The Role of Small Businesses in the Economic Transformation of Eastern Europe: Real But Relatively Unimportant?

Abstract

RICHARD SCASE IS PROFESSOR OF Organisational Behaviour at the niversity of Kent at Canterbury, England. His research interests incorporate entrepreneurship and small business growth. He is currently analysing processes of organisational transformation in the emerging market economies of Central Europe. This paper discusses the role of small businesses in these economies. It argues for a distinction between proprietorship and entrepreneurship and suggests that there is little evidence of rational, growthoriented small business start-up in these countries. Instead, the paper claims that the small business sector consists of those who are motivated to carve out 'niches' of personal autonomy within uncertain economic conditions. It identifies those who constitute the key groupings of the emerging small business sector and argues that though representing real economic change, they are relatively unimportant in the economic transformation of Eastern Europe.

Export behaviour of SMEs in transition countries

“…Transition is a process whereby countries increasingly 1 The SME definition follows the European Community definition, based on the number of employees: small firms (including micro firms) have up to 50 employees; and medium firms have up to 250 employees. 2 See, for example, Bartlett and Prasnikar (1995); Futo et al (1997); Scase (1998); McMillan and Woodruff (2002); Hoshi et al (2003); Iakovleva (2005);and Estrin et al (2006) among many other contributions. 3 We conceptualise firms' export behaviour by taking into account not only the level of export activity but also the likelihood that firms will export at all.…”

Models of entrepreneurs' participation in economic development of Russian Far East

“…Entrepreneurship in the broadest sense is identified with any business; in a narrow sense -with high-risk types of business associated with the implementation of a significant and, as a rule, a new idea " [6]. According to R. Scase, the entrepreneur's goals are profit and growth, but the businessperson is primarily interested in preserving income [7]. Nevertheless, this model can be applied to a limited number of economic entities, involved in the economic and social development of the territory, namely for small and medium-sized businesses.…”

The influence of the perceptions of institutional environment on entrepreneurial plans: exploring the moderating effects of firm age and firm size in Bulgarian enterprises

“…Entrepreneurship in transition economies has distinctive characteristics in comparison with mature market economies, which reflects "the unstable and often hostile nature of the external environment and the scarcity of certain key resources, particularly capital" (Smallbone and Welter, 2001, p. 260). Scase (1997) argues that in transition economies, most private businesses are "proprietors" (owning property for realizing profits, but not striving for capital accumulation) rather than "entrepreneurs" (striving for capital accumulation and business growth) because of the uncertainty describing these economies. Smallbone and Welter (2001) distinguish various specific forms of entrepreneurship in this context including small business ownership, informal sector entrepreneurship, and "nomenclatura" entrepreneurship 1 .…”