Small And Medium-size Enterprise Development – Government And Private Sector

Description
Small And Medium-size Enterprise Development – Government And Private Sector

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

The former Yugoslav Republic of Macedonia

Small and Medium-size Enterprise
Development – Government and
Private Sector
(EuropeAid / 05MAC01 / 10 / 001 – EAR)

Fost er i ng a Cul t ur e of
Ent r epr eneur shi p: A Pr oj ec t
Pr oposal

Prepared by
Dr. Ricardo Pinto

GFA Consulting Group GmbH
Eulenkrugstrasse 82
D - 22359 Hamburg
Germany

Tel.: (+49 - 40) 603 06-100
Fax: (+49 - 40) 603 06-179
E-mail: [email protected]

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 2
EuropeAid/05MAC01/10/001 – EAR

© 2007 European Commission

The findings, conclusions and interpretations expressed in this document are those of the authors and can
in no way be taken to reflect the policies or opinions of the Government of the former Yugoslav Republic of
Macedonia or the European Commission and/or its agencies.

GFA Consulting Group GmbH

Eulenkrugstr. 82
D-22359 Hamburg
Tel.: (+49 - 40) 603 06-100
Fax: (+49 - 40) 603 06-199
E-Mail: [email protected]
Internet: www.gfa-group.de

Managing Directors: Dr. J ohannes Lagemann
Dr. Klaus Altemeier
Dr. Hans-Christoph Schaefer-Kehnert
Dr. Günter Schmidt

Place of registration: D-22359 Hamburg, Germany

Registration number: B 30219

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 3
EuropeAid/05MAC01/10/001 – EAR

Table of Contents

EXECUTIVE SUMMARY 6
1 BACKGROUND INFORMATION 8
1.1 Beneficiary 8
1.2 Country background 8
1.3 Current state of affairs in the SME sector 8
1.4 International Organizations & Donors 9
1.5 Key Institutions 10
1.5.1 MoE: SME policy making 10
1.5.2 APPRM: SME policy implementation 10
1.5.3 SME Forum: Public – Private Consultation 10
2 PROJECT OBJECTIVES & EXPECTED RESULTS 12
2.1 Introduction 12
2.1.1 Entrepreneurship Theory and Practice 12
2.2 Rationale for the Project 14
3 PROJECT ACTIVITIES 16
3.1 General 16
3.2 Overall Purpose 16
3.3 Specific objectives 16
3.4 Project Strategy 16
3.5 Specific activities 16
Component 1: 17
3.5.1 Entrepreneurship Awareness Raising Campaign 17
Component 2: 18
3.5.2 Events in Support of Entrepreneurship 18
3.5.3 Component 3: National Entrepreneurship Awards Scheme 22
3.5.4 Component 4: Entrepreneurship Analysis and Benchmarking 23
3.6 Assumptions underlying the project intervention 24
3.7 Risks 25

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 4
EuropeAid/05MAC01/10/001 – EAR
3.8 Project management 25
3.8.1 Responsible body 25
3.8.2 Project Steering Committee (PSC) 25
3.9 Location 25
3.10 Start Date and Programme Duration 26
3.11 Reporting requirements 26
3.12 Monitoring 27
3.13 Definition of indicators 27
3.14 Simplified Logical Framework 27
4 INPUTS 28
4.1 Resources Required 28
ANNEX A: LOGFRAME PLANNING MATRIX 29

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 5
EuropeAid/05MAC01/10/001 – EAR

Abbreviations

APPRM Agency for Promotion of Entrepreneurship
BDS Business Development Services
BSO Business Support Organisations
C-B Capacity-Building
CEB Council for European Bank
EAR European Agency for Reconstruction
EBRD European Bank for Reconstruction and Development
EIB European Investment Bank
ESA Enterprise Support Agency
FDI Foreign Direct Investment
GDP Gross Domestic Product
GTZ Deutsche Gesellschaft für Technische Zusammenarbeit
ICT Information and Communication Technologies
ISTE International Short-term Expert
KE Key Expert (International Long-term Expert)
LEDO Local Economic Development Offices
LLTE Local Long-term Expert
LSTE Local Short-term Expert
M+E Monitoring and Evaluation
MACC Macedonian Association of Chambers of Commerce
MASIT Macedonian Association of Information Technology
MCA Macedonia Competitiveness Activity
MoE Ministry of Economy
NECC National Council for Competitiveness and Entrepreneurship
NGO Non Government Organisation
OP Operation Plan
PPD Public-Private Dialogue
PSC Project Steering Committee
RESC Regional Enterprise Support Centre
SAA Stabilization and Association Agreement
SEE South East Europe
SME Small and Medium-size Enterprise
STE Short-term Expert
TA Technical Assistance
TAM-BAS Turnaround Management & Business Advisory Services
USAID US Agency for International Development
VAT Value Added Tax
WB World Bank
WTO World Trade Organisation

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 6
EuropeAid/05MAC01/10/001 – EAR
E X E CUT I V E S UMMA RY
GFA Consulting Group GmbH, under the auspices of the Small and Medium-sized Enterprise
Development Project (SMEDP) funded by the European Agency for Reconstruction, engaged an
ISTE from in April and May 2007 to prepare a project concept on entrepreneurship and
awareness raising in the former Yugoslav Republic of Macedonia.
The consultant was tasked primarily with preparing a project document for possible further donor
or government financing for the “Developing a Culture of Entrepreneurship and Awareness
Raising” project on behalf of the Ministry of Economy (MoE) and the Agency for
Entrepreneurship Promotion (APPRM), linked the SME Forum.
The approach in this assignment was to review the documents prepared so far under the
auspices of the SME Forum, define the scope of assistance that would be required for the project
and document the technical and financial requirements for the project. The MoE and APPRM will
then be in a position to disseminate the proposal among the donor community and government
for co-funding.
There is ample justification to undertake a project to promote entrepreneurship:
The Government has prioritised enterprise development and competitiveness;
• The current very high levels of unemployment (36%) call for a greater focus on economic
development, including enhancing the levels of entrepreneurship;
In common with many other transition economies, entrepreneurs are perceived in a very
poor light by society as a whole;
The levels of entrepreneurship in the country, as illustrated by issues such as the self-
employed per capita or the number of SMEs per capital, are low by comparison with
Central and Eastern European (CEE) countries, let alone European Union (EU) ones;
Although many donors in the country are actively assisting the private sector, in terms of
affordable non-financial services the effort is quite limited in relation to entrepreneurship
issues.
The proposed project – Developing a Culture of Entrepreneurship and Awareness Raising – is
presented as a Terms of Reference (ToR) with the following main characteristics:
• The overall purpose of this project is to help develop a more entrepreneurial culture,
thereby assisting the country become more competitive and reducing unemployment.
• The main objectives of this project are to:
o To change society’s perception of entrepreneurship through an awareness raising
campaign.
o To promote entrepreneurship at all levels of society though conferences, fairs,
competitions and related events.
o To promote entrepreneurship at all levels of society through an awards scheme.
o To benchmark the level of entrepreneurship in the country on an on-going basis.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 7
EuropeAid/05MAC01/10/001 – EAR
• A two-year budget of Euro 1,500,000 is proposed comprising Euro
In carrying out the assignment, the consultant collaborated closely with staff from the MoE,
APPRM and SME Forum. In addition, support was obtained from Vesna Stojanova (LSTE) and
Goran Ivanov (SMEDP). Their support was critical to the preparation of this project fiche.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 8
EuropeAid/05MAC01/10/001 – EAR
1 B A CK GROUND I NF ORMA T I ON
1 . 1 B e n e f i c i a r y
The beneficiaries of this proposed project are Ministry of Economy (SME Department), Agency
for Entrepreneurship Promotion (APPRM) and the SME Forum. Society as a whole will benefit
from the resulting increase in entrepreneurship, competitiveness, wealth and employment.
1 . 2 C o u n t r y b a c k g r o u n d
The Government is committed to becoming a member of the European Union (EU). Since
independence in 1999, the country has signed many agreements with the EU, such as the
Stabilization and Association Agreement in 2001. In 2003, the country became a member of the
WTO and signed the European Charter for SMEs, giving a commitment to progress towards the
Charter’s goals by co-ordinating national enterprise policies. In late 2004, the GoM adopted an
Action Plan for implementation of the European Partnership and in December 2005, the country
secured full Candidate Country status, although negotiations have not yet begun.
1 . 3 C u r r e n t s t a t e o f a f f a i r s i n t h e S M E s e c t o r
The GoM recognises the importance of small and medium-sized enterprises (SMEs) as the basis
for establishing a modern and dynamic economy. The experience among EU countries clearly
demonstrates that small enterprises can make a substantial contribution to economic growth,
employment opportunities and exports. SMEs can also respond flexibly to competitive pressures
and adapt quickly to emerging opportunities.
Government support to SMEs is set out in the following key documents:
• The Government’s Work Programme (2006) is built upon three main pillars of activity, namely
increase the competitiveness of the economy, increase domestic and foreign direct
investment and improve capacity of public institutions to implement reforms.
• The National Strategy for SMEs sets out the broad priorities for enterprise development from
2007 until 2013.
• Competitiveness and Innovation Strategy Programme analyses the main problems according
to four dimensions: institutional architecture, business environment, finance and taxation and
innovation and competitiveness for the period 2007-2010, and proposes a series of reform
measures to be implemented with government support.
• The European Charter for Small Enterprises: identifies 10 enterprise development priorities
that the GoM is committed to achieve.
The SME Strategy defines the general direction for SME development in the country that is
consistent with the principles and priorities of the EU Charter while the SME Programme
determines the implementation of the strategy.
The number of private enterprises has been steadily increasing since independence. This
reflects the increasing importance of the private sector's contribution to GDP, employment,

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 9
EuropeAid/05MAC01/10/001 – EAR
exports, etc. (see Table 1). As most other countries, SMEs represent the vast majority of all
enterprises. According to data from the Central Registry, of the almost 45,000 active firms in the
country, 43,837 or 98.8% were small enterprises (as defined by the Law on Trade Companies),
with the remaining number of 830 companies made up of 490 medium and 340 large enterprises.
SMEs are also important in terms of employment creation, accounting for 80% of the total
employment in the country in 2005.
Table 1: Number of Active SMEs (1990-2005)
1991 1994 1997 1999 2000 2001 2002 2003 2004 2005(p)
SMEs 9,703* 28,551* 32,934* 31,204* 33,151 34,991 36,963 39,096 41,517 44,327
All 10,270 29,157 33,455 31,795 33,269 35,110 37,074 39,199 41,590 44,667
Source: 1991-2002: State Statistics; from 2003: Central Registry; (p) preliminary data.
SMEs account for ca. 99% of all enterprises, which is very similar to the EU-plus (Union 15 +
Iceland, Liechtenstein, Norway, Switzerland, also known as EU-19) average of 99.8%. However,
other measures of the state of the enterprise sector show significant differences with other
regions. The number of active SMEs translates into an SME density of 22 per 1,000 inhabitants.
Although this compares reasonably well with average figures for the SEE region (23 per 1,000
inhabitants), it is far below the EU15 average of 53 in EU-plus countries. The share of the private
sector in GDP is below the same value for advanced transition countries, let alone EU member
countries.
Therefore, despite anecdotal evidence suggesting that a significant degree of entrepreneurial
spirit and activity exists in the countries of SEE, the data show that SME density is much lower
than in the wider EU region. Small enterprises are still relatively few for the size of the economy
and they have not yet reached their potential in terms of either employment or production. High
unemployment persists in the country (36%) and new job creating enterprises are urgently
needed. This confirms that the level of entrepreneurship needs to be dramatically improved if the
country is to match that of the level of the EU in the future. This in turn underlines the importance
of developing an appropriate framework to develop a culture of entrepreneurship in the country.
1 . 4 I n t e r n a t i o n a l O r g a n i z a t i o n s & D o n o r s
The former Yugoslav Republic of Macedonia has a history of mobilisation and implementation of
foreign assistance since its independence in 1991. There are many bilateral donors active in the
country, including Austria, Germany, J apan, UK and USA. The main multilateral donors include
the EU (EAR and EC Delegation) and UNDP, and International Finance Institutions include
EBRD, EIB and the World Bank. Although some donors are supporting aspects of youth
entrepreneurship, such as USAID, SINTEF-Norwegian Government, Open Society Institute, etc.
none is engaged in supporting the development of a culture of entrepreneurship in the country
through the integrated components proposed in this Project.

1

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 10
EuropeAid/05MAC01/10/001 – EAR
1 . 5 K e y I n s t i t u t i o n s
Three main institutions are of importance in relation to the proposed project, each of which is
discussed below.
1 . 5 . 1 M o E : S M E p o l i c y m a k i n g
The Department for Entrepreneurship and Creation of Competitiveness (SME Department) at the
Ministry of Economy (MoE) is responsible for defining the national SME policy and for monitoring
its implementation. Its overall remit is as follows:
• Reporting to the Government on all issues relating to SMEs;
• Creating a favourable environment for SMEs;
• Reviewing the existing regulatory framework for SMEs and drafting new legislation or
amending the existing legislation in order to improve it;
• Coordinating with foreign institutions on SME development issues;
• Monitoring support and technical assistance programmes for the SME sector;
• Establishing and updating the National SME Strategy and Programme;
• Liaising with other institutions involved in the improvement of the SME environment.

The SME Department has at its disposal a staff of five and a budget of ca. € 500,000 per annum.
The SME Department would be the principal beneficiary of this project since it is responsible for
entrepreneurship and competitiveness issues.
1 . 5 . 2 A P P R M : S M E p o l i c y i m p l e m e n t a t i o n
The Agency for Entrepreneurship Promotion (APPRM) is responsible for implementing the
National SME policy, as set out in the SME Strategy and Programme. The main responsibilities
of the APPRM are as follows:
• Implementing the SME Programme of measures and activities to support entrepreneurship
and create competitiveness in the small business sector;
• Creating and developing the institutional infrastructure to promote and support
entrepreneurship and competitiveness in small businesses;
• Implementing and coordinating SME support from the public sector and from international
donor programmes;
• Implementing financial and non-financial support measures for the SME sector.

APPRM has a staff of seven and operates on an annual budget of ca. € 135,000. Since it is the
main body responsible for implementing the SME policy, strategy and programme determined by
the MoE’s SME Department, it would be responsible for implementing this project.
1 . 5 . 3 S M E F o r u m : P u b l i c – P r i v a t e C o n s u l t a t i o n
The key body ensuring collaboration between the public and the private sector in the
implementation of the SME Strategy and Programme is the SME Forum. The SME Forum was
established in 2005/06 as a platform for a public-private dialogue in regard of the design and
implementation of the SME policy. The members of SME Form include the MoE and APPRM, the

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 11
EuropeAid/05MAC01/10/001 – EAR
Economic Chamber, the Union of Chambers, the NW Chamber, the Crafts Chamber, NECC,
MASIT, several business associations, and a number of bilateral Chambers as observers.
The SME Forum focuses on all issues – political, strategic, legal, regulatory and other – that are
of importance to the SME Sector. Working Groups have been established for (i) ICT and
Competitiveness, (ii) promotion of entrepreneurship, (iii) contribution to the new Strategy and
Programme. In 2007, the SME Forum undertook a number of initiatives addressing priorities for
the SME sector, including taking the lead in preparing this Project proposal jointly with the MoE
and APPRM. As such, the SME Forum will also be a beneficiary of this project and be closely
involved in its implementation.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 12
EuropeAid/05MAC01/10/001 – EAR
2 P ROJ E CT OB J E CT I V E S & E X P E CT E D
RE S UL T S
2 . 1 I n t r o d u c t i o n
The most pressing problem facing the country is unemployment. SMEs are universally
recognised as significant generators of jobs and play a particularly significant role in relation to
enhancing the competitiveness and productivity of the country. In order to realise greater
employment opportunities, the dynamism of the SMEs sector and a higher level of
entrepreneurship must be stimulated in the country.

2 . 1 . 1 E n t r e p r e n e u r s h i p T h e o r y a n d P r a c t i c e
Policy makers throughout the world placed considerable emphasis on the development of an
enterprise culture in society since it is the key to the creation of a society capable of coping with
the complexities and uncertainties of a globally competitive economy. The EU’s Green Paper on
Entrepreneurship in Europe (COM 2003) defines entrepreneurship as:
“… the mindset and process to create and develop economic activity by blending risk taking,
creativity and/or innovation with sound management, within a new or an existing organisation.”
The Green Paper highlights the key reasons why it is important to focus on entrepreneurship:
• It contributes directly to job creation and growth: increasingly new and small firms are the
major providers of new jobs; entrepreneurship can foster social and economic cohesion in
underdeveloped regions; entrepreneurship can stimulate economic activity and integrate
unemployed or disadvantaged people into work, etc.
• It is crucial to competitiveness: it results in increased efficiency and innovation in firms – in
terms of organisation, processes, products, services or markets; it enhances the
competitiveness of an economy as a whole and thus offers consumers greater choice and
lower price.
• It unlocks personal potential: in addition to material motivations such as money and status,
people become entrepreneurs as a means to self-fulfilment such as freedom, independence
and the challenge.
• It is in society’s interest: entrepreneurs are the key drivers of the market economy and their
achievements provide societies with wealth, jobs and diversity of choice for consumers.
• It is associated with certain behaviour patterns, such as readiness to take risks and a taste
for independence and self-realisation.

This definition is, however, focused almost solely upon business activity - being relevant to all
firms in all sectors as well as ‘non-profit’ organisations - which have significant economic activity.
It, therefore, focuses measures of the ‘culture’ upon issues such as:

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 13
EuropeAid/05MAC01/10/001 – EAR
• The numbers of new businesses created.
• The attitude of society towards running a business.
• The propensity of the population to set-up a business.
• Attitudes towards risk-taking in society and the risk perceived in setting-up one’s own
business.

Publications such as Global Entrepreneurship Monitor (GEM) survey attempt to create an
international benchmark for the monitoring of enterprise culture focused on the business initiation
process. It operates in over fifty countries and is based on a combination of national opinion poll
surveys and expert opinions. It focuses upon business activity as discussed above, recognising
that culture is a pattern of beliefs, norms and values that are widely shared throughout society. In
an overview of entrepreneurship, the OECD (1999) describes ‘culture’ as a key pillar of the
entrepreneurial economy alongside the macro economy and regulatory environment, with
education playing an important role.
Unfortunately, the country has yet to participate in the GEM so it can not be benchmarked
against its competitors. However, according to the World Economic Forum’s 2005/06 Global
Competitiveness Report, the country ranks 85 (out of 117 countries) in the Growth
Competitiveness Index (GCI). Compared with 2004/05, the rankings have improved in terms of
the business environment and macro-economic stability (the latter due to the strict fiscal
discipline and the other stringent monetary policies of the Government). However, in other
parameters of competitiveness – such as the Technology Index – the country's position
stagnated. This appears to reflect a failure to take measures to improve the technological
readiness of businesses at a time when other economies are advancing in this area and because
reforms have not been fully implemented.
This mixed picture is reflected in the findings of the 2005/06 micro-level Business
Competitiveness Index (BCI). The report notes certain improvements in the business
environment; the availability of capital for investment, the quality of the available scientists and
engineers, and the general level of education are positive factors of the business environment.
However, the sophistication of the operations of local companies and quality of their business
strategies has deteriorated. Weaknesses are also manifest in the quality of managers, in the
overall low customer orientation of businesses and in the high dependence on foreign
technologies and technology transfer. The rigidity of the law on environmental protection and
insufficient competition in the domestic market are also negative factors. The index puts the
country ahead of Serbia, Montenegro, Bosnia and Herzegovina, and Albania, but ranks it lower
than Bulgaria and Croatia.
It is evident from the above that much needs to be done, starting with an awareness campaign
about the importance of entrepreneurship and developing an entrepreneurial culture. This is
because the enabling environment for enterprise development is currently rather hostile in its
culture and values to the entrepreneur. It can be argued that the biggest barrier to the
development of independent business in transition economies such as this one is the behaviour
and lack of empathy, indeed hostility, of those who shape the environment for enterprises,
namely the regulators, public officials, educational bodies, professions, local government and
society as a whole. There is, therefore, an imperative to address the issue of the creation of an
enterprise culture in the stakeholder ‘enabling environment’ for MSME development. Also, the

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 14
EuropeAid/05MAC01/10/001 – EAR
impact of globalisation on the role of government in society, on organisations and on society has
been to create much more uncertainty for everyone, thus broadening the need for
entrepreneurial behaviour beyond the business context. This in turn means that the focus of
developing a culture of entrepreneurship needs to extend to the population as a whole. There is
a need to foster entrepreneurial behaviour skills and attributes of the type illustrated in Exhibit 1.
Exhibit 1: Entrepreneurial Behaviours, Skills and Attributes
Behaviours Attributes Skills
Opportunity seeking Self confidence Problem solving
Creative problem Achievement Persuading
solving Orientation Negotiating
Grasping/organising Autonomy Strategic thinking
opportunities ‘Natural’ leadership Articulating ideas
Taking initiatives ‘Fixer’ Selling
Managing interdependence Determination Proposing
Ambition Getting things done Decision making
Seeing things through Hardworking under uncertainty
from beginning to end Commitment Holistic task
Rapid use of judgement Action oriented management
Taking calculated risks Perseverance Social skills
Social networking Strong ego Cooperation

The challenge for the policy maker in fostering a culture of enterprise is significant but this
reinforces the need for making progress in areas that this project proposal focuses on:
• Create awareness raising campaigns that promote entrepreneurship at all levels of society.
• Ensure that general society empathises with and shares the key values of the entrepreneur.
• Assist the education and training system to embed the culture of entrepreneurship.
• Support initiatives in the education and training system at primary, secondary and tertiary
level to underpin enterprise.
• Design instruments to measure the culture of entrepreneurship on a regular basis.
• Create competitions and awards that promote entrepreneurship at all levels of society.

2 . 2 R a t i o n a l e f o r t h e P r o j e c t
The rationale for the countrywide entrepreneurship project is as follows:

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 15
EuropeAid/05MAC01/10/001 – EAR
• The Government has prioritised enterprise development and competitiveness;
• The current very high levels of unemployment (36%) call for a greater focus on economic
development, including enhancing the levels of entrepreneurship;
• In common with many other transition economies, entrepreneurs are perceived in a very poor
light by society as a whole;
• The levels of entrepreneurship in the country, as illustrated by issues such as the self-
employed per capita or the number of SMEs per capital are low by comparison with Central
European Countries (CEE), let alone European Union (EU) ones.
Although many donors in the country are actively assisting the private sector, in terms of
affordable non-financial services the effort is quite negligible in relation to entrepreneurship
issues.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 16
EuropeAid/05MAC01/10/001 – EAR
3 P ROJ E CT A CT I V I T I E S
3 . 1 G e n e r a l
The proposed “Developing a Culture of Entrepreneurship and Awareness Raising” Project would
run for a two-year period; with scope for extension for a further two years.
3 . 2 O v e r a l l P u r p o s e
The overall purpose of this project is to help develop a more entrepreneurial culture, thereby
assisting the country to become more competitive and reduce unemployment.
3 . 3 S p e c i f i c o b j e c t i v e s
The main objectives of this project are:
• To change society’s perception of entrepreneurship through an awareness raising campaign.
• To promote entrepreneurship at all levels of society though conferences, fairs, competitions
and related events.
• To promote entrepreneurship at all levels of society through an awards scheme.
• To benchmark the level of entrepreneurship in the country on an on-going basis.
3 . 4 P r o j e c t S t r a t e g y
The hostility of society as a whole towards the entrepreneur is currently one of the biggest
barriers to the development of independent business in the country. The lack of empathy of those
who shape the environment for enterprises, namely the regulators, public officials, educational
bodies, professions, local government and society as a whole, will be influenced though a
strategy that concentrates on:
• Promotion to raise awareness of the important role played by entrepreneurs in wealth and
employment generation.
• Promotion of entrepreneurship at all levels thought various tools designed to raise the profile
of entrepreneurs.
• Promotion of benchmarking of the entrepreneurial culture in the country.
3 . 5 S p e c i f i c a c t i v i t i e s
The Project consists of four inter-related components:
• Entrepreneurship Awareness Raising Campaign.
• Events in Support of Entrepreneurship.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 17
EuropeAid/05MAC01/10/001 – EAR
• National Entrepreneurship Awards Scheme.
• Entrepreneurship Benchmarking.

These four components are discussed in more detail below.
3 . 5 . 1 C o m p o n e n t 1 : E n t r e p r e n e u r s h i p A w a r e n e s s R a i s i n g
C a m p a i g n
In contrast to EU economies, the levels of entrepreneurship in the country are low. The country is
not generating sufficient start-ups partly due to the imbalance between risks and rewards, lack of
awareness of entrepreneurship, focus on employment rather than self-employment, as well as
the underdeveloped market orientation of the economy. There is a need to increase the
awareness and appreciation of the role of entrepreneurship in society, to encourage people to
look beyond their current preference for a “stable” job, while ensuring that the balance of risk and
reward is tipped more in favour of the entrepreneur. The current perceptions of general society
are consistently negative in relation to entrepreneurship. Therefore, a medium-term campaign is
needed, which counteracts this negative perception by presenting role models or portraits of
success, working closely with the media.
Therefore, the focus of this component is the preparation and implementation of a synchronised
national media campaign over 2 years, combined with supporting materials such as leaflets,
brochure, posters, web site, e-bulletins, e-newsletter, etc. The focus of the campaign will be on
changing the perceptions of society as a whole, as well as policy makers, not least the
educationalists, with a view to engendering a more entrepreneurial culture, policy, legislation, etc.
It is envisaged that a further two-year campaign would focus on enterprises and the unemployed
but this is not part of this Project proposal.
The main target group is the general public (i.e., the 2 million inhabitants), especially adults. The
allied target group is the educations establishment and, in particular, pupils and students. In the
school year 2004/05, there were:
• 224,000 pupils in 1,010 elementary schools.
• 94,000 students in 100 secondary schools
• 8,500 students in vocational schools.
• Ca. 70,000 students in ca. 10 higher educational establishments (e.g. universities in Skopje
and Bitola, SEEU, Tetovo University and other private Universities.

A professional marketing / Public Relations (PR) agency will be commissioned using transparent
and accountable procedures to assist the beneficiaries with the implementation of a professional
and well organised synchronised Entrepreneurship Awareness Raising Campaign (EARC) over
two years.
Box 1 below sets of the preliminary basis for the EARC. The PR agency will use this as the
framework for developing a sophisticated and well-planned EARC strategy and action plan
setting out the full set of activities over the two years of the programme.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 18
EuropeAid/05MAC01/10/001 – EAR
Box 1: Basis of the Entrepreneurship Awareness Raising Campaign (EARC)
Message: Entrepreneurship is essential to wealth generation and unemployment reduction.
Goal: encourage school/university leavers/un/employed to consider entrepreneurship as a career path.
Authority: government endorsement is required to run the campaign.
Audience: society (adults) pupils, students, educational establishments, media and policy makers (Phase II
may focus on the unemployed and enterprises. There should be a gender sensitive approach.
Reach: all parts of the country, including less accessible regions.
Market research: focus group testing of messages, adverts, materials, etc.
Slogan: 10 words to be tested through focus groups
Communication strategy: TV, radio, newspapers, internet / FAQs (case studies, personal stories,
testimonials etc. by real entrepreneurs and celebrities), billboards, posters, pamphlets, SMS (young
people), blogs (young people), etc.
Level of Information: advantages of being an entrepreneur, government support available, etc.
Public involvement: positive involvement of the public is essential to ensure success.
Timing: Phase I for 2 years; followed by Phase II for a further 2 years (more refined campaign)
Impact: need for M&E based on key indicators to be developed (incl. link to GEM – Component 4) such as:
- X number of entrepreneurs per capita
- X number of self employed per capita etc

The awareness raising campaign component will achieve the following results:
• Awareness raising strategy (2+2 years).
• Synchronised awareness raising campaign (action plan for year 1 and year 2).
• Preparation of promotion materials (3 types of leaflet, 3 types of brochures, 10 types of
posters, 1 web site, 18 e-bulletins, 18 e-newsletter, etc).
• Positive change in societal perceptions of entrepreneurship and entrepreneurs.
3 . 5 . 2 C o m p o n e n t 2 : E v e n t s i n S u p p o r t o f
E n t r e p r e n e u r s h i p
Component 2 will enhance the awareness raising campaign through a series of events in
Support of Entrepreneurship designed to add depth and substance to the basic pro
entrepreneurship message. A series of four main events are planned throughout the two years of
the project. Each of these is discussed below.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 19
EuropeAid/05MAC01/10/001 – EAR
European Day of the Entrepreneur
The European Day of the Entrepreneur was initiated by the Eurocities network in 2003. Since
then, the concept of the European Day of the Entrepreneur has spread throughout Europe. The
main idea is to promote and to contribute to foster entrepreneurship in Europe, locally and
internationally. The European Day of the Entrepreneur is, therefore, a major meeting point for
entrepreneurs and all interested institutions in entrepreneurship development; it allows
information to be exchanged; it enables contacts to be made; and it both recognises and fosters
the entrepreneurship spirit.
As part of the process of raising awareness of the importance of entrepreneurship, the SME
Department (MoE) co-organised the first European Day of the Entrepreneur in May 2006. The
event generated significant press and public interest, although it is recognised that there is a
need to increase participation by SMEs and entrepreneurs. It is, therefore, proposed that the
Project will support the costs and organisation of the European Day of the Entrepreneur on an
annual basis (in 2008 and 2009), together with the Entrepreneurship Fair (where firms present
their products and services rather than donors and policy-makers) and to link this to the annual
Entrepreneurship Award Scheme (see Component 3 below).
Annual Entrepreneurship Conference
In addition to the Europe Entrepreneur Day, there is a need to for a high profile event that draws
together senior politicians (President, PM, DPM, Minister of Economy, Minister of Education and
Science, Minister of Labour and Social Policy, etc.) etc. to engage with the private sector and
academics, think tanks, etc. on the development of entrepreneurship in the country. Whereas the
Europe Entrepreneur Day focuses on “entrepreneurs” the annual conference will focus on
developing “entrepreneurship” in the country. The conference will cover the following types of
discussions:
• Direction of GoM policy and how this supports entrepreneurship.
• Entrepreneurship and the link to accession to the EU, competitiveness and globalisation.
• The annual results of the Global Entrepreneurship Monitor (GEM – see Component 4).
• International experience and best practice.
• New policy directions and initiatives to enhance entrepreneurship in the country.

The annual Entrepreneurship conference will bring together politicians, policy makers, industry
captains, business associations, academics, etc. The Project will ensure that the event receives
extensive media coverage, through the use of the President / PM as the host of the event. This
will be closely coordinated with the Awareness Raising Campaign for maximum impact.
Youth Entrepreneurship Fairs
Eight Youth Entrepreneurship Fairs will be organised per annum jointly with business
associations, municipalities, educational establishments and enterprises. The focus will be on
participating in existing fairs by making space available for exhibition / display of products and
services by young entrepreneurs.
In order to increase the visibility of entrepreneurs in the country, special events will be organised
within the 8 regions for the SME sector as part of the high profile regular fairs for your
entrepreneurs to display their products/services. There will be separate pavilions/display areas

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 20
EuropeAid/05MAC01/10/001 – EAR
for the so-called Youth Entrepreneurs Expo (YEE) targeting young people aged 18-28. For
example, the glass-pavilion at the entrance at Skopje Fair would be reserved for the YEE.
The project will support these YEE by participation up to 90% of the costs for:
• Renting YEE pavilions (according to the local rental costs where the fair is organized).
• Provision of promotional materials (leaflets, brochures, badges’, panels/banners etc.).
• Transport costs (for the young entrepreneurs and for the local transport of students
organized visit tours to the YEE).

It is also proposed to organise during these fairs the Young Entrepreneurs Business Week
(YEBW). The YEBW will be a platform for discussions between the young entrepreneurs on:
advantages/obstacles in starting / running their businesses, recommendations to policy reforms,
promotion of innovative ideas/approaches , press-conferences, visits by students from secondary
and vocational schools, and tertiary institutions) etc. During the YEBW, a Contest will also be
organised for the best young entrepreneur with a monetary prize of 2,000 Euros. A J udging
Panel comprising 3-5 businessmen and a1 representative of the MoE/APPRM/Business
Associations will evaluate young entrepreneurs at the according to the following criteria:
There will be an estimated 160 YEE participants per year and the costs for the financial support
will be approximately Euro 100,000 per year. The estimated costs for the organization of the
judging panel, cash-award, operational costs for YEBW (local transport costs for students visiting
tours) will be Euro 25,000.

Regional Roadshows to Promote Entrepreneurial Education
8 Entrepreneurial Educational Caravans (CEE) will be implemented in order to inform the young
population throughout the country about the entrepreneurship educational possibilities at both
under-graduate and graduate level, entrepreneurship training programmes, the skills set required
to start and run a business, financial sources for start-up/seed capital (e.g. venture capital,
commercial banks, business angels, franchising, microfinance and so on) etc. As part of this
process, a multi-media promotional programme will be prepared comprising a mixture of videos,
documentaries, brochures, badges, T-shirts, computer business games, etc. for all educational
institutions/programmes that provide entrepreneurship education.
Key elements of the CEE include the following:
• It will be organised jointly with MoE, APPRM and educational institutions for a week in each
of the 8 regions during the early spring, prior to enrolment of students at the tertiary education
institutions.
• The multimedia programme will be prepared, organized and run by the marketing agency
coordinating Component 1 above and will collaborate closely with the Project Steering
Committed in preparing the programme.
• Target groups will be secondary students and the youth unemployed (15 - 25 years).
• Municipalities and/or educational establishments will contribute to the CEE activities through
the provision of facilities (municipal cultural facilities/ cinemas / campuses, etc.) for the one-
week regional roadshows.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 21
EuropeAid/05MAC01/10/001 – EAR

Entrepreneurship competitions
In addition, a number of entrepreneurial competitions will be organised designed raise
awareness of entrepreneurship as a possible career option as well as stimulate interest in self-
employment and the business sector. The focus of the activities will be 100 selected schools /
colleges and the 10 universities in the country.
100 Schools / Colleges
The target group will be ca. 2,500 young people enrolled at secondary education that
attended/attend entrepreneurial educational programmes/courses such as the J unior
Achievement, EU and USAID vocational entrepreneurial programmes and similar.
Different types of contest are proposed such as:
• Top scores in the Simulation of Company Decision making: iterative cycles of company
decisions in relation to marketing, management, trading, e-business, creation of web sites,
etc. involving groups of10-15 students per company.
• Company Programme: estimation of the most profitable student company involving 10-15
groups of students per company).
• Biggest turnover during the one-day trade shows of student’s companies (part of the above
mentioned fairs): involving groups of 5-6 students per company).
• Top scores in business decision computer games: Sim City, Planning Location Decisions,
etc.) involving individual students that do not attend entrepreneurial course.
The above contests will be organised during each semester on a regional basis and at the end of
the school year in order to arrive at a final national competition involving an estimated 2,500
students. The winning groups of students (first, second and third place) will be awarded modest
prizes: Euro 100 -300) and certificates. While the winners of the business decision computer
games will be awarded free copies of the games.
The judging panels for the contests will comprise and be organised by teachers that run
entrepreneurial courses, combined with representatives from the local/regional business
community and a student who has been trained in the entrepreneurial programmes but does not
participate in the contest. All schools are expected to be furnished with PCs and Internet access.
The simulation contests will have no other costs than engagement of the teachers for organising
and running the iterative simulations.
10 Tertiary Education Establishments
The target group is students enrolled at undergraduate level that have attended/attend
entrepreneurial educational curricula such as the Faculty of Economics - Skopje, Integrated
Business Faculty - Skopje, Faculty of Tourism - Ohrid, Economic Faculty - Prilep, Economic
Faculty - Stip, Economic Faculty - Tetovo, Business School - Kumanovo, Economic Faculty –
FON - Skopje) or participated in the training workshops at the Faculty of Mechanical Engineering
(e.g. the Austrian programme for entrepreneurial students), SINTEF - Norwegian Incubator for
young entrepreneurs . This amounts to approximately 10 faculties in the country overall.

Different types of contest are proposed such as:

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 22
EuropeAid/05MAC01/10/001 – EAR
• Best business plan: innovative business idea, cost-benefit analyses and profitability.
• Best business plan: innovative business idea, cost-benefit analyses and profitability.
• Most successful incubated young enterprise: innovative, profitable, potential for growth.
• Best e-biz programme: innovative, scope of targeted market in the Balkans, EU, etc.
• Best marketing plan for young enterprises: internationalization of small young enterprises.

An estimated 410 students will be involved in the above competitions. The contests will be
organised on an annual basis and all students can apply with the necessity for recommendations
from professors. The best 3 students in each category will be awarded cash prizes of Euro 500 –
1,000 and certificates. The judging panels will consist of successful business people, financiers,
student, academic / APPRM/MoE representative. The winners of the above competitions will also
be assisted to take part in international entrepreneurial contests for young entrepreneurs in the
EU or USA.
The events organised in support of entrepreneurship will achieve the following results:
• Entrepreneurship Day event organised (ca. 250 participants in year 1 and 2).
• National Entrepreneurship Conference organised (ca. 100 participants in year 1 and 2).
• Entrepreneurship fairs (Young Entrepreneurs Expo and Young Entrepreneurs Business
Week) organised jointly with business associations and educational institutions (8 throughout
the country per annum).
• Regional roadshows (Caravan of Entrepreneurial Educational Days) organised jointly with
business associations (8 throughout the country per annum).
• National entrepreneurship competitions organised with 100 schools/ colleges and 10 higher
education establishments (5).
3 . 5 . 3 C o m p o n e n t 3 : N a t i o n a l E n t r e p r e n e u r s h i p A w a r d s
S c h e m e
In addition to seeking to change society’s perception of entrepreneurs, there is a need to reward
successful entrepreneurs as a means of presenting role models to counteract negative
perceptions and encourage entrepreneurs in their activities. However, for the awards to have a
positive and lasting impact there is a need to ensure extensive media coverage of the event as
well as transparent and accountable selection criteria (e.g. balance sheets, turnover, gross profit,
productivity, sustainability, total fixed assets, R&D). In addition to a cash prize and trophy, the
winners will be invited to participate in awareness raising campaign sponsored by the MoE and
business associations.
A number of issues will be important in developing the entrepreneurship awards scheme:
• Entrepreneurship Awards Board consisting of MoE, APPRM and business associations.
• J udging panels comprising a majority of entrepreneurs/financiers.
• Definition of types of award: ca. 5 in 2008 increasing to ca. 10 in 2009.
• Transparent and accountable methodology for selecting winners.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 23
EuropeAid/05MAC01/10/001 – EAR
• Preparation of trophies, certificates, cash prizes, etc.
• Presentation of awards at Entrepreneurship Day or Conference.
• Sponsorship of the event by the private sector (e.g. financial institutions, media, etc.).
• Media management / PR.

The national entrepreneurship awards scheme will achieve the following results:
• Be conducted as part of the Entrepreneurship Day event organised (see above).
• Involve the establishment of ca. 5 awards for various categories of enterprise/entrepreneur in
year 1 and a further 5 in year 2 (total of 10).
• Involve national publicity (TV, radio, press, etc.) with close links to Component 1 involving
media items profiling success stories and portraying entrepreneurship in a positive light.

3 . 5 . 4 C o m p o n e n t 4 : E n t r e p r e n e u r s h i p A n a l y s i s a n d
B e n c h m a r k i n g
One of the barriers to establishing a more entrepreneurial culture in the country is quite simply
the lack of data allowing an analysis of the current situation (statistics and analysis), how this
situation is changing over time (time-series data) and how the country is doing compared with
neighbouring countries and EU member states (benchmarking).
Some improvements are apparent, such as the creation of the SME Observatory, which is the
responsibility of APPRM and has the primary objective of collecting data and analysing, as well
as monitoring and evaluating trends in relation to the SME sector. So far, the SME Observatory
has focused on producing Annual SME Reports (2002, 2003, 2004 and 2005). However, there is
significant scope for improving the operation and capacity of the SME Observatory: it needs to
develop comprehensive time-series information; to become the source of comprehensive data for
the SME sector; to be the basis for analysing the impact of policies and initiatives involving the
enterprise sector. However, there remain significant data gaps still exist, for example, in relation
to taxation and trade (export-import) since enterprises are not appropriately classified. Moreover,
there is currently insufficient human capacity to produce the Annual SME Reports or to undertake
the wider role that is normally associated with SME Observatories, such as collecting best
practice information on SME development, policies, legislation, etc. and enabling benchmarking
relative to other countries/regions.
This component of the project will focus on two main issues:
• Collaborate with all organisations involved in collecting and using SME statistics and analysis
(Statistical Office of the RM, central register, business associations, MoE, APPRM, etc.) to
develop a comprehensive data collecting service relating to the SME sector. Through a
Working Group, the focus will be to develop indictors compatible with EUROSTAT
requirements; to produce annual statistical compendiums on the SME sector; and assess
level of SME development in the country.
• Assist the country to benchmark itself against other countries through the implementation of
two annual Global Entrepreneurship Monitor (GEM) surveys (see below).

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 24
EuropeAid/05MAC01/10/001 – EAR
The annual Global Entrepreneurship Monitor (GEM) is a cross-national assessment of
entrepreneurship. It started in 10 countries (1999) and expanded to 50 by 2005. GEM has
become a leading research consortium concerned with improving our understanding of the
relationships between entrepreneurial activity and national economic growth. Its uniqueness lies
in the fact that no other research exists that can provide consistent cross-country information and
measures of entrepreneurial activity in a global context.
The GEM has three main objectives:
• To measure differences in the level of entrepreneurial activity among countries.
• To uncover factors determining the levels of entrepreneurial activity.
• To identify policies that may enhance the level of entrepreneurial activity.
The information, analysis and recommendations arising from the two planned GEM surveys are
expected to be valuable in:
• Benchmarking the country’s position relative to EU, CEE and SEE countries.
• Highlighting the main entrepreneurial strengths and weaknesses.
• Kick-starting a debate on policy options to further stimulate entrepreneurship.
• Stimulating new policies and initiatives in the country.

Moreover, in order to provide useful information on which to build new policies, the Project will
commission specialist analysis covering three critical themes: women in entrepreneurship, start-
ups and growth of established businesses.

The activities organised in support of this Component of the Project will have the following
results:
• Regular (at least 2) surveys / benchmark studies such as GEM.
• Prepare additional GEM analysis covering three themes: women in entrepreneurship, start-
ups and growth of established businesses.
• Wide dissemination of results to media and society (awareness raising).
• Development of statistics and analysis on SMEs and entrepreneurship.

3 . 6 A s s u m p t i o n s u n d e r l y i n g t h e p r o j e c t
i n t e r v e n t i o n

See Log Frame

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 25
EuropeAid/05MAC01/10/001 – EAR
3 . 7 R i s k s

See Log Frame

3 . 8 P r o j e c t m a n a g e m e n t
3 . 8 . 1 R e s p o n s i b l e b o d y
The SME Department (MoE) will be the main beneficiary. APPRM will be responsible for
managing the Project under supervision by the Project Steering Committee (see below). Day-to-
day implementation of the project will be performed by APPRM with, service delivery outsourced
to various organisations such as consultancies, market research and PR agencies.
3 . 8 . 2 P r o j e c t S t e e r i n g C o m m i t t e e ( P S C )
At an early stage of the Project, the APPRM will establish a Project Steering Committee (PSC)
that will convene at three-monthly intervals. The functions of the PSC will be to:
• Supervise project implementation in general.
• Approve Overall and Annual Work Plans and Budgets.
• Coordinate with donor community, private sector and government.
• Review project progress every three months.
• Provide overall guidance and policy advice.

The PSC will be composed of the following:
• APPRM Director who will also function as PSC Chairperson.
• One representative of the Ministry of Economy.
• One representative of the Ministry of Education and Science
• One representative of the Donor.
• Three representatives of the SME Forum.
• Project Team Leader.

3 . 9 L o c a t i o n
The proposed Project will be managed by APPRM located in Skopje. Implementation of the
Project will be carried out by consultants assigned to projects selected on a transparent and
accountable basis.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 26
EuropeAid/05MAC01/10/001 – EAR
3 . 1 0 S t a r t D a t e a n d P r o g r a m m e D u r a t i o n
It is proposed that the Project will be carried out over a period of 2 years commencing in 2008.

3 . 1 1 R e p o r t i n g r e q u i r e m e n t s
APPRM will need to prepare and submit the following:
o Monthly reports
o Quarterly Report
o Annual reports
o End-of-Project Report
o Ad hoc reports as required
The monthly report due at month end will be submitted to the Agency Director and provide a brief
overview of activities and outputs, and funding usage.
The quarterly reports will be more detailed and analyse progress in all areas (inputs, activities,
outputs and outcomes) as against the annual plan. The annual report will assess achievements
as against the OWP. These reports will be submitted to the Director as well as the PSC.
Upon completion of the project, a detailed report will be prepared showing achievements and
challenges covering 2 years in relation to the overall work plan for the Project.
Periodically, the APPRM will engage an external consultant to conduct impact assessments
leading to the preparation of a report on outcomes or the results of the project.

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 27
EuropeAid/05MAC01/10/001 – EAR

3 . 1 2 Mo n i t o r i n g
The APPRM will be responsible for monitoring the project. The Agency can:
• Indicators are specific performance measures chosen because they provide valid, useful,
practical and comparable measures of progress towards achieving expected results. An
updated log frame will be created with defined indicators in order to monitor progress.
• An independent consultant will evaluate the project impact after 12 and 22 months.
• Quarterly progress reports will be prepared to assess progress, barriers and solutions for
overcoming problems.
• Review financial commitments and disbursements by budget line.
• Review reports submitted by consultants, PR Agency, etc.
3 . 1 3 D e f i n i t i o n o f i n d i c a t o r s
For Objective Verifiable Indicators, refer to the Logical framework.
3 . 1 4 S i m p l i f i e d L o g i c a l F r a m e w o r k
The project’s Logical Framework is provided in Annex A

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 28
EuropeAid/05MAC01/10/001 – EAR
4 I NP UT S
4 . 1 R e s o u r c e s R e q u i r e d
The proposed budget for the Project is Euro 1,500,000 spread over 2 years. The budget for the
Project is broken down by each year as follows:

2008 2009 Total
Component 1 –
Awareness
raising
300,000 600,000 900,000
Component 2 -
Events
150,000 200,000 350,000
Component 3 –
Awards scheme
60,000 40,000 100,000
Component 4 –
Analysis and
benchmarking
75,000 75,000 150,000
Total Euro 585,000 915,000 1,500,000

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 29
EuropeAid/05MAC01/10/001 – EAR
A NNE X A : L OGF RA ME P L A NNI NG MA T RI X
Results Objective Verifiable Indicators Assessment of Indicators Assumptions, Risks and Conditions
Wider Objective
The overall objective is to
help develop a more
entrepreneurial culture,
thereby assisting in the
country become more
competitive and reducing
unemployment.
• Changed attitudes and perceptions
in relation to entrepreneurship
• Increased in density of SMEs
• Increased start-up rates
• National statistics and other
economic data
• GEM survey (2008 and
2009)
• Surveys carried out by
external 3
rd
parties
• Research by PR/marketing
companies / 3
rd
parties
• Continued commitment by the
government to develop
entrepreneurship and support SME
development
• Creation of a stable business
environment that is attractive to foreign
and indigenous investors
• Willingness of members of society to
trust government and businesses
Output 1. Awareness Raising
Change Society’s perception
of entrepreneurship through
awareness raising

• Prepare awareness raising
strategy and action plan
• Implement synchronised media
campaign
• Prepare comprehensive promotion
materials
• Change perceptions of society,
including pupils and students.
• GEM survey (2008 and
2009)
• Media reports
• Press clippings
• Promotion materials
• High levels of professionalism on the
part of sub-contractors such as PR
agencies
• Willingness on the part of media to
engage proactively and positively
• Willingness of the educational
establishment to respond positively

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 30
EuropeAid/05MAC01/10/001 – EAR

Results Objective Verifiable Indicators Assessment of Indicators Assumptions, Risks and Conditions
Output 2. Entrepreneurship
Events
Underpin campaign through
practical initiatives and events
• 2 European Day events (ca. 250
participants each)
• 2 National Entrepreneurship
Conferences (ca. 100 participants)
• 8 Entrepreneurship Fairs
throughout the country
• 8 Regional Roadshows throughout
the country
• Entrepreneurship competitions
involving 2,500 young people in
100 schools and colleges
• Entrepreneurship competitions
involving 410 young people in 10
universities
• Conference agendas
• Conference attendance
lists
• Plans, materials, evaluation
sheets
• Invoices for events
• Sufficient numbers of interested
participants
• Support and commitment from
Government, Ministries, Agencies, etc
• Support and cooperation from schools,
colleges, universities, etc
• Enthusiasm and on the part of pupils
and students, as well as teachers
• Support from business associations
and businesses

Output 3. Entrepreneurship
Awards
Raise the profile of
entrepreneurs through high
visibility and transparent
awards
• Memorandum of Cooperation
between Ministry, APPRM and
business associations
• Establishment of Entrepreneurship
Awards Board/Panel
• Transparent methodology for
assessing applicants and selecting
winners
• 2 sets of awards (5-10 per event)
issued
• Project reports
• Minutes of Board/Panel
meetings
• Media reports
• Willingness of organisers to
collaborate and invest time and effort
required
• Willingness of media to report on
positive rather than negative stories
• Business environment and political
climate conducive to transparent and
accountable procedures
Output 3. Benchmarking
Entrepreneurship
• Memorandum of Cooperation
between Ministry, APPRM and
statistical bodies
• Agreements, contracts, etc.
• New statistical data
• Willingness on the part of statistical
services, central registry, etc, to
collaborate

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal 31
EuropeAid/05MAC01/10/001 – EAR
Strengthen capacity to assess
levels of entrepreneurship and
compare with competitors
• Development of new indicators,
collection and analysis systems
• Cooperation agreement / Contract
with GEM organisers
• Selection of local contractor to
undertake 2 GEM surveys
• Minutes of meetings
• 2 GEM reports
• Availability of resources to underpin
new data collection and analysis
• Willingness of GEM partners (Babcock
College, London Business School) to
collaborate on GEM
• Capacity of local agencies to
undertake survey to professional
standards

Small and medium-size Enterprise Development –
Government and Private Sector
An EU-funded project managed by the European Agency for Reconstruction

Fostering A Culture of Entrepreneurship: A Project Proposal
1
EuropeAid/05MAC01/10/001 – EAR

doc_258363601.pdf