Micro-Enterprise and Micro-Innovation in a Turbulent Era: A Southern European Union Perspective

Micro-Enterprise and Micro-Innovation in a Turbulent Era: A Southern European Union Perspective

Fragkiskos Xirouchakis (University of the Aegean, Greece)
DOI: 10.4018/978-1-5225-2458-8.ch019
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Sustainability, local development and regional development are crucial issues in our days. A success factor for the above is the micro innovation of the micro enterprise. In the present chapter, we are going to focus on the southern European Union area and more specifically in the case of Greece. The development of innovative small and medium enterprises in the Greek regions (with emphasis on the region of Crete) is going to be the key element of sustainability, local development and regional development.
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Introduction-Basic Principles

The Schumpeterian Lines: Schumpeter Mark I (Small Enterprise)

J.Schumpeter is well known as a co-founder of the term innovation1. According to Shumpeter theory Mark I the entrepreneur is the key person in order to innovate and create economic development in the macroeconomic level. The reason is the ability that the entrepreneur has to create all the time new products/services. In this way the entrepreneur destroys products/services that are very common and with no use. At the same time the entrepreneur creates new products/services which are going to replace the above in the near future (Storey D. & Greene F., 2011).

The theory of Schumpeter (1934)Mark I reflects his early thoughts about the entrepreneurship. The main characteristic of this theory is the entrepreneur capitalism. The entrepreneur capitalism emphasizes in the entrepreneurs. These entrepreneurs are the small enterprises. A basic feature of the entrepreneur is the creativity. Furthermore the entrepreneur is a person of action (Antonelli C. Patrucco P. & Quatrano., 2011). The motivations of the entrepreneur are the independency and the creativity and not the profit. The entrepreneur can be an inventor. The entrepreneur borrows capital in order to start the production activity. The imitation is a basic threat not only for the profits of the entrepreneur but also for the future of the enterprise (Schumpeter J., 1934).


The Southern European Union Perspective-Regional Development In Greece

Firm Size and Innovation

An overview of the main features of enterprises, countries and workforce has given to the analyst the assumption that the employment growth rate is heavily related to the innovativeness of individual enterprises as well as the innovativeness of countries (EIM Business and Policy Research, 2011). Table 1 demonstrates that innovation outcomes depend on the employment change and the size class of the enterprises. Therefore the bigger the size of the enterprise the stronger result in the innovation and the increase in the employment. Economy of scale is occurring among innovation and employment.

Table 1.
Share of enterprises with employment increase or decrease during 2009Q4-2010Q4 by size class and innovativeness, for the EU37 business economy
Employment changeMicro (2-9)Small and Medium (10-249)Large (250+)
InnovativeNot InnovativeInnovativeNot InnovativeInnovativeNot Innovative
No change59%68%46%55%38%36%

Source: EIM Business and Policy Research, (2011), p.78

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