Entrepreneurial Competencies as Strategic Tools: A Comparative Study for Eastern European Countries

Entrepreneurial Competencies as Strategic Tools: A Comparative Study for Eastern European Countries

Ana-Maria Bercu (Alexandru Ioan Cuza University of Iasi, Romania) and Dan Lupu (Alexandru Ioan Cuza University of Iasi, Romania)
DOI: 10.4018/978-1-7998-2714-6.ch002

Abstract

The debates about entrepreneurial competencies have increased in number. The study aims to develop the main key components of entrepreneurship as a competence for SMEs in Eastern European Countries (EEC). The development of our study will include a literature review of the concepts and theories in the field, an inventory of the required skills and competencies for SMEs in EEC from three dimensions: a personal one, in terms of motivation and performance; material, as financial resources; and non-material, in terms of attitudes, skills, and behaviors. For the emerging markets, the study is important for revealing the entrepreneurial competencies as tools for strategically planning with impact on the entrepreneurial climate. Implications for the strategic development of the firms will be discussed.
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Introduction

Due to the effects that entrepreneurship in a country has on the economy, the importance of this phenomenon is paramount, noting that where it is strong and the wellbeing of the citizens of that country is greater. Entrepreneurship is the cause of innovation and change being determined by knowledge and flexibility. The development of the entrepreneurial spirit leads to the increase of the economic competitiveness of a country and to better answers to the challenges of the economic globalization (Belás, Dvorský, Tyll, & Zvaríková, 2017; Dana, 2013). The employees of small and medium size enterprises represent a strategic tool for the capacity of companies to adapt and to respond to the challenges of market place, while the entrepreneurs have a major role: to create and develop their business, to organize and manage the required activities and to be part of the market-makers (Schoonhoven and Romanelli, 2001). The competencies allow people to identify their potential to create value, using the resources, demonstrating self-efficacy and ability to overcome the obstacles, and the formal education system plays a very important role (OECD, 2014).

Entrepreneurship, at European and regional level, is a key component for innovation, employment and social integration, and finally, economic growth. Overcoming the economic crisis situations can also be achieved by encouraging entrepreneurship, in this sense the European Union adopting in 2008 the Small Business Act strategy. By adopting the Europe 2020 Strategy, the aim is to create a conducive climate and enhance the entrepreneurial energies at European level.

For decades the issues concerning the entrepreneurship became a point on the agenda of governments being recognized as real opportunities to create new jobs, to support and develop local communities, to sustain economic development at regional, national or global level. Birch (1979) shows that, the new and small firms have a very important role in economy: creating new jobs, promoting the technological progress and determining the structural changes. Other studies (Nightingale and Coad, 2016) show that the small firms have a low rate of survival and present low profitability and that, the jobs created are occupied by the persons with weak skills and, as consequence, the payment received is very low. The jobs created under this assumption are more volatile and do not offer a real perspective for governments to sustain the entrepreneurial activities. The intervention of governments implies a real knowledge of the entrepreneurial activities and the risks assumed by the involved actors (people with business ideas, legislators, local authorities, citizens etc.). Eastern European countries have experimented an extraordinary changes and development in the field, being an important point on the agenda of policy makers. Mason and Brown (2013) reveal the fact that the knowledge plays the central role in competition on European market considering the entrepreneurial activities and building of small and medium firms.

Central and Eastern Europe (CEE) represents a large region from the geographical point of view, but also a very varied region in terms of cultures and languages spoken; regional diversity and interconnectivity between countries also apply to the entrepreneurial ecosystem, giving rise to particular challenges. An entrepreneurial ecosystem consists of a variety of components that strongly influence entrepreneurial activities, being able to be classified into external, specific non-entrepreneurial factors, specific entrepreneurial factors and individual entrepreneurs (Pistrui, Welsch, & Roberts, 1997).

A particular case is that of the countries of Eastern Europe, among which are Romania, which have undergone a period of profound structural changes of system concomitant with significant decreases in the population amount. They generally have a smaller number of entrepreneurs and, consequently, an insufficient number of new private businesses.

This chapter discusses the evolution entrepreneurship in 5 Eastern European Countries comparatively with the EU for the period 2008-2016, and is organized in 4 parts as follows: introduction, literature review, main characteristics of entrepreneurship in CEE and conclusion.

Key Terms in this Chapter

Eastern European countries: the region of Eastern Europe which includes the former communist states and which joined the EU.

Entrepreneurship: mentality and process of creating and developing economic activity by combining risk-taking, creativity and / or management-based innovation, within a new or existing organization.

Entrepreneurial Learning: the term used for associating learning to develop entrepreneurial knowledge.

Education: the process of preparing people as an active element of social life.

Small and Medium-Sized Enterprises: (short for SMEs): companies that have turnover and the number of employees below a certain limit.

University: a higher education institution organized in faculties according to different specialized fields that confer academic degrees.

Entrepreneurial competencies: personal / psychological characteristics that are unique to entrepreneurs: need for achievement, place of control, tolerance of ambiguity, self-confidence, creativity / innovation, predilection for risk-taking and self-sufficiency / freedom.

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