ISSN 1995-459X print E-ISSN 2312-9972 online ISSN 2500-2597 online English
Editor-in-chief Leonid Gokhberg
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2017. vol. 11. No. 3
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Editorial note
People’s Entrepreneurial Activity: Sources and Patterns
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11–24
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The subject of this article is the entrepreneurial activity of the population residing in the post-socialist countries of Central and Eastern Europe (CEE), and its goal is to identify different types of ecosystems of entrepreneurship in these countries by means of analyzing entrepreneurial activity in various countries/groups of countries considered in the context of their societal and economic development. Empirically this article is based upon data from the Global Entrepreneurship Monitor (GEM). On the basis of an analysis of the strengths and weaknesses of existing approaches in the relevant literature to the taxonomy of business ecosystems, using a set of key country-level indicators of the GEM for 2011, this article proposes a taxonomy for entrepreneurship ecosystems based on two «axes» — the quality of entrepreneurial activity (high, average, below average) and the state of the entrepreneurial framework conditions in the respective countries (favorable, average, below average). The result is a clustering of CEE countries’ entrepreneurship ecosystems, where the worst cluster consists solely of Bosnia and Herzegovina, and the best contains the Czech Republic. Russia belongs to a cluster with mid-level indicators along both axes. The results might be used to implement a more focused policy promoting entrepreneurship and support for small businesses, which must move away from generalized schemes towards concrete policy concepts taking into account the resources and limitations of each of the selected types of entrepreneurship ecosystems. |
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25–36
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The formulation of entrepreneurial aspirations represents one of the key stages of the entrepreneurial process. In practice, however, not every declared intention is eventually translated into a viable enterprise, creating the phenomenon of the intention-action gap. This study is based upon the key principles of embeddedness perspective and the theory of planned behavior, considering a variety of factors that are able to increase or diminish the probability of an actual shift from entrepreneurial intentions to concrete start-up activities. These factors include the presence of a family business, support from a university entrepreneurial environment, and the level of development of regional entrepreneurial institutions. An analysis of data on 4,484 students from 32 Russian universities gathered over the course of the international project, the Global University Entrepreneurial Spirit Students’ Survey (GUESSS), in 2013–2014 revealed a negative correlation between a family business and the probability of a potential entrepreneur’s shift from entrepreneurial aspirations to the actual creation of a start-up enterprise. The development of regional entrepreneurial institutions, on the other hand, exhibits a positive link. |
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37–48
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New and emerging technologies pose a serious challenge for the future of employment. As machines learn to accomplish increasingly complex production tasks, the concern arises that automation will wipe out a great number of jobs. This paper investigates the relationship between the risk posed by the automation of jobs and individual-level occupational mobility using a representative German household survey. It provides an overview of current trends and developments on the labor markets due to the automation of jobs. It also describes the most recent dynamics of self-employment and relates it to the risk of the automation of jobs. The results suggest that the expected occupational changes such as losing a job, demotion at one’s current place of employment, or starting a job in a new field are likely to be driven by the high occupation-specific risk of automation. However, the switch to self-employment, both with and without employees, is more likely to occur from paid employment in occupations with a low risk of automation. Hence, the rising level of entrepreneurial activities is less likely due to jobs becoming obsolete over the course of automation, but rather due to the high number of opportunities offered by the digital age. The issues addressed within the paper provide room for further investigation. Particularly, an important question concerns which additional skills workers in jobs with a high risk of automation should acquire in order to make themselves less susceptible to the negative consequences of such a change. More research is needed in order to develop educational strategies to make workers less susceptible to job loss due to automation. |
Technological Entrepreneurship: Factors of Growth
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50–60
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The main purpose of this paper is to assess the possible impact of new technology-based firms on the social and economic development of Central and Eastern European (CEE) and Commonwealth of Independent States (CIS) countries by analyzing the share of such firms among entrepreneurs and society and by investigating data on their expected growth, innovativeness, and internationalization. The study contributes to forecasting the future effects caused by NTBFs on the economy of CEE and CIS countries. We use pooled samples from 2013–2015 from the Global Entrepreneurship Monitor for: Russia (pooled sample size: 4,030), Hungary (6,003), Romania (6,024), Poland (6,001), Lithuania (4,000), Latvia (4,004), Estonia (6,662), Czech Republic (5,009), Slovakia (6,010), and Kazakhstan (4,205). Most analyses are based on a one-way ANOVA analysis of the differences of in the average size of country indicators for the analyzed countries. The research results point to significant differences among the analyzed countries. The share of NTBF owners ranges from 0.7% (Russia) to almost 5% (Slovakia, Romania, and Kazakhstan). NTBFs also substantially differ across countries in terms of projected growth (highest in Hungary and lowest in Russia), internationalization (highest in Latvia, lowest in Russia) and innovativeness (highest in Poland, lowest in Kazakhstan). The main limitations of this study are as follows. The sample used was not chosen specifically for the task. Moreover, the assessment of the novelty of the technology is based on entrepreneur’s self-assessment, so we might expect a bias in that regard. The data on projected growth, internationalization and innovations are just the expectations of the entrepreneurs themselves, so again, bias is expected. The relationships presented in the paper might be strongly influenced by external factors and sample pooling might even magnify that impact. The paper has implications for the policies developed to support entrepreneurship in order to facilitate growth, internationalization, and innovativeness at NTBFs. |
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61–70
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It is widely acknowledged that R&D based startups play a significant role in the economic growth of many countries. However, founding such an enterprise is a risky endeavor, one that requires a balance between the technological search process and business capabilities. Most of the time these varied skills are found among several different people. The task becomes more difficult for recent engineering school graduates who are neither scientists nor business people. Therefore, it is critical for these new techno-entrepreneurs to conscientiously work on building relationships with stakeholders through whom they might access scientific knowledge on one hand and commercial knowledge on the other. The paper explores the process of building relationships with stakeholders based on evidence from Turkish companies. It begins with a review of literature, presenting the different theories concerning relationships with stakeholders as far as entrepreneurship is concerned. Then, it presents the methodology, classification and analysis of in-depth interviews with the founders of R&D-based startups, which help justify the use of a qualitative approach. The case profiles are considered with a focus on the following issues: the counterbalancing of stakeholder power, learning by the entrepreneur as a by-product of interactions with stakeholders, and the earning of a reputation through ethical and passionate business practices. Building upon these preliminary findings, the author draws three main propositions that could be the subject of further research. The main finding of this paper is that there are two opposing forces affecting the development of any company — problem and supporter stakeholders. At that, a stakeholder who was once a supporter could turn into a challenger or vice versa. The entrepreneur could benefit from the counterbalancing effect of these forces. Two major stakeholder groups emerged at the initial stage of the business: the family members and the state’s grant-handling officers. Then, the ethical and passionate conduct of business by these startups could become a factor drawing third parties in to become stakeholders of these startups. The nature and impact of these relationships should be researched further. Such an analysis allows one to understand how R&D-based startups are established and what kind of problems they face when turning (hopefully) into large corporations. On such a basis, this could help governments develop more suitable support programs that would benefit and expand the opportunities available to the founders of new R&D-based firms. |
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71–81
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Despite the government’s efforts to support entrepreneurship, the major share of start-up funding in transitional economies comes from the owners’ own funds and ‘‘love capital’’ rather than from institutional sources (banks, venture funds, etc.). This increases the asymmetry of information concerning the capabilities of the emerging businesses for potential investors, and thus hinders the development of entrepreneurship as a whole. The paper considers the key determinants affecting the decisions made by entrepreneurial start-ups when choosing from a number of ways to finance their business in transitional economies. An attempt has been made to build models for an adequate prediction of the financial strategies of early entrepreneurs. A number of hypotheses have been put forward to verify external and internal factors influencing the financial choices of early entrepreneurs. Hypotheses were tested on a survey sample of early entrepreneurs from seven transitional economies, including Russia. The predictive values of the final models proved to be effective in predicting start-ups’ financial strategies and in comparing the probability of early entrepreneurs borrowing capital. Our findings confirm that the combinations of external and internal financing differ significantly depending on the national macroeconomic and social context. Given that simple borrowing mechanisms for supporting a business can lead to an undesirable tendency to avoid formal borrowed funds altogether, such behavior can hinder the development of entrepreneurship. The obtained results show that pessimistic short-term expectations about the conditions for entrepreneurship in a region aggravate this problem in Russia. The outcomes demonstrate a need to reduce the burden on start-up businesses and to improve innovative entrepreneurial aspirations by encouraging high confidence in a start-up’s future and find the optimal proportion of borrowed sources in a business’s capital structure. |
Innovation in companies
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83–93
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The Russian manufacturing sector has an underdeveloped SME sector both in terms of employment and contributions to GDP in comparison with other economies, with evident signs of stagnation over the past few decades. However, little is known about the capacity of SME sector, i.e., the opportunities to grow and thus exploit the benefits from economies of scale. The paper attempts to estimate the impact of internal and external factors on a firm’s competitiveness in the context of optimal enterprise size. The main conclusion is that that the satisfaction of Russian SME managers has been increasing due to factors such as the sufficient supply of qualified personnel, modern infrastructure, developed partnerships, the expansion of the geographical scope of available markets and favorable institutional conditions for entrepreneurship. In contrast, serious constraints to SME growth in Russia discourage entrepreneurs and lead to poor decisions by managers such as exploiting shadow schemes, leaving the market or growth in the form of nominally independent firms under the informal “umbrella” of one owner. Formidable bureaucratic barriers and significant transactional costs increase the vulnerability of small businesses to administrative pressure. In order to survive and remain on the market, Russian companies have to adapt to the existing institutional environment, and must be larger compared to their counterparts in developed economies. |
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94–102
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Knowledge-intensive business services (KIBS) industries demonstrate some of the highest levels of innovation in most developed economies. However, these industries are very heterogeneous. Research on their innovative activities is needed in order to provide evidence to inform policy instruments to support such companies. In this paper, we analyze the innovation configurations of 477 Russian KIBS companies. First, we use factor analysis to study the key features of their innovative behavior: different innovation types and different features of demand for KIBS from innovative clients (volume, range and level of customization of services). Three factors emerge, and the KIBS companies are divided into six clusters through the prism of these factors. The clusters are: non-innovators; organizational change innovators; marketing innovators; technology-oriented innovators; non-technological innovators and diversified innovators. Finally, we examine the distribution of companies across the clusters in terms of their size and the type of services |
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103–111
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Eco-innovation plays an increasingly important role for the competitiveness of companies. They open up new market opportunities due to the growing demand for eco-friendly products and can increase business efficiency. Using a dynamic capabilities lens, this article analyzes the relationships between various types of eco-innovation (product, process and organizational) and firm efficiency in the context of less innovative and more innovative companies. We use data from an online survey of Slovenian companies that have implemented eco-innovations as part of their operations. Statistical tests include an analysis of variance and a linear regression analysis. We find that organizational eco-innovation positively affects firm efficiency at all companies independent of their innovation potential, while process eco-innovation is positively associated with firm efficiency only among more innovative companies. In addition, at less innovative companies, firm age positively affects firm efficiency, suggesting that older and less innovative companies may enjoy learning curve benefits derived from experience. However, firm size has a positive effect on firm efficiency at more innovative companies, suggesting that more innovative companies may benefit from economies of scale. In general, more innovative companies are more likely to engage in eco-innovation and more likely to derive cost benefits (efficiency) from different types of eco-innovation. The main limitations of our analysis are the subjective data on the level of firms’ innovation and efficiency, the cross-sectional study design, and the single-country setting. Further in-depth longitudinal studies could better model the direction of causality between the implementation of eco-innovation and business efficiency, obtain objective data on business innovation, and ensure a more detailed and nuanced exploration of dynamic firm capabilities. |
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