Study: Romania's entrepreneurs struggle for financing and are unhappy with legislation

A new study has revealed some worrying characteristics in Romania's entrepreneurial climate. “Romanian entrepreneurs lack relevant information about sources of financing, organizations that support entrepreneurship and specific entrepreneurial education and training,” according to the Entrepreneurs Speak Out report by Ernst & Young. Negative perceptions of failure, rather than viewing it as a learning experience, is also a concern as it discourages the risk-taking mentality vital to successful entrepreneurship. “Romania cannot progress without strong entrepreneurship. We need this internal growth engine, in order to stimulate the sustainable development of our local economy,” said Bogdan Ion, Country Managing Partner Ernst & Young Romania . The report published by consultancy firm Ernst & Young is based on a survey of over 100 local entrepreneurs and found that only 12 percent of them viewed business failure as a learning opportunity. Meanwhile, 32 percent of respondents saw failure as a barrier to future business projects and 24 percent as proof of a lack of necessary skills. These perceptions conspire to make Romania a far from supportive society for entrepreneurship, according to Ernst & Young. The report champions entrepreneurship focused education and illustrates the differences in typical education levels between Romanian and US entrepreneurs. In the US, 95.1 percent of small business owners have at least a university degree, while in Romania, the figure is only 53.3 percent. “We need successive generations of entrepreneurs, who can contribute to harnessing our internal resources, generating more jobs and to increasing the added value of Romanian products and services,” said Bogdan Ion. However, financing seems to be the biggest single obstacle to starting a business in Romania. As many as 92 percent of respondents said that financing was difficult for young entrepreneurs in the country. As for solutions, the majority see European funds (63 percent) and bank loans (52 percent) as having highest potential impact. Entrepreneurs in the survey considered that private equity, business angels and venture capital would have only a medium impact. Romania's taxes and legislation are not too popular with entrepreneurs either – only 36 percent believe that the country offers efficient legislation for starting a business against 51 percent of EU entrepreneurs. There could also be improvements in the organizations that help entrepreneurs. More than half of the respondents believe that the support these organizations give is not sufficiently coordinated. Ernst & Young is a global professional services firms with approximately 167,000 employees in 700 offices across 140 countries, and revenues of approximately USD 24.4 billion in 2012. In Romania, Ernst & Young was set up in 1992 and now has 500 employees in Romania and Moldova. The firm provides assurance, tax, transactions, and advisory services to clients ranging from multinationals to local companies. Ernst & Young has offices in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau.