/eurostat/data/database[accessed on 19 May 2020].
[6] Gourova, Elissaveta & Ionkov, Nikifor & Dragomirova, Mila. (2014). E-skills Challenges in Bulgaria. Conference Paper. 12th International Conference E-society 2014, At Madrid Spain.
[7] Investopedia, 2019, Why Entrepreneurship is Important to the Economy, [online], available at:https://www.investopedia.com/articles/personal-finance/101414/why-entrepreneurs-are-important-economy.asp[accessed on 20 March 2020].
[8] Global Entrepreneurship Monitor Bulgaria, 2019, Why is entrepreneurship important?, [online], available at: https://gemorg.bg/zashto-e-vazhno-predpriemachestvoto/[accessed on 6 April 2020].
[9] Eurostat, 2020, Database, [online], available at: https://ec.europa.eu/eurostat/data/database[accessed on 19 May 2020].
[10] Eurostat, 2020, Database, [online], available at: https://ec.europa.eu/eurostat/data/database[accessed on 19 May 2020].
[11] Andonova, V. & Krusteff M. (2017). GEM National Report on entrepreneurship in Bulgaria, [online], available at: https://gemorg.bg/wp-content/uploads/2017/10/GEM-Annual-Report-ENG-2017-final-WEB.pdf [accessed on 3 April 2020].
[12] Andonova, V. & Krusteff M. (2017). GEM National Report on entrepreneurship in Bulgaria, [online], available at: https://gemorg.bg/wp-content/uploads/2017/10/GEM-Annual-Report-ENG-2017-final-WEB.pdf [accessed on 3 April 2020].
[13] Desirée van Welsum. (2016). World Development Report. Background Paper. Digital Dividends: Enabling Digital Entrepreneurs. World Bank Group. [online], available at: http://pubdocs.worldbank.org/en/354261452529895321/WDR16-BP-Enabling-digial-entrepreneurs-DWELSUM.pdf [accessed on 31 March 2020].
[14] G.S. Vineela. (2018). Digital Entrepreneurship. IJIRMPS Volume 6, Issue 4, 2018. ISSN: 2349-7300. Available at: https://www.ijirmps.org/papers/2018/4/160.pdf [accessed on 7 April 2020].
