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Entrepreneurship in Estonia: Combination of Political and Entrepreneurial Agenda
Abstract
Entrepreneurship as a private economic initiative in Estonia became legal with Gorbachev Perestroika at the end of the long period of Soviet occupation. Therefore, political agenda of transition from command to market economy also marks entrepreneurship development trajectory. Efforts of the Estonian government, for ICT development, from the 1990s, and entrepreneurship promotion in the twenty-first century manifest as political entrepreneurship. In a combination of these two aspirations, technology startup boom characterizes Estonian entrepreneurship in the second decade of the twenty-first century.
... De um lado, há países (ou políticos) que defendem medidas mais rígidas de imigração, promovendo a discriminação étnica e gerando efeitos colaterais aos imigrantes, como o caso atual dos EUA e de alguns países europeus (como visto em Almeida et al., 2016;Schlueter, Masso, Davidov, 2018). Já de outro, defende-se o incentivo às políticas migratórias que buscam atrair mão-de-obra qualificada e com boa educação, sendo este o caso do Canadá (Kaushik, Drolet, 2018) e da Austrália (Chand, Tung, 2019), assim como o da Estônia (Mets, 2017). ...
... Além disso, com a necessidade de as pequenas e médias empresas se estabelecerem internacional ou até globalmente, se dá a criação de novos empregos ligados à inovação tecnológica, induzindo mais empregos em outros setores e gerando um efeito multiplicador até cinco vezes maior que de outros setores (Moretti, 2012). No entanto, para a criação bem-sucedida de ecossistemas empreendedores high-tech, há a necessidade de uma configuração de componentes que incluam atores tangíveis e intangíveis (Mets, 2017), como: mercados nacionais e estrangeiros acessíveis, capital humano incluindo talentos gerenciais e técnicos com experiência empresarial, financiamento, sistemas de suporte, estrutura regulatória, infraestrutura de telecomunicações, internet e transporte, educação, treinamento, parques tecnológicos e incubadoras. ...
... A Estônia, que ingressou na União Europeia em 2004, tem promovido a aglomeração de empresas de e-services em seu desenvolvimento regional (Kattel, Mergel, 2018), pretendendo alcançar um patamar semelhante ao da economia finlandesa, embora tenha aproximadamente 30.000 empregos de alta qualificação parcialmente atendidos (Mets, 2017). Para esse fim, sendo um país pequeno, o investimento em tecnologia e born globals baseadas no conhecimento é uma das melhores soluções para se alcançar mercados em todo o mundo (Mets, 2016). ...
Resumo: Uma recente imigração de brasileiros para Estônia é revelada no presente artigo, evidenciando trajetórias dos imigrantes e o surgimento de negócios étnicos e tecnológicos. O país situa-se no seio do Mar Báltico e promove a imigração qualificada, focada na economia digital. Foi aplicado um questionário tipo survey a 65 respondentes brasileiros que vivem na Estônia, sendo complementado por oito entrevistas em profundidade com empreendedores brasileiros e artistas que se empresariam no país. Os pesquisadores apresentam as características dessa comunidade em formação e possíveis caminhos para futuros imigrantes, evidenciando aspectos dos negócios étnicos e interações dos brasileiros com a cultura estoniana, trajetórias migratórias, dificuldades enfrentadas e oportunidades levantadas por esses imigrantes.
... All those policy measures were implemented by the Estonian government stimulating the speed of growth in the 'catching-up' period realized with the accession to the European Union (EU) and NATO in 2004. This could also be called the period of bold political entrepreneurship in an activity chronology of the Estonian government (Mets 2017a). In a relatively short time, Estonia moved from the lowest development level to the nextinvestment-driven economy according to Porter et al. (2002). ...
... Similarly, R&D basis for biotechnology and material technologies are created in these two leading Estonian universities. Although there exist several success stories of entrepreneurial new ventures in these fields (see, e.g., Mets 2017aMets ,b, 2016Mets , 2012, they are in the clear minority of the Estonian startup scenery. But, practically common to the majority of betterknown technology companies, is their early internationalization or even globalization orientation. ...
... Likewise, the early EU-membership of the three Baltic countries, Estonia, Latvia, and Lithuania, has spurred productive entrepreneurship and launched all three countries on the path of successful economic development (Aidis 2017). In Estonia, political entrepreneurship on the part of the government was responsible for the high rates of technology entrepreneurship in the country (Mets 2017). Krumina and Paalzow (2017) argue that in Latvia necessity-driven entrepreneurship helped the economy during downturns. ...
It has been documented that entrepreneurs can affect institutions at local, regional, and national levels. Most studies in entrepreneurship, however, look at how institutions and institutional frameworks support or deter entrepreneurial actions, while the literature on whether and how entrepreneurship affects institutions is lacking. This necessitates the examination of a two-way relationship between institutions and economic agents. Institutional change caused by entrepreneurs’ actions is often presented through the lens of institutional entrepreneurship. Entrepreneurs influence institutions through three main channels: political action, innovation, and direct action, which may involve “passive adaptation and evasion, active adaptation and resistance to change.” Most of the documented examples of entrepreneurs’ impact are from postsocialist countries, countries in transition, and emerging market economies. This chapter offers an extensive overview of how entrepreneurs influence institutional change in emerging market economies.
... Thus, Lentsch [11] demonstrates the broader social context of entrepreneurship. In this article, we look at political entrepreneurship as a phenomenon that triggers and drives essential developments/changes in society, e.g., the creation of political, monetary, legal and physical infrastructure for a functioning state and social life [17]. In essence, this means that PE includes and combines all the three levels described above. ...
... Siinkirjutaja arvates jääb piiratuks ka poliitilise ettevõtluse käsitlus, kui võtta arvesse, et poliitikute otsustest sõltuvad paljud ettevõtluse ökosüsteemi kujundavad otsused. Eesti senist arengutki võib vaadelda kui poliitilise ettevõtluse tulemust (Mets, 2017). Poliitilise ettevõtluse lühi-ja pikaajaline perspektiiv on kindlasti üks ette võtluse paradokse, mis väärib uurimist. ...
Suna Løwe Nielseni, Kim Klyveri, Majbritt Rostgaard Evaldi ja Torben Bageri raamat "Entrepreneurship in theory and practice: Paradoxes in play" on hea sissejuhatus valdkonda. See mitte üksnes ei paku teoreetilist vaatenurka distsipliinile, vaid ka suunab lugejat kriitiliselt analüüsima ettevõtluse pakutavaid võimalusi ning avardab kaasuste ja paradokside kaudu ettevõtja mõtteviisi, soodustades selle rakendamist ettevõtlusprotsessis. Sellisena on raamat väärtuslik nii üliõpilasele kui ka valdkonna professionaalile, kelleks magistriõppe läbinu peaks kujunema.
... Since 2014 World Economic Forum (WEF) [6] considered Estonia among innovationdriven knowledge-based societies, and two years laterbeing hidden entrepreneurship champion in Europe [7]. Besides, Estonia has become one of the developed startup ecosystems where young ICT companies are booming [8]. ...
The paper evaluates the convergence paths of Central and Eastern European member states of the EU during the 2010s, when the main task for these countries was avoiding the middle-income trap—when wages are not so low anymore to compete with less developed countries, while innovation is not developed enough yet to compete with developed countries. Using various statistical indicators, the paper shows that while most countries in the region have been on a convergence path during the decade under analysis, not all succeeded in avoiding the trap. While some countries successfully implemented policies to step on the path of productivity- and innovation-led growth (Czechia, Slovenia, Estonia, and Lithuania), in several other states, growth was supported mainly by low costs and loose monetary conditions including significant transfers from the EU. The comparative analysis of Estonia and Hungary illustrates the different growth models and shows how the institutional system plays a key role in exiting the trap.
The book is devoted to supporting entrepreneurship in Poland, Slovakia and Estonia from the perspective of local authorities of each country, solutions available from the perspective of the central level, as well as the involvement of the institutional environment in creating conditions for initiating and running a business.
A tanulmány fő célja 11 kelet-közép-európai ország (EU11) 2010-es évekbeli fejlődési pályájának a bemutatása. A szerző abból a feltevésből indul ki, hogy ebben az időszakban a fő feladat a közepes jövedelem csapdájának nevezett jelenség leküzdése volt. Leíró statisztikai eszközökkel mutatja be, hogy bár szinte mindegyik régiós ország felzárkózási pályán haladt, a követett gazdasági stratégiák jelentősen különböztek egymástól: míg a régió egyes országai sikeresen állnak át a termelékenység-és innovációvezérelt növekedési pályára, más országokban továbbra is a költségelőny és a kedvező pénzügyi feltételek tekinthetők a növekedés elsődleges hajtóerejének. A tanulmány Észtország és Magyar-ország példáján keresztül illusztrálja az intézmények jelentőségét az eltérő gazdasági stratégiákban.
The GEM Report 2016-17 completes its 18 years of measuring entrepreneurship-related activities . The study has a noble mission of generating globally comparative data of entrepreneurial activity . It helps identify factors determining national levels of entrepreneurial activity as well as policies aimed at enhancing entrepreneurial activity . It measures entrepreneurship through surveys and interviews of various field experts, conducted by the teams in their respective countries . The GEM survey generates a variety of relevant, primary information on different aspects of entrepreneurship and provides harmonised measures about individuals’ attributes and their activities in different phases of venturing (from nascent to start-up to established business and to discontinuation) . The GEM Report 2016-17 covers results based on 64 economies completing the Adult Population Survey (APS) and 65 economies completing the National Expert Survey (NES) . The report provides insights into entrepreneurial activities in India . The GEM India study was conducted using a well-established GEM research methodology, consistent across all participating countries, thus enabling a cross-country comparison . The APS was conducted among 3,400 samples, which provided information regarding the level of entrepreneurial activity in their country, based on the national framework conditions, whereas the NES was conducted on 72 national experts . The NES in India focused on entrepreneurial ecosystem, also with regard to the nine entrepreneurial framework conditions .
How do you measure your entrepreneurial ecosystem? How should you interpret the data about your startup community? What economic indicators should matter for vibrancy and growth? These questions come up repeatedly in conversations with entrepreneurs, program heads, event organizers, investors, policymakers, and others. The frequency of these queries reflects the phenomenon: With the rapid spread of efforts to build entrepreneurial ecosystems, it’s only natural to wonder what outcomes should be tracked. And, what you track depends on what you’re trying to achieve.In some places, the desired outcome is simply more: more entrepreneurs, more companies, and more jobs. Other communities design their ecosystem efforts around a particular type of company or type of job. Some regions, moreover, see the “entrepreneurial ecosystem” as a marketing effort, and focus on a particular type of individual they hope to attract to their area. For other cities, the only thing that matters is the “exit” - initial public offerings and acquisitions. These are all worthy objectives, and communities must define their own goals. Yet where most places fail is in reliance on a handful of limited input metrics rather than outcomes. To judge the vibrancy of their entrepreneurial ecosystems, many states and regions focus on things like research and development funding at universities, available investment capital, and engineering degrees. These may be associated with more entrepreneurial activity, but they are inputs, not necessarily the outcomes to be tracked. Other regions focus on patents or technology licenses out of universities - these are a piece of the puzzle, but they’re not necessarily the leading indicators of entrepreneurial vibrancy. At the other end of the spectrum is the kitchen-sink approach - because every part of an entrepreneurial ecosystem is critically important, you must track everything. This approach has the admirable quality of avoiding Campbell’s Law but provides no sense of prioritization or focus for those community leaders involved in the ecosystem. There must be some middle ground between trying to capture every dimension of an entrepreneurial ecosystem and overly focusing on only one or two indicators. There are also different levels of measurement for entrepreneurial ecosystems. In this paper, we focus on the overall performance of the ecosystem in terms of outcomes and vibrancy. In future work, we will explore measurement indicators that can be instituted at the level of programs and organizations.
In this book, one of the most highly recognized entrepreneurship scholars shares in a personal and readable way his rich experience and ideas on how entrepreneurship can be researched. Entrepreneurship is a phenomenon of tremendous societal importance. It is also an elusive phenomenon, which makes researching it fun, fascinating―and frustrating at times. In this fully updated edition, numerous real examples accompany the treatment of problems and solutions concerning design, sampling, operationalization and analysis.
Researching Entrepreneurship is targeted primarily at research students and academics who are relatively new to research or to entrepreneurship research. This said, basic knowledge of research methods is assumed, and when foundational issues are discussed they are typically approach from a non-standard angle and/or with an eye to illuminate entrepreneurship-specific problems and solutions. This makes large parts of the contents potentially valuable for entrepreneurship scholars at any level of research proficiency. The book is also of interest to sophisticated, non-academic users with a professional interest in collecting and analyzing data from emerging and young ventures, and to those who make use of published entrepreneurship research. For example, analysts in marketing research or consultancy firms, business associations, statistical agencies and other government offices may find this book to be a valuable tool. Moreover, while the examples are derived from entrepreneurship research, the book provides a unique "experienced empirical researcher" (rather than "textbook method expert") treatment of issues that are of equal relevance across the social sciences. This goes for topics like the role of theory; research design; validity assessment; statistical inference, and replication.
Entrepreneurship research has developed rapidly in the decade that has passed since the first edition. Therefore, all chapters have been comprehensively updated and many have been extended; sometimes to twice the original length. Two of the original chapters have been excluded to make room for entirely new chapters on “the Dependent Variable” and “The Entrepreneurship Nexus.” While retaining a unique, personal tone, the author uses examples and references that build on contributions from a large number of top entrepreneurship researchers.
Regional policies for entrepreneurship are currently going through a transition from increasing the quantity of entrepreneurship to increasing the quality of entrepreneurship. The next step will be the transition from entrepreneurship policy towards policy for an entrepreneurial economy. The entrepreneurial ecosystem approach has been heralded as a new framework accommodating these transitions. This approach starts with the entrepreneurial actor, but emphasizes the context of productive entrepreneurship. Entrepreneurship is not only the output of the system, entrepreneurs are important players themselves in creating the ecosystem and keeping it healthy. This research briefing reviews the entrepreneurial ecosystem literature and its shortcomings, and provides a novel synthesis. The entrepreneurial ecosystem approach speaks directly to practitioners, but its causal depth and evidence base is rather limited. This article provides a novel synthesis including a causal scheme of how the framework and systemic conditions of the ecosystem lead to particular entrepreneurial activities as output of the ecosystem and new value creation as outcome of the ecosystem. In addition it provides a framework for analysing the interactions between the elements within the ecosystem. This offers a much more rigorous and relevant starting point for subsequent studies into entrepreneurial ecosystems and the regional policy implications of these.
This paper adapts the entrepreneurial theory developed by Richard Cantillon, Frank Knight, and Ludwig von Mises to the theory of "political entrepreneurship." Political entrepreneurship is an outgrowth of the theory of the market entrepreneur, and derives from extending entrepreneurial theory from the market into the po-litical sphere of action. By applying the theory of the entrepreneur to political behavior, we provide a basis for identifying political entrepreneurs, and for separating them analytically from other government agents. The essence of political entrepreneurship is the redirection of production from the path it would have taken in an unregulated market. Nevertheless, this production does produce an income stream to political entrepre-neurs which closely resembles the profit of market entrepreneurs.
If economic interdependence with Europe and the US is seen as a diplomatic vulnerability, countries that might one day face sanctions will look for alternate arrangements that are less easily exploited.
Both the commonsensical and leading theoretical accounts of entrepreneurship, democracy, and solidarity fail to describe adequately entrepreneurial, democratic, and solidarity-building practices. These accounts are inadequate because they assume a faulty description of human being. In this article we develop an interpretation of entrepreneurship, democratic action, and solidarity-building that relies on understanding human beings as neither primarily thinking nor desiring but as skillful beings. Western human beings are at their best when they are engaged in producing large-scale cultural or historical changes in the way people and things are dealt with. The three domains of human activity where these historical changes are most clearly accomplished are entrepreneurship, democratic action, and solidarity. Section I, guided by a roughly Kuhnian notion of holding on to an anomaly until it re-gestalts the way we see things, offers a general interpretation of how skillful human beings open up new worlds by changing their shared background practices in three ways: reconfiguring, which makes a marginal practice central; crossappropriation, in which one domain of practices takes over useful practices from another domain; and articulating, whereby dispersed or confused practices are brought into clearer focus. An entrepreneur creates a product which reconfigures the practices. This interpretation of entrepreneurial skills is contrasted with current accounts that overlook ehtrepreneurship to concentrate on instrumental or theoretical models of business activities. Section II claims that the most exemplary kind of political action in a liberal democracy is that of political action groups. Such groups produce a change in a nation’s background practices through a kind of speaking that leads to massive cross-appropriation. We describe Mothers Against Drunk Driving (MADD) and suggest that it both satisfies the requirements for genuine democratic action that we have established in our examination of other views and lacks their disadvantages. We conclude that the relatively detached action suggested by current theories of liberal democracy fail to do justice to democratic practice. The final section argues that those who claim that a single highest value or procedure provides a source of solidarity that satisfies all the competing interests in a multi-cultural nation always arrive at a solidarity that is too thin to provide for the serious sort of commitments that one would be willing to die for. We propose that solidarity in multi-cultural states implies commitment to a set of thick values, and that when one realizes that these thick values construct one’s identity one is willing to die for them. While political action concerns itself with ordering values, solidarity involves the cultivation of them in such a way that no ordering of them matters. But solidarity is not to be understood as a subjective feeling. It is rather the experience of a group identity, a ‘we’, that sees things and deals with things in terms of shared concerns. This ‘we’ comes to recognize itself when the actions it engages in transform it. The paradigmatic action that transforms such a ‘we’ occurs when a culture figure articulates some forgotten concern or value. As in the cases of entrepreneurship and democratic action, a culture figure cultivates solidarity by changing the background practices in a historical manner. It is concluded that traditional theoretical accounts, by overlooking the primacy of involved skillful activities and the importance of background change, fail to capture the source, the function, and the point of entrepreneurship, liberal democracy, and solidarity.
Public policy is currently shifting from SME policy toward entrepreneurship policy, which supports entrepreneurship without
directing attention to quantitative goals and specific firms or employment groups. The institutional framework set by public
policy affects the prevalence and performance of both productive entrepreneurship and so-called high-impact entrepreneurship
in turn. Although varying contexts and economic systems make prescribing a general panacea impossible, a number of relevant
policy areas are identified and analyzed. Independent of environment, productive entrepreneurship should be rewarded and unproductive
entrepreneurship should be discouraged. Successful ventures must also have the incentive to continue renewing themselves just
as it must be easy to start and expand a business. In particular, we analyze regulatory entry and growth barriers, labor market
regulation, liquidity constraints, and tax policy at length.
KeywordsEntrepreneurship-Gazelles-High-growth firms-High-impact entrepreneurship-Innovation-Institutions-Product market regulations-Property rights-Self-employment-Tax policy
Theories of political entrepreneurship usually focus on the construction of coalitions necessary to change policy. We argue
that political entrepreneurs who are unable to secure favored policies may redirect their efforts to a “higher tier,” attempting
to change the rules of the game to enable the exploitation of future political profit opportunities. We present a taxonomy
of three levels of political rules—pre-constitutional, constitutional, and post-constitutional—and identify the salient characteristics
of institutional entrepreneurship that targets rules at each level. The development of the congressional committee system
is explored as a case study in entrepreneurship over post-constitutional rules.
KeywordsEntrepreneurship–Congressional committee system–Collective action–Institutions
Much has been written about networks, strategic alliances, and virtual organizations. Yet these currently popular frameworks provide little systematic assistance when it comes to out-innovating the competition. That's because most managers still view the problem in the old way: companies go head-to-head in an industry, battling for market share. James Moore sets up a new metaphor for competition drawn from the study of biology and social systems. He suggests that a company be viewed not as a member of a single industry but as a part of a business ecosystem that crosses a variety of industries. In a business ecosystem, companies "co-evolve" around a new innovation, working cooperatively and competitively to support new products and satisfy customer needs. Apple Computer, for example, leads an ecosystem that covers personal computers, consumer electronics, information, and communications. In any larger business environment, several ecosystems may vie for survival and dominance, such as the IBM and Apple ecosystems in personal computers or Wal-Mart and K mart in discount retailing. In fact, it's largely competition among business ecosystems, not individual companies, that's fueling today's industrial transformation. Managers can't afford to ignore the birth of new ecosystems or the competition among those that already exist. Whether that means investing in the right new technology, signing on suppliers to expand a growing business, developing crucial elements of value to maintain leadership, or incorporating new innovations to fend off obsolescence, executives must understand the evolutionary stages all business ecosystems go through and, more important, how to direct those changes.
The Singing Revolution led to regaining independence after 50 years of Soviet occupation and created a new socioeconomic situation in Estonia in 1991. One of the first steps, of the Estonian government, was a telecommunication concession to the private company Eesti Telekom, in 1992. In 1995–1998, the Estonian government launched the national ICT strategy followed by the e-governance program. Fast economic and welfare growth in 1995–2007 ended with the global crisis, reminding many that linear growth of the economy is not sustainable anymore. Some new trends appeared in the last 8 years: Estonia has become the home of many new ICT startups which soon became global. There are opinions that it is not important for the Estonian economy, and ordinary Estonians will never experience a better living standard from such ICT startups. The chapter, based on data available from the statistics and multiple case studies, tries to find the answer.
In this book, one of the most highly recognized entrepreneurship scholars shares in a personal and readable way his rich experience and ideas on how entrepreneurship can be researched. Entrepreneurship is a phenomenon of tremendous societal importance. It is also an elusive phenomenon, which makes researching it fun, fascinating—and frustrating at times. In this fully updated edition, numerous real examples accompany the treatment of problems and solutions concerning design, sampling, operationalization and analysis.
Researching Entrepreneurship is targeted primarily at research students and academics who are relatively new to research or to entrepreneurship research. This said, basic knowledge of research methods is assumed, and when foundational issues are discussed they are typically approach from a non-standard angle and/or with an eye to illuminate entrepreneurship-specific problems and solutions. This makes large parts of the contents potentially valuable for entrepreneurship scholars at any level of research proficiency. The book is also of interest to sophisticated, non-academic users with a professional interest in collecting and analyzing data from emerging and young ventures, and to those who make use of published entrepreneurship research. For example, analysts in marketing research or consultancy firms, business associations, statistical agencies and other government offices may find this book to be a valuable tool. Moreover, while the examples are derived from entrepreneurship research, the book provides a unique "experienced empirical researcher" (rather than "textbook method expert") treatment of issues that are of equal relevance across the social sciences. This goes for topics like the role of theory; research design; validity assessment; statistical inference, and replication.
Entrepreneurship research has developed rapidly in the decade that has passed since the first edition. Therefore, all chapters have been comprehensively updated and many have been extended; sometimes to twice the original length. Two of the original chapters have been excluded to make room for entirely new chapters on “the Dependent Variable” and “The Entrepreneurship Nexus.” While retaining a unique, personal tone, the author uses examples and references that build on contributions from a large number of top entrepreneurship researchers.
In this chapter, the authors deal with the social constructivist entrepreneurial process-based training methodology approach at venture creation across different fields as experienced by trainers moderating the learning process with both social entrepreneurs and technology entrepreneurs in traditional (handicraft) and virtual technologies. The social constructivist approach-based methodology was first developed for implementation within the framework of a venture lab-type of ecosystem/environment at the University of Tartu, Centre for Entrepreneurship. The combination of the above methodology with the venture lab environment was called Entrepreneurship Home® and registered as the trademark of the University of Tartu. Following this, the Entrepreneurship Home® methodology was incorporated into mainstream entrepreneurship courses across study programs of the university, including adult training courses.
Over the last two decades, the role of the EU can be considered highly important in advancing institutional reforms and overall development in Estonia. The article focuses on Estonian regional policy (RP) and analyses whether it has gone through Europeanization (i.e. convergence with EU regulations and values, or followed its own development path). The institutional cycle model of territorial governance is used for establishing the analytical framework. The research was largely carried out as a second-person action research and used interviews over the period of 1990–2011. The article concludes that Estonian RP shows considerable dynamics as public and political support to RP, administrative structures and policy tools have changed. Europeanization of Estonian RP was most visible in 1994–1998, when an institutional framework was created, in parallel with intensive learning from the West. Overall, in 1999–2004 the application of EU cohesion policy tools took place with significant convergence. After joining the EU in 2004, national RP programmes were reduced, the institutional framework was frozen and a selective application of EU rules and the use of EU cohesion policy measures for achieving some personal political agendas started, driving Estonian RP away from common European values.
The paper sets out to review entrepreneurship in transition countries, assessing the extent to which theories and concepts of entrepreneurship developed in a market economy context can provide an appropriate interpretative framework. This is done in order to develop propositions for a model of entrepreneurship under transition conditions, which captures (1) the distinctive features of entrepreneurship, (2) the context for entrepreneurship in these countries and (3) the entrepreneurial process. The paper builds on previous papers by the authors, selectively using empirical evidence to support appropriate conceptualisation.
What does it take for a region to foster technological entrepreneurship? Recently, there has been significant interest in this topic. Most writers on this topic emphasize the tangible infrastructure such as sound legal systems, transparent capital markets, advanced telecommunications and transportation systems, etc. Sound legal systems, capital markets, and other structural features are necessary prerequisites for technopreneurship; however, what I am calling the intangibles of entrepreneurship are the sufficient conditions that allow, specifically, for Schumpeterian entrepreneurship to thrive in a locality. Often, governments attempt to promote technopreneurship by injecting risk capital. They distribute these funds through small business development centers, and several regions and countries have even attempted 'public' venture capital funds. However, my hypothesis is that if only risk capital is injected, it flows straight to low-quality entrepreneurship. Focusing on only risk capital, the investing government assumes that the risk capital itself will create all other prerequisites for growth. This is a major supposition. If risk capital is expected to produce extraordinary wealth, it must be accompanied by seven other intangibles, including, access to novel ideas, role models, informal forums, region-specific opportunities, safety nets, access to large markets, and executive leadership.
We contribute to research on country-level entrepreneurship by introducing the concept of National Systems of Entrepreneurship and by providing an approach to characterizing them. We suggest that National Systems of Entrepreneurship are fundamentally resource allocation systems that are driven by individual-level opportunity pursuit, through the creation of new ventures, with the outcomes of this activity regulated by country-specific institutions. In contrast with the institutional emphasis of the National Systems of Innovation frameworks, where institutions engender and regulate action, National Systems of Entrepreneurship are driven by individuals, with institutions regulating the outcomes of individual action. Building on these principles, we introduce a novel index methodology to characterizing National Systems of Entrepreneurship. The distinctive features of the methodology are: (1) systemic approach, which recognizes interactions between components of National Systems of Entrepreneurship; (2) the Penalty for Bottleneck feature, which identifies bottleneck factors that hold back system performance; (3) contextualization, which recognizes that national entrepreneurship processes are always embedded in a given country’s institutional framework.
This research examines the applicability of the entrepreneurial ecosystem literature to the development of a ‘ustainable valley’, whereby a community becomes a centre for entrepreneurial innovations. Specifically, this research explores how components of the formal and informal network, physical infrastructure and culture within a community could contribute to a sustainable entrepreneurial ecosystem. One community, Victoria, British Columbia, is utilized to lay out the framework for the infrastructure necessary to create such a system. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.
The born global start-up lacks resources compared to the requirement of reaching world markets. Further, the extant internationalization theories may not be adequate to indicate viable channel alternatives for born globals. The conventional way of pledging personal assets, raising resources, and expanding internationally is definitely slow and this adds to the usual business risks. Thus, the major imperative emerges that the born global must utilize large channels provided by MNCs, networks, and/or the Internet to receive substantial revenues and cash flow rapidly. These channels also provide learning, technology, and evolutionary growth. Examples of the performance of born globals, with relatively similar products, originating from Israel and Finland are used to elaborate. Also, the managerial implications for born globals, and future research areas are brought out.
What does it take for a region to foster technological entrepreneurship? Recently, there has been significant interest in this topic. Most writers on this topic emphasize the tangible infrastructure such as sound legal systems, transparent capital markets, advanced telecommunications and transportation systems, etc. Sound legal systems, capital markets, and other structural features are necessary prerequisites for technopreneurship; however, what I am calling the intangibles of entrepreneurship are the sufficient conditions that allow, specifically, for Schumpeterian entrepreneurship to thrive in a locality. Often, governments attempt to promote technopreneurship by injecting risk capital. They distribute these funds through small business development centers, and several regions and countries have even attempted “public” venture capital funds. However, my hypothesis is that if only risk capital is injected, it flows straight to low-quality entrepreneurship. Focusing on only risk capital, the investing government assumes that the risk capital itself will create all other prerequisites for growth. This is a major supposition. If risk capital is expected to produce extraordinary wealth, it must be accompanied by seven other intangibles, including, access to novel ideas, role models, informal forums, region-specific opportunities, safety nets, access to large markets, and executive leadership.
In this paper we analyse the role of government in relation to the development of entrepreneurship in countries where private business activity was illegal until the beginning of the 1990s. By focusing on Estonia and Belarus we are concerned with countries with an ostensibly similar political heritage, yet with contrasting experiences during the post-Soviet period. Various authors have argued the need for entrepreneurship research to acknowledge the heterogeneity of environmental conditions, outcomes, and behaviours that exist with respect to entrepreneurship. Government policies and actions are a key element contributing to the heterogeneity of external conditions in which entrepreneurship occurs and are thus part of social embeddedness. The findings have implications for policy makers in transition and developing countries by emphasising the variety of ways in which the state can influence the nature and pace of private business development and the central role of institutional behaviour in this process. The findings also have implications for researchers interested in extending analysis of entrepreneurship into a wide range of business environments.
The paper is concerned with the role of government in relation to SME development in economies at different stages of market reform. It demonstrates that, as in mature market economies, the state is a major factor influencing the nature and pace of SME development, although more through its influence on the external environment in which business activity can develop than through direct support measures or interventions. Survey evidence from the Ukraine, Belarus and Moldova suggests that many enterprises are set up, survive and sometimes even grow despite government, because of the creativity of individuals in mobilising resources and their flexibility in adapting to hostile external environments. The problem is that in these situations the number of firms remains small and their contribution to economic development rather limited. In such a context, government still has to create the framework conditions for private sector development to become embedded and sustaining. At the same time, in countries where market reforms are at a more advanced stage (such as Poland), current priorities for government with respect to the environment for SME development include bringing legislation and regulations in line with EU standards in preparation for EU accession, encouraging the banking system to adapt and recognise the SME sector as a potential market for a range of financial products, facilitating the development of venture capital funds for that minority of SMEs that seek external equity, and working in partnership with the private sector to establish an effective support infrastructure. Although there may be a case for selective interventions in both types of circumstances, direct support measures are not the main role for government in either case.
This study surveys the literature examining the privatization of state-owned enterprises (SOEs) We review the history of privatization, the theoretical and empirical evidence on the relative performance of state owned and privately owned firms, the types of privatization, if and by how much privatization has improved the performance of former SOEs in non-transition and transition countries, how investors in privatizations have fared, and the impact of privatization on the development of capital markets and corporate governance. In most settings privatization "works" in that the firms become more efficient, more profitable, and financially healthier, and reward investors.
It is now more than ten years since the dismantling of the USSR began, not only in terms of the reasserted independence of the member states, but also in terms of the end of the centralised Soviet command economy. The experiences of a myriad of investors, public and private, who have lost funds they so hopefully made available to emerging enterprises in the Eastern European states, particularly in Russia, have clearly demonstrated to Western observers the difficulties associated with making a transition from a command to a market economy. And yet the transformation in different states has had different degrees of success. For example, in Estonia, the strategies to move from a command to a market economy, adopted by the political leadership throughout the 1990s, have been relatively successful. In this article, the policies that led to this success are identified. It is believed that tentative generalisations from the experiences of Estonia may be helpful in determining the necessary conditions for successful change from a command to a market economy in other countries. To the extent that such transitions contribute to real economic growth, empirical evidence about the conditions necessary for their realisation provides general understanding of the forces underlying economic development. Moreover, it may well be that these generalisations can be used by private and public organisations to obtain a first indication of the probabilities of success of investments that they are contemplating making in a transitional economy, whether measured by return on capital, and/or contribution to general welfare. Copyright Blackwell Publishers Ltd 2002.
This paper was developed with financial support from the SBF Bourse de Paris and the New York Stock Exchange, and the assistance of George Sofianos, Bill Tschirhart, and Didier Davidoff is gratefully acknowledged. We appreciate comments received on this paper from Anthony Boardman, Bernardo Bortolotti, Narjess Boubakri, JeanClaude Cosset, Kathy Dewenter, Alexander Dyck, Ivan Ivanov, Ranko Jelic, Claude Laurin, Marc Lipson, Luis Lopez-Calva, John McMillan (the editor), Harold Mulherin, Rob Nash, John Nellis, David Newberry, David Parker, Enrico Perotti, Annette Poulsen, Ravi Ramamurti, Susan Rose-Ackerman, Nemat Shafik, Mary Shirley, Aidan Vining and three anonymous referees. Additionally, we appreciate comments received from participants at the NYSE/Paris Bourse Global Equity Markets conference (Paris, December 1998), the Harvard Institute for International Development Privatization Workshop (June 2000), the International Federation of Stock Exchanges' Third Global Emerging Markets Conference (Istanbul, April 2000), four World Bank and/or International Finance Corporation meetings, two OECD conferences (Paris and Beijing), the 1999 Conference on Privatization and the Kuwaiti Economy in the Next Century, the 1998 Financial Management Association meeting, the 1999 European Financial Management Association meeting, the Fondazione ENI Enrico Mattei (FFEM), the Swiss Banking Institute and Credit Suisse, and seminars at the City University Business School (London), London Guildhall University and the University of Oklahoma. All remaining errors are the authors' alone. Please address correspondence to: William L. Megginson Price College of Business 307 West Brooks, 205A Adams Hall The University of Oklahoma Norman, OK 73019-4005 Tel: (405) 325-2058; Fax: (405) 325-1957 e-mail:...
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