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Orkhan Mammadov: State support mechanism for internal market research is welcomed by entrepreneurs 07.10.19
Orkhan Mammadov: State support mechanism for internal market research is welcomed by entrepreneurs

Following the relevant Decree of the President of the Republic of Azerbaijan, another state support mechanism for entrepreneurs has been launched. The new mechanism to support micro, small, and medium businesses in conducting internal market research, provides additional incentives for further expansion of entrepreneurship by being a continuance of the existing government support measures. Organizing support measures for internal market research is carried out by the Small and Medium Business Development Agency (SMBDA) of the Republic of Azerbaijan. What is internal market research, and what kind of support will be provided to entrepreneurs under this mechanism? Orkhan Mammadov, Chairman of the Board of SMBDA, answered the questions of AZERTAC (Azertaj).

Mr. Mammadov, what is the internal market research, and what kind of innovations and advantages will this mechanism bring in terms of supporting business development?

- It is important to study the demand for products and services to be produced, the customers, and the sales network for a successful business and its expansion. In this regard, market research plays the role of an important data source. The market research also helps to reduce the risks of an entrepreneur, helps to build and expand business in the right direction.

Currently, market research in our country is carried out by entrepreneurs and companies specialized in this field. Conducting market research by entrepreneurs who start a new business and want to launch new products and services is not always effective. Market research by professional consulting companies requires certain expenses. Our observations show that this is the reason why entrepreneurs, especially micro and small entrepreneurs, are reluctant to conduct market research.

State support is provided for conducting market research to stimulate the competitive production of micro, small, and medium businesses under the Decree of the President of the Republic of Azerbaijan dated May 29, 2019. Micro, small, and medium businesses can benefit from this support mechanism under regulations approved by the mentioned Decree. Entrepreneurs will be provided with information and financial support to carry out internal market research in the relevant area under this mechanism upon their request. The launch of a new state support mechanism for entrepreneurs once again shows that President Ilham Aliyev is the biggest supporter and patron of entrepreneurs.

By providing state support for micro, small, and medium businesses to conduct internal market research, on the one hand, entrepreneur's costs will be reduced, and on the other, by stimulating competitive production, the creation of new products and services, businesses and facilities, and growth in production in private sector will be supported.

Acceptance of the applications of entrepreneurs to conduct internal market research has been already started.

In general, how is the process organized, and how will businesses benefit from this support?

As you know, according to the rules, the state support for the internal market research of micro, small, and medium businesses is carried out by the Small and Medium Business Development Agency. The agency has formed a working group to implement the relevant decree of the head of state. Acceptance of applications from businesses to conduct internal market research has been started in August. Entrepreneurs have already submitted several applications to conduct internal market research in various fields.

SMBs, as well as business associations and consulting companies, which combine hundreds of entrepreneurs, have been informed about internal market research. For this purpose, a special section has been created on SMBDA's official website “www.smb.gov.az an educational video clip has been produced and broadcasted on television channels and social networks.

If we briefly describe the process of conducting internal market research, the entrepreneur should first directly or electronically submit a completed sample application form to SMBDA for market research in the area of interest. An entrepreneur's application is evaluated by a working group formed at the agency and is also reviewed by consulting firms specialized in this field to conduct approved internal market research under the Law on Public Procurement. Market research can be conducted by local and foreign legal and natural persons, i.e., universities, institutes, private research and analytical centers, consulting companies, as well as small and medium business development centers. Once the internal market research is ready, the SMBDA will evaluate the report and present it to the entrepreneur.

80% of the cost of each internal market research conducted based on the request made by the micro-business entity, and 50% of the cost of each internal market research conducted based on the request made by the small business entity will be covered by the state. In general, the amount of support paid for each internal market research is up to 20,000 manats. Medium businesses will benefit from this support mechanism by participating in free training courses and seminars and getting ongoing information support in the fields identified.

Entrepreneurs may apply individually or in groups for market research. As you know, there are business associations that engage in different fields of the economy in our country. Entrepreneurs may also apply on behalf of the association for conducting internal market research. I would like to note that the market research, which will be prepared based on the request of the entrepreneur, will be presented to this particular entrepreneur only. Moreover, consulting companies based on the initiative from SMBDA will receive requests to conduct internal market research on priority fields of the economy.

The internal market research, based on these orders, will be open to all businesses and will be posted on the agency's website.

Given that the support for the internal market research is a new mechanism, what are your expectations about SMBs activity in this area?

- We observed that the entrepreneurs are interested in conducting market research within the events held to inform the business community, especially micro, small, and medium businesses about the state support mechanism for conducting internal market research As I have already mentioned, entrepreneurs would give up conducting market research in most cases due to the fact that such research requires some cost.

Another observation is related to the fact that entrepreneurs are unaware that market research is essential during the establishment of a business. Every entrepreneur who starts a business and is interested in expanding their business activities should know that market research is a prerequisite for their success.

Although the acceptance of applications from entrepreneurs for state support of internal market research began shortly, requests and questions submitted to the SMBDA indicate that the new mechanism has been welcomed by entrepreneurs. The entrepreneurs are also pleased with the launch of such a support mechanism, and they welcome the relevant Decree of the President in this regard.

What other mechanisms is SMBDA planning to use to support micro, small, and medium businesses?

The agency aims to support SMBs at all stages, from the establishment of micro, small, and medium businesses to the expansion of entrepreneurship activities within the state support mechanisms and services provided by SMBDA and to play the role of a bridge between the public authorities and entrepreneurs in the field. To summarize, the activities of the Agency include areas, such as to support the development of SMBs, protect their interests, encourage entrepreneurs to set up a new business and develop existing business, support access to local and foreign markets and financing.

Since the launch of SMBDA, a lot of work has been done in such areas as protecting the interests of SMBs, promoting investment projects, supporting sales, educating entrepreneurs, and more.

The agency aims to communicate with businesses through four (4) contact platforms and provide services. These are territorial (SMB Friend Network and SMB Development Centers), sectoral (field associations and focus groups, SMB cluster companies), one place principle (SMB houses), and Electronic Means (e-SMB House portal) platforms, many of which are already in the service of SMBs. Appropriate measures are taken to set up other support mechanisms, and entrepreneurs will soon be able to benefit from these mechanisms.

One of these is the SMB Friend mechanism implemented based on the public-entrepreneur cooperation platform and is currently at the services of entrepreneurs. SMB Friends, who are closely interacting with the micro, small and medium businesses in the administrative area where they operate, and support their initiatives, identifying and realizing their potential opportunities, all stages of establishing new SMBs and their development, as well as protecting the rights of entrepreneurs, already operates in 14 cities and regions of the country. The SMB Friend Network is expected to cover the entire country.

Currently, activities are underway to establish the first small and medium business house (SMB House) in Baku with the purpose of to ensure all G2B (government to business) and B2B (business to business) services to entrepreneurs in the single space. Entrepreneurs in SMB House will be able to access the services they need at all stages of business management, starting with their business planning. Here more than 100 “G2B” services from more than 30 government agencies and “B2B” services from private organizations will be organized on business processes, such as plan the business, start the business, operate the business, and develop the business.

At the same time, appropriate measures are being taken to create an “SMB House” portal, which will provide services through a single platform in electronic form. The E-SMB House portal will provide SMB support mechanisms in nonstop shop mode across a single electronic platform.

In addition to these mechanisms, establishment, and stimulation of SMB clusters, support of start-ups, enhancement of the work of micro and small businesses to organize sales in trade networks, increase the personnel capacity of SMBs, the establishment of SMB registries and other support mechanisms are developed. Furthermore, we continue to work on the establishment of SMB development centers, the Public-Private Partnership Development Center, and SMB development funds, which are part of the Agency's structure, and these mechanisms will incorporate various support measures for SMBs.

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