Start-up grants encourage new business

12.6.2020

According to a recent survey conducted by the Ministry of Economic Affairs and Employment, start-up grants were perceived as an incentive to starting a new business, and offered a faster track to starting a company.

According to the survey, the main motivational factors for becoming an entrepreneur or self-employed were the same as in the 2012 study. The respondents listed the desire to create a job themselves, freedom and independence in working life, and the ability to make better use of their professional skills and education as the main motivational factors. The overview of the start-up funding echoes the views expressed in the 2012 report. Entrepreneurs who had received start-up funding felt that although the grant had encouraged them to start up a business, it was not the main inspiration. Guidance and advice regarding start-up funding and entrepreneurship training were also considered important.

Growing satisfaction with the start-up funding service package

What had changed significantly from the 2012 survey was transition to the labour market: the number of business discontinuations and, as a result, the number of self-employed persons becoming wage and salary earners increased. At the same time, however, a growing number of self-employed persons who had previously been part-time entrepreneurs used the start-up funding to expand into full-time self-employment.

Overall satisfaction with the speed of decision-making, payments and the application process increased. Regional differences in interpretation in the start-up grant decision-making processes were identified as the biggest challenge. The growing importance of part-time entrepreneurship and self-employment represents a challenge for the start-up funding system. On the whole, both entrepreneurs receiving start-up grants and experts were satisfied with the communication regarding start-up funding.

When asked about development needs, experts said financial advisory services should be part of the application process. Recommendations made based on the survey included making start-up grant practices and processes more consistent, and changing the start-up grant eligibility criteria to take better account of new forms of work and self-employment. In addition, the process should permit making preparations for business activities before the entrepreneur receives any start-up funding.

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Start-up grants encourage new business (Ministry of Economic Affairs and Employment, press release 12.6.2020) (tem.fi)

The survey asked entrepreneurs who had received start-up grants in 2011–2019 and experts on start-up funding to provide their views on the effectiveness of start-up grants. Other areas covered included the recruitment capabilities of companies and their ability to identify the skills they need. The objective of the survey was to provide an updated overview of the services available to new entrepreneurs, and to provide information to drive business renewal and support the establishment of new growth-oriented companies. The results of this survey were compared against those of the previous study on the effectiveness of start-up grants, which was published in 2012.