Free Enterprise and Entrepreneurship in Serbia: An Analysis of Motivations, Financing and Obstacles

Abstract

Problem statement:Entrepreneurship is considered to be a major driving force to economic development throughout the world. Free enterprise is challenging in any country, especially in a developing nation such as Serbia where communism and socialism prevailed for decades. The purpose of this study is to examine entrepreneurship and free enterprise in Serbia as well as the challenges or obstacles they face. The hope is to understand how Serbian entrepreneurs operate in their nation, especially since little is known about them. Approach: A questionnaire was designed and distributed to a sample of Serbian entrepreneurs. Descriptive statistics were calculated based on responses from participants. The study investigates 59 entrepreneurs; identifying commonalities in funding, motivation behind entrepreneurship and common challenges they face. Underlying similarities or differences are examined. Results: Empirical evidence indicates that the majority of Serbian entrepreneurs rely on equity funding to finance their ventures, form businesses to pursue personal freedom, bootstrap their nascent firms and provide services or represent/sell someone else's products rather than create their own. Results indicate that the greatest challenges to Serbian business owners are with administrative issues associated with their government, political instability and economic uncertainty. Analogous to the USA, Serbian entrepreneurs create business for freedom, independence and monetary gain. Conclusion: The overall results of the study confirm the benefit of entrepreneurship in the transitioning economy, while highlighting the many obstacles that entrepreneurs face. Results indicate that entrepreneurship in Serbia is gaining interest due to the belief that it promotes a better life. Political instability, uncertainty about the future, difficulty obtaining clients and general inexperience pose the greatest threats to Serbian business owners. As entrepreneurship continues to expand in Serbia, they will have greater impact on the local and European economy. Any shifts or changes occurring in entrepreneurship should be examined closer in the future.