Small Firms And Entrepreneurship In Central And Eastern Europe

Much of the research on transformation/transition in Central and Eastern European Countries (CEECs) focuses on macroeconomic issues (inflation, economic growth, employment ...). Little research has been devoted so far to microeconomic analysis. Recently the issue of new enterprises and firm founders has moved to the centre of economic and policy considerations. Readers of this book will learn about the role played by these firms in the transformation of central and eastern European countries. The book also includes contributions from Central and Eastern Europe on which little or no investigation has been performed until now (Yugoslavia, Romania, Slovakia).

This book analyses the relative importance of small firms in industrial economies. It brings together a series of studies spanning a spectrum of selected countries in developed Western nations and Eastern Europe to identify the exact role of small firms and how this role has evolved. A striking result which emerges is that a distinct and consistent shift away from large firms and towards small enterprises has occurred within the manufacturing sector of all Western countries, while the role of small firms in Eastern European nations has been remarkably restricted, and, indeed, all these countries have experienced a shift away from small firms. It is clear from this analysis that a major challenge for political and economic reform in Central and Eastern Europe is to create the strong entrepreneurial sector which exists in the West.

This unique Handbook explores the role of government in the development of entrepreneurship in countries where twenty years ago private enterprise was illegal or barely tolerated. The expert contributors reveal that government policy is one of the key influences on the external environment in which businesses develop, particularly in countries where it has been necessary to redefine the role of the state in relation to business development. They outline how government policy can also act as an enabling and/or a constraining force with respect to entrepreneurship development, particularly in relation to institutional change and the development of a market-based economy. This Handbook includes up-to-date information and analysis as to how entrepreneurship policies have evolved in the wider Europe, focusing on the challenges that arise in designing and implementing entrepreneurship policy. The Handbook of Research on Entrepreneurship Policies in Central and Eastern Europe excellently covers different facets of entrepreneurship policies in Central and Eastern Europe and will prove invaluable for academics, students and researchers of entrepreneurship and small business as well as policy studies. Policy makers will also find plenty of key insights and relevant information in this important resource.

The present analysis brings together a series of studies across a spectrum of selected countries in developed Western nations and Eastern Europe to identify the exact role of small firms, and how that role has evolved during the fifteen years preceding the publication of the book in mid-nineties. The studies included provide systematic evidence on the following issues: first, the role of small firms and the extent to which they account for economic activity, and how this varies across nations; second, how the role of small firms varies across sector and industries; third, whether the firm-size distribution has shifted towards or away from small businesses. Results emerging from the present studies indicate that a consistent shift away from large firms and towards small businesses has occurred within the manufacturing sector of all Western countries in the time period under discussion. In contrast, Eastern European countries had experienced a shift away from small enterprises. The major challenge for political and economic reform in Central and Eastern Europe that emerges from these analyses is how to create the strong entrepreneurial sector which exists in the West. Chapters 2 through 7 focus on the role of small firms in the economies of the United States and Western Europe (UK, West Germany, Netherlands, Portugal and Italy). Among the findings: New business formation in the 1980s in the United Kingdom had led to a significant increase in the number of businesses in the service sectors, but not nearly as much increase in manufacturing. Small firms in West Germany are not a source of dramatic job generation. The decrease in average firm size for the West German economy as a whole can more or less completely be explained by the change in sectoral composition. When the employment measure is used, no significant shift in the size of firms in the overall US economy between 1976 and 1986 is noticed. However, when the sales measure is used, a slight trend towards smaller firms can be identified. By contrast, within the manufacturing sector a pronounced shift away from large firms and towards small businesses had occurred. This trend is less apparent when the employment measure is used, but much stronger when the sales measure is applied Smaller firms have provided the bulk of employment in the Netherlands, and there has been a shift towards an increased importance of smaller-scale enterprises? In Portuguese manufacturing, entry barriers, namely economies of scale and product differentiation, had a negative impact on small-firm intensity, and small firms avoided export-oriented industries that are characterized by more intense competition. In the Italian economy there has been great turbulence among small firms. While small firms have persisted since the early 1950s, there has been recent growth, structural changes in the economy, and changes in relationship with large firms. Chapters 8 through 10 focus on Czechoslovakia, East Germany and Poland, respectively. The examination of the role of small firms in Czechoslovak manufacturing offers an alternative to the often fallacious description of firm behavior in the command economy as a strict government controlled hierarchical structure, through an analysis of Czechoslovak manufacturing firms within the context of the economic strategy based on the returns to scale paradigm. The enterprise structure of the past in East Germany has been changing rapidly; this study emphasizes which specific preconditions should be promoted in order to facilitate a vital entrepreneurial sector. A chapter on the implications of the Polish economic reform for small business adds to the discussion of the development of small business in Poland during the transformation from central planning to a market economy, using a sample of small businesses in the area around and including Gdansk. The final ch.

First published in 1999. Small businesses now constitute the most dynamic element of growth in the emerging markets of the Central and Eastern European region. This book argues that the small and medium sized enterprise (SME) sector has contributed more to the growth of these countries in transition than have privatized state enterprises and the public sector. In 1989 most of the countries of Eastern and Central Europe were still under an economic system dominated by state-owned enterprises. Since then a process of liberalization has been unleashed to promote free market policies. This has involved programs of privatization and restructuring of public enterprises, as well as the promotion of policies to enable a private sector to develop. Small businesses are creating thousands of new jobs while large companies are "retrenching and downsizing" their work force. In some countries of the region this process is much further along than in others. However, the SME sector has developed at a more rapid pace than has the privatization of the large public companies. There has been a flurry of new enterprises springing up throughout the region which are "trickling up" in a frequently hostile environment against tremendous odds, and yet managing to have a pronounced impact on their respective economies. Small businesses have taken over in sectors that used to be dominated by big enterprises, primarily in services and consumer products. They have provided a crucial outlet for pent-up entrepreneurial talent that had remained dormant during the long period of state domination. This work urges legislators, policy-makers, and development agencies alike to take account of the importance of the SME's in their legislation and planning. Given a more favorable environment, these small businesses will provide even greater impetus for economic growth. Equally important is for entrepreneurs themselves to be convinced of the rightness of their path in societies that have traditionally looked down upon profit-seekers as unscrupulous and selfish. If the CEE region is to achieve its full potential of economic growth, policies and support mechanisms to promote the SME sector will be needed to assure a favorable environment.

This text provides an overview of entrepreneurship in a range of important emerging markets. A team of expert contributors provide analysis of entrepreneurship practice. Empirical insight into how entrepreneurial firms in Central and Eastern Europe internationalize is supplemented with context provided by world-renowned editors.

This title was first published in 2003. Since the late 1970s there has been considerable interest in the role of small firms in economic development in general and employment generation in particular. Throughout the developed world, governments have introduced a range of measures to encourage small firm growth and development in an attempt to stimulate economic growth, generate employment and foster innovation. Though not all measures have been successful many policies have transferred to the transition economies of Central and Eastern Europe where, since 1989, small firm growth and development has achieved considerable importance in economic restructuring. Accordingly, this volume presents the leading research on the role of small firms in economic development and employment generation in both transition and developed countries. Setting itself in a wider theoretical context, the book also considers the implications for both policy and theory and suggests directions for future research.

The process of the transition to a market-oriented economy for countries from Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) started some 25 years ago. A new technology base triggered the fast growth of new investments into intangible assets by global economic leaders at the beginning of the 1990s, providing the basis for a move towards a knowledge economy. During the past 25 years, entrepreneurs in CEE and the CIS have reshaped traditional industries and created new industries, combining innovative ideas with traditional competencies. Yet we still do not know very much about how and why companies led by entrepreneurs develop, how they expand globally and what the role of new knowledge and innovation is in the internationalization process. Understanding the pathways of entrepreneurial development, especially growth through internationalization, is important for the overall development of countries in transition and beyond. Entrepreneurship in Central and Eastern Europe: Development through Internationalization provides an overview of entrepreneurship in a range of important emerging markets. This book aims to fill the gap in the literature by providing up-to-date data and case-based evidence. With coverage of a range of national firms from countries including Belarus, Estonia, Hungary, Poland, Latvia, Lithuania, Serbia, Slovakia, Slovenia and Ukraine, this book will be vital supplementary reading around international entrepreneurship and essential reading for those studying the business environment in this vital emerging market.