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Wschodnioeuropejskie Czasopismo Naukowe (East European Scientific Journal) #2(18), 2017 stst™ 85
ЭКОНОМИЧЕСКИЕ НАУКИ
Snezhana Kovalenko
Candidate of agricultural Sciences, Associate Professor of Department of Economy and Finance, Gomel Branch of International University "MITSO" Коваленко Снежана Александровна, кандидат сельскохозяйственных наук, доцент кафедры экономики и финансов, Гомельский филиал
Международного университета «МИТСО»
ИНКУБАТОР ПРЕДИНВЕСТИЦИОННОЙ ФАЗЫ БИЗНЕС-ПРОЕКТИРОВАНИЯ PRE-INVESTMENT STAGE INCUBATOR OF BUSINESS DESIGN
ABSTRACT
The object of the study in this article are the incubators of small business. The article analyzes factors that caused some inhibition of the incubation process in Belarus. The author considers that one of the reasons for the weak development of small business are some problems in the pre-investment stage of the design of a particular business. The know-how of entrepreneurship intensification is suggested on the basis of crowd funding model.
АННОТАЦИЯ
Предметом исследования в данной статье являются инкубаторы малого бизнеса. Анализируются факторы, которые обусловили некоторое торможение процесса инкубации в Республике Беларусь. В качестве одной из причин слабого развития малого бизнеса автор видит комплекс проблем, возникающих на прединвестиционной стадии проектирования конкретного бизнеса. На основе модели краудфандинга предлагается ноу-хау активизации предпринимательства.
Keywords: small business, business incubator, crowd funding, voting paradox business idea.
Ключевые слова: малый бизнес, инкубатор предпринимательства, краудфандинг, парадокс голосования, бизнес-идея.
Development of small business incubators on the territory of the Republic of Belarus
Business Incubator is a structure that specializes in supporting small businesses by creating favorable conditions for the development of a particular company. In order to promote starting businesses some resources such as manufacturing, office, information, consulting, credit and other financial resources are provided for them.
The first business incubators appeared in the UK in the 50s of the 20th century. About 70 business incubators operated in the world in the mid-80s of the 20th century, their number exceeded 1000 in the mid-90s of the 20th century. In the 21st century this number increased by approximately 10 times. Over the last 20 years more than a thousand business incubators have actively developed. Such dynamics in itself testifies the recognition of this entrepreneurship form. Moreover, the small business has recently found an outstanding efficiency: in the last decade, it is small businesses that created the majority of new jobs in the developed countries.
The main tasks of modern incubators are to provide to small business premises and facilities, information and consulting services, assistance in obtaining financial resources, introduction of new technologies, to assist in finding partners.
Currently, 19 incubators function in the Republic of Belarus. [1] There is a slow but steady increase in the number of these entities. Some of them are state entities, but a number of incubators provide their clients with favorable conditions of business formation for a fee as private entities. In the latter case, the incubator of small business is a unique form of business
concentrated on the production of other firms. The average incubation period is 2-3 years. After this period the company is supposed to be firmly grounded and to bring some benefit to the state and society as a whole.
Similar business support functions are carried out in our country by various societies of mutual crediting of small and medium-sized businesses. In accordance with the law in vigour of the Republic of Belarus "On support of small and medium-sized businesses" this society has entitled to provide temporary financial assistance to its shareholders in the form of a loan for a fee or free of charge. To do this, entrepreneurs consolidate their mutual contributions and make their own decisions about how they will distribute these funds.
It is necessary to correlate the results of the incubator's operations and other structures that focus on supporting entrepreneurship, with the amount of the benefits produced by the firm under incubating in the past:
1. Commercial profit. At first the incubated company being a commercial organization is supposed to be able to get economic profit, i.e. net accounting profit minus opportunity cost. The profit is by nature of the entrepreneur's income - a person who is a member of the same society as everyone else. The increase in society's revenue brings into action the investment accelerator and the costs multiplier.
2. Additional taxes linked to business activities.
3. Additional employment due to the activities of new firms.
4. Additional investment determined by specific investments multiplier.
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5. Associated money supply. Production funds set up by new businesses slow down money supply and thereby make available for the monetary headquarters emissive resources, i.e. money deprived of inflationary charge.
6. Positive externalities produced by new firms.
7. The incubators' activity provides the incubators' employees themselves with work and income.
In Belarus, despite such significant and positive results of the business incubators' functioning these structures do not work at full capacity because of two substantial reasons. One of them lies in the lack of legal framework regulation. For example, Belarusian state incubators enjoy the 0.5 renting rate and have to be guided by the provisions prohibiting them to rent their premises to commercial firms at a reduced rate.
The other reason for the inhibition of the mass incubation development of small businesses in the Republic of Belarus is the economic crisis which in recent years has acquired the form of depression. At such times, the majority of business entities are not able to plan their activity for more than a year. Taking into account the fact that public officials are also engaged in a special kind of business, it must be assumed that they are not free from depressive expectations. Under these conditions, the incubation period of three years seems to them unaffordable luxury. As a result the resources necessary for the successful functioning of Belarusian incubators are either not available or are available in insufficient quantities.
Deep incubation
The Belarusian economy is in a dire need of the rapid small business development. In 2015 the share of private business in the total amount of the national economy amounted to only 3.1% of small businesses - 9%. In general, small and medium-sized businesses produced 24,2% of GDP in 2015 [2, p. 19]. Meanwhile, in most European countries the share of SME production constitutes about half of GDP.
Teaching at the economic department, especially to the students of the correspondence form of education, has allowed us to identify another (in addition to a well-known one) reason for slow development of small business in the Republic of Belarus. It is the difficulty in human self-identification as an entrepreneur. People, even young people with a relatively high level of optimistic expectations, in times of depression may experience an increased risk of experiencing fear and anxiety about the real business. This fear can be multiplexed through the so-called paradox of voting.
For example, some three investors try to get an idea about the suitability of a particular project. During the economic crisis, the public opinion can be very particular. Under these conditions the verdict "the project is good but other investors will not support the project" is quite likely. If the first investor and the second, and the third are of the same opinion there may appear a paradoxical situation: each of the investors will believe the project to be good but because of the distrust to the environment which is characteristic to the economic depression and they will publicly identify this project as unrealistic.
To prevent this kind of deadlock hindering private business to develop normally all investors are supposed to carry out the project analysis within a single information space. To reduce the weight of depressed expectations for beginning entrepreneurs, on the other hand, to prevent the voting paradox, we propose to promote a so-called "deep incubation", whose aim is to produce human identification as an entrepreneur in the eyes of potential investors, as well as for himself by organizing special kinds of crowd funding platforms (CFP).
Crowd funding is a super new form of joint investment. Business entities, often starting up businesses, voluntarily consolidate their resources through the Internet for the purpose of investing in a specific investment idea or business plan. This may have a commercial purpose (financing of start-ups, setting up of various forms of small business, various logistics projects), a technical one (creating new software, transportation of goods or passengers) or a social objective.
The positive value of crowd funding can manifest itself in situations which are rather characteristic for our post-Soviet society, in which it is difficult to collect investment funds from a single investor. When the investors are not alone to invest in the project, they cooperate with other investors and thus may stimulate each other. As a result, likely unrealistic project can be quite realistic.
Individuals and legal entities, both Russian and Belarusian are able to use crowd funding by means of offering their business idea on the terms of payment, maturity and repayment, maintaining the liquidity of their investments. Serviceability principle will consist in the fact that CFP performing the incubation of entrepreneurial ideas will take over the placement of investment proposals for fee (no more than 5% of the required amount which is quite feasible for start-ups). The principle of maturity and repayment means that if during the declared period the required amount (pledged sum) is not obtained, each of the depositors will be entitled to close his or her deposit in the bank providing this type of operation. As a result, there will be a hedge of risks for investors, which should reduce their excitement and anxiety. Investments will be implicit, dependable on each other, which can serve as a basis for the formation of corporate culture on the post-Soviet territory. At the same time "customer due diligence" will be implemented: the bank will be able to make sure that the project is supported (or is not supported) by a sufficiently large number of potential investors. And if the project is sufficiently supported by the investors, this fact in itself will mean lower financing risks on behalf of the bank.
Crowd funding platforms (CFP) operating in the post-Soviet space are too young and they have not developed properly yet. In all functioning CFP the participants are divided into two groups: A) the authors of a project, as a rule, they are executors when the project obtains the required sum; B) the investors, those who implicitly invest their money into an idea. Our vision of the pre-investment incubator project implies dividing all the participants into three groups:
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- Authors (owners) of the idea of the project;
- Managers, i.e. those who will take the responsibility to manage the future project if the project is successful in the crowd environment and collects the required sum;
- Investors or those who under the implicitness terms will invest their money in the idea.
If the ideas that represent the demand for investment and management are excessive, there may appear a complementary relationship among them. It means that one idea would produce, develop or support another idea, etc. Investors of these or those author's ideas will serve as indicators of the feasibility of each presented ideas and thus contribute to more productive development of each of them (from one authorship level to the next one). As a result, laypeople with non-economic education can be the subjects of the demand for the investment in ideas. The segment of crowd funding " draft demand " is just destined to contribute to the development of business ideas not only in the individual space of the individual entrepreneur but also under the conditions when a person has not identified himself (or herself) as an entrepreneur, but he (she) wants to try his hand at this field. The pre-investment incubator business idea must be understood, clarified, developed and fleshed out by qualified personnel and, perhaps, be able to interact with other creative entrepreneurial ideas.
There should three main criteria of business idea validity:
- Is this ides contradictory or not and does it comply with the conditions prevailing on the market?
- How important is it for the society and profitable for the entrepreneur? How original is it (or similar ideas has already existed)?
Thus, the following filters can be introduced into incubators PINS:
- Business support center experts have to make a verdict on the suitability (inconsistency) of the project;
- If the author believes that the project is important to society and profitable enough to qualify for loans and trust, but cannot find investors willing to vouch for him, the author will himself become an investor to make the required deposit for a certain period of time;
- It makes sense to set certain bonuses to those who will reveal and prove that the proposed project is not original.
According to the project of deep incubation only those business ideas are accepted for the quotation on the CFP which have not got their managers responsible for the idea implement yet. We suggest positioning of two demand prices on behalf of the project: one price must express the amount of money needed for the project, the other the cost of authorship.
As a rule all business ideas (both great ones and mediocre ones) do not begin in the form of a business plan. First they are usually conceived as a vision of the project, sometimes an intuitive image, which can be expressed in a few sentences or by a simple picture. A huge number of entrepreneurial ideas remain, using a metaphor from biology, like stem-cells for a variety
of reasons. One of them is that some people, who tend to create ideas, do not often have the will or the determination to implement them. From the other hand some people, disciplined and determined, with experience in business and in interfering with different kinds of legal institutions, often have problems in the emancipation of their imagination and are not able to produce new entrepreneurial ideas. The decomposition of entrepreneurial activity in the pre-investment stage will make more efficient the use of each of the polar entrepreneurial skills: both intellectual one and that one which is associated with willpower and breadth of the soul. Those who are able to easily create business ideas will not be burdened with the task of their implementation. Those who are able to execute and implement the ready-made ideas will find them on the CFP easier than now when the author of the idea a priori is to implement the declared entrepreneurial idea.
It is also necessary to ensure that the author's right of veto for the implementation of a startup. However, it should be easy to overcome a veto for a modest fee from the performers who are ready to take responsibility for the implementation of this idea.
The investments in the author's projects not having yet their implementing managers a priori entail a greater risk, and therefore should be implicit in another dimension. Thus, 1000 euros invested under the fixed, secured and repayable terms can be positioned against more than one ideas, let's say three, so the first which finds a manager gains the investment (in this case, for example, a thousand euros invested on fixed, secured and repayable terms) and the position of the investor.
According to the classical principles of equity crowd funding each of the investors is motivated by other investors, so that the motivation in the project auto develops (or degrades if the project fails) and only at the end of the pre-investment phase of the business designing becomes sufficient to initiate investing proceedings. Therefore, it is psychologically more difficult to carry out their monetary investments the first investors despite the existing liquidity of the assets. Consequently, the first investors should be in a privileged position. For example, 10 investors participated in crowd funding and invested in a project 1000 euros each. Let's admit that the project was successfully completed and started up on the market with one hundred shares each having the nominal value of one hundred euros. Then, for example, the first investor is to buy two implicit actions for his every hundred euros (that is, shares that will become shares as soon as the project collects the required sum of money), and the last investor is to pay two hundred euros for one implicit share.
Thus, the value of its future (implicit) shares will rise along with the aging of the project. In this example an implicit share costs 50 euros at the beginning of the project and rises to two hundred euros at the end of funds raising. Such dynamics (in the economic theory it is called valorization) will reflect the real state of affairs and the deep incubation progress. After all, actually, the project which managed to collect a larger
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share of required funds is more realistic in comparison with the project which did not interest or inspired little interest with the investors. So a more realistic project should be evaluated higher.
There may exist different levels of the authorship. Here is another example. Let's admit for purely descriptive purposes that there has been suggested an idea of a bicycle, in which the source of the movement is not only the cyclist's feet but also the hands; steering function is performed by the moving of the head in the helmet (like in 3D virtual reality helmets appeared in the last 10 years). The author of this market demand for the invention can be guided by the conviction that sooner or later such invention appears because there exists an unconscious need for many people to combine the advantages of the well-known trainer and the possibility to move distributing the effort between the arms and legs at the same time. And it will contribute to the realization of this need. This is the first level of authorship. Those investors who agree with the fact that this invention is knocking at the door of a real business, will implement their implicit investments whose sum will condition whether it is worth working specific technical requirements. If the number of potential investors convinced that sooner or later such a
device appears is sufficiently large, there can be formed and a team of designers and marketers, which will set up the goal to develop a specific project of production and promotion of the product. It will be the second level of authorship.
The represented materials in the whole are also the idea-demand for a specific, more advanced and grounded incubator project in the pre-investment phase of a particular business designing. This project is based on the conviction that what happened in the real sector in the last century, i.e. the division of labor of owners and managers, will happen on the start-ups market.
References:
1. List of incubators of small business of the Republic of Belarus [Electronic resource] // The Ministry of Economy of Belarus. - Access: http://www.economy.gov.by/ru/small_business/support -of-small-enterprise/activities-of-infrastructure-to-support-small-businesses/perechen-incubatorov. - Access Date: 09.01.2017.
2. Small and medium business in the Republic of Belarus, 2016: Art. digest. - Minsk: The National Statistics Committee of Belarus (National Statistical Committee), 2016. - 368 p.
A.N. Kozlyanchenko
Competitor of the Department of Economic Theory Chernihiv National Technological University Chernihiv, Ukraine
RESEARCH OF MODERN PROBLEMS OF AGRICULTURAL MECHANICAL ENGINEERING OF
UKRAINE
Abstract. In the article the modern problems of agricultural engineering. Determined that agricultural engineering is an integral part of agriculture, whose main task - to ensure the agricultural production of reliable and high quality equipment. Today the industry is in decline, as evidenced by the volume of production. In addition, the technical equipment of agricultural production is in critical condition. To improve the situation the author proposes ways of crisis management of agricultural engineering at the macro and micro levels.
Keywords: crisis management, industry, agricultural machinery, processing, production, machine-building complex.
Formulation of the problem. Effective functioning of the industrial complex is the determining factor in the dynamic development of the domestic economy, improving its competitiveness in the global economic environment, achieving high social standards of living. The need for the development of mechanical engineering due to the fact that there are means of production, lays the rate of productivity growth, energy factors, reduction of material and a new quality of the final product. Agricultural machinery is an integral part of agriculture, whose main objective - to ensure the agricultural production of reliable and high-quality equipment. At the same time, there is the fact of the imbalance development of agricultural machinery, and therefore find ways to scientifically based industry revival is an important task of the day.
Analysis of recent research and publications.
Problems of development of agricultural mechanical engineering of Ukraine considered in their scientific works by such scholars as the E.P. Amosenok, Y.M.
Bartashevska, Y.K. Bilousko, I.S. Grozniy, B.M. Danylyshyn, N.P. Karachina, V.V. Rossokha, A.A. Shapurovo, N.I. Shifrin and many others. In particular, a significant contribution to the study of this problem was made by B. Danylyshyn, he focused on issues of functioning of the machine-building complex of Ukraine, and has proved its strategic goals and directions of further development.
Purpose of the study is to identify the main problems that hinder the development of agricultural engineering for further development of the crisis management arrangements and measures to counter the emergence of the crisis in the industry.
Key findings. The history of the emergence and development of agricultural engineering as a branch of industrial production, is engaged in manufacturing of labor resources in agriculture is directly linked with the global development of science and technology and socio-economic relations in the society. Machinebuilding industry of our country began in the first half of the XIX century and in the early twentieth century
