Youth entrepreneurship in the mechanism of ensuring sustainable economic growth of national economy

In article are researched features of a youth entrepreneurship, it is provided data of social researches in the field. Authors recognize that development of business activity of youth is an essential factor of successful socialization of youth, effective inclusion in processes of ensuring sustainable economic growth of national economy. In article are offered also weaknesses of a youth entrepreneurship, a problem of its development are reflected in Kazakhstan strong, mechanisms of regulation and stimulation of business activity of youth. Implementation of measures of state policy for development and activization of youth business in the mechanism of industrial and innovative growth of the Republic of Kazakhstan will allow to increase efficiency and targeting of measures of support of business activity of youth that will promote eventually expansion of a share of youth business (including innovative) and to the general growth of the business sector, increase in public welfare, expansion of the middle class.

For overcoming global challenges of world economy and for the purpose of providing a sustainable growth of economy the Head of state is announced the Third upgrade of economy which provides formation of new model of economic growth, technological upgrade of economy in case of the prevailing role of a private sector, production diversification, promotion of non-oil export and also continuous improvement of quality of a human capital. One of priorities of upgrade of economy and new model of its growth at the level of 5-6 % in year is cardinal improvement and expansion of the business environment.

Today small and medium business creates 25 % of value added and provides employment of 37 % of the population in Kazakhstan while in the majority of the countries of OECD these indicators are 57 % and 60-70 % respectively. At the same time, most (60 %) of the entities of small and medium business function in the sectors making goods and services with a low value added [1].

The government of Kazakhstan sets before itself the purpose to double MSP share in GDP by 2030 (to 36 % of the basic level equal to 17,5 % of GDP for the end of 2011) and up to 50 % of GDP by 2050. So far the government started several important reforms directed to improvement of a business environment in the country. It is:

  • – systematization of the legal, economic, social conditions and guarantees providing freedom of enterprise in the Entrepreneurial code of the Republic of Kazakhstan. The principles of stimulation of social responsibility of an entrepreneurship, limited participation of the state in business activity, development of self-regulation in the sphere of an entrepreneurship, the cross liability of subjects of an entrepreneurship and the state are enshrined in the document;
  • – rendering complex support of development of the business sector and entrepreneurial potential according to the Road Map of Business 2020 program within four directions: subsidizing of an interest rate of the credits, guaranteeing credits, provision of grants and also service measures for training and increase in competences of entrepreneurs;
  • – systematic decrease in administrative barriers and excessive legislative load of business for the purpose of creation of favorable entrepreneurial climate in Kazakhstan. So, the government drafts the new Tax Code which includes the standards directed to reducing number of checks and simplification of process of management of small and medium business.

Besides, the Government actively conducts implementation of policy of privatization of the state assets. The comprehensive plan of privatization which is planned to be finished by the end of 2018 is implemented for the purpose of achievement of an effective objective of decrease in the state participation in economy to 15 % in GDP that corresponds to the level of the countries of OECD.

Within decrease in a role of state regulation of an entrepreneurship in 2016 was adopted the Law on self-regulation which gave the chance to subjects of an entrepreneurship independently to determine rules in the market by direct participation in regulation of some types of industries.

Kazakhstan took the 36th place in the rating of the World Bank of «Doing Business 2018» published on October 31, 2017 that showed decrease on 1 line item in comparison with last year [2].

In 2018 the place of Kazakhstan is in rating near China (34), Russia (35), Slovenia (37) and Belarus (38). Kazakhstan exceeds on the indicators Hungary (48), Belgium (52) and Italy (46). Kazakhstan developed the cadastral plans available to the public by means of the website of the electronic government, entered the legislation stimulating transparency, brought amendments in laws on corporate management, cut customs expenses and simplified the procedure of customs clearance.

In general, experts of the World Bank note positive orientation of the state reforms in such directions as:

  1. registration of property. Kazakhstan facilitated a cession of property by improvement of transparency and mechanisms of the dispute resolution in a management system by land resources;
  2. protection of minority investors. Kazakhstan strengthened protection of minority investors, having increased shareholder rights and a role in adoption of large corporate decisions, having specified structure of property and control, requiring bigger corporate transparency and expanding access to corporate information during legal proceeding;
  3. ensuring performance of contracts. Kazakhstan simplified performance of contracts by entering of additional temporary standards for key legal procedures which are observed in most cases.

Necessary strategic component of small and medium business is the youth entrepreneurship. Broad involvement of youth in business activity is one of effective tools of the problem resolution of unemployment and ensuring full employment of a manpower that is especially important in the conditions of the crisis and post-crisis periods of development of national economy and regions.

Statistically, about 300 million young people aged from 18 up to 30 years around the world or don't take a fixed place of employment, or in general are the unemployed. About 20 % from them possess excellent capabilities to start own business and, owing to various reasons, only 5 % are solved on it [3]. Meanwhile, business activity of young people, on the one hand, promotes strengthening of financial position of young people, and on the other hand – provides their professional and personal implementation.

Allocation of a youth entrepreneurship as a special segment of an entrepreneurship is caused by its specific signs, special characteristics strong and weaknesses.

Strengths of a youth entrepreneurship:

  • – high innovative activity, innovation of thinking;
  • – high mobility, flexibility of approaches, speed of reaction on development of the new markets;
  • – high level of opportunities of systematic updating of the entrepreneurial knowledge and skills according to the changing requirements of production and market;
  • – the potential capability of young people to maintain the increased labor and nervous tension accompanying business activity, especially at its starting stage;
  • – predisposition of youth to risk.

Weaknesses of a youth entrepreneurship:

  • – insignificant social experience;
  • – lack of business reputation;
  • – weak practical skills of application of economic laws and mechanisms;
  • – problem of forming of the start capital.

The perspective of a youth entrepreneurship is one of relevant tasks of the modern economic theory and practice as in it both are accumulated economic, and social challenges of the modern world.

Now such organizations as Enactus, The Sundance family foundation (USA), Youth Venture (USA), Peace child International (Great Britain), Citi YMCA Youth For Causes (Singapore) are engaged in support of development of a youth entrepreneurship in the world. Besides, considerable support to development of a youth entrepreneurship is given by student's business clubs based on the universities (in the USA - Columbia Entrepreneurs Organization, GSB Entrepreneur Club, HBS Entrepreneurship Club, University of Wisconsin Entrepreneurship Association; in Finland - Aalto Entrepreneurship Society and Aalto Venture Park; in Sweden - Idelab and GU Holding, etc.). Support to all young entrepreneurs is also given by national and international business clubs, such as: Asia-Pacific Student Entrepreneurship Society (ASES), National Association for Community College Entrepreneurship (NACCE), The Center for Entrepreneurship (CFE), Student Entrepreneur Support Project, The Youth Business Support Unit (YBSU) of at Sharek Youth Forum. The similar organizations and programs for support of a youth entrepreneurship exist in the post-socialist countries. In particular, the most effective by results of the activities are such as Program of support of a youth entrepreneurship «Svou Cestou – Youn business» (Czech Republic), the Youth Business of Poland Program, theYouth Business of Russia Program, the Russian center of assistance to a youth entrepreneurship (Moscow), «Youth social service» of support of youth entrepreneurial initiatives (Minsk), etc. [4].

In world economic science and practice of youth is assigned the significant role in forming of a welfare of society in general and own segment – in particular. So, in the scientific work of T. Kruse, covering problem aspects of business activity of youth notes that the youth entrepreneurship contributes to the professional and personal development of young people and also creates at them important life skills [5].

In foreign researches attention is paid to age criteria of a youth predprimatelstvo (in particular, in work of F.Chigunta [6]), to psychological features (as in work of K. Lewis and Cl. Massey [7]) and also to problems which young entrepreneurs face (for example, in the research U. Schoof pays attention to such problems as insufficient educational level in field of an entrepreneurship and lack of necessary financing [8]). In work of D.Clercq, B.Honig consider business activity of youth as the tool which can help disadvantaged persons to avoid social isolation [9]. Work of M.A. Tirziu, C. Vrabie, published in 2017 concerning stimulation of a youth entrepreneurship in public sector [10]. One of the last researches in the field of a youth entrepreneurship is the research of the International School of social entrepreneurship based on the National research Tomsk state university which showed that there is a sharp need for implementation of special programs of support of a youth entrepreneurship [11]. Researches of a condition of development of a youth entrepreneurship in transformational economies are provided in works S.G. Petrosyan [12], A.B. Ivanova [13], B. Mezentseva [14], et al.

The carried-out overview of prior scientific research shows that in case of all width of scientific interest in an entrepreneurship problem, its youth component, didn't receive due reflection as an independent subject of a scientific and practical research. In particular, subject borders of the concept «youth entrepreneurship» and its subject personification for the purpose of the address making active impact aren't determined yet that reduces efficiency of support of a youth entrepreneurship from the state. Besides, there is a number of the problems of forming of an effective institutional economic environment of a youth entrepreneurship requiring serious theoretic-applied researches.

Youth — the social and demographic group allocated on the basis of set of age characteristics, features of a social position and social and psychological properties. However in the state statistics and in state programs there are discrepancies in determination of this age group. So by the Law of the Republic of Kazakhstan «About the State Youth Policy» of July 7, 2004 it is determined that «the youth is citizens of the Republic of Kazakhstan aged from fourteen up to twenty nine years», and under the Act of the Russian Federation «About the state youth policy» of April 14, 2008 the youth is citizens of the Russian Federation aged from fourteen up to thirty years. The difference is not so big, but in the state statistics of Kazakhstan, since 2001, the age threshold of reference of the population to youth changed: till 2001 the age threshold of reference to youth was 16 — 29 years, and since 2001, 15 — 24 years, according to the recommendation of the International Labor Organization (ILO) and the determination accepted by the International Conferences of Statisticians of Work (ICSW). Accurate determination of youth and finding of general determination of youth is not a simple task. The age is the useful, but insufficient specifying characterizing transition from youth to adulthood. The European specialists consider how key milestones on the way to adulthood the following criteria: age restriction of child allowances, completion of compulsory school education, age of vote and the minimum age to stand on elections. The main social and demographic events in lifecycle of the person fall on this age period: completion of the general education, choice and receipt of a profession, beginning of a labor activity, marriage, birth of children [15]. For these reasons, in case of collection of statistical data (in general on the world) for social and demographic assessment of a provision of youth, the European specialists are oriented generally to the population aged from 15 up to 29 years.

According to statistical information, the youth of Kazakhstan aged from 14 up to 29 years is 27 % of the population of the country, its number constitutes 4,5 million people today. Taking into account the offered age limit increase of category of young entrepreneurs up to 35 years, this figure increases about 5,2 million people that is equal to 30 % of all population of the country. It is the huge potential for involvement of youth to occupation an entrepreneurship. At the same time, the level of youth unemployment aged from 14 up to 29 years constitutes 4.6 %, the quantity of self-employed and jobless exceeds 700 thousand people [16].

Researches of the scientists making the analysis of age characteristics of the entrepreneur show that entrepreneurial potential is generally concentrated among the youth up to 35 years differing in an inventory of social energy and lack of the psychological barriers limiting its activity.

Table 1 shows, in Kazakhstan in age structure of entrepreneurs prevailaged people from 25 to 34 years (16,5 %). It is remarkable that aged people of 45-54 years wishing to begin the case more (9.6 %), than the people aiming at an entrepreneurship at the age of 35 - 44 years (7,4 %) and 18-24 years (9,4 %)

Table 1

The index of early entrepreneurial activity by age groupes in Kazakhstan, %

Age

2014

2015

2016

18-24

12,0

10,1

9,4

25-34

16,8

15,9

16,5

35-44

14,1

8,2

7,4

45-54

11,1

10,6

9,6

55-64

6,9

7,6

8,4

Note. Source [1].

The index of early business activity (TEA) is a key indicator which measures percent of adult population (from 18 to 64 years), being in process of start or only begun the business. This indicator unites people who are in one of two initial processes of entrepreneurial process: the arising entrepreneurs and new owners of business.

TEA indicators in Kazakhstan decreased during the period from 2014 to 2016, perhaps, because of economic shock a little after adoption by the government of the decision on the floating rate of tenge. (11,3) was lower than TEA of Kazakhstan in 2016, than in the resource economies oriented (16,8) and effective- oriented and is a little higher, than in the innovative oriented economies (9,1). This indicator is also lower, than on average in the region of Asia and Oceania (11,3), but is very close to indicators of India (10,6) and China. It should be noted that the TEA value in Kazakhstan is still much higher, than in Russia (the 6,3 and 55 place) [2].

This dynamics is explained by two basic reasons. First, Kazakhstan - the industrial country; therefore, it is quite natural that the TEA value in Kazakhstan will be closer to indicators of the innovative oriented economies. Secondly, fall of a rate of tenge influenced closing of many small enterprises. For example, the sphere of trade was reduced as the goods purchased abroad, steel unreasonably expensive to the Kazakhstan consumers. It causes unwillingness to overcome the arising obstacles in entrepreneurs

In 2016 the National chamber of entrepreneurs of Atameken by request of the Ministry of national economy of the Republic of Kazakhstan conducted large-scale sociological survey according to the analysis of potential of the population on opening of business by regions.

The analysis of age groupes showed that the most perspective from the point of view of age potential entrepreneurs are persons aged from 18 up to 24 years. In Kazakhstan the most active young entrepreneurs are revealed in the Aktyubinsk, Atyrau, East Kazakhstan and North Kazakhstan regions. The lowest indicator is established in the Kyzylorda region.

The number of leading regions by the number of the able-bodied population which expressed firm intention to open the case included the South Kazakhstan, Almaty, Aktyubinsk and Karaganda regions (Table 2). The centers of the largest agglomerations of Kazakhstan which are designated as the main points of growth in the strategic development program of Kazakhstan till 2050 became leaders in number of potential entrepreneurs. This circumstance is additional confirmation of justification and feasibility of pointed development of agglomerations as main drivers of growth and centers of development of an entrepreneurial initiative.

The group with average values of entrepreneurial intentions included the largest cities of the republic - Astana and Almaty, the Atyrau, West Kazakhstan, Jambyl, Kostanay, Mangystau, Pavlodar and East Kazakhstan regions. It should be noted that the group with the average level of entrepreneurial intentions prevails by the number of regions. More than a half of all regions of RK entered this category. The quantitative prevalence of this group demonstrates relative uniformity of development of an individual entrepreneurial initiative about the country.

The group of outsiders included the Kyzylorda, North Kazakhstan and Akmola regions. Level of entrepreneurial intentions in these regions didn't exceed a 3 % indicator (Table 2).

Table 2

Distribution of regions of Kazakhstan on groups according to indicators of entrepreneurial intentions

Classification of regions by business initiative level

Regions of Kazakhstan

Level of entrepreneurial intentions of the population, %

Leading regions

South Kazakhstan

17,0

Almaty

12,7

Aktobe

Karaganda

Regions with the average level of a business initiative

Almaty city

6,7

East Kazakhstan

6,0

Atyrau

6,0

Zhambyl

55

Mangistau

53

Astana city

4,6

Kostanay

4,3

West Kazakhstan

-l-ιι

Pavlodar

43

Regions outsiders

North Kazakhstan

24

Akmola

M

Kyzylorda

07

Note. Source [17].

Low level of interest of the population in an entrepreneurship of these regions can be caused by a number of objective factors: first, the regions which entered into this group traditionally lag behind by the number of active subjects of an entrepreneurship that is a consequence of lack of the extensive market, secondly, at regions there is a high competition from the border areas of Russia.

In case of determination of level of entrepreneurial intentions and also distribution of regions on this or that sign on groups the following factors exerting the greatest impact on desire of the population to be engaged in own business were considered. Below the provided factors are located on the importance of everyone when forming entrepreneurial intentions.

  • – confidence of future entrepreneurs in success of the undertakings;
  • – experience and knowledge of a selective destination of business activity;
  • – emergence of favorable conditions for opening of the case in the short term;
  • – availability among the acquaintances, the family, people who opened the matter in the recent past.

The problem of development of a youth entrepreneurship is relevant in all world economy. However, in the conditions of our country it should be noted its differences from functioning of youth business in developed countries. Longer experience of market development allows economically dominating countries to provide to a youth entrepreneurship more sparing conditions. It belongs also to steady institutional basis, and to broad knowledge of young entrepreneurs of programs of support of their business, and to financial preferences. Also international experience of support of innovative projects which part was initiated among young people is invaluable.

At the same time, despite relevance of a youth entrepreneurship in world practice, its development in Kazakhstan is rather specific and has a number of problems. In particular:

Lack of knowledge, skills and experience of conducting business activity.

In development of a youth entrepreneurship not business self-realization, and tasks of reduction of unemployment is more important. From here - forcedness to be engaged in business activity, caused, as a rule, by work loss, difficulty to find a new place of employment owing to what the person unconsciously comes to an entrepreneurship, generally to survive, earn money a living.

  • – Social moods. Poorly expressed among young people there is an entrepreneurial spirit assuming readiness to take the risk, to create new. The youth gives preference to the prospects of self-realization in the sphere of large business or public service more willingly today.
  • Perception of entrepreneurs mass consciousness. Entrepreneurs as social group aren't among the leading professional preferences of young people. Among young people business activity is perceived in the context of rather an overcoming difficulties, than achievement of success.
  • Content of education and not aiming of an education system of Kazakhstan at cultivation of specialists capable to open the matter, promotion in an education system of a value system, directed to a work for hire. In traditional educational institutions is given necessary economic knowledge, but aren't created the incentives and behavioral competences necessary for successful business activity.
  • Borders of a youth entrepreneurship aren't relief, the youth entrepreneurship isn't structured in the system of small business.
  • Adaptation factors of innovative development of a youth entrepreneurship aren't disaggregated.
  • Lack of system policy of purposeful development of business activity of youth and special programs of support of a youth entrepreneurship. The measures undertaken in the direction of support of small business for youth as social group, don't yield visible result yet. The administrative, legal and financial barriers interfering free entry into the market are still formidable. Besides, the abundance of bureaucratic procedures when giving takes place documents/receipt of the help for development of business activity.
  • Lack of the start capital and mortgage property for business financing.
  • Not knowledge of youth of the organizations performing the state support of a small entrepreneurship.
  • Low interest of staff of state bodies in effective work of state programs of support of entrepreneurs.

Youth - the most active part of society which quickly reacts to any changes in life and which effectively perceives their useful parties. Therefore it is possible to say that the youth has where high potential and a capability to business activity, than other age groupes. The youth entrepreneurship is very difficult sector which requires especially close attention from state bodies. Its correctly constructed, purposeful support will provide development of a small entrepreneurship in the region that, in turn, will lead to economic growth, to increase in investment attractiveness of the region.

For support and development of a youth entrepreneurship in the country it is necessary to designate key tasks which need to be solved:

  1. Promoting of business activity among youth, by means of holding training and educational actions, meetings with the acting entrepreneurs, informing on forms of the state support and also distribution of the promotional materials propagandizing the ideas of fair and socially responsible entrepreneur. Promotion in media of a youth entrepreneurship, approaches to effective business and also promotion of organiza- tions/funds with various form of business, commercial and non-commercial, rendering assistance in business activity to the beginning/acting entrepreneurs.
  2. Mass involvement of young people in business activity, through carrying out questioning of potential entrepreneurs, database compilation of the young people ready to become entrepreneurs.
  3. Selection of the youth having capabilities to maintaining entrepreneurial activities through holding expert sessions for further training and escort of the beginning entrepreneurs.
  4. Training and instilling in young people of skills of business. Knowledge of business activity needs to be begun with a school bench, at the universities. In educational institutions it is recommended to create the most realistic to reality of the entrepreneurial environment conditions that young people could be prepared at earlier stages of the formation morally and consciously choose a way of the entrepreneur. In this regard creation in educational institutions of the corresponding ecosystem aimed at development of business initiatives of the studying youth is key.
  5. Creation in regions of associations/consolidations/funds/business incubators the rendering assistance to entrepreneurs on initial stage of formation of their business, a so-called menterstvo, a mentorship.
  6. Creation/development of institute of venture funds which could take and develop the youth business ideas with the subsequent sale to the interested organizations.
  7. Creation of the general portal where all programs / organizations / funds which participate in development of a youth entrepreneurship in Kazakhstan will be accumulated.
  8. Creation of the micro credits and conditions of preferential crediting or grants, without compulsory provision of mortgage property. Thus, which youth has no possibility of provision of mortgage property in case of registration of the credit, will be able to realize the business ideas.
  9. Transfer of the empty / reserve rooms which are in state-owned property without the right of the further redemption, in trust management to young entrepreneurs for development of business activity, business incubators.
  10. Development аţ the паţİопаİ level of the śресİаİ program апđ гоаđ тар for development of а youth entrepreneurship.

Proceeding from the above-mentioned, in analytical aspect innovative animation needs reasons for effective model of sustainable development of a youth entrepreneurship based on post-industrial dominants, first of all. In applied aspect it is necessary to develop model of support and activization of a youth entrepreneurship on the basis of sociological poll, deep interviews, statistical selections. In the strategic plan based on expert evaluations development of the corresponding mechanism and tools on management of development of a youth entrepreneurship, forming of forsayt-model of its development and the road map is necessary. Development of forsayt-model of development and activization of a youth entrepreneurship in the mechanism of industrial and innovative growth of the Republic of Kazakhstan will allow will increase efficiency and targeting of measures of support of business activity of youth that will promote eventually expansion of a share of a youth entrepreneurship (including innovative) and to the general growth of the business sector, increase in public welfare, expansion of the middle class.

 

References

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Year: 2018
City: Karaganda
Category: Economy