(Financial Literacy and Digital Tools)

The challenges and opportunities the project aims to address are based on the following findings;

- The importance of financial literacy for the survival rate of newly founded entities and importance of micro enterprises for economic development and job creation.

Essentially, running any business is based on the bottom line. The success of a business depends on the planning and tight management of budgets, balancing the books, and revising financial strategies as necessary. Effective financial management results in the intended outcome of initial business investment: The return on that investment in the form of profits for company owners and stakeholders. Moreover, financial literacy allows entrepreneurs to evaluate company performance and judge which aspects work well and are worth investment as well as which functions need improvement or are simply unnecessary or unprofitable.

The November 2017 EU report 'SME Performance Review' outlines that newly founded entities ‘created by self-employed, have survival rates typically between 30-60 % after the first five years. 'This clearly underlines that there is a high probability of failure for new entrepreneurs and is a worrying factor in consideration of the fact that in 2016, 30.6 million individuals were self-employed in the EU-28, accounting for 14 % of total EU-28 employment.

The same November 2017 'SME Performance Review' EU report also highlights that while data for the surviving firms show that the vast majority of firms created by the self-employed do not substantially increase employment in the five years following their creation, there is a sub-set of up to 20 % of firms that manages to increase employment by more than 5 employees. Hence, in combination with the sheer number of self-employed, this segment does have a sizeable impact on the economy, and especially on employment creation.' The Facebook-OECD ‘Future of Business Survey’ pinpoints that large firms have a more positive evaluation of the state of their business than smaller firm. The Eurobarometer survey (2015) also highlights that complicated administrative procedures, high delivery costs and identifying business partners were indicated as the major barriers for exporting. This presents a learning curve challenge to start up microentrepreneurs, which may be overcome with access to factual and useful data related to their business development.

- Digital tools and platforms in the internationalisation of micro enterprises.

The late 2015 European Commission Report 'A Digital Single Market Strategy for Europe -Analysis and Evidence' clearly outlines that the European market for mobile applications is growing fast and there is an increasing need for mobile application developers. However, there is a considerable lack of IT training, certification and experience in the European workforce. Europe lags behind its main competitors in ICT research and in digital innovation.

The OECD 2017 report ENTREPRENEURSHIP AT A GLANCE 2017, outlines that the development of affordable digital tools and platforms has provided new opportunities for micro enterprises to tap into foreign markets in a way that would previously have been unimaginable. Recent data from the ‘Future of Business Survey’, a Facebook OECD World Bank monthly survey of SMEs with a digital presence, show that individual entrepreneurs engage in exports as a major activity for their business, by capitalising on digital tools, despite their small scale. The survey also confirms previous findings that businesses that trade internationally are more confident in the current state and future outlook of their businesses, and are also more likely to have positive prospects of job creation.

The basis of the proposed project had already been developed with consultation sessions carried out with micro businesses, in order to gather a perspective about the practical skills with focus on internationalisation to identify in what way, and which digital skills are necessary to build steps to internationalise businesses. Partners identified the need for entrepreneurs having hands on accessible tools to evaluate the performance of their enterprise , the further development of both internationalisation skills as well as the digital skills and the clear need to liaise and communicate with other entrepreneurs based on literature, other project results, and making consultation sessions with students, start-up entrepreneurs and companies.

The main conclusions of the consultation exercise corroborated with the data of the literature:

  1. digital skills are determinant in this sector;
  2. there is a gap between what information is available and what is essential for a young entity to survive, which can be overcome by a strong articulation a clear and comprehensive understanding of I) financial literacy and ii) access to knowledge related to how to internationalise a business iii) access to practical information as in the proposed SME HUB.

Therefore, the first work plan set the conditions for further research and deeper analysis, enabling an accurate disciplines development with learning outcomes revised according to the entrepreneur needs.

The synthesis report informs on the the development of training materials and learning outcomes tailored to the current needs of micro entrepreneurs in Europe, with a particular focus on the seven countries represented by the project partners, namely Ireland, Germany, Greece, Malta, the Netherlands, Bulgaria and Italy. This report proposes which digital internationalisation and financial literacy skills should be addressed in the DIFME training programme and resources, as well as the most appropriate duration, mode/s and method/s of delivery of the programme. These are based primarily on the results of an online survey conducted in each of the DIFME partner countries following a review of extant literature and past research. Partners then followed with a small number of structured interviews with entrepreneurship scholars, advisors, mentors and business support leaders in order to obtain expert views on the financial literacy and digital internationalisation skills that are necessary for micro entrepreneurs.

Download the entire report here.

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This analysis also included the comparison of the different HEIS learning models in practice, identifying pros and cons of each approach, and setting the grounds for common industry oriented learning outcomes based on a closer cooperation between HEIs and entrepreneurs This work was led by Inqubator Leeuwarden ( Netherlands) working with University of Malta and all the partners were involved in liaising and researching feedback from entrepreneurs to analyse the existing situation and training needs, as well as the potential effectiveness of e-learning and online tools used for the training path both start-ups as well as experienced ones.