Central and Eastern Europe: the Transition to Entrepreneurial Capitalism
Austria was the last nation to officially sign up for Global Entrepreneurship Week this year and we are especially grateful to the Business Council for International Understanding
(BCIU) who with little noticed organized one of our global Featured Events - a forum on “Entrepreneurship and Innovation for Central and Eastern European Competitiveness” which took place on November 15-17. At this event, business leaders, policy leaders and entrepreneurship experts exchanged thoughts on the role of entrepreneurship in the post-Communist transition. Stay tuned for more details and video.
This forum could not be timelier. The 20th anniversary of the fall of the Berlin Wall on November 9th was a reminder of the importance of economic freedom to economic prosperity. Businesses and their financiers have moved 500 million people out of poverty and into a middle class. Nevertheless, as a recent article on The Economist
highlighted, economic freedom has advanced over the past 20 years but it cannot be taken for granted. The key now lies in advancing a form of capitalism that puts entrepreneurs as the main growth drivers.
The fashion industry and its various associated industries in the C&EE (magazine publishing, cosmetics, fashion accessories, interior decoration and supplies, etc.) are examples of the importance of entrepreneurs for the economy. Representatives from these industries at the conference shared stories about the negative impact of the current financial downturn and the resulting restructuring. Even so, creative businesses have been able to recognize that some of the previously-considered absolutes in this industry, such as the buying patterns of distributors, had disappeared and bravely decided to completely change their outlook and business models to survive. Governments now have to work on a delicate balance in this regard; they must find ways to support new and growing business without creating an expectation the government will provide – a common theme we heard across the world at policy events.
Innovation and entrepreneurship are vitally important in Central and Eastern European (C&EE) nations. This region has great potential to encourage more people to turn their ingenuity and determination to create enterprises and thereby grow their economies. However, entrepreneurs need a stable environment in which to take risks and grow their businesses. Central and Eastern European governments can help unleash a new wave of entrepreneurship by setting appropriate economic rules and incentives. However, in doing so, they must avoid linear views about spurring economic growth and top down government programs. Again a common theme we saw everywhere in the world this week is how can we help governments shake the natural public sector tendency to think “programs” and re-organizing and labeling their entrepreneurship efforts. Role models welcome.