european perspectives of western balkans entrepreneurship and sme – case of croatia slavica singer...
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EUROPEAN PERSPECTIVES OF WESTERN BALKANS
ENTREPRENEURSHIP AND SME – case of Croatia
Slavica SingerCEPOR, Zagreb, Croatia
singer_european perspective of western balkans, sofia, 29Nov2004
Basic question and answer
Q: How to survive in a globalized world?
A: To develop an enterprising society of Empowered individuals Ethical businesses Fair government Active civil society,
able to compete and cooperate.
singer_european perspective of western balkans, sofia, 29Nov2004
Need for change...
In looking at problems Connected, not isolated
In seeking solutions Entrepreneurial (holistic, opportunity driven)
In policy approach from traditional macroeconomic view to
growth theory of firmIn definition of stakeholders
Individuals, firms, government, civil society
singer_european perspective of western balkans, sofia, 29Nov2004
How to find best answers?
To know own situation
To know what is going on around you
To know what you want to achieve
singer_european perspective of western balkans, sofia, 29Nov2004
Croatia now... 1
unemployment, high and persistent 16 % ILO - 1991-2003
symetric change in structure of employment 1990-2000 Doubled in small enterprises Halved in large enterprises
regional development imbalances 1 to 6, in GDP/capita, TEA index
singer_european perspective of western balkans, sofia, 29Nov2004
Croatia now... 2
low competitivenesslow entrepreneurial activitylow profitability of SMEshigh corruption
singer_european perspective of western balkans, sofia, 29Nov2004
Competitiveness 1
Growth Competitiveness Index: Croatia
from 53.(2003) to 61.(2004)
Bulgariafrom 64. (2003) to 59.(2004)
economic growth in long run: technologypublic institutionsmacroeconomic environment
singer_european perspective of western balkans, sofia, 29Nov2004
Competitiveness 2
Microeconomic Competitiveness Index: Croatia
from 62. (2003) to 67. (2004) Bulgaria
from 77. (2003) to 70. (2004)
sustainable level of productivity: company operations and strategyquality of the national business environment
singer_european perspective of western balkans, sofia, 29Nov2004
indices
TEA – total entrepreneurial activity (start-up) opportunity vs. necessity
FEA – firm entrepreneurial activity (growth
potential) more than 20 employed after 5 years, new products, new technology
singer_european perspective of western balkans, sofia, 29Nov2004
Croatia vs World (1)
2002-2003 avg 41 countries
Entrepreneurial activity (TEA)World 9.9 vs. Croatia 3.10 (41.)
Slovenia 4.30 (35.)Growing businesses (FEA)World 2.0 vs. Croatia 1.12 (36.)
Slovenia 2.70 (7.)
singer_european perspective of western balkans, sofia, 29Nov2004
Croatia vs World (2)
% of employment in growing businesses
World 12.3 vs. Croatia 4.5 (39.) Slovenia 17.1 (7.)
singer_european perspective of western balkans, sofia, 29Nov2004
Why the interest in growth firms?
employment creation targeting on ‘winners' and ‘quality’ the ‘middle business’ structure argument better returns to investment - long term better returns to public efforts growth sector development concern high tech development concern developing export potential
singer_european perspective of western balkans, sofia, 29Nov2004
Values
Self-employment desirable career?o 58 % yes
Entrepreneurs have high social status?o 48 % no, 28 % yes, 24 % do not know
Media present success stories?o 48 % no, 40 % yes
singer_european perspective of western balkans, sofia, 29Nov2004
Entrepreneurs are born, not made?
No, education matters.
Those with more education are more likely to pursue opportunity entrepreneurship – more benefits for national growth
11.96 TEA (with knowledge and skills)vs. 0.21 TEA (without knowledge and skills)
singer_european perspective of western balkans, sofia, 29Nov2004
Uneven distribution of optimism...
Zagreb Slavonia
Entrepreneurial intentions? 9.6 % 2.5 %
Business opportunity? 20.4 10.3
Have knowledge? 41.5 16.9
Entrepreneur –good career? 60.3 43.8
singer_european perspective of western balkans, sofia, 29Nov2004
What is going on in EU...
Entrepreneurship in Europe, green paper, 2003
Charter for Small Enterprises, 2000 – Croatia signed in 2003
singer_european perspective of western balkans, sofia, 29Nov2004
What Croatia wants to achieve?
Goals (2004-2014 time horizon): Sustainable growth of GDP (55-60% of EU
GDP) – 5+ % annual growth of GDP Lowered unemployment – 8 % Increased social inclusiveness
National Council on Competitiveness
2004.
singer_european perspective of western balkans, sofia, 29Nov2004
Many surveys agree on obstacles...
Education
Administrative barriers
Government policies/programs
Cultural and social norms
singer_european perspective of western balkans, sofia, 29Nov2004
But small businesses ask for...
Taxation policy
Technological capacity
Better legislation
Better representation
singer_european perspective of western balkans, sofia, 29Nov2004
Government is focusing on...
Developing institutional infrastructure for enhancing entrepreneurship Clusters, centers for entrepreneurship,
business incubators, business zones...
Subsidized loan programs
Training services for start-up entrepreneurs
singer_european perspective of western balkans, sofia, 29Nov2004
But not enough on... 1
Elimination of administrative barriers No silent approval Time to register property 956 days,
EU15 48, Bulgaria 19 Time to start a business 49 days, EU15
31, Bulgaria 32 Costs to go through insolvency 26.1% of
estate (recovery rate), EU15 70.2%, Bulgaria 34.2%
singer_european perspective of western balkans, sofia, 29Nov2004
But not enough on... 2
EducationUpgrading policy capacity in
government Suffocating in operational programs
Businesses with growth potentialDevelopment of non-traditional
financial instruments Equity, business angels...
singer_european perspective of western balkans, sofia, 29Nov2004
Concluding questions
Who are listening to whom?
Do stakeholders have capacity to communicate?
Do stakeholders have entrepreneurial capacity for change?
singer_european perspective of western balkans, sofia, 29Nov2004
Recommendations
To work on developing capacity for Listening Communicating Changing among all stakeholders (individuals, firms,
government, civil society) in order to develop consensus on URGENT NEED FOR CHANGE
To identify common international perspective on progress in entrepreneurship and SME Global Entrepreneurship Monitor project?
singer_european perspective of western balkans, sofia, 29Nov2004
CEPOR - SME Policy Center
Centar za politiku razvoja malih poduzeća CEPOR
Contact details:Trg J.F. Kennedy 7/IHR-10000 Zagreb, CroatiaPhone: +385 1 2305 363Fax: +385 1 2345 577www.cepor.hrE-mail: [email protected]
singer_european perspective of western balkans, sofia, 29Nov2004
CEPOR founders
Croatian Chamber of CommerceCroatian Chamber of CraftsInstitute for International Relations, ZagrebEconomic Institute, ZagrebJ.J. Strossmayer University in Osijek, Faculty of
Economics, OsijekIstrian Regional Agency, PulaCenter for Entrepreneurship, OsijekMedjimurje Entrepreneurship Center, ČakovecOpen Society Institute-CroatiaAssociation of Croatian Institutions for Promoting
Entrepreneurship
singer_european perspective of western balkans, sofia, 29Nov2004
Contact details
Slavica Singer
Director CEPOR – SME Policy Center
e-mail: [email protected]