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International Conference“Economic System of European Union and Adjustment of Bosnia and Herzegovina”

University of Mostar – Faculty of EconomicsMostar, April 26-27, 2002

DEVELOPMENT OF THE SME SUPPORT SYSTEM WITH THE SPECIAL REFERENCE TO THE »VOUCHER« SYSTEM FOR

COUNSELING: THE CASE OF SLOVENIA

Miroslav GlasUniversity of Ljubljana, Faculty of Economics, Ljubljana, Slovenia

Kardeljeva ploščad 17, 1101 Ljubljana, SloveniaPhone: +386 1 589 2400

e-mail: [email protected]

Mateja Drnovšeke-mail: [email protected]

Viljem PšeničnyGEA College of Entrepreneurship

Dunajska 156, 1000 Ljubljana, SloveniaPhone: +386 1 568 7002


Damjan MirtičUniversity of Ljubljana, Faculty of Economics, Ljubljana, Slovenia

Kardeljeva ploščad 17, 1101 Ljubljana, SloveniaPhone: +386 1 589 2400


Ljubljana, July 2002

International Conference: Economic System of EU and Adjustment of BiH; Mostar, April 26-27, 2002

DEVELOPMENT OF THE SME SUPPORT SYSTEM WITHTHE SPECIAL REFERENCE TO THE »VOUCHER« SYSTEM

FOR COUNSELLING: THE CASE OF SLOVENIA

Key words: Small and Medium-Sized Businesses, Support System, »Voucher« System, Counseling, Local Enterprise Center

ABSTRACT

Small and medium-sized enterprises (SMEs) need some external business support, in particular during the early development stage, to survive and grow. Government agencies have developed a number of initiatives and “voucher” system is one among them targeted at the counseling support combined with information and training.

Slovenia decided to develop such a system on the basis of experience with the system of support for self-employment program and some international “best practices”. After the basic concept has evolved, a pilot program started in two small regions and the program is now scheduled to cover the whole territory, relying on the network of Local Enterprise Centers (LECs).

This paper represents the fundamental concept of the “voucher” system and the rules for a comprehensive approach, discusses the organizational structure and functions of different stakeholders. The assumptions for an effective system are analyzed and some comments from the first evaluation are discussed.

POVZETEK

Mala in srednje velika podjetja (MSP) potrebujejo zunanjo poslovno podporo, zlasti v zgodnji razvojni fazi, da bi preživela in rasla. Vladne agencije so razvile številne iniciative, med njimi tudi “vavčerski” sistem, ki cilja na svetovalno podporo, v kombinaciji z informiranjem in usposabljanjem.

Slovenije se odločila razviti tak sistem na podlagi izkušenj s sistemom podpore za program samozaposlovanja in nekaterih mednarodnih “dobrih praks”. Potem ko je bil razvit izhodiščni koncept, so začeli s pilotskim programom v dveh manjših regijah in program je sedaj pripravljen za vse ozemlje, pri čemer bo temeljil na mreži Lokalnih poslovnih centrov (LPC).

Prispevek predstavlja temeljno zamisel “vavčerskega” sistema in pravila za celoviti pristop, razpravlja o organizacijski strukturi in funkcijah različnih vplivnih skupin. Analiziramo predpostavke za učinkovito izvajanje sistema in predstavljamo nekatere pripombe iz prve evalvacije projekta.

© Miroslav Glas, Mateja Drnovšek, Viljem Pšeničny, Damjan Mirtič: Ljubljana 2002 –


1. INTRODUCTION

Within developed market economies, first in the USA and later in Europe, there has been a renaissance in the small business sector. The majority of enterprises employ less than ten employees and small businesses have become a major contributor to private-sector employment, output and innovation. The wave of entrepreneurship reached transition countries with some time-lag, and Slovenian economy has been characterized during early 1990’s with an outburst in the number of new small companies and sole proprietors (Glas and Drnovšek, 1998).

The need to stimulate the development of the small business sector has been confirmed in the EU countries in the effort to change the dynamics of structural changes, new technologies, products and services. A great variety and number of police initiatives have been introduced, developed by numerous agencies. They should compensate for the “market failure” since the free market mechanism does not adequately support the flow of new ventures.

One of such initiatives in the area of “soft” business services to small and medium-sized enterprises (SMEs) is the “voucher system” (VS) providing advisory services, information and some training to different groups of “would-be” entrepreneurs and existing SMEs. Following the early program of a comprehensive support to unemployed people (self-employment program) and some models abroad (Catalunya, Austria) Slovenia during 2000 started a VS that is currently being introduced to the country as whole since first evaluations of the pilot project confirmed its viability.

2. “VOUCHER SCHEME”: THE RATIONALE AND BASIC CONCEPTS

To support the restructuring of the Slovene enterprise sector along with the privatization, the government in Slovenia decided to promote entrepreneurship and SME development. This effort, considering the tradition of the private sector and the lack of entrepreneurial culture (Glas, 1998) implies some activities:

- promoting the business (entrepreneurship) culture that should support new venture creation, introducing entrepreneurship into the education system, broadening political, regulatory, and social support,

- encouraging the net increase in the number of business units, with a special care for the quality of ventures (technology, market, R&D) and for inclusion of some less active social groups (youngsters, women, rural entrepreneurs),

- supporting the growth of ventures with explicit growth potential through internationalization, creation of networks and clusters etc.

Experience shows that a comprehensive system has to be developed, involving a SME development strategy/policy, delivery mechanisms (support institutions of different legal and ownership forms) and programs/projects of support (Glas, 2000). The VS in the case of Slovenia considers counseling (the form of consulting appropriate when dealing with SMEs and even potential entrepreneurs) as the core support activity among “soft” and “hard” forms of support that should enable other forms of support to be more effective (see Figure 1).



The VS is based on the belief that SMEs need support if more ventures are to be created, more of them would survive the tough first period and an increasing number would grow and employ more people. The support provided by a network of institutions should have some characteristics (Haskins et al., 1989; 28) that also include low price of services to be accessible by “would-be” entrepreneurs that can hardly afford to pay for commercial consulting fees. The project team for the VS therefore started from the assumptions:

Figure 1. The counseling activity as the focal point of SME support

1. “Soft” forms of support should be accessible under beneficial terms, implying different subsidies to various groups of beneficiaries in order to attract more entrepreneurs / SMEs to use services, giving them the “critical mass” of services to exercise a real impact on their business decisions.

2. These services have to be equally available on all localities throughout Slovenia to ensure the equality of opportunities to start own businesses to all target groups of entrepreneurs (derived from the nature of public resources used for the VS).

3. These services have to be differentiated for different target groups to serve their needs in terms of the list of services included, the extent of assistance (hours of advisory and other services) to be subsidized as well as the level of subsidies (from some free basic services to only a portion of fees to be covered by government).

4. The system has to be stable through a longer period to ensure better visibility and promotion – this assumption demands continuous financing and trustworthy institutions as providers.

The comprehensive system of subsidized counseling should provide for the following general objectives:

1. To ease the access to the entrepreneurial career to all enterprising, creative Slovenians, irrespective of their current status (graduates, employed and unemployed persons), age and gender, locality etc. (until this system, a kind of VS has only been provided to formally unemployed persons, registered with the Employment Services).

2. To improve the quality of the entrepreneurial process and thereby to ensure a good preparation of applicants for the start-up phase (important in the absence of entrepreneurship culture and planning habits among Slovenians).


Forms of SME / entrepreneurship support

INFORMATIONCOUNSELLINGGeneral levelExpert level

FINANCIAL ASSISTANCE

OTHER FORMS OF SUPPORT

LOCATIONS AND PREMISES

Business zonesIncubators

Technology parks

Microcredit schemesGuarantee schemes

Equity capital

TRAINING


3. To increase the quality of dynamic businesses, to enhance the implementation of their growth plans in the areas of technology, product/service innovation, new market entry, assuming more sophisticated financial instruments etc.

Government in Slovenia tended to support this initiative following the findings of their study (Benchmarking Slovenia, 2000) that after the very promising early 1990s (Glas and Drnovšek, 1998) the level of SME development is far from expectations and needs:

- the number of new SMEs has sharply fallen after 1994, limiting the entry of new ideas and concepts;

- among SMEs, only few could be considered as dynamic, growing businesses with an important employment impact, capable to enter the targeted niches on the world market, ensuring the technology renewal, high value added, and creative and well rewarded jobs;

- SMEs are not sufficiently efficient, causing instability, financial shortages, fear from failure and psychological stress turning into social tensions.

BASIC RULES FOR THE VOUCHER SYSTEM

1. Rule of equality: equal access to the VS all over Slovenia as the task for the support network (in place only in some communities).

2. Rule of high quality services: the standard level of services should be assured through a process of selection, evaluation and training of business advisors.

3. Rule of system’s transparency: easy access of entrepreneurs/SMEs should be ensured and the system should be transparent through uniform rules for operation and communications among the stakeholders, also enabling steady control of the use of public resources.

4. Rule of the right of the choice of advisor from a list of certified service providers as well as the right to substitute him/her with another advisor in the case of really substandard quality of advisor or incompatible business views.

5. Rule of the equal opportunity for different advisors to become members of the network irrespective of their ownership and legal status, organization, territorial origin in order to ensure competition among service providers and to avoid any discrimination or unjustified precedence for some counseling organizations.

6. Rule of pre-determined eligibility criteria for beneficiaries to be categorized into different target groups entitled to different packages of services.

7. Rule of differential extent of services to which different target groups of beneficiaries are entitled according to their needs, with different level of subsidies.

8. Rule of the choice of services within a pre-determined amount of subsidized services by each beneficiary (entrepreneur/SME).

9. Rule of the simplicity of the scheme to avoid administrative complications but still enabling the monitoring of service provision and measuring the quality of services and assessing the impact on SMEs and local economy.

10. Rule of exclusion of beneficiaries that fail to comply with their responsibilities or whose business ideas did not pass the viability test.



The counseling process within the scheme that entitles applicants to different levels of public resource use involves regularly some steps:

1. Applicants enter through an assessment process executed at the Local Enterprise Center (LEC) by the advisor-administrator of the scheme who is responsible to check the fulfillment of entry criteria for every entrepreneur/SME (considering also the extent of services already exploited in previous years) and to allocate specific packages to every applicant.

2. When applicants enter the system, the advisor at the LEC files the basic profile of the entrepreneur/SME and his business idea and every subsequent advisor could rely on this profile not to “start from scratch”. Applicants get “vouchers” as the entitlements to a specified amount of services and they choose the counselor they want to work with. They can substitute the chosen advisor with another one if the counseling process is not proceeding well. The choice is limited to the list of certified SME counselors. Entrepreneurs can depending on the nature of services demanded engage either a general advisor or expert advisors (their fees are strictly determined on the annual basis).

3. Entrepreneurs and advisers start the counseling process where the extent of services ensured by the VS is strictly determined and at every phase of the process clearly defined counseling products have to be submitted e.g. market studies, business plans, registration documentation, proposal to financing to justify further services.

4. The whole process should lead to improved entrepreneurial process and improved results in terms of the number of firms and jobs created, innovations, new markets entered etc.

The whole process of counseling is allowing only a minimal amount of services. In case the entrepreneur would need more assistance for some individual reasons there is not much room for this provision. Public resources are limited and the VS is not intended to solve all the problems, in particular not to substitute for commercial advisory services for SMEs that could pay the market fees. This limited amount of services is a pressure on both entrepreneurs and advisers to organize efficiently and not to waste resources. There is a special provision for innovative, high-tech SMEs to be allowed more assistance, but with some hands-on control of the advisor at LEC.

3. ORGANIZATIONAL MODEL OF THE VOUCHER SYSTEM

The voucher scheme is organizationally based on the assumption of the existence of the support network with Local Enterprise Centers as the primary agents, responsible for the administration of the scheme on their respective territory. There are still some problems with this network due to a number of reasons, local administration reform being the most important. In mid-1990s the Ministry of Economy started the process of Local Development Initiatives that involved the creation of LECs for the territory of one or more municipalities. The problems is the fragmentation of municipalities since 1995. Until 1995 Slovenia has been divided into some 62 municipalities and the whole network was adapted to that structure. In 1995 the local level has parted into two branches: there are administrative units as the extension of the national government, responsible for some licenses, permits, fiscal issues. Their number is almost equivalent to former municipalities but they are currently not involved with SME development. Municipalities are



constitutionally the focal units of the local self-governance but after some waves of new divisions of former larger municipalities we are now left with almost 200 municipalities, some of them being so small that not one firm is located on their territory. Municipalities with less than 5.000 of population could hardly manage some resources to support business infrastructure and to promote entrepreneurship and SME development. Slovenia would probably need some 30-40 LECs and therefore municipalities have to co-operate in establishing some joint infrastructure. This is a difficult task because of the lack of resources at the municipal level to support SMEs, municipalities with different political coalitions do not share the common vision of the economic development and since there is no regional administrative level, it is difficult to merge resources to found a LEC and a local financial institution. However, where LECs have substantial personal authority and professional expertise, fairly creative forms of SME support have been introduced.

Figure 2. The organizational model for the “voucher system” in Slovenia

Let us comment on the organizational scheme in Figure 2. The important feature of the VS is to cover the needs for assistance for every person in Slovenia that would consider an entrepreneurial career. The target beneficiaries are therefore:

1. Potential (“would-be”) entrepreneurs: students and graduates (expected to bring more innovative, advanced technology ideas), unemployed persons (as continuation of the self-employment program) and employed persons that might already have a business idea for their venture or expect to become unemployed.

2. Existing SMEs: when potential entrepreneurs register their new businesses, the assistance extends to the most vulnerable period of the first year of operations and to a lesser degree to additional two years. Later on SMEs can enter the VS with new projects (innovation, R&D activity, new products/services/markets and technologies,


ExistingSMEs

Potential entrepreneurs

Growing businesses

Troubled businesses

Students and graduates

Employed persons

Unemployed persons

LEC – LOCAL ENTERPRISE

CENTER

Primary agent

SMALL BUSINESS DEVELOPMENT CENTRE - SBDC

Project teamCertification BoardAssociation of SME

counsellors

NETWORK PARTNERS

Secondary agents

RDA – REGIONAL DEVELOPMENT

AGENCIES

Advisers in LECs

COUNSELORSLocal service

providers (LSP)


investment) or in the case they face financial difficulties and need urgent support to turn around the business.

The eligible subjects can enter the system either directly turning to LECs or through any other institution within the support network (chambers, financial organizations and associations) that would direct them to LECs who are the exclusive agents entitled to issue vouchers and administer the procedure. The role of network partners is therefore:

- to keep their original mission within the process of SME promotion,- to act as secondary agents within the VS: they promote the system among their

members, customers and other stakeholders, they direct entrepreneurs to the LECs,- their trained and certified staff could take the role of local service providers within a

limited amount of activities, on the equal foot with other counselors;- they provide some “soft” services e.g. information and training that compound the level

of assistance.

While the VS is administered at the local level by LECs, the Small Business Develop-ment Centre (SBDC) at the national level figures as the “guardian” of the system, providing for strategic support:

- to care to foster the development of the LEC network as the high priority,- to monitor and evaluate operations of VS in order to identify weak points, needs for

improvements and to solve for them,- to organize the training and certification of local service providers,- to ensure the development of a computer-aided information system which is the key to

a well-functioning VS (the system might turn into a nightmare without a proper information system),

- to organize the training for all assisting staff in LECs and other network partners,- to promote the system among potential entrepreneurs and SMEs.

While LECs administer the whole system on their territory, as local service providers they can engage the staff with various status:

- some skilled advisers employed by LECs – but to a limited amount and LECs should never consider a quasi-monopoly provision of these services,

- counselors from different commercial consulting, engineering and other firms, from universities and higher education and research organizations if certified,

- certified staff from other network partners.

However, as a rule nobody should limit his/her activity to subsidized counseling only and this type of services should represent an entry into additional services for SMEs.

4. THE ADVISORY / COUNSELING SERVICES

The VS covers and area of SME counseling, not all the forms of SME support services. One has to be careful not to include services that could easily be delivered as market activity and SMEs would be capable to cover the market rate e.g. accounting, tax and



financial advisers, some marketing services etc. The system while focusing on advisory services is designed flexibly to be able to extend in the future to other services:

- basic information services for SMEs (nor provided by commercial agents),- standardized training modules for entrepreneurs, other staff from SMEs as well as the

needs for retraining of employed/unemployed to answer the changing needs,- the link between “soft” services and financial support for SMEs,- entrepreneurs and SMEs already covered by some support in incubators, science and

technology parks etc.

In this way, the VS would really become a comprehensive system, but its development should be based on careful evaluation of results, SME needs and the EU policy to support enterprise sector. Currently, the system is mostly involved in the start-up phase and some specific development projects.

Figure 3. Counseling services covered by the voucher system

The VS is well structured for “would-be” entrepreneurs where the process is fairly uniform for all business ideas and the extent of assistance could be well planned and standardized in advance. This stage also involves a great number of beneficiaries and some joint activities could be organized to decrease costs (training). This part of the VS also extensively combines counseling with training and information support and therefore the individual advisory process is compounded by training in small groups. Each step at this stage has to end with a “counseling product” and successful execution of each step is the entry into the following step. Entrepreneurs still could quit after each step, provided:


»Would-be« entrepreneurs Earlier established firms

1. Counselling interview

2. Introductory training

3 hours

6 hours

3. Market analysis (training, advice)

10 hours

4. Business plan preparation (training & counseling)

24 hours

5. Registration of the venture 4 hours

6. Support for the start-up SME 24 hours

Advisory support:13-36 months

SMEs with development projects with strong impact (investment,

jobs, R&D)

Financially troubled SMEs – turnaround projects


- they get convinced that the entrepreneurial career is not the right choice for them, anyway,

- they get job with another organization and push the idea of new venture creation to some other period of time,

- the counselor gives a negative evaluation of the business idea and entrepreneurs capabilities (here, a troublesome process of complaints could start).

However, if a “would-be” entrepreneur quits the process he still maintains the right to re-enter the process later with a new business idea, but the local administrator could then decide to shorten the duration of some steps where entrepreneur already has past experience.

5. CONDITIONS FOR AN EFFECTIVE VOUCHER SYSTEM

Voucher system while offering conceptually a well-conceived support to all potential entrepreneurs and SMEs demands some conditions to be fulfilled to enable the support network to provide services according to basic rules of the system. These conditions relate to the financial and human resources and organization of the system.

1. The network of LECs should cover the whole territory; where this support is not yet available, the SBDC should negotiate the support with the neighbour LECs or some private consulting firms or SME counselors on a contractual basis. Also, the quality of LECs administration should be monitored and a system of quality assurance should be developed.

2. A computerized on-line information system should be developed in order to avoid the burden of administrative paperwork. The system demands quite an extensive documentation to justify the public resources engaged with the system. This documentation has to be orderly filed and an internet-based system of information and documentation should support the activities with clients without the need to duplicate some steps (e.g. interview) or multiple entry of data (company profile, business idea description). Basically, to maintain the information system is the task of every LEC but the SBDC has to monitor the system as whole.

3. Training should ensure that all stakeholders among system providers know their role and continually improve their capabilities both in system administration and in advisory techniques.

4. The selection process for SME counselors should ensure appropriate quality of basic advisory services at the start and SME counselors have to update their knowledge of the regulatory system and SME legislation as well as improve their counseling skills.

5. The voucher scheme has to be properly financed to ensure the quality improvements over time. Lack of financial resources would weaken the whole system considerably:- loss of trust with entrepreneurs if the implementation would be discontinued,- best SME counselors would leave the system to pursue an alternative career,- the training process would be interrupted,- the information system could be insufficiently maintained and- the lack of promotion would miss the systems objectives.



Figure 4. The structure of documentation with the voucher system

Figure 5. Training input for the voucher system

6. The voucher scheme has to be properly promoted among the potential entrepreneurs while it is much easier to reach existing SMEs through the secondary agents.

The VS is a flexible concept and the SBDC as the top administrator could always adapt the system to the level of expertise in the system of LECs as well as SME advisers and to the amount of financial resources available along several dimensions:

- the type of services involved: besides advisory services information and training could be involved as well,

- the portfolio of counseling services could be restricted or extended,- the extent of services could change, e.g. the number of hours allowed for specific

services (counseling products) could be extended or more freedom could be allowed to LECs advisers – administrators to decide in individual cases,

- the counseling fees could change,- the extent of staff training and promotional activities could be adapted.


REGISTER/RECORDS

Records of certified counselors

Lists of entrepreneursRecords of enterprises

(SMEs)Authorized LECsNetwork partners

OPERATIONS, INVOICING

Data on counselorsDocuments on the counseling

processAdministration of the system in

LECs

VouchersInvoices

Counseling products

MATERIALS

Promotional materialsCounselling tools

(training materials)

IMPLEMENTING AGENTS / STAFF

SBDC staff (strategy) Staff employed with network partners

Primary agents (LECs)Local service providers (LSP)

Organization, system

administration and monitoring

Basic skills to do the interview and

evaluate entrepreneurs and SMEs to enter the

system

Training for the system

implementation

Training for SME counseling

(counseling tools)


6. CERTIFICATION PROCEDURE FOR SME COUNSELORS

The voucher system rests on the quality and enthusiasm of the staff involved. The key to put the system effectively into force and to create a high profile for the system is the quality (image) of local service providers, SME counselors and also administrators. While at the beginning of 1990s there were hardly some experienced SME advisers available, over years a strong group of some 200 SME counselors and local economic development advisers have been trained through GEA College and abroad. Some have left the network due to the constant shortage of resources but the pool of counselors has steadily increased and only in last two years there is a stagnation.

For the voucher system an elaborate selection and evaluation system has been devised to bring to a qualified list of certified SME counselors and expert advisers. The system distinguishes between three level of counselors considering their professional expertise and experience: junior advisor, advisor and expert (senior) advisor. The entry criteria for the pool of certified counselors are listed as following:

- higher education (and extensive practice) or university education,- fluency in at least one language of EU countries,- extensive work and counseling experience evaluated on the basis of years of counseling

experience and the list of references (SMEs or other consulting projects),- professional test.

Professional test is but one of elements of the selection process although sometimes far too much is expected from the test and more trust should be put on continuous training organized through the professional association of SME counselors. Nevertheless, the professional test consists from several components:

1. Extensive written test, covering the following expertise: - general knowledge: SME legislation, theory of entrepreneurship and SME sector,- SME registration procedure for different statutory types of SMEs,- professional business expertise in entrepreneurship, marketing, law and human

resource management (all SME focused).2. Test of computer proficiency including: MS Word word processing exercise, MS Excel

spreadsheet manipulations and graphics, presentation skills using the MS Powerpoint, e-mail services used and searching the world-wide-web for specific information.

3. Delivery of a business plan developed with the assistance of the SME counselor and recommended for financing.

4. Analysis and discussion of a case business plan (written ands oral exercise).5. Analysis and recommended actions in a comprehensive enterprise case, using different

consulting tools.6. Oral test (if necessary).

7. ASSESSMENT OF THE VOUCHER SYSTEM

Voucher scheme started with two pilot implementation regions, the Koroška (A.L.P. Peca) and Dolenjska region (Podjetniški center Novo mesto). The pilot projects have been



successful to certain degree but mainly some deficiencies and complications in the administration procedure have been identified.

The results of the pilot implementation of the VS that was rolled out in two pilot regions (southeast and northeast of Slovenia) prior to the nation-wide launch were evaluated in the 2002’s VS evaluation (Drnovšek, 2002). The implementation of the VS involves four parties: government (providing financing for the VS), local coordinators elected and partially sponsored by the government, counselors-in-making from the national network of consultants and target participants. In order to evaluate the system, several qualitative and quantitative techniques were applied following the OECD recommendations in policy evaluation (OECD, 1997).

First, evaluators have conducted series of structural interviews with target participants within VS, local coordinators and professionals providing counseling to target participants. Secondly, the VS archive located in the two local pilot centers was studied. Finally, the data gathered in the first two steps was used in developing self-reported anonymous questionnaires, which were mailed to all entrepreneurs that participated in the pilot VS. The main purpose was to gauge the overall satisfaction of the entrepreneurs with the system and the 'quality' of its services. All registered users were mailed and Dilman's technique of response rate improvement was used to achieve 36% response rate.

The largest numbers of nascent entrepreneurs entering VS were unemployed to bridge their unemployment status by starting their own company in the form of simple sole proprietorship businesses in the service sector, serving local market needs. They predominantly used the system's business plan preparation service to secure additional funds from the government and banks in starting up. Among types of SMEs, evaluators found that only a few high tech companies with growth potential participated in the VS. The target category of “a company with a growth-project” was frequently used by traditional SME's that entered the system with the motive of facilitating their construction investments, for example expansion of the office space. Very few participants used VS services to expand their markets, customer base, etc. Among existing companies manufacturing, construction and trade companies were prevailing.

Generally speaking, the adoption goal of the VS was successfully implemented since sample respondents expressed a high overall level of satisfaction with utility of VS and also reasonably good satisfaction with the quality of services provided by counselors-in-making.

Nevertheless, the evaluation of the pilot VS implementation provided several starting points for policy implications. A list of policy implications includes:

- motion to gear consultants towards counseling;- advice to better evaluate candidates for the services to avoid unproductive

engagements;- proposal to exclude companies in troubles from the system;- list of additional services that were requested by the polled participants;- proposal to enlarge the documentation model, better track and consciously set goals to

measure performance in a more objective manner;- an adaptive model of dynamic evaluation of local centers' performance and partial

relocation of funds to improve performance of the system in run-time and



- some other miscellaneous improvements.

8. CONCLUSION

Considering the lack of entrepreneurship culture and experience in Slovenia and the need to develop a strong SME sector, the idea to install a comprehensive “voucher system” covering the advisory services but extending to other “soft” services as well has been developed and a concept of the voucher system devised and implemented in two pilot regions. Despite some deficiencies the system has been well appreciated by potential entrepreneurs while the part of support for existing SMEs with development projects has to be further developed and tested.

There are some key issues for an effective voucher system: first, appropriate financial resources have to be administered, combining resources from the national and local budgets. Second, the network of Local Enterprise Centers has to evolve to ensure proper management of public resources and an easy access of entrepreneurs / SMEs to the system. Third, the human factor, the high quality pool of SME advisers has to develop gradually. The system of certification demanded some effort from advisers and some improvements in their expertise resulted, but it would be even more important to develop the plan of further training on the annual basis.

Nevertheless, this initiative to develop the “voucher” system as a nation-wide program is interesting and the future will really prove its viability and the maturity of all stakeholders involved in creating and implementing the system.



9. REFERENCES

Drnovšek, M. (2002): Evalvacija uvajanja vavčerskega sistema. Ekonomska fakulteta, Ljubljana.Glas, M. (1996): Some Dilemmas of the Development of Small Business Support Institutions. Slovenska ekonomska revija, Vol. 47, No. 5-6.Glas, M. (1998): Eastern Europe: Slovenia. Morrison, ed.: Entrepreneurship: An International Perspective. Butterworth-Heinemann, Oxford.Glas, M.; Drnovšek, M. (1998): Small Business in Slovenia: Expectations and Accomplishments. RENT XIII workshop, London.Glas, M. et al. (1998): Integrirani pristop k podjetniškemu in lokalnemu razvoju v Sloveniji. UNDP – UNIDO – PCMG, Ljubljana.Glas, M. (1999): »Vavčerski« sistem za samozaposlovalce v Kataloniji. Glas: Svetovanje – Dodatna gradiva k predmetu. Ekonomska fakulteta, Ljubljana.Glas, M. (2000): Dileme razvoja podporne strukture za podjetništvo. Glas & Pšeničny: Podjetništvo – Izziv za 21. stoletje. MMGT, LjubljanaGlas, M.; Pšeničny, V.; Babnik, M. (2000): Razvoj in izvedba sistema subvencioniranega svetovanja na podlagi napotnic (»vavčerski sistem«). GEA Ventures, Ljubljana.Glas, M. et al. (2000): Gradivo za strokovni preizkus znanja podjetniških svetovalcev v »vavčerskem« sistemu 2001-2002. GEA Ventures, Ljubljana.Haskins, G.; Gibb, A.; Hubert, T. (19899: A Guide to Small-Firms Assistance in Europe. Gower for EANPC and EFMD, Aldershot.Johnson, S.; Sear, L.; Jenkins, A. (2000): Small-business Policy, Support and Governance. Carter & Jones-Evans: Enterprise and Small Business – Principles, Practice, and Policy. Prentice Hall, Harlow.Proceedings to Conference on Policy Evalvation in Innovation and Technology (1997). OECD, Paris.
