Monitoring of opportunities for development of self-employment in the Novosibirsk oblast

Profound changes in the social, economic, political and other spheres of Russia, which began in the perestroika period and continue up to the present, have led to the emergence of a population category such as the unemployed. In 2014 the unemployment rate in the country amounted to 5.2%. According to the population survey on employment issues, the number of the unemployed has not changed as compared to 1992 and accounts for 3,889 thousand people, although in certain years, under the crisis conditions in the society there was a significant increase in the number of the unemployed, and since 2010 – a marked annual decrease. Slightly different statistics is noted regarded the unemployed residing in rural areas. Compared to the figure of 1992, their number increased 2.2 times (1992 – 639, 2014 – 1,408 thousand people). The proportion of the unemployed rural population in the total number of the unemployed has increased symmetrically from 16.4 to 36.2%1.

The Russian state, implementing active employment policy, takes responsibility of creating conditions to provide employment for those citizens who are looking for and ready to work. Among the directions of the active employment policy, self-employment is of great importance, as it absorbs the unemployed workforce and serves as a kind of a social “shock absorber” due to high labor-absorbing potential.

Self-employment is a complex socioeconomic phenomenon. In this regard, there are different approaches to its definition. Without elaborating further on their reviewing, we should note that scientific literature suggests two approaches to the definition of self-employment: the narrow and the broad.

The narrow approach distinguishes selfemployment and entrepreneurship. The authors consider self-employment as the smallest forms of independent activity. For example, V.V. Radaev, considering entrepreneurship, writes that “...it is joined by the adjacent periphery in the form of large groups of self-employees, who, however, do not belong to actual entrepreneurs”2. T.I. Zaslavskaya emphasizes the individual nature of activity within self-employment with the use of one’s own financial means3. Supporters of the most common broad approach include, for example, E.A. Abramova, who believes that “the self- employed in Russia are those who provide and organize their activities, which serves as their main source of income4.

S.A. Guchek writes that “self-employment can be both formal and informal,” and views its different forms, including enterprise creation5.

We also adhere to a broad understanding of the term, which is based on the view of the ILO (International Labor Organization): “self-employed workers (without permanent employed workers) and working owners of unincorporated businesses (with permanent employees) are considered self-employed”6. This, in our opinion, is a special kind of people’s participation in socially useful activities based on their personal initiative, independence and responsibility, and directed, as a rule, to receiving labor income which provides realization of personal potential and self-actualization of the individual as a personality, which is manifested as relations (economic, social, legal, etc.) between people.

• ⁴    Abramova E.A. Samozanyatost’ naseleniya kak stupen’ pod”ema ekonomiki v period preodoleniya krizisa [Self-employment of the population as a stage of economic growth in the period of crisis overcoming]. Sovremennye naukoemkie tekhnologii: regional’noe prilozhenie [Modern science-incentive technologies. Regional Supplement], 2010, no.1, p. 6.

• ⁵    Guchek A.S. Samostoyatel’naya zanyatost’ nase-leniya: podkhody k izucheniyu, metody issledovaniya [Self-employment: study approaches and methods]. Trudy Karel’skogo nauchnogo tsentra RAN [Transactions of Karelian Research Center of Russian Academy of Sciences], 2012, no. 6, p. 3.

• ⁶    MOT: sodeistvie razvitiyu samostoyatel’noi zanyatosti: doklad VII Mezhdunarodnoi konferentsii truda, 77-ya sessiya [ILO: promotion of self-employment development: report of the 8th International Labor Conference, 77th session]. Geneva, 1990. p. 3.

Self-employment is closely connected to entrepreneurship. However, certain characteristics underlying the two concepts must be distinguished. In our opinion, the term “entrepreneurship” is based on both the sphere and the activity, and the concept of “self-employment” includes the degree and the nature of human involvement in labor, i.e. employment peculiarities of a person. Selfemployment serves as the basis for enterprise creation, its foundation. We believe that selfemployment is prior to entrepreneurship, since it cannot be implemented without initiative, independence, risk, innovation, etc. Thinking about entrepreneurship, an individual chooses the kind of employment which contributes to the development of his activity, creativity, freedom, which is self-employment. In relation to the aforementioned, self-employment is any form of entrepreneurship, but it is important that the person is self-employed and uses money or natural products for his\her existence which are received as a result of self-employment. We also contrast selfemployment and “hobby” – activities which do not bring material reward and are mainly performed off-duty.

Both employed and unemployed citizens can switch to self-employment due to their dissatisfaction with wage work, its content, or in order to address their creative needs, needs for self-expression and realization of personal potential. The article explores the unemployed who have transformed social interactions with society, changed their social status, standard values and interests. For them it cannot be perceived without any harm or feelings of bitterness and resentment. The interests of the majority of the unemployed are often unstable. Self-employment can help them reintegrate into the social structure of the society through its inclusive nature, providing the opportunity to work, support themselves and their families, and helping increase the citizens’ conviction that they are again able to restore social interaction and become full members of the society.

It should be noted that self-employment may not be practiced by all unemployed citizens. It requires that people possess certain qualities, skills, abilities and willingness to work independently. They must also have special character qualities and demonstrate a different level of activity compared to wage work. It is also important to take into account the fact that the shift to self-employment is compelled for the majority of the unemployed people due to adverse circumstances. For them, selfemployment is a means of survival. J. Storey has shown in his study that about a quarter of entrepreneurs in the surveyed area were unemployed7. Self-employment in foreign countries has long been considered as a form of employment, mitigating and smoothing social upheavals which produce the rise of unemployment8.

Encouraging the unemployed to shift to self-employment in Russia is entrusted to the state employment service and relevant subdivisions of the regional administrations. Employment services are designed to target the unemployed towards certain forms of selfemployment. That is why they test people using special techniques aimed at revealing business and entrepreneurial qualities, provide consulting services, assist in writing a business plan, familiarize with a package of documents on business establishment, refer, if necessary, to entrepreneurship training, help in credit support, etc.

However, for successful self-employment implementation within the framework of the active policy such services require information about the intentions of the unemployed concerning their way out of unemployment, about their desires, motives, readiness for self-employment, etc. This fact served as the purpose for the monitoring of sociological surveys on development possibilities of self-employment among the unemployed population applying to the employment services. Such monitoring was conducted in the Novosibirsk Oblast. It included three researches: in 1995 (sample – 551 people), in 2002 (sample – 618 people) and in 2013 (sample – 346 people). Two-stage sampling was used to conduct the survey. The first stage included the selection of survey groups (a population group of a rural district, an “oblast” city was chosen for this survey). In 1995, in accordance with economic, natural climatic features and the degree of small business development, five typical districts in each zone were selected. Inside each zone a 10% sample of the unemployed applying to employment services was used. In 2002, the approach to sampling was slightly modified. Due to the fact that each group was more homogeneous than the whole population group it was decided to increase the number of selected groups and to reduce the number of people in each group. As a rule, the sampling error tends to zero when using such sampling method9. Therefore, on order to obtain reliable results and use them in practice, it was decided to conduct a sociological survey in all rural areas and cities of the Oblast without exception, dividing between them the size of the sample in proportion to the number of the unemployed applying to the employment services. The second sampling stage randomly selected the respondents by a 10% sample among the unemployed applying to the employment services within districts and cities. The same approach was used in 2013.

Let us consider the results of the survey. It is no secret that unemployment forces people to reconsider the approaches to the traditional way of life, change their habits and save money. Thus self-evaluation of financial situation shows that in 2013, 63.6% of respondents noted that they had financial difficulties and often had to save money; 25.5% were forced to save even on the essentials, and 7.5% actually live in poverty. However, it should be remembered that unemployed rural people are largely relieved by household plots. The analysis of the dynamics of financial situation self-evaluation shows that this indicator has marked positive trends. During the period under review the number of people experiencing dissatisfaction with their financial situation decreased by 33% (1995 – 94.4 %, 2002 – 92.6%, 2013 – 63.6%), the number of people forced to save money decreased by more than a half (1995 – 48.6%, 2002 –39.0%, 2013 – 23.3%), while the number of people living in poverty decreased by 61% (1995 – 19.3%, 2002 – 13.8%, 2013 – 7.5%). Data on the sources of income of unemployed people demonstrate that within the income structure the most substantial are the wages of a wife or a husband (43.2%), unemployment benefits (30.8 %), household plot income (8.9%), parents’ pension (6.5%). There are no significant changes in the income dynamics, excluding household plot incomes. Their share in the income structure has grown by more than 4 times compared to 1995 (2.1% in 1995 and 8.9% in 2013). This is partly due to the fact that in the Oblast, starting from 1998, has been continuously working on the development of self-employment in household plots.

Unemployed citizens have difficult life, that is why they reduce their remuneration requirements in order to get a job. Thus in

1995, 12.6% of the respondents were willing to reduce the size of the salary, while in 2013 the proportion reduced to 35.3%.

The monitoring has shown that the period under research produced a number of significant changes in people’s consciousness, their activity, adaptation to market economy, their social and labor expectations, etc. Ten years after the beginning of perestroika in Russia, P. Sztompka wrote about “socialist mentality”, “socialist spirit”, “Homo Sovieticus”10, emphasizing that the low degree of people’s participation in the development of new types of activities, the devaluation of their work values, the rejection of changes did not coincide with the directions of the active state employment policy, especially in the initial period of perestroika, when people, instead of being active and industrious, preferred to wait for the state to take good care of them. Today such paternalistic dependence and people’s attitude is steadily changing. The monitoring demonstrates that the number of respondents believing that the state should support all members of the society, has declined by 38.6% (in 1995 the number of such respondents comprised 82.5% and in 2013 – 51.4%). At the same time the number of citizens who prefer self-reliance has increased from 4.2% in 1995 to 20% in 2013, which indicates people’s change of attitude to the market. This point is implicitly confirmed by the trends demonstrating a decrease of 26.4% of respondents who prefer to be unemployed, receive unemployment benefits and expect everything to change for the better (in 2002 their number comprised 9.6%, in 2013 – 6.4%). Simultaneously, the number of citizens engaged in temporary or irregular employment is gradually increasing (in 1995 – 12.6% of respondents, in 2002 – 31.2%, in 2013 – 48.7 %). However, despite the favorable trends, it has to be admitted that paternalistic attitudes still remain quite strong.

People’s attitude to the change of profession for the purpose of mercenary job is gradually changing. On order to get such job only 10.3% of respondents were ready to change their profession in 1995, 28% – in 2002, 29.5% – in 2013. The analysis of data from 2013 has shown that 43.9% of respondents used to be manual workers before losing their jobs, and 36.7% were office workers. Mostly these are different rural professions. Despite this, it is difficult for rural residents to find a job in their vocational field due to the monostructural and sectoral economic development in rural areas, and spatial mobility is not always possible and acceptable for them. However, since 2002 the number of people not willing to change their profession has stopped changing and now amounts to 67% of the respondents, while in 1995 this number comprised 87%. However, a positive trend in this direction must be noted: the number of people not willing to change their profession or specialty is declining, albeit slowly, which indicates an increase in people’s professional mobility.

In general, the survey results show that for a long time unemployed people applying to the employment services tend to use mostly passive or forced active strategies when addressing their own employment problems. The negative impact of state paternalism, which was typical of Russia earlier, continues to affect people’s attitudes, as evidenced by the fact that more than 40% of the unemployed citizens unemployed registered with the employment services take a passive waiting position, accepting unfavorable and illegitimate conditions of temporary employment11.

The reason for this is the habit, established over the years of the Soviet power, of working at state-owned enterprises, receiving stable wages without any fear for the future. However, the respondents underestimate the global changes that have occurred in the country and affected people’s social roles and positions, as well as the fact that the market policy is currently directing people at an independent, competitive activity. Furthermore, there are little opportunities of wage labor, as the majority of collective and state farms collapsed, and new enterprises capable of attracting the unemployed as employees, are established not very often.

Another category of the unemployed includes people who do not wait for wage work and actively try to escape from adverse circumstances and “try on” selfemployment having no work experience in the market economy. In fact, after the perestroika period the state abandoned people to the survival on their own (with the exception of unemployment benefits), without considering the fact that during the years of socialism and communism construction they grew unaccustomed to independence, initiative and enterprise. They are often motivated to start their own business after the disappearance of the former life supports, material poverty and the need to provide themselves and their families with means of survival. These people with little support from the employment services try to adapt, survive, develop their own ways of selfsufficiency and take their place in the agricultural space. The consequence of these processes is the broad-scale spread of self-employment, the development of which made it possible for the processes of rural area employment to improve. In a number of cases rural self-employment is the only opportunity for the unemployed to earn their living and resist unemployment.

In general, during the period under review the number of people among the respondents who consider self-employment as part of employment strategies increased by 40.1%. The shift of the unemployed to self-employment may be manifested in various forms (Tab. 1) .

The data clearly demonstrate that the preferences of the unemployed in rural areas mainly extend to two forms: starting one’s own business (small business, individual labor activity) and self-employment in household plots. The dynamics of preference change suggests that in general during the period under review the number of people willing to start their own business was decreasing, but it decreased compared to the level of 2002. The substantial increase (by more than 7 times) in the number of people willing to undertake self-employment in household plots is also worth noting. On the other hand, only 1.7%– 4.0% of respondents in different years considered establishing a farm. The dynamics of people’s views about the transition to selfemployment is affected by various reasons: unpreparedness for entrepreneurial activities, lack of funds, difficulties with registration of rights in land stakes, severe shortage of own equipment, poor forms of assistance and support, frequent change of tax regimes, etc.

Table 1. Choice dynamics of certain employment types (% of the total number of respondents)

Employment types	1995	2002	2013
Starting one’s own business	27.0	15.4	24.3
Working in a household plot	2.4	17.4	18.7
Organizing a farm	4.0	1.7	3.8

Much in the solution of these problems depends on the attitude of state and regional authorities, which is now beginning to change. Significant assistance is provided to the residents of the village of the Novosibirsk Oblast by the implementation of regional programs “Family cattle farm” and “Beginner farmer”, aimed at the development of self-employment and improvement of living standards in rural areas, as well as by the long-term target program “Development of small and medium business units in the Novosibirsk Oblast for 2012–2016”, by the functioning of the portal “Small and medium business of the Novosibirsk Oblast”, the creation of funds for development, support and microfinance of small and medium business;, the organization of contests and conferences among the self-employed.

However, willingness alone is not sufficient for the implementation of self- employment, there must also be certain readiness of the unemployed to practice it (Tab. 2).

The table shows a tenfold increase in the proportion of people who are ready for self-employment and know how to do it. A significant number of the respondents is ready for self-employment but is not familiar with the business procedure. During the period under review this proportion increased by 2.6 times but such people require small business training12. Socio-demographic analysis of this group has shown the group consists of mostly young people. The fact that young people accepted market conditions and are ready to conduct business activities, but need training, is evidenced by the research results of other authors13. There is also a gradual decline in the number of citizens (31.9%) who are not ready for self-employment.

Table 2. Readiness of the unemployed to practise self-employment (% of the total number of respondents)

Readiness variants	1995	2002	2013
1. Ready and know how to do it	2	10	20
2. Ready but cannot	8	22	21
3. Ready but do not want to	1	2	4
4. Know how to do it, but not ready personally	12	6	8
5. Not sure	25	18	18
6. Not ready	44	38	30

¹² Shukshina Z.A. Vuz i obuchayushchiisya vzroslyi: sotsial’no-innovatsionnyi kharakter vzaimodeistviya [University and an adult student: socio-innovative interaction]. Vysshee obrazovanie segodnya [Higher education today], 2007, no. 3.

¹³ Inozemtseva A.V. Molodezh’ i maloe predprinimatel’stvo: rezul’taty sotsiologicheskogo issledovaniya [Youth and small business: results of sociological research]. Teoriya i praktika obshchestvennogo razvitiya [Theory and practice of social development], 2014, no.19, pp. 34-37.

The study has shown that in 2013 service sector was considered the most promising sector for starting a business (27.6% of respondents), followed by agricultural production (21.1%) and mediation services in purchase and sale (10.6%). According to the monitoring, the preferences of the respondents on the fields of activities remain unchanged over time. The only exception is mediation services which in 1995 were put by the respondents to the 6th place, but since 2002 they have firmly held their position in the top three favorable sectors. From the point of view of the respondents the aforementioned sectors are more suitable for self-employment due to obstacle-free product marketing (24.8%), the opportunity to use unemployed labor force (22%), and available natural conditions to create prerequisites for the resource base replenishment (22%).

Self-employment in household plots, resulting from the negative influence of macro-economic factors, is developing as a real form of unemployment reduction in rural areas. This is evidenced by the experience of the Yaroslavl, Vologda, Voronezh, Tver, Novosibirsk, Tyumen and other oblasts, where unemployed people are provided with the assistance in order to develop self-employment in household plots, using different forms.

According to the survey, in 2013, 18.7% of respondents connected their future life with self-employment in household plots (in 1995 – 2.4%, in 2002 – 17.4%). These are most often older women (50–60

years old), which indicates their adequate estimation of their own employability. Young people, compared to other age groups, are less willing to engage in the household plots, and over time the proportion of young people in the given category is reducing. In 2002 28% of young people (population aged under 29) expressed their willingness to practice self-employment in household plots, while in 2013 the figure reduced to 17%. Moreover, no one among the young people aged under 20 chose this type of self-employment, which is understandable. Young people have successfully adapted to market conditions, they are for the most part ambitious and do not consider such type of employment prestigious. The study has shown that this age group is more inclined to start their own business.

Respondents willing to engage in selfemployment in household plots are more focused on livestock production (45.1%), bee-keeping (9.8%) and poultry farming (5.9%). The majority of them (31.4%) want to independently produce and sell agricultural products without intermediaries, 19.6% – want to produce agricultural products without selling, and 13.4% want to engage in young stock and poultry fattening on a contractual basis. However, unemployed people who are engaged in self-employment in household plots need support. On the one hand, they have a solid background relying on their families (94.7% of those wishing to start their own business and 54.6% of those who intend to engage in household plots hope for their families’ support). On the other hand, family support alone is not sufficient. For this category of citizens it is extremely difficult to start a brand new activity without external assistance.

The available survey data on the types of assistance required during the transition of citizens to self-employment are presented in Table 3 .

The data from the table show that in order to shift to self-employment the respondents primarily require tax benefits, money loans, support of rural and regional authorities, receiving necessary skills and knowledge and provision of cattle, sheep and poultry with young stock. The need for these types of assistance was mentioned by respondents in three surveys, and we have repeatedly noted that the main problems of self-employment development are gradually transforming into its stable characteristics. Data analysis in the dynamics shows that in 1995 and 2002 respondents considered money loans the main type of assistance but in 2013 this type has moved in importance to the 2nd place. Tax benefits as a necessary type of assistance in 1995 and 2002 were placed by the respondents on the 2nd place, and in 2013 – on the 1st place. For many years our society has been raising the issue of the simplification of the tax regime, the government has repeatedly declared the change in the tax policy for entrepreneurs, their willingness to assist them, however, there are still no significant changes in this respect. On the contrary, self-employed people are often negatively affected by wrong decisions. Thus P.M. Kozyreva cites as an example a twofold increase in insurance premiums in Russia since the 1st January, 2013, which has resulted in the closedown of almost 500 thousand individual entrepreneurs14.

Table 3. Types of support necessary for self-employment development (% of the total number of respondents)*

Options	1995	2002	2013
Money loans	72.3	61.0	54.0
Tax benefits	68	62.9	66.0
Provision of cattle, sheep and poultry with young stock	6	11.4	34.0
Provision with forage and seeds	8.4	13.4	28.0
Receiving necessary skills and knowledge	59.4	30.0	30.2
Psychological support	32.4	12.9	4.0
Possibility of cooperation with other residents	28.4	18.3	14.0
Possibility of processing and product storage	22.1	18.9	18.0
Support of rural and regional authorities	58.4	44.2	52.0
* Respondents had multiple-choice options.

¹⁴ Kozyreva P.M. Maloe predprinimatel’stvo v Rossii: povsednevnye problemy i trudnosti razvitiya [Small business in Russia: everyday issues and development constraints]. Ekonomicheskie i sotsial’nye peremeny: fakty, tendentsii, prognoz [Economic and social changes: facts, trends, forecast], 2015, no. 1, pp. 48-49.

Thus the inability to find a job and the need to support a family motivate unemployed people to shift to self-employment. That is why their potential readiness for self-employment is rather strong. The study of socio-demographic characteristics of the unemployed population applying to the employment services shows that, in general, about 85% of respondents constitute the most efficient population groups, 35% of which have higher education. They are more mobile to acquire new knowledge and possess the necessary knowledge base to practice self-employment. However, the acquired profession leads them primarily in the search of wage work.

Of course, self-employment is only one of the directions of active population employment policy, and by its development alone it is impossible to fully solve the problem of unemployment in rural areas. Therefore it should not be made a fetish. However, real help to at least 15-20% of the unemployed can be provided, those who choose this difficult path. Regional and territorial authorities should deliberately engage in the development of selfemployment, including the development of special programs, targeted assistance and support for those willing to become self-employed based on their business preferences, since domestic and foreign experience shows that self-employment is successfully implemented when much social significance is attached to its development, and, on the contrary, its development is slow, accompanied by significant economic and social costs if the government or the region is not actively involved in this process. Self-employment currently gets an additional chance in its development due to the impact of global factors151. The imposition of sanctions to ban the import of certain agricultural products (meat, milk, fish and vegetables) creates favorable conditions for the application of the labor of the self-employed. The government intends on taking a number of measures contributing to the development of selfemployment. Thus D.A. Medvedev has proposed to introduce a new mechanism of taxation for self-employed people – they need to register with the tax administration and obtain a temporary tax exemption. Selfemployed people will have to notify the tax service about their work. After filing the notice they will be exempt from paying taxes for 2–3 years. At the end of this period the person should decide which tax system is suitable for him to work with16.

The development of self-employment in the Novosibirsk Oblast has the most favorable impact on the social situation in rural areas. Successful independent activity with the support of regional authorities is of great socio-economic importance: a selfemployed worker sets an example to the younger generation, since he demonstrates that, while living in a rural area, one can find the scope and place of application of their labor and ideas, work profitably, boost self-esteem and raise social status, overcome dependent and wait-and-see attitudes and believe in oneself.