Journal of Entrepreneurship Education (Print ISSN: 1098-8394; Online ISSN: 1528-2651)

Research Article: 2020 Vol: 23 Issue: 1

Methodology Comprehensive Assessment of the Business Environment in the Regions of Russia: Introducing Business Environment into Education System

Verdi Mutalimov, Peoples’ Friendship University of Russia, Azerbaijan State University of Economics

Irina Kovaleva, State University of Management

Alexey Mikhaylov, Financial University under the Government of the Russian Federation

Diana Stepanova, Plekhanov Russian University of Economics, Orcid id: 0000-0001-5981-6889

Citation Information: Mutalimov, V., Kovaleva, I., Mikhaylov, A., & Stepanova, D. (2020). Methodology comprehensive assessment of the business environment in the regions of Russia: Introducing business environment into education system. Journal of Entrepreneurship Education, 23(1).

Abstract

The purpose of the article is to analyze existing business environment in the regions of the Russian Federation, as well as introduction of business environment into the education system.

In order to define the methodology of comprehensive assessment of the business environment and its introducing into education system, an online survey of representatives of regional Russian economic universities was conducted.

It is shown that the modern education system does not form the necessary skills to meet the requirements of the labor market. There is a significant difference in those factors that teachers, students, entrepreneurs consider important for entrepreneurial activities. Entrepreneurs put forward new requirements for the knowledge and skills of students; students often cannot decide what skills and knowledge are important to them, and teachers do not see the need for change.

The ability to use computer technologies and equipment, as well as the knowledge of foreign languages are gradually moving from the category of important features of a modern specialist to the category of instrumental skills. While the latter are necessary to the same extent as ordinary literacy. Besides, a modern system of education does not form so-called soft skills and hard-skills necessary for a modern business person. In the modern economy The following aspects are decisive: specialized knowledge and interdisciplinary ones, skills and abilities to acquire knowledge independently throughout life, systematic and strategic thinking, the ability to work with foreign partners and the like.

A scheme for the interaction of the business environment with the education system is proposed and also means of improving the communication of entrepreneurs and universities.

Keywords

Skill Set, Soft-Skills, Hard-Skills, Entrepreneurial Environment, Internal Business Environment, Higher Education Institution, Education System of the Russian Federation.

Introduction

At the present stage of society's development, entrepreneurship is considered as the main driver of economic development, which is reflected in the regulatory documents of developed countries, for example, countries of the European Union (European Parliament and the Council, 2006). In particular, the creation of an appropriate business environment is one of the priority tasks of the state (EVCA (European Private Equity and Venture Capital Association), 2005; European Commission, 2006).

When analyzing the business environment, the main problems are that there are no universal assessment criteria, and also that the business environment is characterized by dynamism and territoriality. That is, the value development priorities of various societies are not always aimed at enhancing entrepreneurship, which is associated with the socio-political system, cultural values and traditions, social moods, etc. (Sadovnikova & Mirzaahmedov, 2019).

The modern education system is one of the factors in the formation of the business environment, while the interaction of entrepreneurs and the education system makes it possible to meet the wider needs of society and the labor market. In particular, the World Bank's Report on the World Development 2013 is fully devoted to employment issues, subsequent reports determine vocational training as a problem not only in higher education, but also in the global community (The World Bank, 2019). The thesis is expressed that the modern economy requires the increase of staff qualifications, the acquisition of new skills and knowledge throughout life. With the transition in developed countries to a post-industrial type of society, the requirements for knowledge, skills and abilities acquired at a university are being substantially modified, and at a faster pace. University graduates do not always fit into these trends - primarily in connection with the state of modern society, which is very far from post-industrial. However, in most higher education institutions, updating and bringing theoretical training in line with modern labor market requirements and updating the material and technical base is extremely slow due to a number of objective and subjective factors.

Thus, it is advisable to make certain comparisons of:

• The business environment in the regions of the Russian Federation.

• The requirements that the labor market puts forward to the education system and the students' and teachers' vision of the skills necessary for doing business.

The purpose of this analysis is to determine the gaps between the requirements of the labor market and the actual state of affairs in the education system, as well as a comparison with world experience in this field.

Literature Review

Modern economy should be conducive for entrepreneurship development (Gnyawali & Fogel, 1994; Audretsch & Thurik, 2000; Schramm, 2004). Moreover, the determining factor in the formation of a favorable business environment is government policy aimed at supporting entrepreneurship (Semerci̇ & Çi̇men, 2017). Adequate environment for modern entrepreneurship can realize such qualities of character as self-efficacy, risk tendency, initiative and autonomy (Yushuai & Changping, 2014).

A number of studies, as well as the 2010 GEM Global Report (Verkhovskaya & Dorokhina, 2010), showed the existence of a systematic relationship between the level of GDP per capita of a country, its economic growth, and the level and type of entrepreneurial activity. The main factors of the business environment are (Verkhovskaya & Dorokhina, 2010):

• Regulatory framework.

• Political situation.

• Social moods in society.

• Scientific and technical level and the implementation of scientific and technological developments.

• The state of development of market infrastructure.

• Availability of financial resources.

• Government entrepreneurship support programs.

• Education system and training.

• The degree of openness of the market and minimizing barriers to entry.

• Cultural and social norms.

• Protection of intellectual property rights.

According to the report of the World Bank Doing Business 2020 (Ölvecká, 2013), the following possibilities can be attributed to the main fundamental opportunities for carrying out entrepreneurial activities within the framework of the current legislation:

• Independent free choice of type of activity, attraction and use in business of property and funds of legal entities and citizens.

• Independent formation of a program of activities, selection of suppliers and consumers of manufactured products, pricing.

• Free hiring of employees, attraction and use of labor resources.

• Attracting and using material, technical, financial, natural and there resources (the use of which is not prohibited or not limited by applicable law).

• Free disposal of profit remaining after payment of mandatory payments established by applicable law.

• Independent implementation of foreign economic activity, international cooperation, trade in domestic and foreign markets.

The main factors in the deterioration of the business environment are frequent changes in regulations, the complexity of judicial procedures, inaccessibility of loans, ambiguous policies, local corruption practices, tax fees, etc. (World Bank, 2020).

The formation of a favourable business environment requires a number of measures of state regulation of entrepreneurship, namely (Ölvecká, 2013):

• Expanding financial opportunities, creating specialized credit programs.

• Mobilization of venture capital for innovation.

• Promoting the development of vocational education and the formation of a personnel reserve according to market needs.

• Support in foreign markets.

• Elimination of bureaucratic obstacles.

• Improving the tax environment for small and medium-sized businesses.

• Non-discriminatory treatment of taxpayers.

Historically, entrepreneurial education (and its effectiveness) was considered from the point of view of the individual (Bandura, 1999; Kuprina et al., 2019), and the role that the social environment plays in the process of learning entrepreneurship was also studied (Landström & Benner, 2010).

In general, the following directions are distinguished in entrepreneurial education (Toutain et al., 2017):

• Entrepreneurial education is dominated by studies of additional and alternative factors of influence on individual behaviour, which at the same time take into account the influence of the group and possible cooperation between its members.

• An interdisciplinary approach is proposed (based on research in the field of sociology, anthropology and pedagogical sciences) to improve understanding of entrepreneurial learning processes.

• Conducting long-term studies, the purpose of which is to observe the complex processes of personality transformation with the impact of training.

• Development of knowledge and training methods for entrepreneurship.

Empirically determined are the following characteristics of the internal environment that affect the implementation of corporate entrepreneurship in an emerging market (Bhardwaj, 2012):

• The ability to receive and disseminate information as a driving force for the development of entrepreneurship.

• Risk tendency.

• Management support.

• Remuneration.

• Flexibility.

• Reasonable deadlines for completing tasks.

There are also various characteristics of the internal environment at the national and regional levels (Afzal et al., 2018):

• The prestige of entrepreneurship.

• Fear of failure.

• The degree of "university-entrepreneur" interactions.

• Protection of intellectual property rights.

• National standards of higher education.

Moreover, at the national level, the prestige of entrepreneurship is considered the main factor in the internal environment, and at the regional level - the degree of interaction between the university and the entrepreneur.

Summarizing the studies, the authors note the need to increase the degree of interaction between the university and the entrepreneur, especially for small and medium-sized businesses. Along with the need to introduce new information technologies in teaching practice, combining training courses, etc. (OECD, 2009). In developed countries, the problem is solved by differentiating education: various training, subjects at the choice of the student, additional courses, retraining programs, etc. (European Commission, 2008; OECD, 2009).

At the same time, there are no data on methods for assessing the business environment, the research is theoretical and descriptive, and no models for the interaction of the business environment and the education system have been developed.

Setting Goals

Thus, it is possible state an insufficient level of research on the business environment, the presence of unresolved scientific problems associated with the need to attract all forms of entrepreneurship in the education system. At the present stage of development, an increasing number of people in the Russian Federation have the necessary resources and motivation to create their own business and work for themselves in the economic environment. The latter allows maximum use of entrepreneurial opportunities.

This problem is especially relevant for the Russian Federation, as entrepreneurs in countries with different levels of GDP per capita, as a rule, face different and unequal problems, have different business opportunities and conditions that are characteristic only for these countries. Policies and favourable business conditions in one country (or region) may not necessarily be effective and favourable in another.

The purpose of the article is to determine the conditions for the development of a modern entrepreneurial economy by improving the business environment in the regions of the Russian Federation, as well as its introduction into the education system.

Research Problems

• Analysis of the characteristics of the business environment in the regions of the Russian Federation.

• Development of recommendations on the implementation of business experience in the education system.

Methods and Materials

In order to determine the conditions for introducing the business environment into the education system of Russian Federation regions, an online survey of representatives of regional economic universities of the Russian Federation was conducted (Table 1). An online survey of representatives of universities (teachers, students) and entrepreneurs was carried out in accordance with the requirements of “Student experience in the research university” (SERU).

Table 1 Data on Respondents Who Participated in the Survey
University Number of students surveyed Number of teachers surveyed Number of entrepreneurs surveyed in the region
Kazan (Volga region) Federal University 148 25 33
Volgograd State University 197 24 38
Pskov State University 211 18 42
Chelyabinsk State University 248 24 44
South Ural State University 217 18 29
Total 1021 109 186

The choice of universities was made randomly; the survey was conducted on a voluntary basis. In order to reach the target audience, an online survey was conducted by posting the questionnaire on websites, on social networks and sending out e-mails, as well as by proposing to fill out the questionnaire by teleconference.

Online surveys do not provide direct contact between the interviewer and the respondent, the questionnaire questions are arranged in a logical order, the transition to the next question occurs only after the answer to the previous one.

The following questions were envisaged:

The status of the respondent (student, teacher, entrepreneur).

• What skills, from your point of view, are necessary for entrepreneurial activity?

• What features of the business environment of our country require the formation of specific skills (and which ones)?

• What knowledge, skills or abilities necessary for entrepreneurial activity are not provided by the education system?

• Is it advisable to increase the level of communication between universities, students, entrepreneurs, and how?

• What is the purpose of increasing the level of communication between universities, students, entrepreneurs?

For each question, several answers could be offered, which were subsequently grouped.

Results

Most educational institutions train students in the specialty "Management", which forms a significant number of managers for the labor market who are able to analyze and optimize business processes, manage enterprises (Figure 1). In the specialties "Economics", "Finance", "Accounting and taxation" they train specialists who provide specialized service functions for managing certain types of enterprise resources. A smaller part of educational institutions provides training in "Entrepreneurship", "Public Administration" and "Marketing"-specialties that form the following competencies:

Figure 1 Economic Specialties of Universities where the Survey was Conducted

• Researching the needs of society.

• Creating product markets.

• Founding new enterprises.

• Moving to new business models.

• Interacting with public authorities and local community.

• The spread of entrepreneurial culture taking into account national and world trends in the development of society and the like.

The survey results are presented in Table 2.

Table 2 Survey Results
Answers/quantity Number of students surveyed Number of teachers surveyed Number of entrepreneurs surveyed in the region
What skills, from your point of view, are necessary for entrepreneurial activity?
Communicative (ability to negotiate, self-presentation skills, etc.) 511 15 157
Market research to promote a product or service 125 78 121
Using the latest technologies and achievements of scientific and technological progress 758 58 110
Ability to apply knowledge on the basics of entrepreneurship 474 84 105
Knowledge of English 874 48 98
Others 1 2 1
What features of the business environment of our country require the formation of specific skills?
Instability of legislation 28 84 184
Traditions (including traditions of doing business) and mentality 879 98 178
Moral values, the importance of the institution of the family 578 54 28
Which ones?
Communication skills 128 12 847
Intuitive decision making 147 24 587
Difficult to answer 847 84 29
Is it advisable to increase the level of communication between universities/students/entrepreneurs?
Yes 984 47 184
No 9 11 2
Difficult to answer 28 51 0
By what means the level of communication between universities/students/entrepreneurs can be increased?
Invite entrepreneurs to give lectures, hold workshops, business meetings 925 87 114
Conducting seminars, conferences 874 54 87
Students internships 1011 24 28
Teacher internship 471 1 17
Development of individual business courses 57 28 87
Coaching 87 17 54
What is the purpose in increasing the level of communication between universities/students/entrepreneurs?
Increase in the number of practical exercises 847 94 187
Reducing the number of fundamental subjects in favor of applied 211 55 11

Thus, according to the results of the survey, there is a significant difference in those factors that teachers/students/entrepreneurs consider important for entrepreneurial activities. The ability to use computer technologies and equipment, as well as the knowledge of foreign languages, are gradually moving from the category of important features of a modern specialist to the category of instrumental skills that are necessary to the same extent as ordinary literacy.

Besides, it can be seen that entrepreneurs note the importance of so-called soft skills-communication skills, negotiating, establishing joint activities, teamwork skills. 83% of entrepreneurs and 50% of students and less than 15% of teachers see these skills as a priority. The majority of respondents of all categories spoke out for the need to increase the level of interaction between entrepreneurs and the education system. Namely, 90% of students, 73% of teachers and 99% of entrepreneurs (Figures 2-5).

Figure 2 Answers TO the question “What Skills, from your Point of View, are Necessary for Entrepreneurial Activity?

Figure 3 Answers to the Question “What Features of the Business Environment of Russia Require the Formation of Specific Skills?

Figure 4 Answers to the Question “By what Means the level of Communication between Universities/Students/Entrepreneurs can be Increased?

Figure 5 Scheme of the Role of the Education System in the Formation of the Business Environment

For the full implementation of the interaction model “entrepreneurship-the education system”, it is necessary to improve the ways of their interaction. In essence, this means reorienting the educational process from input indicators (duration of study, content, goals formulated for higher education institutions and teachers) to the parameters of competencies and educational outcomes.

The scheme of interaction between the business environment and the education system is presented in Figure 5.

The knowledge economy clearly shows a transition to a market of opportunities to implement the theory in practice. The main thing is the person's ability to produce new knowledge in the field of business. Thus, it becomes relevant to train specialists, who will be in demand for this activity. Future entrepreneurs should be able to create new knowledge in business. Hence, the essential task of higher education institutions is not just to provide the existing set of modern knowledge, but to teach students to create (produce) knowledge and successfully put it into practice. Business education forms a synergistic effect of the functioning of the open dynamic system “education-knowledge”. The degree of openness of the system is characterized by the number and influence of environmental factors. In particular, the processes of entrepreneurial activity and the manifestation of human capital. The dynamism of the system is determined by the speed of adaptation to new conditions and environmental requirements. At the same time, the system "education-knowledge" affects the processes of entrepreneurial activity and the development of human capital. In turn, the system also experiences significant influence from the latter. This system affects the formation of a knowledge-based society.

Thus, today's professional economic education for any society, especially transformational, is a key factor in ensuring its ongoing development in the framework of global trends. This, in turn, actualizes the problem of diversity of forms, methods and technologies for providing citizens with high-quality educational services in the field of economic sciences. Among economic specialties in higher education, the main focus should be on business education. The phenomenon of "entrepreneurship" should be perceived as a social need and business knowledge-as intrinsic value. Feedback from graduates and employers should be regarded as a criterion for assessing the quality of training programs. Nowadays, future specialists are required to have an active professional, creative attitude to entrepreneurial activity.

Therefore, it is important to improve the quality of business education, education content. The latest technologies should be introduced into the educational process. Given this, in the structure of economic education (both general and entrepreneurial) it is necessary to provide meaningful elements aimed at forming the professional competencies of the future entrepreneur in the economic realities of modern society.

Discussion

According to the results of the study, it can be stated that there is a gap between the actual state of affairs and the requirements of the labor market. The most disturbing issue is that the modern education system does not imply the formation of so-called soft skills hard-skills required by a modern entrepreneur. These include socio-psychological skills-communication, leadership, team, public skills, professional knowledge and skills necessary for the implementation of the actual business activities. Since the educational process rarely has the task of promoting these skills (for example, conducting seminars that will include student's presentations), employers have to spend considerable resources on developing these skills. In modern conditions, advanced universities pay attention to the formation of these skills (Yar Solomon et al., 2008; Khaouja et al., 2019), which cannot be said about regional universities of the Russian Federation.

It seems expedient to introduce practice-oriented training, which is built on the basis of social partnership, and aimed at creating a new model of professional training. Such training should be introduced on the basis of enterprises, institutions, organizations. Thus, it will strengthen training ties with production and increase the responsibility of employers for quality of training.

The domestic educational system continues to form fundamental knowledge at a high level. At the same time, this knowledge is often not actually professional, it is rather general in nature. Two important problems in the training of future specialists can be identified: a lack of practical skills and an excessive generalization of theoretical knowledge. At the same time, employers are interested in specialists who possess deep, but highly specialized knowledge. At the same time, a large number of educational curricula are partially outdated and contain fragments of curricula that have been created 10-20 years ago and cannot be in pace with actual changes in the labor market. It is also worth noting that changes in educational programs in accordance with new requirements are usually limited by formal quantitative criteria, which leads to a decrease in the volume of majors and special disciplines (Raitskaya & Tikhonova, 2018).

Foreign higher educational institutions have introduced key professional knowledge and skills into their training courses, have intensified the introduction of short programs to improve the professional level of a wide range of employees (Solomon et al., 2008; Johnstone et al., 2018). The split between the theoretical knowledge that the university provides and their practical application in real conditions is leveled out by the following:

• Implementation of teamwork principles.

• Implementation of real projects outsourced as training tasks.

• Increasing the number of projects involving the search and analysis of information - the ability of specialists to find, process and synthesize information coming from various sources.

• Conflict management: The ability to negotiate, minimize conflict situations and prevent a tense atmosphere in the team.

• Presentations: The ability to clearly articulate and present their ideas to others in the most advantageous form.

• Communication skills: The ability to transmit information to people clearly, simply and efficiently.

• Flexibility: The ability to accept negative and unexpected changes and immediately seek new creative solutions.

• Time management: A set of techniques and technologies that enable a person to plan personal time in order to increase the efficiency and rationality of its use.

New difficult conditions require fundamentally new mechanisms of interaction between the education system and the labor market. The following might be appropriate to increase the effectiveness of such interaction:

• Conduct a high-quality survey of enterprises in the regions on their requirements for graduates of higher educational institutions.

• Monitoring of student curricula by enterprise representatives.

• Create a permanent database of vacant positions in enterprises.

• Organize student excursions to enterprises in order to increase their motivation.

• Ensure the practice and further employment of graduates taking into account the interests of employers.

Conclusions

The modern education system is one of the factors in the formation of the business environment, while the interaction of entrepreneurs and the education system makes it possible to meet the wider needs of society and the labor market.

The difficulty in assessing the business environment in the context of its interaction with the education system is that the education system is one of the factors in the formation of the business environment, as well as a factor that the business environment can influence.

The paper considers the main problems of the interaction of the business community and the education system. According to the results of the study, there is a gap between the actual state of affairs and the requirements of the labor market. The most disturbing is that the modern educational system does not imply the formation of so-called soft skills, it is also characterized by a lack of practical skills and an excessive generalization of theoretical knowledge.

It is shown that the vision of knowledge, skills and abilities that are necessary to meet the requirements of the labor market differs for students, teachers and entrepreneurs.

There is a significant difference in those factors that teachers/students/entrepreneurs consider important for entrepreneurial activities. The ability to use computer technologies and equipment, as well as knowledge of foreign languages, gradually move from the category of important features of a modern specialist to the category of instrumental, ordinary skills.

The modern labor market needs specialists of a new type who are able to quickly adapt to rapidly changing working conditions. A valuable quality of a modern employee is communicative competence. Decisive are:

• Knowledge, mainly special, closer to practice, as well as interdisciplinary.

• Skills and abilities to acquire knowledge independently throughout life.

• Systematic and strategic thinking in the context of widespread globalization processes, the ability to work with foreign partners and the like.

It is shown that Russian universities do not introduce key professional knowledge and skills into their training programs, and do not introduce short programs to improve the professional level of a wide range of workers.

In order to be competitive, young professionals should learn:

• Methods of job search.

• How to convince the employer to hire him/her rather than other candidates.

• The rules of conduct in a business environment.

• The skills of public presentation of themselves and the results of their work.

• Communication skills.

• Teamwork.

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