**Part 1**

**Gender & Entrepreneurship** 

**1** 

 *Israel* 

**Gender Differences Among** 

*1Ben-Gurion University of the Negev, 2The Academic College of Tel-Aviv-Jaffa,* 

**Social vs. Business Entrepreneurs** 

A rapidly growing body of research attests to the interest in **women's entrepreneurship** (e.g. Boyd, 2005; Bruni, Gheradi, & Poggio, 2004; Brush, Carter, Gatewood, Greene & Hart, 2006; Lerner & Pines, 2011; Mulholland, 1996; Pines, 2002; Pines & Schwartz, 2008). This interest is relatively recent (Humbert, Drew & Kelan, 2009). As Carter and Shaw (2006) have noted, research on entrepreneurship has been moving from looking at *whether* gender makes

Despite the growing interest and despite the fact that the number of women entrepreneurs has accelerated radically in recent years (Weiler & Bernasek, 2001) the **gender gap in entrepreneurship** is still very big. This is clearly evident in the Global Entrepreneurship Monitor (GEM) Reports on Women and Entrepreneurship (Allen, Elam, Langowitz & Dean, 2007; Allen, Langowotz & Minniti, 2006; Minniti, Allen & Langowotz, 2005) that examined the rates of entrepreneurship in over 40 countries and showed that in all these countries the rates of women's entrepreneurship were lower than men's. The 2009 data are based on 55 countries, but the picture remained very similar, as can be seen in the data presented in GEM Figure 1 which show early stage entrepreneurial activity rates by gender (Bosma & Levie, 2009 p. 25). Even a cursory examination of GEM Figure 1 reveals several interesting findings, such as the very different rates of entrepreneurship in the different countries, ranging from as low as five percent to as high as over 35%. Part of the explanation for these differences, suggested by GEM, are the different types of economies, ranging from the poorest factor driven economies, through efficiency driven economies, all the way to the most advanced

Another interesting finding is the different percent of women as compared to men entrepreneurs in the different countries, ranging from a relatively small difference in countries such as Ecuador, Brazil and Tonga to a relatively large difference in countries such as Korea, Norway and France. In only two countries, Guatemala and Brazil, the percent of women entrepreneurs was higher than that of men. In all other 53 GEM countries, the

The surprising finding that the percent of women entrepreneurs is higher in countries where the general income per capita is small and where women have no other option for

a difference to *how* it makes a difference. This chapter is a case in point.

percent of men entrepreneurs was higher than that of women.

**1. Introduction** 

innovation driven economies.

Ayala M. Pines1, Miri Lerner2 and Dafna Schwartz1

## **Gender Differences Among Social vs. Business Entrepreneurs**

Ayala M. Pines1, Miri Lerner2 and Dafna Schwartz1 *1Ben-Gurion University of the Negev, 2The Academic College of Tel-Aviv-Jaffa, Israel* 

#### **1. Introduction**

A rapidly growing body of research attests to the interest in **women's entrepreneurship** (e.g. Boyd, 2005; Bruni, Gheradi, & Poggio, 2004; Brush, Carter, Gatewood, Greene & Hart, 2006; Lerner & Pines, 2011; Mulholland, 1996; Pines, 2002; Pines & Schwartz, 2008). This interest is relatively recent (Humbert, Drew & Kelan, 2009). As Carter and Shaw (2006) have noted, research on entrepreneurship has been moving from looking at *whether* gender makes a difference to *how* it makes a difference. This chapter is a case in point.

Despite the growing interest and despite the fact that the number of women entrepreneurs has accelerated radically in recent years (Weiler & Bernasek, 2001) the **gender gap in entrepreneurship** is still very big. This is clearly evident in the Global Entrepreneurship Monitor (GEM) Reports on Women and Entrepreneurship (Allen, Elam, Langowitz & Dean, 2007; Allen, Langowotz & Minniti, 2006; Minniti, Allen & Langowotz, 2005) that examined the rates of entrepreneurship in over 40 countries and showed that in all these countries the rates of women's entrepreneurship were lower than men's. The 2009 data are based on 55 countries, but the picture remained very similar, as can be seen in the data presented in GEM Figure 1 which show early stage entrepreneurial activity rates by gender (Bosma & Levie, 2009 p. 25).

Even a cursory examination of GEM Figure 1 reveals several interesting findings, such as the very different rates of entrepreneurship in the different countries, ranging from as low as five percent to as high as over 35%. Part of the explanation for these differences, suggested by GEM, are the different types of economies, ranging from the poorest factor driven economies, through efficiency driven economies, all the way to the most advanced innovation driven economies.

Another interesting finding is the different percent of women as compared to men entrepreneurs in the different countries, ranging from a relatively small difference in countries such as Ecuador, Brazil and Tonga to a relatively large difference in countries such as Korea, Norway and France. In only two countries, Guatemala and Brazil, the percent of women entrepreneurs was higher than that of men. In all other 53 GEM countries, the percent of men entrepreneurs was higher than that of women.

The surprising finding that the percent of women entrepreneurs is higher in countries where the general income per capita is small and where women have no other option for

Gender Differences Among Social vs. Business Entrepreneurs 5

the social perspective, is similarity in entrepreneurship between men and women. Such similarity can be explained by Schneider's (1987) Attraction Selection Attrition (ASA) model. Schneider's basic proposition as that the processes of attraction to organizations, selection into organizations, and attrition from organizations produce over time a restriction of range on individual differences. Consequently, people who remain in an organization over time come to be rather similar. This has been referred to as the homogeneity hypothesis (e.g., Denton, 1999; Schneider, Smith, Taylor, & Fleenor, 1998). Based on Schneider's model, it can be expected that men and women who are attracted to an entrepreneurial career, who go through the selection process that screens out those who don't have the needed attitudes and personality, and who acquire the skills and experience needed for running a business,

This proposition was examined by Pines and Schwartz (2008) in three studies that addressed gender differences in entrepreneurship. Each study focused on a different subject population and different entrepreneurial activity. The first was a national telephone survey of adults. Its results showed few gender differences in entrepreneurial values. However, women described themselves as valuing job security more than men and men described

The second study involved management students who responded to a self-report questionnaire. Its results showed large gender differences in the willingness to start a business. About twice as many male than female students either had a business or intended to start one. Male students viewed themselves as more suitable to be a business owner, expressed greater

These findings can be explained by women's tendency to perceive themselves in a less favorable light as entrepreneurs than men (Langowitz & Minniti's, 2007). However, all these gender differences almost disappeared in the group of the management students who

The third study involved interviews with small business owners. Its results showed far more similarities than differences between male and female business owners, including similarities in demographic characteristics, work and businesses characteristics and reasons

Combined, the three studies can be interpreted as supporting Schneider's (1987) ASA model and the social perspective on the origin of gender differences in the case of men and women entrepreneurs. The current chapter extends the discussion of **the gender gap in**

**Social entrepreneurship** has been growing fast in recent decades with the growing number of third-sector organizations, the segment of the economy that is neither public nor business. The trend in many countries of adopting the ideology of diminishing government involvement in the economy and in society has made it increasingly more difficult for welfare states to answer social needs and claims, and has broadened their reliance on the activities of the third-sector nonprofit organizations (NPOs) (Sharir & Lerner, 2006). As a result there is growing interest in

**Social entrepreneurs** have been described as "People who realize where there is an opportunity to satisfy some unmet need that the state welfare system will not or cannot meet and who gather the necessary resources and use these to 'make a difference '"

**entrepreneurship to a comparison between business and social entrepreneurs.** 

the activities of social entrepreneurs in different countries and contexts.

end up being rather similar, whether they are male or female.

either owned a business or intended to start a business.

for starting a business.

themselves as more confident and as loving challenges more than women.

preference for being one, and described themselves as being more entrepreneurial.

Fig. 1. Early-Stage Entrepreneurial Activity Rates by Gender, 2009.

making a living (such as Ecuador) and lower in countries where the general income per capita is high (such as Norway) has been explained as a result of the **difference between "necessity" and "opportunity" entrepreneurship**, with necessity entrepreneurship found to be more prevalent among women (Allen, et al., 2006; Allen, et al., 2007; Bosma et al., 2009; Reynolds, Bygrave, Autio, Cox, & Hay, 2003). Related terms used in the entrepreneurial literature are "push" vs. "pull" factors, where "push" factors force people to become entrepreneurs, while "pull" factors attract them to entrepreneurship (Orhan & Scott, 2001). Women in poor countries, it seems, are more influenced by "push" than by "pull" factors. In other words, when women are forced to by economic conditions they can be much more entrepreneurial; which is to say, women's entrepreneurship is as much a result of circumstances as it is a result of innate tendencies.

This conclusion times the question of gender differences in entrepreneurship to the larger question of the origins of gender differences in human behavior. As noted by Eagly and Wood (1999), the origins of sex differences in human behavior may lie mainly in evolved dispositions that differ by sex or mainly in the differing placement of women and men in the social structure. The difference between these two options is critical because if gender differences are the result of social forces such as socialization, cultural norms and gender roles and stereotypes, they can be assumed to be changeable (e.g., Deaux & LaFrance, 1998; Ruble & Martin, 1998; Spence & Buckner, 2000). But if they result from evolutionary forces (e.g., Buss, 2000; Fisher, 1999) then they are innate and fundamentally unchangeable.

The discovery of cross-cultural variation in gender differences in entrepreneurship can be viewed as supporting the social structural (rather than evolutionary or biological) explanation for gender differences in entrepreneurship. Another finding that can support

Fig. 1. Early-Stage Entrepreneurial Activity Rates by Gender, 2009.

circumstances as it is a result of innate tendencies.

making a living (such as Ecuador) and lower in countries where the general income per capita is high (such as Norway) has been explained as a result of the **difference between "necessity" and "opportunity" entrepreneurship**, with necessity entrepreneurship found to be more prevalent among women (Allen, et al., 2006; Allen, et al., 2007; Bosma et al., 2009; Reynolds, Bygrave, Autio, Cox, & Hay, 2003). Related terms used in the entrepreneurial literature are "push" vs. "pull" factors, where "push" factors force people to become entrepreneurs, while "pull" factors attract them to entrepreneurship (Orhan & Scott, 2001). Women in poor countries, it seems, are more influenced by "push" than by "pull" factors. In other words, when women are forced to by economic conditions they can be much more entrepreneurial; which is to say, women's entrepreneurship is as much a result of

This conclusion times the question of gender differences in entrepreneurship to the larger question of the origins of gender differences in human behavior. As noted by Eagly and Wood (1999), the origins of sex differences in human behavior may lie mainly in evolved dispositions that differ by sex or mainly in the differing placement of women and men in the social structure. The difference between these two options is critical because if gender differences are the result of social forces such as socialization, cultural norms and gender roles and stereotypes, they can be assumed to be changeable (e.g., Deaux & LaFrance, 1998; Ruble & Martin, 1998; Spence & Buckner, 2000). But if they result from evolutionary forces

(e.g., Buss, 2000; Fisher, 1999) then they are innate and fundamentally unchangeable.

The discovery of cross-cultural variation in gender differences in entrepreneurship can be viewed as supporting the social structural (rather than evolutionary or biological) explanation for gender differences in entrepreneurship. Another finding that can support the social perspective, is similarity in entrepreneurship between men and women. Such similarity can be explained by Schneider's (1987) Attraction Selection Attrition (ASA) model. Schneider's basic proposition as that the processes of attraction to organizations, selection into organizations, and attrition from organizations produce over time a restriction of range on individual differences. Consequently, people who remain in an organization over time come to be rather similar. This has been referred to as the homogeneity hypothesis (e.g., Denton, 1999; Schneider, Smith, Taylor, & Fleenor, 1998). Based on Schneider's model, it can be expected that men and women who are attracted to an entrepreneurial career, who go through the selection process that screens out those who don't have the needed attitudes and personality, and who acquire the skills and experience needed for running a business, end up being rather similar, whether they are male or female.

This proposition was examined by Pines and Schwartz (2008) in three studies that addressed gender differences in entrepreneurship. Each study focused on a different subject population and different entrepreneurial activity. The first was a national telephone survey of adults. Its results showed few gender differences in entrepreneurial values. However, women described themselves as valuing job security more than men and men described themselves as more confident and as loving challenges more than women.

The second study involved management students who responded to a self-report questionnaire. Its results showed large gender differences in the willingness to start a business. About twice as many male than female students either had a business or intended to start one. Male students viewed themselves as more suitable to be a business owner, expressed greater preference for being one, and described themselves as being more entrepreneurial.

These findings can be explained by women's tendency to perceive themselves in a less favorable light as entrepreneurs than men (Langowitz & Minniti's, 2007). However, all these gender differences almost disappeared in the group of the management students who either owned a business or intended to start a business.

The third study involved interviews with small business owners. Its results showed far more similarities than differences between male and female business owners, including similarities in demographic characteristics, work and businesses characteristics and reasons for starting a business.

Combined, the three studies can be interpreted as supporting Schneider's (1987) ASA model and the social perspective on the origin of gender differences in the case of men and women entrepreneurs. The current chapter extends the discussion of **the gender gap in entrepreneurship to a comparison between business and social entrepreneurs.** 

**Social entrepreneurship** has been growing fast in recent decades with the growing number of third-sector organizations, the segment of the economy that is neither public nor business. The trend in many countries of adopting the ideology of diminishing government involvement in the economy and in society has made it increasingly more difficult for welfare states to answer social needs and claims, and has broadened their reliance on the activities of the third-sector nonprofit organizations (NPOs) (Sharir & Lerner, 2006). As a result there is growing interest in the activities of social entrepreneurs in different countries and contexts.

**Social entrepreneurs** have been described as "People who realize where there is an opportunity to satisfy some unmet need that the state welfare system will not or cannot meet and who gather the necessary resources and use these to 'make a difference '"

Gender Differences Among Social vs. Business Entrepreneurs 7

It is clear from Figure 2 that the rate of Social Entrepreneurial Activity (SEA) of women was very similar across the three different categories of economic development, while the rates of men's SEA increased with economic development (lowest in Factor driven economies and

A further examination of the gender gap in entrepreneurial activity is suggested in Table 1, which compares men and women's early stage SEA and TEA in the three types of

Factor Driven Economies

Relative Difference= Difference/

Average 0.6 0.8 0.2 0.3 14.4 20.9 6.6 0.4 Std. 0.6 0.7 0.2 0.5 9.2 8.4 4.1 0.3 Efficiency Driven Economies Average 0.7 1.1 0.4 0.3 8.9 13.5 4.6 0.4 Std. 0.6 0.6 0.4 0.4 5.7 6.2 3.5 0.3 Innovation Driven Economies Average 0.7 1.2 0.5 0.4 4.2 8.1 4.0 0.5 Std. 0.6 0.9 0.8 0.3 1.9 3.5 2.6 0.3

Table 1 presents the percent of women's SEA (column 1) and TEA (column 5), the percent of men's SEA (column 2) and TEA (column 6) the difference between women's and men's SEA (column 3) and between women's and men's TEA (column 7), and the relative difference in men's entrepreneurial activity (the percent difference divided by the percent of employed

Table 1 and Figure 2 show very clearly the differences between SEA and TEA, between men

• Business related entrepreneurship is much more prevalent than social entrepreneurship

• There are different entrepreneurial rates in Factor, Efficiency and Innovation driven

and women and among the three types of economy. They demonstrate the following:

• The gender differences in entrepreneurial activity are smaller in SEA than in TEA. • Women's SEA in the three types of economy is much more similar than women's TEA. Table 2 and Figure 3 present the relative difference (i.e., Male-Female/Male) between men's and women's Early-Stage SEA and TEA, in Factor, Efficiency and Innovation Driven

1 2 3 4 56 7 8

Male Female Male

Difference= Male-Female

Relative Difference= Difference/ Male

SEA TEA

Table 1. Comparison between Social Entrepreneurial Activity (SEA) and Total Entrepreneurial Activity (SEA), by Type of economy and by Gender (Percentages)

Difference= Male-Female

highest in Innovation driven economies).

economies, based on GEM 2009 data.

Female Male

men) for SEA (column 4) and TEA (column 8).

• Men are more entrepreneurial than women

economies

economies.

(Thompson, Alvy & Lees 2000). As such, social entrepreneurs are perceived as change agents who create and sustain social value without being limited by the resources at hand (Stevenson & Jarrilo, 1991).

Like business entrepreneurs, social entrepreneurs establish new organizations, develop and implement innovative programs, and organize or distribute new services. Even though they are differently motivated, the challenges and problems facing social entrepreneurs during the initiation, establishment and institutionalization of their ventures resemble those faced by business entrepreneurs (Yitzhaki, Lerner & Sharir, 2008). However, their activity is valued by their ability to maximize social rather than economic returns (Sullivan Mort, Weerawardena & Carnegie, 2003).

It appears that the main difference between entrepreneurs operating in the business sector and those operating in the not-for profit sector is in the latter's sense of mission and service as opposed to the goal of profitability and financial gains that characterizes the former. A sense of mission and a commitment to service, as opposed to profit, also characterize women (e.g., Fisher, 1999; Helgesen, 1990; Henning & Jardim, 1978). Thus the gender gap in entrepreneurship can be expected to be smaller in social entrepreneurship as compared to business entrepreneurship. In other words, the rate of women in social entrepreneurship can be expected to be similar or even higher of the men.

#### **2. Results**

The results of a GEM 2009 study of gender differences in Social Entrepreneurial Activity (SEA) (Bosma & Levie, 2009) offer partial support for this proposition. These findings revealed that social enterprises were more likely to be started by men than by women, but the gender gap was not as big as the Total Entrepreneurial Activity (TEA) in business enterprises. These results are evident in Figure 2 below. Figure 2 presents men's and women's mean SEA and TEA entrepreneurial activity by type of economy based on GEM 2009 data.

Fig. 2. Men's and women's mean entrepreneurial activity by type of entrepreneurship and type of economy.

(Thompson, Alvy & Lees 2000). As such, social entrepreneurs are perceived as change agents who create and sustain social value without being limited by the resources at hand

Like business entrepreneurs, social entrepreneurs establish new organizations, develop and implement innovative programs, and organize or distribute new services. Even though they are differently motivated, the challenges and problems facing social entrepreneurs during the initiation, establishment and institutionalization of their ventures resemble those faced by business entrepreneurs (Yitzhaki, Lerner & Sharir, 2008). However, their activity is valued by their ability to maximize social rather than economic returns (Sullivan Mort,

It appears that the main difference between entrepreneurs operating in the business sector and those operating in the not-for profit sector is in the latter's sense of mission and service as opposed to the goal of profitability and financial gains that characterizes the former. A sense of mission and a commitment to service, as opposed to profit, also characterize women (e.g., Fisher, 1999; Helgesen, 1990; Henning & Jardim, 1978). Thus the gender gap in entrepreneurship can be expected to be smaller in social entrepreneurship as compared to business entrepreneurship. In other words, the rate of women in social entrepreneurship can

The results of a GEM 2009 study of gender differences in Social Entrepreneurial Activity (SEA) (Bosma & Levie, 2009) offer partial support for this proposition. These findings revealed that social enterprises were more likely to be started by men than by women, but the gender gap was not as big as the Total Entrepreneurial Activity (TEA) in business enterprises. These results are evident in Figure 2 below. Figure 2 presents men's and women's mean SEA and

Fig. 2. Men's and women's mean entrepreneurial activity by type of entrepreneurship and

TEA entrepreneurial activity by type of economy based on GEM 2009 data.

(Stevenson & Jarrilo, 1991).

Weerawardena & Carnegie, 2003).

**2. Results** 

type of economy.

be expected to be similar or even higher of the men.

It is clear from Figure 2 that the rate of Social Entrepreneurial Activity (SEA) of women was very similar across the three different categories of economic development, while the rates of men's SEA increased with economic development (lowest in Factor driven economies and highest in Innovation driven economies).

A further examination of the gender gap in entrepreneurial activity is suggested in Table 1, which compares men and women's early stage SEA and TEA in the three types of economies, based on GEM 2009 data.


Table 1. Comparison between Social Entrepreneurial Activity (SEA) and Total Entrepreneurial Activity (SEA), by Type of economy and by Gender (Percentages)

Table 1 presents the percent of women's SEA (column 1) and TEA (column 5), the percent of men's SEA (column 2) and TEA (column 6) the difference between women's and men's SEA (column 3) and between women's and men's TEA (column 7), and the relative difference in men's entrepreneurial activity (the percent difference divided by the percent of employed men) for SEA (column 4) and TEA (column 8).

Table 1 and Figure 2 show very clearly the differences between SEA and TEA, between men and women and among the three types of economy. They demonstrate the following:


Table 2 and Figure 3 present the relative difference (i.e., Male-Female/Male) between men's and women's Early-Stage SEA and TEA, in Factor, Efficiency and Innovation Driven economies.

Gender Differences Among Social vs. Business Entrepreneurs 9

• Looking at the Standard Deviations of the relative gender differences, it seems that the variability among the countries in each of the types of economy is higher in SEA than in TEA. This variability may be a reflection of the fact that this type of entrepreneurial activity is often the result of specific social and economic conditions. The higher the level of the economy, the more SEA becomes established, and probably becomes an integral part of the economic life, which causes the cross-cultural variability to diminish. Thus, the greatest variability in SEA is found in the Factor driven economies,

• However, the variability of relative gender differences in TEA is very similar in the three types of economy, with no relationship to their economic level. It seems that TEA, which represents all different types of business activities, is part of the general

The overall lower level of SEA, when compared to TEA, may be related to several reasons, paramount among them is the fact that social ventures tend to have lower levels of turnover than business related ventures, where as turnover is part and parcel of a

One possible explanation for the finding that SEA is highest in more developed (Innovation Driven) economies and lowest in the least developed (Factor driven) economies, is that individuals in wealthier countries, having satisfied their own basic needs, may be more likely to turn to the needs of others. In other words, the opportunity cost of social entrepreneurship may be higher in developing countries (Bosma & Levie, 2009). This is unfortunate, because social and environmental problems are often more prevalent in

Examined through the lenses of opportunity vs. necessity entrepreneurship, it seems that necessity social entrepreneurship is comprised of people who were expelled from the job market and are looking for ways to get back to it. Raising awareness to social issues around them, they are able to raise financial as well as other resources. Opportunity social entrepreneurship, on the other hand, originates in worldwide trends including the shrinking role of governments in the provision of social services, the privatization of public services, and the rise in standard of living which increases awareness of the need for further services. In opportunity entrepreneurship there is a fundamental difference between less developed countries where the focus is on survival and more developed countries where ventures may be related to the standard and quality of life, such as

Another explanation for the finding that SEA is higher in more developed economies and lower in the less developed economies (suggested by Bosma & Levie, 2009) is that the definitions of a traditional business enterprise and a social enterprise may overlap in developing countries, whereas they may be more distinct in developed countries. William

**3.1 Difference between Total Entrepreneurial Activity (TEA) and Social** 

and the lowest, in Innovation driven economies.

economic fabric of countries.

**Entrepreneurial Activity (SEA)** 

**3. Discussion** 

competitive market.

developing countries.

environmental and conservation issues.


\* Relative Difference= (Male-Female)/Male

Table 2. Comparison of the Relative Gender Difference\* in SEA and TEA by Type of Economy: Averages and Standard Deviations

Only the relative rates (means and SDs) in the entrepreneurial activity of the three types of economies are presented in Table 2: in column 1 the mean for SEA and in column 3 for TEA, in column 2 the SD for SEA and in column 4 for TEA.

Fig. 3. Comparison of the Relative Gender Difference\* in SEA and TEA by Type of Economy

Once again Table 2 and figure 3 make the relative differences between SEA and TEA, between men and women and among the three types of economy abundantly clear:


#### **3. Discussion**

8 Entrepreneurship - Gender, Geographies and Social Context

Factor Driven Economies 0.3 0.5 0.4 0.3 Efficiency Driven Economies 0.3 0.4 0.4 0.3 Innovation Driven Economies 0.4 0.3 0.5 0.3

Only the relative rates (means and SDs) in the entrepreneurial activity of the three types of economies are presented in Table 2: in column 1 the mean for SEA and in column 3 for TEA,

Fig. 3. Comparison of the Relative Gender Difference\* in SEA and TEA by Type of Economy

Once again Table 2 and figure 3 make the relative differences between SEA and TEA,

• When the comparison made in relative, rather than in absolute terms, the gender

• Nevertheless, there are still relative differences between SEA and TEA, with smaller

• The relative gender difference is somewhat smaller in the less developed Factor and Efficiency driven economies and higher in more developed Innovation driven

between men and women and among the three types of economy abundantly clear:

economies, but still, the relative difference is smaller in SEA than in TEA.

gender differences found in SEA in all three types of economy.

differences in SEA and in TEA become smaller.

Table 2. Comparison of the Relative Gender Difference\* in SEA and TEA by Type of

\*

Relative Difference= (Male-Female)/Male

Economy: Averages and Standard Deviations

in column 2 the SD for SEA and in column 4 for TEA.

SEA TEA 1 2 3 4 Average SD Average SD

#### **3.1 Difference between Total Entrepreneurial Activity (TEA) and Social Entrepreneurial Activity (SEA)**

The overall lower level of SEA, when compared to TEA, may be related to several reasons, paramount among them is the fact that social ventures tend to have lower levels of turnover than business related ventures, where as turnover is part and parcel of a competitive market.

One possible explanation for the finding that SEA is highest in more developed (Innovation Driven) economies and lowest in the least developed (Factor driven) economies, is that individuals in wealthier countries, having satisfied their own basic needs, may be more likely to turn to the needs of others. In other words, the opportunity cost of social entrepreneurship may be higher in developing countries (Bosma & Levie, 2009). This is unfortunate, because social and environmental problems are often more prevalent in developing countries.

Examined through the lenses of opportunity vs. necessity entrepreneurship, it seems that necessity social entrepreneurship is comprised of people who were expelled from the job market and are looking for ways to get back to it. Raising awareness to social issues around them, they are able to raise financial as well as other resources. Opportunity social entrepreneurship, on the other hand, originates in worldwide trends including the shrinking role of governments in the provision of social services, the privatization of public services, and the rise in standard of living which increases awareness of the need for further services. In opportunity entrepreneurship there is a fundamental difference between less developed countries where the focus is on survival and more developed countries where ventures may be related to the standard and quality of life, such as environmental and conservation issues.

Another explanation for the finding that SEA is higher in more developed economies and lower in the less developed economies (suggested by Bosma & Levie, 2009) is that the definitions of a traditional business enterprise and a social enterprise may overlap in developing countries, whereas they may be more distinct in developed countries. William

Gender Differences Among Social vs. Business Entrepreneurs 11

women to say that they have the knowledge, skill and experience required to start a new business, while women are more likely to say that fear of failure would prevent them from

The fact that a gender gap, albeit smaller than the gender gap in TEA, still exists in SEA is significant and worrisome, because as noted earlier, social entrepreneurship seems to be an area to which women are expected to be attracted and in which they are expected to have a

In our global village, public companies that are traded in the stock market in developed countries (especially in those that are characterized as Innovation driven, but gradually also in those defined as Efficiency driven) have to publicize in their balance sheets their contribution to the community. This fact, combined with the fact that a contribution to the community has become a trade mark assent, increases the prevalence of social ventures and encourages business leaders and public service leaders to initiate various social ventures. This type of social entrepreneurship is lead by high ranking public and private officials, who tend to be male, especially in the economic areas that tend to have money

Women in high ranking positions, however, tend to have greater difficulty taking on additional roles, since many of them still carry the main responsibility for household and child care. In addition, the economic crisis in recent years has challenges social ventures, that have to deal with budget cuts and function like traditional businesses that have to operate within strict budgetary limitations and at times even create revenues. The result of this trend is that the skills needed for managing social ventures are similar to those needed for managing regular ventures, and as noted earlier there is a big gender gap in

This is critical because as social entrepreneurship is growing (especially in Innovation driven economies), there is a growing danger that women entrepreneurs will again find themselves lagging behind, and given the lower turnover rates in SEA, the danger is that

The findings related to the gender gap have theoretical implications for gender theory and research and for entrepreneurship theory and research. They also have important practical implications. A study by Wilson, Kickul and Marlin (2007) demonstrated a relationship between self-efficacy and career intentions and showed that the effects of entrepreneurship education in MBA programs on entrepreneurial self-efficacy was stronger for women than for men. The implications for the importance of entrepreneurial education and training for

Other implications involve the development of social networks for women entrepreneurs that will support and empower them through all the stages of establishing their venture – be

The findings related to the difference between SEA and TEA have important implications for business owners and managers and for policy makers as contribution to the community

starting a venture (Allen et Al., 2007).

relative advantage.

for ventures.

those skills.

this lag will remain.

**4. Implications** 

women are obvious.

it a business or a social venture.

Baumol has suggested that the level of entrepreneurship is the same across countries, but that entrepreneurship is manifested in different ways depending on the institutional context (Baumol, 1990, 1993). In wealthier countries, social entrepreneurship may replace business entrepreneurship, at least to some extent. SEA rates are much lower than TEA rates in almost all countries. SEA as a proportion of SEA plus TEA, but not SEA itself, tends to increase with GDP per capita, providing partial support for Baumol's hypothesis of substitution of one form of entrepreneurship for another.

In some countries, the level of overlap of social and business entrepreneurship is quite significant, such as Peru (2.5%), Colombia (2.8%), Venezuela (1.7%) and Jamaica (2.0%). This finding is important, as it indicates that "social" and "business" entrepreneurship categories may be blurred. Earlier reported TEA levels in these countries may have included a small but still considerable level of social entrepreneurs who were running "social businesses" (Allen et al., 2007 p. 11).

#### **3.2 Gender difference in Total Entrepreneurial Activity (TEA) and Social Entrepreneurial Activity (SEA)**

Examination of entrepreneurial behavior around the globe yields a clear picture of a gender gap. Overall, men are more likely to be involved in entrepreneurial activity than women. This gender gap is evident in both early stage entrepreneurial participation and established business ownership, and it exists irrespective of the economic level of the country, from the lowest Factor driven economies to the highest Innovation driven economies.

The gender gap is more pronounced in high-income economies than in either low on middle-income economies. As noted in the introduction, these differences can be explained as reflecting the difference between "*necessity*" and "*opportunity*" entrepreneurship, (Allen et al., 2006; Allen, et al., 2007; Bosma & Levie., 2009; Reynolds et al., 2003;) or "push" vs. "pull" factors (Orhan & Scott, 2001).

While men are more likely to be involved in entrepreneurial activity than women overall, there are several interesting exceptions. In Japan, Brazil, Peru, and Thailand, for example, the entrepreneurial activities of women equal or exceed those of men (Allen et al., 2007, p.13). The gender differences are also small in Latin America and Caribbean countries. These findings may be explained in part by the differences in choices for women across these country groups in which labor markets, institutional structures, and cultural norms provide a varying array of incentives to women's entrepreneurial activity.

When examining the gender gap in social entrepreneurship, it seems that while the gender gap still exists (there are more men than women social entrepreneurs), the difference is smaller. Furthermore, there is no difference in the rate of women social entrepreneurs in the different types of economies. The consistent gender difference can be related to the findings reported by Pines and Schwartz (2008) of women's greater reluctance to start a business, self-perception as being less suitable to be a business owner and less entrepreneurial than men; to Langowitz and Minniti's, 2007 finding of women's tendency to perceive themselves as less entrepreneurial, and to GEM data showing that men are more likely than

Baumol has suggested that the level of entrepreneurship is the same across countries, but that entrepreneurship is manifested in different ways depending on the institutional context (Baumol, 1990, 1993). In wealthier countries, social entrepreneurship may replace business entrepreneurship, at least to some extent. SEA rates are much lower than TEA rates in almost all countries. SEA as a proportion of SEA plus TEA, but not SEA itself, tends to increase with GDP per capita, providing partial support for Baumol's hypothesis of

In some countries, the level of overlap of social and business entrepreneurship is quite significant, such as Peru (2.5%), Colombia (2.8%), Venezuela (1.7%) and Jamaica (2.0%). This finding is important, as it indicates that "social" and "business" entrepreneurship categories may be blurred. Earlier reported TEA levels in these countries may have included a small but still considerable level of social entrepreneurs who were running "social

Examination of entrepreneurial behavior around the globe yields a clear picture of a gender gap. Overall, men are more likely to be involved in entrepreneurial activity than women. This gender gap is evident in both early stage entrepreneurial participation and established business ownership, and it exists irrespective of the economic level of the country, from the lowest Factor driven economies to the highest Innovation driven

The gender gap is more pronounced in high-income economies than in either low on middle-income economies. As noted in the introduction, these differences can be explained as reflecting the difference between "*necessity*" and "*opportunity*" entrepreneurship, (Allen et al., 2006; Allen, et al., 2007; Bosma & Levie., 2009; Reynolds et al., 2003;) or "push" vs. "pull"

While men are more likely to be involved in entrepreneurial activity than women overall, there are several interesting exceptions. In Japan, Brazil, Peru, and Thailand, for example, the entrepreneurial activities of women equal or exceed those of men (Allen et al., 2007, p.13). The gender differences are also small in Latin America and Caribbean countries. These findings may be explained in part by the differences in choices for women across these country groups in which labor markets, institutional structures, and cultural norms

When examining the gender gap in social entrepreneurship, it seems that while the gender gap still exists (there are more men than women social entrepreneurs), the difference is smaller. Furthermore, there is no difference in the rate of women social entrepreneurs in the different types of economies. The consistent gender difference can be related to the findings reported by Pines and Schwartz (2008) of women's greater reluctance to start a business, self-perception as being less suitable to be a business owner and less entrepreneurial than men; to Langowitz and Minniti's, 2007 finding of women's tendency to perceive themselves as less entrepreneurial, and to GEM data showing that men are more likely than

provide a varying array of incentives to women's entrepreneurial activity.

**3.2 Gender difference in Total Entrepreneurial Activity (TEA) and Social** 

substitution of one form of entrepreneurship for another.

businesses" (Allen et al., 2007 p. 11).

**Entrepreneurial Activity (SEA)** 

factors (Orhan & Scott, 2001).

economies.

women to say that they have the knowledge, skill and experience required to start a new business, while women are more likely to say that fear of failure would prevent them from starting a venture (Allen et Al., 2007).

The fact that a gender gap, albeit smaller than the gender gap in TEA, still exists in SEA is significant and worrisome, because as noted earlier, social entrepreneurship seems to be an area to which women are expected to be attracted and in which they are expected to have a relative advantage.

In our global village, public companies that are traded in the stock market in developed countries (especially in those that are characterized as Innovation driven, but gradually also in those defined as Efficiency driven) have to publicize in their balance sheets their contribution to the community. This fact, combined with the fact that a contribution to the community has become a trade mark assent, increases the prevalence of social ventures and encourages business leaders and public service leaders to initiate various social ventures. This type of social entrepreneurship is lead by high ranking public and private officials, who tend to be male, especially in the economic areas that tend to have money for ventures.

Women in high ranking positions, however, tend to have greater difficulty taking on additional roles, since many of them still carry the main responsibility for household and child care. In addition, the economic crisis in recent years has challenges social ventures, that have to deal with budget cuts and function like traditional businesses that have to operate within strict budgetary limitations and at times even create revenues. The result of this trend is that the skills needed for managing social ventures are similar to those needed for managing regular ventures, and as noted earlier there is a big gender gap in those skills.

This is critical because as social entrepreneurship is growing (especially in Innovation driven economies), there is a growing danger that women entrepreneurs will again find themselves lagging behind, and given the lower turnover rates in SEA, the danger is that this lag will remain.

#### **4. Implications**

The findings related to the gender gap have theoretical implications for gender theory and research and for entrepreneurship theory and research. They also have important practical implications. A study by Wilson, Kickul and Marlin (2007) demonstrated a relationship between self-efficacy and career intentions and showed that the effects of entrepreneurship education in MBA programs on entrepreneurial self-efficacy was stronger for women than for men. The implications for the importance of entrepreneurial education and training for women are obvious.

Other implications involve the development of social networks for women entrepreneurs that will support and empower them through all the stages of establishing their venture – be it a business or a social venture.

The findings related to the difference between SEA and TEA have important implications for business owners and managers and for policy makers as contribution to the community

Gender Differences Among Social vs. Business Entrepreneurs 13

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**2** 

Julius Kikooma *Makerere University,* 

*Uganda* 

**Gender and Entrepreneurship in Uganda:** 

Despite the vastness and depth of the entrepreneurship literature, there is a gap between women's experiences of the phenomenon and what explanations traditional research is producing in academic setting. This means that explanations of entrepreneurial experiences remain largely rooted in orthodox perspectives focused on comparisons of male and female entrepreneurs. Yet such an approach does not illuminate how and why entrepreneurship came to be defined and understood in relation to the behavior of only

Inadequacies in comprehending the phenomenon of entrepreneurship by the orthodox approaches have led to the criticism that the concept of entrepreneurship is discriminatory (Billig, 1994), gender-biased (Moore, 1990; Stevenson, 1990), ethnocentrically determined, and even in some respects ideologically controlled (Armstrong, 2001; Ogbor, 2000). More specifically, Ogbor (2000) argued that the discourse on entrepreneurship can potentially sustain not only prevailing societal biases, but also serve as a tapestry for unexamined and contradictory assumptions and knowledge about entrepreneurs. Feminist critics have similarly pointed out weaknesses in the ability of the orthodox frameworks in small business and entrepreneurship research to advance theories relevant to women's experiences. Moreover, despite appeals by researchers (Davidson & Wilklund, 2001; Low & MacMillan, 1988; Shane & Venkataraman, 2000) for alternative approaches, many problem formulations and research themes in the entrepreneurship literature are mainly approached from a particular paradigmatic

The above arguments suggest that while the research on female entrepreneurship has provided much insight into the behaviours and characteristics of some women business owners, much of the focus has remained on strategies through which female entrepreneurs can mimic the male norm. Such an orientation is guided by an interest in sex-equality, defined as women's similar access to success in business ownership as men's. Citing the limitations that have been recognized with these basic approaches to the study of women and gender which initially looked promising, Ahl (2006) argued that they are inadequate for understanding gender and women's activities. Ahl's argument was that the women's own perspectives are lost in these strategies of adding women, not merely by their under-

**1. Introduction** 

men.

orientation.

**Women Manoeuvring Economic Space** 

Yitzhaki, R., Lerner, M. and Sharir, M. (2008). What Social Ventures Are? Toward a Theoretical Framework and Empirical Examination of Successful Social ventures. In: G. Shockley, P. Frankand R. Stough (Eds.). *Non-Market Entrepreneurship: Interdisciplinary Approaches.* NY: Edward Elgar, 217-241.

## **Gender and Entrepreneurship in Uganda: Women Manoeuvring Economic Space**

Julius Kikooma *Makerere University, Uganda* 

#### **1. Introduction**

14 Entrepreneurship - Gender, Geographies and Social Context

Yitzhaki, R., Lerner, M. and Sharir, M. (2008). What Social Ventures Are? Toward a

*Interdisciplinary Approaches.* NY: Edward Elgar, 217-241.

Theoretical Framework and Empirical Examination of Successful Social ventures. In: G. Shockley, P. Frankand R. Stough (Eds.). *Non-Market Entrepreneurship:* 

> Despite the vastness and depth of the entrepreneurship literature, there is a gap between women's experiences of the phenomenon and what explanations traditional research is producing in academic setting. This means that explanations of entrepreneurial experiences remain largely rooted in orthodox perspectives focused on comparisons of male and female entrepreneurs. Yet such an approach does not illuminate how and why entrepreneurship came to be defined and understood in relation to the behavior of only men.

> Inadequacies in comprehending the phenomenon of entrepreneurship by the orthodox approaches have led to the criticism that the concept of entrepreneurship is discriminatory (Billig, 1994), gender-biased (Moore, 1990; Stevenson, 1990), ethnocentrically determined, and even in some respects ideologically controlled (Armstrong, 2001; Ogbor, 2000). More specifically, Ogbor (2000) argued that the discourse on entrepreneurship can potentially sustain not only prevailing societal biases, but also serve as a tapestry for unexamined and contradictory assumptions and knowledge about entrepreneurs. Feminist critics have similarly pointed out weaknesses in the ability of the orthodox frameworks in small business and entrepreneurship research to advance theories relevant to women's experiences. Moreover, despite appeals by researchers (Davidson & Wilklund, 2001; Low & MacMillan, 1988; Shane & Venkataraman, 2000) for alternative approaches, many problem formulations and research themes in the entrepreneurship literature are mainly approached from a particular paradigmatic orientation.

> The above arguments suggest that while the research on female entrepreneurship has provided much insight into the behaviours and characteristics of some women business owners, much of the focus has remained on strategies through which female entrepreneurs can mimic the male norm. Such an orientation is guided by an interest in sex-equality, defined as women's similar access to success in business ownership as men's. Citing the limitations that have been recognized with these basic approaches to the study of women and gender which initially looked promising, Ahl (2006) argued that they are inadequate for understanding gender and women's activities. Ahl's argument was that the women's own perspectives are lost in these strategies of adding women, not merely by their under-

Gender and Entrepreneurship in Uganda: Women Manoeuvring Economic Space 17

scholarship which can encourage reflexive theoretical analyses when researching

Second, feminist theories are not only about 'women's' issues (i.e., studying women *qua* women) (Maynard, 2004a). Rather, by using feminist theories as conceptual lenses, a more inclusive social research practice, one that brings in the concerns of others, not just women, who are directly effected by global social and cultural practices and discourses, can be created (Maynard, 2004a, b). In Africa diverse perspectives on feminism can be found in the contemporary literature (Lewis, 2001). Indeed a range of perspectives are encompassed by feminist scholarship in Africa (Arnfred, 2004; Lewis, 2001; Sadiq, 2002). Recurring themes include the divide between continental Africans and those in the diaspora, the diversity in 'African' feminisms which includes womanists (Kolawole, 1997), black feminists, African feminists, or post-colonial feminists (Pereira, 2002; Touré, Barry, & Diallo, 2003); and varying forms of engagement with 'Western' feminism. However, what is crucial to the question of how women in different socio-cultural and historical locations organize, around what kinds of issues, whether or not they view their activities as feminist, and if so, how they formulate their relations to feminism, is that their struggles have been not only a response to oppressive features of their own societies, but also a fight against the imposition

Those who advance social constructionist ontology argue that a focus on gender relations brings the analyst's attention not simply to the sex of participants as embodied actors but to the cultural production of their subjectivities and material production of their lives (Ahl, 2006). From these processes emerge power-laden, contested, and ever changing social terrains where diverse interests play out (Calàs, Smircich, Bourne, 2009). In terms of entrepreneurship, as Calàs etal (200) suggested, two questions come to the fore: in which ways is entrepreneurship implicated in those gendering processes and practices? What else can be revealed about entrepreneurship through analyses of those processes? Using examples from Uganda, the next sections focus on contextual dynamics in entrepreneurship

According to the report by the Uganda Bureau of Statistics (2007) on the Uganda Business Register of 2006/2007, informal sector businesses constitute the largest number of businesses in Uganda. This is particularly the case in the trade sector into which over 60% of the national businesses fall. As the report observed, the informal sector has turned out to be very important in terms of employment creation. Despite quantitative measurement of the contributions of female micro-entrepreneurs to the GDP being slow in coming, the trading and services sectors (especially food and beverages, textiles, retail trade, pottery), which have led to the high rate of economic growth in the informal economy (Global Entrepreneurship Monitor [GEM] Uganda 2004 Executive Report), are areas of female

In Uganda, the history of women's entry into the business world in some ways parallels, but is distinct from, that of men. As Snyder (2000) noted, the contemporary story of

entrepreneurship.

of Western norms (Pereira, 2002).

**3. The study 3.1 Context** 

dominance.

that are less visible in the extant entrepreneurship literature.

representation in research, but by the fact that whenever they are represented, they are represented in the terms controlled by the dominant groups, rather than their own terms and with their own voice.

Against that background, although women have been included in a number of studies on entrepreneurship in recent years, there has been little focus on challenging traditional definitions of entrepreneurship or in developing new methods to collect information on entrepreneurship. As such, while there has been some reflection on the difference which the sex of the business owner makes, this reflection has not been contextualized within theoretical understandings of the ways in which entrepreneurial work is socially constructed. That is the ways in which entrepreneurial work is situated within gendered processes which form and are formed through relationships between work, organizational structure and the sex of the entrepreneur.

#### **2. Doing gender and entrepreneurship**

Discussions in the previous section made reference to problems involving culture and gender in relation to the entrepreneurial experiences of entrepreneurs in contexts different from those on which much of the dominant discourses are based. As such the case for linking gender and culture in the analysis of activities of entrepreneurs is a compelling one. That is, it's pertinent to focus on ongoing and context specific practices and the relationships that are created through them. In this case (with respect to the study on which this chapter is based), what else are Ugandan women and men doing under the mantle of entrepreneurship discourses?

The argument has long been made that gender is culturally determined. Oakley (cited in Mills, 1988), for example, distinguished between sex and gender, arguing that sex refers to basic physiological differences between men and women, while gender refers to culturally specific patterns of behaviour which may be attached to the sexes. In other words, gender refers to a set of assumptions about the nature and character of the biological differences between males and females; assumptions that are manifest in a number of ideas and practices which have a determinant influence upon the identity, social opportunities and life experiences of human actors (Mills, 1988). In respect to entrepreneurship, they are assumptions that have tended to be taken for granted in discourse and praxis (Ogbor, 2000). This has led to calls for a shift in epistemological position to the study of entrepreneurship (Steyaert & Hjorth, 2007; Rindova, Barry & Ketchen, 2009). Along with others in the entrepreneurship literature (e.g. Blake & Hanson, 2005), the work of Bruni, Gherardi, and Poggio (2004a, b) which used feminist theorizing are good examples to this effect. Bruni et al. (2004a, b) argue that gender and entrepreneurship become mutually constituted through gendered practices performed on a daily basis. That is, doing entrepreneurship is also doing gender. Inspired by such approaches to entrepreneurship scholarship, this chapter takes the social constructionist approach to feminist theorizing as appropriate for these purposes. First, all feminist theorizing is premised on the assumption that gender is fundamental in the structuring of society, with women being historically disadvantaged, and it seeks to end this condition. To this end feminist scholars critically analyse social agendas and consider all forms of knowledge (including that of entrepreneurship) as advancing the interest of some and not others (Harding 1991). As such feminist theorizing offers possibilities for critical scholarship which can encourage reflexive theoretical analyses when researching entrepreneurship.

Second, feminist theories are not only about 'women's' issues (i.e., studying women *qua* women) (Maynard, 2004a). Rather, by using feminist theories as conceptual lenses, a more inclusive social research practice, one that brings in the concerns of others, not just women, who are directly effected by global social and cultural practices and discourses, can be created (Maynard, 2004a, b). In Africa diverse perspectives on feminism can be found in the contemporary literature (Lewis, 2001). Indeed a range of perspectives are encompassed by feminist scholarship in Africa (Arnfred, 2004; Lewis, 2001; Sadiq, 2002). Recurring themes include the divide between continental Africans and those in the diaspora, the diversity in 'African' feminisms which includes womanists (Kolawole, 1997), black feminists, African feminists, or post-colonial feminists (Pereira, 2002; Touré, Barry, & Diallo, 2003); and varying forms of engagement with 'Western' feminism. However, what is crucial to the question of how women in different socio-cultural and historical locations organize, around what kinds of issues, whether or not they view their activities as feminist, and if so, how they formulate their relations to feminism, is that their struggles have been not only a response to oppressive features of their own societies, but also a fight against the imposition of Western norms (Pereira, 2002).

Those who advance social constructionist ontology argue that a focus on gender relations brings the analyst's attention not simply to the sex of participants as embodied actors but to the cultural production of their subjectivities and material production of their lives (Ahl, 2006). From these processes emerge power-laden, contested, and ever changing social terrains where diverse interests play out (Calàs, Smircich, Bourne, 2009). In terms of entrepreneurship, as Calàs etal (200) suggested, two questions come to the fore: in which ways is entrepreneurship implicated in those gendering processes and practices? What else can be revealed about entrepreneurship through analyses of those processes? Using examples from Uganda, the next sections focus on contextual dynamics in entrepreneurship that are less visible in the extant entrepreneurship literature.

#### **3. The study**

#### **3.1 Context**

16 Entrepreneurship - Gender, Geographies and Social Context

representation in research, but by the fact that whenever they are represented, they are represented in the terms controlled by the dominant groups, rather than their own terms

Against that background, although women have been included in a number of studies on entrepreneurship in recent years, there has been little focus on challenging traditional definitions of entrepreneurship or in developing new methods to collect information on entrepreneurship. As such, while there has been some reflection on the difference which the sex of the business owner makes, this reflection has not been contextualized within theoretical understandings of the ways in which entrepreneurial work is socially constructed. That is the ways in which entrepreneurial work is situated within gendered processes which form and are formed through relationships between work, organizational

Discussions in the previous section made reference to problems involving culture and gender in relation to the entrepreneurial experiences of entrepreneurs in contexts different from those on which much of the dominant discourses are based. As such the case for linking gender and culture in the analysis of activities of entrepreneurs is a compelling one. That is, it's pertinent to focus on ongoing and context specific practices and the relationships that are created through them. In this case (with respect to the study on which this chapter is based), what else are Ugandan women and men doing under the mantle of

The argument has long been made that gender is culturally determined. Oakley (cited in Mills, 1988), for example, distinguished between sex and gender, arguing that sex refers to basic physiological differences between men and women, while gender refers to culturally specific patterns of behaviour which may be attached to the sexes. In other words, gender refers to a set of assumptions about the nature and character of the biological differences between males and females; assumptions that are manifest in a number of ideas and practices which have a determinant influence upon the identity, social opportunities and life experiences of human actors (Mills, 1988). In respect to entrepreneurship, they are assumptions that have tended to be taken for granted in discourse and praxis (Ogbor, 2000). This has led to calls for a shift in epistemological position to the study of entrepreneurship (Steyaert & Hjorth, 2007; Rindova, Barry & Ketchen, 2009). Along with others in the entrepreneurship literature (e.g. Blake & Hanson, 2005), the work of Bruni, Gherardi, and Poggio (2004a, b) which used feminist theorizing are good examples to this effect. Bruni et al. (2004a, b) argue that gender and entrepreneurship become mutually constituted through gendered practices performed on a daily basis. That is, doing entrepreneurship is also doing gender. Inspired by such approaches to entrepreneurship scholarship, this chapter takes the social constructionist approach to feminist theorizing as appropriate for these purposes. First, all feminist theorizing is premised on the assumption that gender is fundamental in the structuring of society, with women being historically disadvantaged, and it seeks to end this condition. To this end feminist scholars critically analyse social agendas and consider all forms of knowledge (including that of entrepreneurship) as advancing the interest of some and not others (Harding 1991). As such feminist theorizing offers possibilities for critical

and with their own voice.

structure and the sex of the entrepreneur.

entrepreneurship discourses?

**2. Doing gender and entrepreneurship** 

According to the report by the Uganda Bureau of Statistics (2007) on the Uganda Business Register of 2006/2007, informal sector businesses constitute the largest number of businesses in Uganda. This is particularly the case in the trade sector into which over 60% of the national businesses fall. As the report observed, the informal sector has turned out to be very important in terms of employment creation. Despite quantitative measurement of the contributions of female micro-entrepreneurs to the GDP being slow in coming, the trading and services sectors (especially food and beverages, textiles, retail trade, pottery), which have led to the high rate of economic growth in the informal economy (Global Entrepreneurship Monitor [GEM] Uganda 2004 Executive Report), are areas of female dominance.

In Uganda, the history of women's entry into the business world in some ways parallels, but is distinct from, that of men. As Snyder (2000) noted, the contemporary story of

Gender and Entrepreneurship in Uganda: Women Manoeuvring Economic Space 19

work outside of their homesteads. Thus, the National Resistance Movement's [NRM's] ascent to power was critical for entrepreneurship because it provided an encouraging environment that came with stability. In spite of these successes, Ugandan feminists groups complain that their countrywomen still have a long way to go before their efforts can bear any significant fruits. Although the Ugandan government has offered strong leadership in promoting women's rights - something the feminist groups admit - economic factors and the lack of supporting infrastructure continue to prevent women from achieving gender parity. A look at the recent Uganda Business Register survey sheds more light on this. For instance, in the report on the Uganda Business Inquiry of 2006/2007 the trade sector has the highest value added, namely 735 billion shillings. In addition, most businesses in this sector are in the one to four employees size band. However, although the report revealed that women entrepreneurs are mainly to be found owning the small businesses employing between one and four persons, the report treats and characterizes women workers in the economy as a minority, and explains the differences between men's and women's businesses as a result of women owners' lesser qualifications in terms of human, social and financial capital. This is paradoxical in the sense that women's progress in business ownership remains virtually invisible while a few demographic differences between men's and women's businesses are

Similarly, Snyder (2000) observed that whereas women in Uganda now have the instruments for their political empowerment (enshrined in the 1995 constitution), women's economic power has not been boosted with similar positive policies and actions. Thus, such features make Uganda a particularly interesting place for research that addresses questions

In this study, a choice was made to undertake a narrative type of inquiry because of three contributions that such an approach has been observed to make to research studies that emphasize interpretation, rather than prediction. First, it has been observed that narrative inquiry provides an internally consistent research approach when asking questions that relate to meaning and interpretation. Second, narrative inquiry is an appropriate methodology to capture complex interpretations of experience because it captures context and makes space for the multiple representations of various voices with a stake in the research (Dodge, Ospina, & Foldy, 2005). Finally, it taps into the unique kind of knowledge

In order to carry out a narrative form of inquiry, a number of research techniques were used to generate stories about participants' entrepreneurial experiences. This meant that the researcher listened carefully to how the participants thought about their lives, and critically to how traditional social sciences scholars conceptualized women's and men's lives. In terms of specific techniques, the study utilized in-depth interviews and short life-story forms of

The sampling strategy followed that of Byrne (2004), broadly described as a purposive approach. That is, the selection of participants was based on information derived from already available sources of data, such as life-history documents relating to some of the

documented.

interviewing.

relating to experiences of female entrepreneurs.

**3.2 Study design and methods** 

that is communicated through stories.

female entrepreneurs in Uganda is also the story of the country's experience of, and recovery from, civil war and its legacy of death, destruction and fear. In terms of explaining the rise in women's entrepreneurship, Uganda's case is unique because "a veritable explosion of Ugandan African entrepreneurship was born out of the need to survive amidst chaos" (Snyder, 2000; p. 17), since the civil wars and economic crises that engulfed the country in the 1970s and early 1980s had such profound demographic and structural impacts.

#### **3.1.1 Gender ideology**<sup>1</sup>  **and the challenges to female entrepreneurship in Uganda**

In Uganda, men and women are connected through kinship relationships that, in turn, are nested in broader structural domains, such as ethnic groups and classes (Ssetuba, 2002; Tadria, 1987; Wakoko & Lobao, 1996). The values and beliefs generated by this system create gender differences in social behaviours, and at the same time reinforce and maintain the status quo in terms of economic and social relations (Tadria, 1987). In Uganda, these distinctions are articulated in proverbs, jokes and myths, and in informal and formal discussions (Ssetuba, 2002). In contrast to other African nations, where gender ideologies stress the role of women as both producers and reproducers (Overa, 2003), in Uganda Tadria (1987) noted that a woman's worth is measured first in terms of what she can offer to family survival. That is, in terms of procuring and processing food (Tadria, 1987). In addition, childbearing is considered an added advantage in marriage. Following this tradition, and as a result of the fact that a high proportion of women live in rural areas, over time Ugandan women have come to provide 60% of the labour force in the agricultural sector and account for over 80% of the labour force in food production (Snyder, 2000).

According to Bantebya (1992) the analysis of the societal impact of colonialism on women's economic activities suggests that this system was more detrimental for women than for men. After all, as Tadria (1987) observed, in Uganda men became part of the money economy while the women remained in the traditional sector. More specifically, Tadria (1987) argued that the economy was demarcated into two ideologically-aligned sectors: a local sector dominated by women and characterized by the sale of agricultural produce and other commodities around the homesteads, and the external sector dominated by men (men who migrate from their homes to engage in a variety of cash-generating activities). However, consciousness of discrimination by formal institutions has been on the rise in recent times in Uganda, and women's recent actions in politics (Goetz 2002; Tamale, 1998; Tripp, 1999, 2001), entrepreneurship (Snyder, 2000) and finance (Guwatudde, 1994) have been acknowledged by scholars. It is even suggested that these actions have created changes in gender ideology and power relationships at both the social-structural, and the household levels (Wakoko & Lobao, 1996).

The economic crisis discussed above embraced the position of many Ugandan women, especially poor and peasant women, and weakened the basis of men's domination. With the decline of agriculture in the 1970s, which had been dominated by men, women learned to

 1 Wade and Tavris (1994) suggested that in a given society people hold a model or ideology of gender in which differences - and the basis and justification for differences between the sexes - are explicated.

work outside of their homesteads. Thus, the National Resistance Movement's [NRM's] ascent to power was critical for entrepreneurship because it provided an encouraging environment that came with stability. In spite of these successes, Ugandan feminists groups complain that their countrywomen still have a long way to go before their efforts can bear any significant fruits. Although the Ugandan government has offered strong leadership in promoting women's rights - something the feminist groups admit - economic factors and the lack of supporting infrastructure continue to prevent women from achieving gender parity. A look at the recent Uganda Business Register survey sheds more light on this. For instance, in the report on the Uganda Business Inquiry of 2006/2007 the trade sector has the highest value added, namely 735 billion shillings. In addition, most businesses in this sector are in the one to four employees size band. However, although the report revealed that women entrepreneurs are mainly to be found owning the small businesses employing between one and four persons, the report treats and characterizes women workers in the economy as a minority, and explains the differences between men's and women's businesses as a result of women owners' lesser qualifications in terms of human, social and financial capital. This is paradoxical in the sense that women's progress in business ownership remains virtually invisible while a few demographic differences between men's and women's businesses are documented.

Similarly, Snyder (2000) observed that whereas women in Uganda now have the instruments for their political empowerment (enshrined in the 1995 constitution), women's economic power has not been boosted with similar positive policies and actions. Thus, such features make Uganda a particularly interesting place for research that addresses questions relating to experiences of female entrepreneurs.

#### **3.2 Study design and methods**

18 Entrepreneurship - Gender, Geographies and Social Context

female entrepreneurs in Uganda is also the story of the country's experience of, and recovery from, civil war and its legacy of death, destruction and fear. In terms of explaining the rise in women's entrepreneurship, Uganda's case is unique because "a veritable explosion of Ugandan African entrepreneurship was born out of the need to survive amidst chaos" (Snyder, 2000; p. 17), since the civil wars and economic crises that engulfed the country in the 1970s and early 1980s had such profound demographic and

In Uganda, men and women are connected through kinship relationships that, in turn, are nested in broader structural domains, such as ethnic groups and classes (Ssetuba, 2002; Tadria, 1987; Wakoko & Lobao, 1996). The values and beliefs generated by this system create gender differences in social behaviours, and at the same time reinforce and maintain the status quo in terms of economic and social relations (Tadria, 1987). In Uganda, these distinctions are articulated in proverbs, jokes and myths, and in informal and formal discussions (Ssetuba, 2002). In contrast to other African nations, where gender ideologies stress the role of women as both producers and reproducers (Overa, 2003), in Uganda Tadria (1987) noted that a woman's worth is measured first in terms of what she can offer to family survival. That is, in terms of procuring and processing food (Tadria, 1987). In addition, childbearing is considered an added advantage in marriage. Following this tradition, and as a result of the fact that a high proportion of women live in rural areas, over time Ugandan women have come to provide 60% of the labour force in the agricultural sector and account for over 80% of the labour force in food production

According to Bantebya (1992) the analysis of the societal impact of colonialism on women's economic activities suggests that this system was more detrimental for women than for men. After all, as Tadria (1987) observed, in Uganda men became part of the money economy while the women remained in the traditional sector. More specifically, Tadria (1987) argued that the economy was demarcated into two ideologically-aligned sectors: a local sector dominated by women and characterized by the sale of agricultural produce and other commodities around the homesteads, and the external sector dominated by men (men who migrate from their homes to engage in a variety of cash-generating activities). However, consciousness of discrimination by formal institutions has been on the rise in recent times in Uganda, and women's recent actions in politics (Goetz 2002; Tamale, 1998; Tripp, 1999, 2001), entrepreneurship (Snyder, 2000) and finance (Guwatudde, 1994) have been acknowledged by scholars. It is even suggested that these actions have created changes in gender ideology and power relationships at both the social-structural, and the household

The economic crisis discussed above embraced the position of many Ugandan women, especially poor and peasant women, and weakened the basis of men's domination. With the decline of agriculture in the 1970s, which had been dominated by men, women learned to

1 Wade and Tavris (1994) suggested that in a given society people hold a model or ideology of gender in which differences - and the basis and justification for differences between the sexes - are explicated.

 **and the challenges to female entrepreneurship in Uganda** 

structural impacts.

(Snyder, 2000).

levels (Wakoko & Lobao, 1996).

**3.1.1 Gender ideology**<sup>1</sup>

In this study, a choice was made to undertake a narrative type of inquiry because of three contributions that such an approach has been observed to make to research studies that emphasize interpretation, rather than prediction. First, it has been observed that narrative inquiry provides an internally consistent research approach when asking questions that relate to meaning and interpretation. Second, narrative inquiry is an appropriate methodology to capture complex interpretations of experience because it captures context and makes space for the multiple representations of various voices with a stake in the research (Dodge, Ospina, & Foldy, 2005). Finally, it taps into the unique kind of knowledge that is communicated through stories.

In order to carry out a narrative form of inquiry, a number of research techniques were used to generate stories about participants' entrepreneurial experiences. This meant that the researcher listened carefully to how the participants thought about their lives, and critically to how traditional social sciences scholars conceptualized women's and men's lives. In terms of specific techniques, the study utilized in-depth interviews and short life-story forms of interviewing.

The sampling strategy followed that of Byrne (2004), broadly described as a purposive approach. That is, the selection of participants was based on information derived from already available sources of data, such as life-history documents relating to some of the

Gender and Entrepreneurship in Uganda: Women Manoeuvring Economic Space 21

current gender order and the accommodations they have to make. Manoeuvring space stories provide narratives of the ways in which gender is created and maintained in entrepreneurship discourse and practice. Cultural entrepreneurship stories provide narratives that tell of the meanings that entrepreneurs attach to, and the strategies for,

Rather than presenting case materials relating to entrepreneurial experiences of all the cases in the study, narratives of selected cases are presented in the next sections based on their potential to articulate issues relating to how female entrepreneurs maneouvre economic space. Therefore a detailed presentation and discussion of "bigmanship"; cultural entrepreneurship as well as gendered identity stories is beyond the scope of this chapter.

While it's still largely the case that local gender ideologies shape women's economic opportunities in Uganda, this section presents two case studies of the extent to which female entrepreneurs maneouvre space within the male economic space. In the third case study entrepreneur's highlights one female entrepreneur's effort to initiate a self-help association in order to deal with the hostility that was being directed at her ability to crop-farm successfully in a village with culturally biased negative attitudes towards progressive

Robinah's story of how her company (RORASH Educational Publishers) was established starts with her experiences of working outside of the country with mostly international organizations. The characters in her story are family members, and the importance of family is apparent in her narratives. The success of the company is presented as being entirely dependent on her prior experiences while working with international publishers and the marketing skills acquired earlier. In her story, two characters from her family are mentioned in relation to how RORASH was established. Although their involvement in the process of establishing the company was acknowledged, it was taken for granted. For instance, the role of her brother is referred to only when describing the difficulty she had in

So Heinemann was looking for someone to represent them in Uganda and my former boss at Oxford University Press who [*sic*] I had worked with - the Heinemann staff in charge of Africa some years ago in Nigeria - recommended me. That is how the relationship started. I mean it was a long one. We missed each other, phones were not working. Sometimes they would travel to Kampala to come and meet me. I would not know how long the flight [would take?] I wouldn't know … So trips were made and

2 The concept of space used here is based on Daly's (1991) social constructionist understanding of economic space as no longer presenting itself as a fixed totality constructed independently of its

3 That is how the media carried her story when it first came out (Kamugasa, 1998).

**' for female entrepreneurs in Uganda** 

success they adopt.

Interested readers can refer to Kikooma (2007; 2011).

**4.1 Case study 1: The story of Uganda's 'woman publisher'**<sup>3</sup>

**4. Manoeuvring economic 'space**<sup>2</sup>

methods of crop farming.

communicating with Heinemann.

articulations with other social practices.

participants. These sources were used to identify and locate appropriate participants who would then be approached and asked to participate. In some cases, snowball sampling (Byrne, 2004) was also followed. In the snowball strategy, some of the participants identified potential participants who were then approached by the researcher. As it has been observed in the literature, life-history research typically relies on small sample groups (Plummer, 2001). In this study, this meant that the participant sampling was based on considerations of data quality, rather than on statistical representativeness.

The current study made the following three assumptions that underpin three approaches to narratives discussed in this paper. The first assumption is that the stories of entrepreneurs tell about their experiences in their entrepreneurial activities give us access to the arguments, intentions, and meanings that support entrepreneurship (narrative as language). Secondly, entrepreneurship as practice is a legitimate source of knowledge from which to draw lessons about entrepreneurship, which can then be applied to other contexts (narrative as knowledge). The third assumption is that even though an entrepreneur may actively resist societal structures of power, those structures may influence their work, producing incongruence between discourse and practice (narrative as metaphor).

In analysing and interpreting narratives generated during the research process, three assumptions guided the researcher's methodological choices and influenced the nature of the analysis that was carried out. Drawing on narrative as language, the researcher used stories about participants' entrepreneurial experiences as the primary source for exploring entrepreneurship practices. Life-story interviews facilitated the flow of stories and storytelling. Similarly, in order to tap into the wisdom of participants' tacit knowledge- so important to the narrative as knowledge approach- the researcher's emphasis was focused on access to the insights embedded in entrepreneurs' day-to-day practices. Finally, drawing from narrative as metaphor, texts were critiqued and deconstructed, rather than taking them at face value in order to decipher implicit shared meanings of the participants' narratives of their experiences, and possibly offering alternative interpretations of accepted views in entrepreneurship discourse. Integrating elements from all these approaches, the study combined formal narrative analysis, thematic coding, and deconstruction techniques to analyse the data.

Case stories in the study database fell into three main categories: bigmanship, African woman, and cultural entrepreneurship stories. These are briefly described as follows: bigmanship was a category of stories of a culturally idealized form of masculine character. Such stories came in two forms. In the first form, which was referred to as hegemonic masculinity, entrepreneurs in this category provided stories that were consistent with the idea of a male archetypical entrepreneur. In the second form there were stories that provided a defensive grappling with gender issues. That is, in their accounts, emphasis was on gender neutrality as the criterion of fairness.

Women entrepreneurs' stories of challenges, perseverance and triumph constituted the second category which is referred to as African woman stories. More specifically, African woman stories came in two forms: gendered identity and manoeuvring space stories. In the gendered identity story category, there is a certain tentativeness regarding the position of men in the female entrepreneurs' business lives. This is reflected in their views of the

participants. These sources were used to identify and locate appropriate participants who would then be approached and asked to participate. In some cases, snowball sampling (Byrne, 2004) was also followed. In the snowball strategy, some of the participants identified potential participants who were then approached by the researcher. As it has been observed in the literature, life-history research typically relies on small sample groups (Plummer, 2001). In this study, this meant that the participant sampling was based on considerations of

The current study made the following three assumptions that underpin three approaches to narratives discussed in this paper. The first assumption is that the stories of entrepreneurs tell about their experiences in their entrepreneurial activities give us access to the arguments, intentions, and meanings that support entrepreneurship (narrative as language). Secondly, entrepreneurship as practice is a legitimate source of knowledge from which to draw lessons about entrepreneurship, which can then be applied to other contexts (narrative as knowledge). The third assumption is that even though an entrepreneur may actively resist societal structures of power, those structures may influence their work, producing

In analysing and interpreting narratives generated during the research process, three assumptions guided the researcher's methodological choices and influenced the nature of the analysis that was carried out. Drawing on narrative as language, the researcher used stories about participants' entrepreneurial experiences as the primary source for exploring entrepreneurship practices. Life-story interviews facilitated the flow of stories and storytelling. Similarly, in order to tap into the wisdom of participants' tacit knowledge- so important to the narrative as knowledge approach- the researcher's emphasis was focused on access to the insights embedded in entrepreneurs' day-to-day practices. Finally, drawing from narrative as metaphor, texts were critiqued and deconstructed, rather than taking them at face value in order to decipher implicit shared meanings of the participants' narratives of their experiences, and possibly offering alternative interpretations of accepted views in entrepreneurship discourse. Integrating elements from all these approaches, the study combined formal narrative analysis, thematic coding, and deconstruction techniques to

Case stories in the study database fell into three main categories: bigmanship, African woman, and cultural entrepreneurship stories. These are briefly described as follows: bigmanship was a category of stories of a culturally idealized form of masculine character. Such stories came in two forms. In the first form, which was referred to as hegemonic masculinity, entrepreneurs in this category provided stories that were consistent with the idea of a male archetypical entrepreneur. In the second form there were stories that provided a defensive grappling with gender issues. That is, in their accounts, emphasis was

Women entrepreneurs' stories of challenges, perseverance and triumph constituted the second category which is referred to as African woman stories. More specifically, African woman stories came in two forms: gendered identity and manoeuvring space stories. In the gendered identity story category, there is a certain tentativeness regarding the position of men in the female entrepreneurs' business lives. This is reflected in their views of the

data quality, rather than on statistical representativeness.

analyse the data.

on gender neutrality as the criterion of fairness.

incongruence between discourse and practice (narrative as metaphor).

current gender order and the accommodations they have to make. Manoeuvring space stories provide narratives of the ways in which gender is created and maintained in entrepreneurship discourse and practice. Cultural entrepreneurship stories provide narratives that tell of the meanings that entrepreneurs attach to, and the strategies for, success they adopt.

Rather than presenting case materials relating to entrepreneurial experiences of all the cases in the study, narratives of selected cases are presented in the next sections based on their potential to articulate issues relating to how female entrepreneurs maneouvre economic space. Therefore a detailed presentation and discussion of "bigmanship"; cultural entrepreneurship as well as gendered identity stories is beyond the scope of this chapter. Interested readers can refer to Kikooma (2007; 2011).

#### **4. Manoeuvring economic 'space**<sup>2</sup> **' for female entrepreneurs in Uganda**

While it's still largely the case that local gender ideologies shape women's economic opportunities in Uganda, this section presents two case studies of the extent to which female entrepreneurs maneouvre space within the male economic space. In the third case study entrepreneur's highlights one female entrepreneur's effort to initiate a self-help association in order to deal with the hostility that was being directed at her ability to crop-farm successfully in a village with culturally biased negative attitudes towards progressive methods of crop farming.

#### **4.1 Case study 1: The story of Uganda's 'woman publisher'**<sup>3</sup>

Robinah's story of how her company (RORASH Educational Publishers) was established starts with her experiences of working outside of the country with mostly international organizations. The characters in her story are family members, and the importance of family is apparent in her narratives. The success of the company is presented as being entirely dependent on her prior experiences while working with international publishers and the marketing skills acquired earlier. In her story, two characters from her family are mentioned in relation to how RORASH was established. Although their involvement in the process of establishing the company was acknowledged, it was taken for granted. For instance, the role of her brother is referred to only when describing the difficulty she had in communicating with Heinemann.

So Heinemann was looking for someone to represent them in Uganda and my former boss at Oxford University Press who [*sic*] I had worked with - the Heinemann staff in charge of Africa some years ago in Nigeria - recommended me. That is how the relationship started. I mean it was a long one. We missed each other, phones were not working. Sometimes they would travel to Kampala to come and meet me. I would not know how long the flight [would take?] I wouldn't know … So trips were made and

<sup>2</sup> The concept of space used here is based on Daly's (1991) social constructionist understanding of economic space as no longer presenting itself as a fixed totality constructed independently of its articulations with other social practices.

<sup>3</sup> That is how the media carried her story when it first came out (Kamugasa, 1998).

Gender and Entrepreneurship in Uganda: Women Manoeuvring Economic Space 23

for anyone to understand the 'success' story of the company fully. That is why, although the husband's guidance is acknowledged as useful, it is presented as only given when it is sought for. Yet even the name RORASH (an acronym from the names of the couple - Robinah and Rashid) suggests that the husband is, in fact, central to this business,

From Robinah's narratives, what is said (but also from what may not have been said of the company's success story) is here seen as mobilizing, and even legitimating an entrepreneurial figure with an image of a "woman multi-million publisher" as one newspaper once described her business prowess (Kamugasa, 1998, p. 15). Thus, her narratives contribute to the hegemonic entrepreneurship discourse which glorifies an entrepreneurial male figure akin to what in the literature are masculine ideals related to

The work of Weedon (1987) may be instructive in examining the above examples. According to Weedon (1987), a post-structuralist perspective allows an investigator not just to evaluate the material possibilities available to women, but it also gives the investigator a sophisticated account of how discourse steeped in particular ideologies may make choices impossible or contradictory. In the case above, Robinah recognizes herself as an independent, successful business woman, but does not recognize the ways in which such a subject position is constructed and, in the words of Weedon (1987, p. 310), "assumes she is

For a long time in Uganda the business of driving a public transport vehicle, let alone owning one, was a "man's thing'. However, it was not to remain so forever. In November 1997 the *New Vision* newspaper wrote that when Victoria Muwanga decided to venture into the transport business like any other ambitious Ugandan, little did she know that it would be such a big issue. Nine months later, she not only captured the traffic officers' attention, but also won public acclaim (Rwomusana, 1997). The media described the shock on a

A *matatu* [minibus] passenger bound for Ntinda from Kampala was deeply impressed with his driver's safety consciousness. "Drives carefully. Does not screech the brakes," he commented as he moved forward to congratulate the driver. Astonished, he blurred

Driver Victoria is one of the female entrepreneurs in Uganda who tried to find new ways to enhance her livelihood. Although she acknowledged that her job (of driving the *matatu*  [mini bus] - the most common form of transport) had been labelled as a 'men only' job in

As Kampala's first female *matatu* owner-driver, and probably also first in Uganda, her story compelled Snyder (2000) to include her in the book on "Women in African economies". Describing her experience in her new job, Victoria said: "You need to see the shock on people's faces, especially men, who enter my bus unknowingly and later discover a woman

Uganda, she believed that this was changing as her passengers like 'her driving'.

behind the wheel. But now they like my driving" (Snyder, 2000, p. 187).

something which is not apparent in Robinah's narratives.

risk-taking, authority, sexuality and paid work (Connell, 1995, 2001).

the author of the ideology which constructs her subjectivity".

passenger's face on realizing that the driver was a woman

out, "Are you really a woman?" (Rwomusana, 1997, p. 14).

**4.2 Case study 2: A woman who ventured into a non-traditional domain** 

one of the reasons we missed each other was communication owing at the time. The telecommunication system was very poor. Finally we met. The first obstacle was phones. I would have to make an appointment to talk to him through my brother. So my brother would give him something like one or two days to try and locate me. And when I appear maybe his phone is not working. You know. That sort of thing. So it was like a rat race. I don't know how to call it. Eventually we met and they appointed me as their agent in Uganda. Sole agent.

Robinah's story of the creation of RORASH as sole agent shows how the ingredients of entrepreneurship described in 'epic' terms (Gabriel, 1998) acquire meaning not in the abstract, but by being framed within the entrepreneurial stories. Unlike other stories, the interweaving between the business and the family in its dimensions of gender are not described in problematic terms. In fact, it is at this point that difficulties emerge that make the apparently gender-neutral epic story reveal its carefully constructed gendered nature. For example, the husband's involvement in the business at any stage in the creation process, as well as after its establishment, is not made explicit except to mention that through his contacts, they (he and Robinah) were able to convince someone to give them a loan to cover the foreign exchange of 10,000 US dollars that were allocated by government to RORASH when it was being established.

I had to look for the equivalent Uganda shillings to cover the allocation … It was not a liberalized market. So I had to get the match up in Uganda shillings and the equivalent at the time. I think this was seven million shillings. So you can quickly work out the rate at the time. So I used my husband's connection. My husband used to work with Bank of Uganda before we left the country; and remember foreign exchange was by allocation. So many allocatees become his friends. In other words, there were many business people whose applications were fronted by him. So we wrote to one of the friends to lend us seven million shillings. The friend offered the money interest free with only one condition; that the stock will be warehoused by the lender. So, in so far as I would withdraw certain quantities, sell off, pay off, then I would be allowed to withdraw more. This was not a hindrance on my part. If anything, it was … it helped us cut on costs because warehousing costs would have hindered us.

For the most part, Robinah's story 'silenced' other stories, so to speak. The husband and his role in the business are not visible in the narratives. It is only at some critical junctures that his contribution is made reference to. Moreover, she referred to the character of her husband in unpretentious terms.

I think here, let me talk about my husband. He is a globe-trotter, but he is a shy man and he is not very sociable. For him, he likes sports, exercises. Unlike him, I am social. I like both dancing and parties. But he has had no problem with my activities. He gives me guidance whenever I seek it. Being a banker, he finds this sort of work a bit boring.

Here we see how the narrator's 'theory in use' (Bruni et al. 2004) can give meaning to discursive practices of story-telling situated in a specific spatial setting. Robinah's framing of her story seems to put emphasis on her part of the story of RORASH, and in so doing lessens the possibility of the husband's part of the RORASH story being seen as necessary

Robinah's story of the creation of RORASH as sole agent shows how the ingredients of entrepreneurship described in 'epic' terms (Gabriel, 1998) acquire meaning not in the abstract, but by being framed within the entrepreneurial stories. Unlike other stories, the interweaving between the business and the family in its dimensions of gender are not described in problematic terms. In fact, it is at this point that difficulties emerge that make the apparently gender-neutral epic story reveal its carefully constructed gendered nature. For example, the husband's involvement in the business at any stage in the creation process, as well as after its establishment, is not made explicit except to mention that through his contacts, they (he and Robinah) were able to convince someone to give them a loan to cover the foreign exchange of 10,000 US dollars that were allocated by government to RORASH

I had to look for the equivalent Uganda shillings to cover the allocation … It was not a liberalized market. So I had to get the match up in Uganda shillings and the equivalent at the time. I think this was seven million shillings. So you can quickly work out the rate at the time. So I used my husband's connection. My husband used to work with Bank of Uganda before we left the country; and remember foreign exchange was by allocation. So many allocatees become his friends. In other words, there were many business people whose applications were fronted by him. So we wrote to one of the friends to lend us seven million shillings. The friend offered the money interest free with only one condition; that the stock will be warehoused by the lender. So, in so far as I would withdraw certain quantities, sell off, pay off, then I would be allowed to withdraw more. This was not a hindrance on my part. If anything, it was … it helped us cut on costs because warehousing costs would have

For the most part, Robinah's story 'silenced' other stories, so to speak. The husband and his role in the business are not visible in the narratives. It is only at some critical junctures that his contribution is made reference to. Moreover, she referred to the character of her husband

I think here, let me talk about my husband. He is a globe-trotter, but he is a shy man and he is not very sociable. For him, he likes sports, exercises. Unlike him, I am social. I like both dancing and parties. But he has had no problem with my activities. He gives me guidance whenever I seek it. Being a banker, he finds this sort of work a bit boring. Here we see how the narrator's 'theory in use' (Bruni et al. 2004) can give meaning to discursive practices of story-telling situated in a specific spatial setting. Robinah's framing of her story seems to put emphasis on her part of the story of RORASH, and in so doing lessens the possibility of the husband's part of the RORASH story being seen as necessary

their agent in Uganda. Sole agent.

when it was being established.

hindered us.

in unpretentious terms.

one of the reasons we missed each other was communication owing at the time. The telecommunication system was very poor. Finally we met. The first obstacle was phones. I would have to make an appointment to talk to him through my brother. So my brother would give him something like one or two days to try and locate me. And when I appear maybe his phone is not working. You know. That sort of thing. So it was like a rat race. I don't know how to call it. Eventually we met and they appointed me as for anyone to understand the 'success' story of the company fully. That is why, although the husband's guidance is acknowledged as useful, it is presented as only given when it is sought for. Yet even the name RORASH (an acronym from the names of the couple - Robinah and Rashid) suggests that the husband is, in fact, central to this business, something which is not apparent in Robinah's narratives.

From Robinah's narratives, what is said (but also from what may not have been said of the company's success story) is here seen as mobilizing, and even legitimating an entrepreneurial figure with an image of a "woman multi-million publisher" as one newspaper once described her business prowess (Kamugasa, 1998, p. 15). Thus, her narratives contribute to the hegemonic entrepreneurship discourse which glorifies an entrepreneurial male figure akin to what in the literature are masculine ideals related to risk-taking, authority, sexuality and paid work (Connell, 1995, 2001).

The work of Weedon (1987) may be instructive in examining the above examples. According to Weedon (1987), a post-structuralist perspective allows an investigator not just to evaluate the material possibilities available to women, but it also gives the investigator a sophisticated account of how discourse steeped in particular ideologies may make choices impossible or contradictory. In the case above, Robinah recognizes herself as an independent, successful business woman, but does not recognize the ways in which such a subject position is constructed and, in the words of Weedon (1987, p. 310), "assumes she is the author of the ideology which constructs her subjectivity".

#### **4.2 Case study 2: A woman who ventured into a non-traditional domain**

For a long time in Uganda the business of driving a public transport vehicle, let alone owning one, was a "man's thing'. However, it was not to remain so forever. In November 1997 the *New Vision* newspaper wrote that when Victoria Muwanga decided to venture into the transport business like any other ambitious Ugandan, little did she know that it would be such a big issue. Nine months later, she not only captured the traffic officers' attention, but also won public acclaim (Rwomusana, 1997). The media described the shock on a passenger's face on realizing that the driver was a woman

A *matatu* [minibus] passenger bound for Ntinda from Kampala was deeply impressed with his driver's safety consciousness. "Drives carefully. Does not screech the brakes," he commented as he moved forward to congratulate the driver. Astonished, he blurred out, "Are you really a woman?" (Rwomusana, 1997, p. 14).

Driver Victoria is one of the female entrepreneurs in Uganda who tried to find new ways to enhance her livelihood. Although she acknowledged that her job (of driving the *matatu*  [mini bus] - the most common form of transport) had been labelled as a 'men only' job in Uganda, she believed that this was changing as her passengers like 'her driving'.

As Kampala's first female *matatu* owner-driver, and probably also first in Uganda, her story compelled Snyder (2000) to include her in the book on "Women in African economies". Describing her experience in her new job, Victoria said: "You need to see the shock on people's faces, especially men, who enter my bus unknowingly and later discover a woman behind the wheel. But now they like my driving" (Snyder, 2000, p. 187).

Gender and Entrepreneurship in Uganda: Women Manoeuvring Economic Space 25

think they are very rich, stay at home until the money is gone and then come crawling

What this case study reveals is that while women, on the one hand, are faced with reduced access to both material and other resources, and are subjected to a large number of oppressing mechanisms legitimized by patriarchal structures (Snyder, 2000), they are far from being passive individuals. On the contrary, Victoria's case shows that they are reflective and active agents, often with both influence and authority within their daily reality. From her story it is clear that gender struggle is integral to all expressions of gender relations, though it can take various implicit and explicit forms. Victoria grew up struggling with expectations of her as a female with specific roles. For instance, these expectations influenced which profession she was expected to join, courses that she studied at school and what skills she acquired as a young girl growing up in a male-dominated world. Indeed, she studied nursing, then studied with Irish nuns in Nsambya Hospital and later studied a secretarial course; all of which were considered as training for 'women's jobs' (Snyder, 2000). Later, she tried different sorts of businesses, including operating a restaurant, farming, as well as food businesses. These are, again, 'women's jobs'. None of these were in

The main message of this case study is in the way it brings to the foreground a discord in the traditional role patterns revealed through her entrepreneurial activities. In addition, the traditional notions of gender identity and relations are brought into question. In her case, for instance, girls would normally not be expected to learn how to ride a bike, let alone drive a vehicle, which would later become a critical skill in her current business life. Her story calls into question traditional notions of masculinity in discourse of entrepreneurship and suggests that men gain advantages from the culturally-dominant ideal of masculinity centred around authority, physical toughness and strength, and paid work (Pilcher & Whelehan, 2004), but that few men actually live up to it as the last paragraph in Victoria's

Some of the most familiar cultural interfaces in Africa are to be found in work by Munene, Schwartz and Kibanja (2005) who attempted to characterize the social and cultural life in relation to poverty in Uganda. They described a particular focal entrepreneurial individual with social capital in a community development association. They explained how in that case study, a focal individual joined a new community after the Ugandan civil war (during the period 1981-1986) and brought with her new ways of crop-farming. In this particular community members experienced perennial food shortages because the rocky landscape with saline topsoil on which they farmed was infertile. The authors noted that for unknown

5 According to Munene, Schwartz and Kibanja (2005), an interface is an abstraction referring to an interpersonal or an intergroup space, which is generated by the meeting of two parties (agents) in the process of an exchange. It is composed of the interactional outcome of motivations, beliefs, perceptions and underlying experiences that each of the parties brings to an exchange. According to Munene et al. (2005), there are many types of cultural interfaces which may be viewed as negative or positive for

 **using entrepreneurship** 

back," she explains.

transport.

narratives demonstrates.

economic development in Africa.

**4.3 Confronting negative cultural interfaces**<sup>5</sup>

Snyder hailed her for bravery and said that Victoria is unwilling to be sidelined because she is a widow and is determined not to become the burden to her family and community. When some men say that she is a *muyaye*4 her reaction is clear:

I do not care because I know I am not a *muyaye*; I am just earning an honest living. I have to survive. Women should not fear what people say. It is what you think, how you carry yourself that matters. Nothing is going to stop you from being a woman, a wife, a mother just because you drive a taxi! (Snyder, 2000, pp. 187-188).

Victoria plies the Ntinda-Kampala route, a service that earned her a vocational award from the Rotary Club of Mengo. "This is great. I did not expect such recognition and respect from these young people," she told the New Vision newspaper. She said the recognition made some members of her family who had been reluctant to accept her new profession, change their minds.

My eldest son who had insisted that his friends would laugh at him is now happy with my achievement. The big girl had encouraged me from the start but had probably not expected such an honour in a short time.

But why was she driving? Born into a polygamous family whose head was a medical assistant, Victoria tried her hand at many things. She dropped out of her secondary school education at senior three level upon her father's death. With a helping hand from a maternal uncle, she later enrolled for a nursing course in Nsambya, but this hope soon withered for the ambitious young woman when one time she (ad)ventured into a discotheque at night and was suspended together with friends. "Naturally, my uncle was disappointed, but being a forgiving parent that he is, he sent me to Nakawa to study secretarial," she said in her interview with the *New Vision* newspaper.

Victoria learnt driving as a young girl while living at her uncle's place, a man whom she regards highly. "My uncle was a minister and one could bribe his drivers to teach you how to drive. The first vehicle I drove was a Mercedes-Benz," she revealed. Victoria tried farming and food businesses for a while until a friend suggested buying a taxi. However, when she bought a taxi and gave it to a driver, with a relative to oversee, the two connived to cheat her. "For a whole year I got no money while the vehicle became ramshackled," she revealed. The hired drivers were using the vehicle to transport goats, *matooke* [green bananas] and other produce from many hundred miles away. "When I grew tired of all that, I thought that I could surely drive," she explains. She went to UTODA (Uganda Taxi Operators' and Drivers' Association) offices for a driving permit, and after undergoing several tests she was commissioned to drive. "It is best to be your own driver", she admits. Victoria believes there is no reason not to drive and hiring 'young boys', most of whom have never handled a million shillings before. "They can cheat an owner out of a hundred thousand shillings, then

<sup>4</sup> In Uganda, more particularly in towns, muyaye is a derogatory term that is used to insult someone. According to Obbo (1991), the word bayaye (the plural of muyaye) originally referred to the unruly, marijuana [njaye]-smoking young men from Kyagwe county in Southern Uganda during the reign of Kabaka [King] Mwanga. They were mostly rebellious youths who rebelled against their parents and teachers, and sought a short-cut means of earning a living. Currently, they are stereotypically seen as 'unemployed', shabbily dressed, and foul-mouthed, operating in city market places and taxi and bus parking lots.

Snyder hailed her for bravery and said that Victoria is unwilling to be sidelined because she is a widow and is determined not to become the burden to her family and community.

Victoria plies the Ntinda-Kampala route, a service that earned her a vocational award from the Rotary Club of Mengo. "This is great. I did not expect such recognition and respect from these young people," she told the New Vision newspaper. She said the recognition made some members of her family who had been reluctant to accept her new profession, change

My eldest son who had insisted that his friends would laugh at him is now happy with my achievement. The big girl had encouraged me from the start but had probably not

But why was she driving? Born into a polygamous family whose head was a medical assistant, Victoria tried her hand at many things. She dropped out of her secondary school education at senior three level upon her father's death. With a helping hand from a maternal uncle, she later enrolled for a nursing course in Nsambya, but this hope soon withered for the ambitious young woman when one time she (ad)ventured into a discotheque at night and was suspended together with friends. "Naturally, my uncle was disappointed, but being a forgiving parent that he is, he sent me to Nakawa to study secretarial," she said in

Victoria learnt driving as a young girl while living at her uncle's place, a man whom she regards highly. "My uncle was a minister and one could bribe his drivers to teach you how to drive. The first vehicle I drove was a Mercedes-Benz," she revealed. Victoria tried farming and food businesses for a while until a friend suggested buying a taxi. However, when she bought a taxi and gave it to a driver, with a relative to oversee, the two connived to cheat her. "For a whole year I got no money while the vehicle became ramshackled," she revealed. The hired drivers were using the vehicle to transport goats, *matooke* [green bananas] and other produce from many hundred miles away. "When I grew tired of all that, I thought that I could surely drive," she explains. She went to UTODA (Uganda Taxi Operators' and Drivers' Association) offices for a driving permit, and after undergoing several tests she was commissioned to drive. "It is best to be your own driver", she admits. Victoria believes there is no reason not to drive and hiring 'young boys', most of whom have never handled a million shillings before. "They can cheat an owner out of a hundred thousand shillings, then

4 In Uganda, more particularly in towns, muyaye is a derogatory term that is used to insult someone. According to Obbo (1991), the word bayaye (the plural of muyaye) originally referred to the unruly, marijuana [njaye]-smoking young men from Kyagwe county in Southern Uganda during the reign of Kabaka [King] Mwanga. They were mostly rebellious youths who rebelled against their parents and teachers, and sought a short-cut means of earning a living. Currently, they are stereotypically seen as 'unemployed', shabbily dressed, and foul-mouthed, operating in city market places and taxi and bus

I do not care because I know I am not a *muyaye*; I am just earning an honest living. I have to survive. Women should not fear what people say. It is what you think, how you carry yourself that matters. Nothing is going to stop you from being a woman, a wife, a

When some men say that she is a *muyaye*4 her reaction is clear:

expected such an honour in a short time.

her interview with the *New Vision* newspaper.

their minds.

parking lots.

mother just because you drive a taxi! (Snyder, 2000, pp. 187-188).

think they are very rich, stay at home until the money is gone and then come crawling back," she explains.

What this case study reveals is that while women, on the one hand, are faced with reduced access to both material and other resources, and are subjected to a large number of oppressing mechanisms legitimized by patriarchal structures (Snyder, 2000), they are far from being passive individuals. On the contrary, Victoria's case shows that they are reflective and active agents, often with both influence and authority within their daily reality. From her story it is clear that gender struggle is integral to all expressions of gender relations, though it can take various implicit and explicit forms. Victoria grew up struggling with expectations of her as a female with specific roles. For instance, these expectations influenced which profession she was expected to join, courses that she studied at school and what skills she acquired as a young girl growing up in a male-dominated world. Indeed, she studied nursing, then studied with Irish nuns in Nsambya Hospital and later studied a secretarial course; all of which were considered as training for 'women's jobs' (Snyder, 2000). Later, she tried different sorts of businesses, including operating a restaurant, farming, as well as food businesses. These are, again, 'women's jobs'. None of these were in transport.

The main message of this case study is in the way it brings to the foreground a discord in the traditional role patterns revealed through her entrepreneurial activities. In addition, the traditional notions of gender identity and relations are brought into question. In her case, for instance, girls would normally not be expected to learn how to ride a bike, let alone drive a vehicle, which would later become a critical skill in her current business life. Her story calls into question traditional notions of masculinity in discourse of entrepreneurship and suggests that men gain advantages from the culturally-dominant ideal of masculinity centred around authority, physical toughness and strength, and paid work (Pilcher & Whelehan, 2004), but that few men actually live up to it as the last paragraph in Victoria's narratives demonstrates.

#### **4.3 Confronting negative cultural interfaces**<sup>5</sup>  **using entrepreneurship**

Some of the most familiar cultural interfaces in Africa are to be found in work by Munene, Schwartz and Kibanja (2005) who attempted to characterize the social and cultural life in relation to poverty in Uganda. They described a particular focal entrepreneurial individual with social capital in a community development association. They explained how in that case study, a focal individual joined a new community after the Ugandan civil war (during the period 1981-1986) and brought with her new ways of crop-farming. In this particular community members experienced perennial food shortages because the rocky landscape with saline topsoil on which they farmed was infertile. The authors noted that for unknown

<sup>5</sup> According to Munene, Schwartz and Kibanja (2005), an interface is an abstraction referring to an interpersonal or an intergroup space, which is generated by the meeting of two parties (agents) in the process of an exchange. It is composed of the interactional outcome of motivations, beliefs, perceptions and underlying experiences that each of the parties brings to an exchange. According to Munene et al. (2005), there are many types of cultural interfaces which may be viewed as negative or positive for economic development in Africa.

Gender and Entrepreneurship in Uganda: Women Manoeuvring Economic Space 27

subordination to what individual men and women did or how they were but also accounted for the choices available through the discursive order. Even when studying individuals "the

The social dimension focuses on the social process that constitutes entrepreneurship. The third case study example shifts the focal point from singular entrepreneurs to the everyday processes where multiple actors and stakeholders are made visible as related to entrepreneurship. As Steyaert and Katz (2004) observed, by relating entrepreneurship to society, we become aware of the scenes, aspects and stakeholders we have privileged taking part in entrepreneurial processes and draw attention to other possibilities to tell stories of

Whereas the contributions of this study relate to the broadening of entrepreneurship knowledge in general, case materials presented and conceptual lenses applied to analyze them help inform general theory and explain conditions that deviate from traditional theoretical explanations of the phenomenon. The descriptions and discussions in this study highlight a contrasting process, namely examining how entrepreneurs in the case studies presented were practising entrepreneurship and gender in forms that can be considered alternative (if not opposite) to those normally prescribed by a model of hegemonic

It has been acknowledged that an account of the processes that position people as 'men' and 'women' within business practices and as entrepreneurs within gendered practices is an approach still underutilized in the literature (Bruni et al., 2004). In this regard, the use of gender and cultural interfaces as conceptual tools with which to examine entrepreneurship, as both an economic phenomenon, as well as a social practice among historically situated men and women entrepreneurs in Uganda can be seen as a first step towards rethinking

Ahl, H. (2006). Why research on women entrepreneurs needs new directions.

Armstrong, P. (2001). Science, enterprise and profit: Ideology in the knowledge driven

Arnfred, S. (2004). Gender research in Africa: dilemmas and challenges as seen by an

Bantebya, G. K. (1992). The role of women in petty commodity production and commerce: A

Billig, M. S. (1994). The death and rebirth of entrepreneurialism in Negroes Island,

outsider. In A. Arnfred, B. Bakare-Yusuf, E. Kisiang'ani, D. Lewis, O. Oyewumi and F.C. Steady (Eds.), *African gender scholarship: Concepts, methodologies and* 

case study of rural peasant women in Uganda. *Eastern African Social Science Research* 

Philippines: A critique of cultural theories of enterprise. *Journal of Economic Issues*,

female entrepreneurship discourse in this particular context.

economy. *Economy and Society*, *30*(4), 524-52.

*paradigms* (pp.82-100). Dakar: CODESRIA

*Review, 8*(2), 1-19.

*28*(3), 659 – 678.

*Entrepreneurship: Theory and Practice*, 30(3), 595–621.

social" was accounted for.

entrepreneurship.

**6. Conclusions** 

masculinity.

**7. References** 

reasons, the community had never utilized the services of an agricultural extension worker to show them how to overcome this problem. Overtime they had come to believe that it was impossible to get good harvests in their village and they were suspicious of anyone who claimed it could be done.

The community members who had been struggling to survive off their saline soil immediately noticed the new settler's success. Part of the village thought that the newcomer to their community was a miracle worker who was using supernatural powers to achieve 'bumper' crop harvests. The more extreme community members holding this view thought that the newcomer had been excommunicated from her former village because she was a witch "since only a witch could succeed where everyone else was failing" (Munene et al, 2005, p. 89). The settler became the talk of the village and of even neighbouring villages and expressing negative evaluations of her. To deal with the hostility that was being directed at her because of her ability to crop-farm successfully, she decided to train the villagers in what she referred to as environmentally sustainable agriculture. To achieve this objective she initiated a self-help association called *Twegombe* (let us be ambitious) Development Association through which she could impart her skills. According to her, the people of the village were neither hardworking nor progressive. *Baali tebegomba* (they had no ambition and no admiration for those who were successful), the new settler said. In time women around the village heard and saw what members of *Twegombe* were doing and they gradually joined one by one and, according to Munene et al. (2005), the association has become one of the most progressive development associations in the community.

For a study on entrepreneurship in a context such as the one described above, what one can note is that entrepreneurial individuals not only seek to combine various resources, but also combine various social relationships in order to create and generate value in the community. An interesting insight in the case study just described above is the role of the focal entrepreneurial individual in changing community mores and social values through unpaid self-motivated social functions, as well as through the exchange of information on villager behaviour and through financial incentives. Moreover, she saw that in order for her to do well, she needed to ensure that the village did well, too.

#### **5. Beyond a sole economic discourse**

Recently, there have been calls to entrepreneurship as a more complex phenomenon than is allowed by its narrow formulation as an economic activity (Calàs, Smircich & Bourne, 2009). They question whether the economic emphasis behind entrepreneurship constructs in that traditional perspectives, as well the constructs themselves, represent appropriately all the may constitute the domain of entrepreneurship, including its nature as phenomena. The forms and practices of entrepreneurship presented in this chapter allow us to include other discourses such as cultural and civic discourses besides the economic one. The first two case studies provides us with insight into how individual men and women in the study context perform gender in daily interaction. This was similar to a study by Gherardi (1996), who showed that there was a discursive limitation to what subject positions were available for professional women in male working environments. As the two studies show, the women remain as outsiders. These studies do not only simplify explanations for women's subordination to what individual men and women did or how they were but also accounted for the choices available through the discursive order. Even when studying individuals "the social" was accounted for.

The social dimension focuses on the social process that constitutes entrepreneurship. The third case study example shifts the focal point from singular entrepreneurs to the everyday processes where multiple actors and stakeholders are made visible as related to entrepreneurship. As Steyaert and Katz (2004) observed, by relating entrepreneurship to society, we become aware of the scenes, aspects and stakeholders we have privileged taking part in entrepreneurial processes and draw attention to other possibilities to tell stories of entrepreneurship.

#### **6. Conclusions**

26 Entrepreneurship - Gender, Geographies and Social Context

reasons, the community had never utilized the services of an agricultural extension worker to show them how to overcome this problem. Overtime they had come to believe that it was impossible to get good harvests in their village and they were suspicious of anyone who

The community members who had been struggling to survive off their saline soil immediately noticed the new settler's success. Part of the village thought that the newcomer to their community was a miracle worker who was using supernatural powers to achieve 'bumper' crop harvests. The more extreme community members holding this view thought that the newcomer had been excommunicated from her former village because she was a witch "since only a witch could succeed where everyone else was failing" (Munene et al, 2005, p. 89). The settler became the talk of the village and of even neighbouring villages and expressing negative evaluations of her. To deal with the hostility that was being directed at her because of her ability to crop-farm successfully, she decided to train the villagers in what she referred to as environmentally sustainable agriculture. To achieve this objective she initiated a self-help association called *Twegombe* (let us be ambitious) Development Association through which she could impart her skills. According to her, the people of the village were neither hardworking nor progressive. *Baali tebegomba* (they had no ambition and no admiration for those who were successful), the new settler said. In time women around the village heard and saw what members of *Twegombe* were doing and they gradually joined one by one and, according to Munene et al. (2005), the association has become one of the most progressive development

For a study on entrepreneurship in a context such as the one described above, what one can note is that entrepreneurial individuals not only seek to combine various resources, but also combine various social relationships in order to create and generate value in the community. An interesting insight in the case study just described above is the role of the focal entrepreneurial individual in changing community mores and social values through unpaid self-motivated social functions, as well as through the exchange of information on villager behaviour and through financial incentives. Moreover, she saw that in order for her to do

Recently, there have been calls to entrepreneurship as a more complex phenomenon than is allowed by its narrow formulation as an economic activity (Calàs, Smircich & Bourne, 2009). They question whether the economic emphasis behind entrepreneurship constructs in that traditional perspectives, as well the constructs themselves, represent appropriately all the may constitute the domain of entrepreneurship, including its nature as phenomena. The forms and practices of entrepreneurship presented in this chapter allow us to include other discourses such as cultural and civic discourses besides the economic one. The first two case studies provides us with insight into how individual men and women in the study context perform gender in daily interaction. This was similar to a study by Gherardi (1996), who showed that there was a discursive limitation to what subject positions were available for professional women in male working environments. As the two studies show, the women remain as outsiders. These studies do not only simplify explanations for women's

claimed it could be done.

associations in the community.

well, she needed to ensure that the village did well, too.

**5. Beyond a sole economic discourse** 

Whereas the contributions of this study relate to the broadening of entrepreneurship knowledge in general, case materials presented and conceptual lenses applied to analyze them help inform general theory and explain conditions that deviate from traditional theoretical explanations of the phenomenon. The descriptions and discussions in this study highlight a contrasting process, namely examining how entrepreneurs in the case studies presented were practising entrepreneurship and gender in forms that can be considered alternative (if not opposite) to those normally prescribed by a model of hegemonic masculinity.

It has been acknowledged that an account of the processes that position people as 'men' and 'women' within business practices and as entrepreneurs within gendered practices is an approach still underutilized in the literature (Bruni et al., 2004). In this regard, the use of gender and cultural interfaces as conceptual tools with which to examine entrepreneurship, as both an economic phenomenon, as well as a social practice among historically situated men and women entrepreneurs in Uganda can be seen as a first step towards rethinking female entrepreneurship discourse in this particular context.

#### **7. References**


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**3** 

Eva Leffler

*Sweden* 

**Entrepreneurship in Schools and** 

*Department of Education, Umeå University,* 

**the Invisible of Gender: A Swedish Context** 

For a long time entrepreneurship has been of great importance for society. Consequently its role in society has been of great interest. It is significant for the research in this area that it is multidisciplinary and there has been a struggle finding an explicit definition of the concept of 'entrepreneurship'. Now, entrepreneurship has made its entrance to more arenas than the economic ones and has become a concern for schools and education as is evident from national as well as international policies. Since the beginning of the 1990s, the concept of 'entrepreneurship' has been an item on the agenda of the Organization for Economic Cooperation and Development (OECD) as well as the European Commission. The report *Towards an 'Enterprising' Culture: a challenge for education and training* states that schools should 'go in for an enterprising culture' and that, at the same time, this implies a challenge for education (OECD, 1989, pp. 21-22). The European Commission also states the need for developing enterprising people and the importance of starting at early ages and to be a natural part of the whole school system. Children and young people are supposed to acquire an entrepreneurial attitude through teaching and learning. In this way entrepreneurship has more and more become a concern for schools and education. Schools have therefore a big responsibility for fostering and developing young people's enterprising

In the Swedish debate on education, it is often claimed that a well-educated population is a prerequisite for welfare, because it lays the foundation for employment, growth and a sustainable society (Leffler & Svedberg, 2005). The value of education for the individual in the form of personal development and better chances in working life is also emphasized (the Ministry of Education and Science, 2001). The current interest in education and training in enterprise and lifelong learning has its origin in the employment and growth problems in the 1980s and 1990s. Entrepreneurship in schools has often been initiated by actors outside school, and in Sweden this question earlier belonged to the area of economic policy, as the Swedish National Board for Industrial and Technical Development (Nutek) was the driving force for the introduction of entrepreneurship in education. The concept of entrepreneurship in schools has now received topical interest within the educational agenda and big efforts are made to implement the concept of entrepreneurship in the whole school system not only in Sweden, but also in the rest of the world. This raises questions of driving forces, underlying motives and consequences

**1. Introduction** 

abilities (European Commission, 2002, 2004).


## **Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context**

#### Eva Leffler

*Department of Education, Umeå University, Sweden* 

#### **1. Introduction**

30 Entrepreneurship - Gender, Geographies and Social Context

Tripp, A. M. (2001). The politics of autonomy and cooptation in Africa: The case of Ugandan women's movement. *Journal of African Modern Studies, 39*(1), 101-128. Tripp, A. M. (1999). *Women and politics in Uganda*. Madison: University of Wisconsin Press;

Uganda Bureau of Statistics. (2007). *A report on the Uganda business register 2006/2007*.

Wade, C., & Tavris, C. (1994). The longest war: Gender and culture. In W.J. Lonner and S.R. Malpass (Eds.), *Psychology and culture* (pp. 121-126). Boston: Allyn & Bacon. Wakoko, F., & Lobao, L. (1996). Reconceptualizing gender and reconstructing social life:

Weedon, C. (1987). *Feminist Practice and Poststructuralist Theory*. Oxford: Blackwell.

Ugandan women and the path to national development. *Africa Today*, *43*(3), 307-

London: James Currey; Kampala: Fountain.

Kampala: Author.

322.

For a long time entrepreneurship has been of great importance for society. Consequently its role in society has been of great interest. It is significant for the research in this area that it is multidisciplinary and there has been a struggle finding an explicit definition of the concept of 'entrepreneurship'. Now, entrepreneurship has made its entrance to more arenas than the economic ones and has become a concern for schools and education as is evident from national as well as international policies. Since the beginning of the 1990s, the concept of 'entrepreneurship' has been an item on the agenda of the Organization for Economic Cooperation and Development (OECD) as well as the European Commission. The report *Towards an 'Enterprising' Culture: a challenge for education and training* states that schools should 'go in for an enterprising culture' and that, at the same time, this implies a challenge for education (OECD, 1989, pp. 21-22). The European Commission also states the need for developing enterprising people and the importance of starting at early ages and to be a natural part of the whole school system. Children and young people are supposed to acquire an entrepreneurial attitude through teaching and learning. In this way entrepreneurship has more and more become a concern for schools and education. Schools have therefore a big responsibility for fostering and developing young people's enterprising abilities (European Commission, 2002, 2004).

In the Swedish debate on education, it is often claimed that a well-educated population is a prerequisite for welfare, because it lays the foundation for employment, growth and a sustainable society (Leffler & Svedberg, 2005). The value of education for the individual in the form of personal development and better chances in working life is also emphasized (the Ministry of Education and Science, 2001). The current interest in education and training in enterprise and lifelong learning has its origin in the employment and growth problems in the 1980s and 1990s. Entrepreneurship in schools has often been initiated by actors outside school, and in Sweden this question earlier belonged to the area of economic policy, as the Swedish National Board for Industrial and Technical Development (Nutek) was the driving force for the introduction of entrepreneurship in education. The concept of entrepreneurship in schools has now received topical interest within the educational agenda and big efforts are made to implement the concept of entrepreneurship in the whole school system not only in Sweden, but also in the rest of the world. This raises questions of driving forces, underlying motives and consequences

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 33

Individual Choice']), which is an introduction programme for pupils who have too low marks for a national programme, and an Entrepreneurial programme. I also had a total of 8 teachers of whom 3 were women and 5 were men participating in the study. The interview study was conducted in spring 2008 and designed as an individual open letter based on some issues about self-knowledge, self-confidence, personal strengths and weaknesses and

In my way of analyzing and expressing myself I take a discourse analytical attitude, which means that I highlight expressions and statements in the text in order to describe how contexts, patterns and meanings are created, to elucidate what statements, concepts and theories conceptualize a certain area, in this case entrepreneurship in schools and gender. My theoretical points of departure for interpretations and analyses will be Michel Foucault's theories of discourse (Foucault, 1993, 2002a, 2002b) and theories of gender. Although Foucault has been criticised for being gender blind (Braidotti, 1991), there is research that has further developed Foucault for feminist analysis (see for example Lindström, 2005). I have chosen to use the concept of 'gender', which includes sex and gender at different levels: the biological, social, cultural and theoretical level (Sporre, 1999). In this study it is sometimes analytically profitable to use Judith Butler's concept of 'performativity' (Butler, 1997). According to the ethnologist Marie Nordberg, gender may be considered a performative practice, because "gender is something that comes into being through norms being repeated and practised" (Nordberg, 2005, 24). Nordberg shows in her thesis how discourse, hegemony and performativity can overlap. She thinks that while '*discourse* is the linguistic set of norms and *hegemony* is dominance and normalisation and the practice whereby a certain meaning is fixed, performativity is the act and process that creates and brings about certain subjects, experiences and practices' (Nordberg, 2005, 27). Why, for example, do we still talk about male and female businesspersons? Our mode of expression reveals what practices are possible and impossible respectively. Discourses contribute in this way to shaping our reality. By means of the concept of discourse, I will be able to show in my analysis how it is possible to talk about a certain topic, what is accepted or not, and how this manifests itself in practical activities (Foucault, 1993, 2002a; Whinther Jørgensen & Phillips, 2000). What may be regarded as true and false respectively and what can be said and who has the right to speak are made visible through various exclusion procedures (Foucault, 1993). Power and knowledge are linked together and the concept of power may be seen as a method, a technique working with normalisation and control (Foucault, 2002b). The power is both restrictive and productive, since some aspects of the world are omitted or subordinated. As such, aspects of power are of importance with respect to girls' self-image and what they express and also what strategies they develop for what they consider possible

Unemployment among young people and society's changing needs are reasons why the concept of 'enterprise' exists on most of the OECD countries' agendas today. Society requires creative individuals who can take initiative and responsibility. The meanings of the concepts of entrepreneurship and enterprise vary, however, which has been a problem in many different research disciplines. Considerable efforts have been made to appropriate and claim rather than explain entrepreneurship, which in turn has resulted in the concept

future plans.

in their future.

**3. Entrepreneurship in schools** 

(Leffler, Svedberg & Botha, 2010). Critical voices have been raised, however, claiming that the introduction of enterprise in school contexts is a way of concealing the increasing youth unemployment by transforming structural problems in society into a matter of influencing young people's attitudes (Shacklock *et al*., 2000; cf. also Johannisson *et al*., 2000). It would thus be a way of transferring the problems from a societal to an individual plane. Against this background, one may assume that the effort of launching entrepreneurship in schools may be seen as a mobilization strategy aimed at changing society in a specific direction (Leffler & Svedberg, 2005). On one hand, entrepreneurship is thus described as something good for both the individual and society (Stevenson & Lundström, 2002) while, on the other, it is questioned what relations between the individual and society entrepreneurship symbolizes.

In a Swedish context and especially in Swedish schools, entrepreneurship and gender issues may be regarded as a challenge in several respects. Firstly, entrepreneurship as a concept is controversial in many ways, as it has ideological and political connotations. For example, in Sweden in the 1970s the entrepreneur represented the ugly face of capitalism and the predominant attitude to entrepreneurs was contempt (Johannisson *et al.*, 2010). The attitude to the concept then developed from denial to become more affirmative. Today entrepreneurship is expected to contribute to developing the welfare of Sweden and in many other countries as well as helping countries moving out of the economic crisis and is associated with societal growth (OECD, 1989). Secondly, Sweden as a country has a long tradition of gender equality work. The concept of 'gender equality' denotes what the relationship between women and men should be like and was introduced as a political recommendation in the middle of the 1970s (SOU 2005:66). The work for gender equality has had different foci in different periods. In the 1960s the focus was on women's access to the labour market, while in the 1970s women's working conditions were in focus. It was characteristic of these decades that an institutionalization of gender equality began and structures were created to raise the status of women. Since then, there have been a development and shift of traditional gendered professions to include both genders, but there has also been a development of new professions that may be even more gender stereotyped.

#### **2. Brief description of method and perspective**

The purpose of the chapter is to problematize and discuss if entrepreneurship in schools can contribute and encourage gender crossing in pupils' choices of professions, and if so, in what ways education in entrepreneurship can develop young people's entrepreneurial capacities with a focus on gender. The research questions raised concern; what gender discourses are visible in entrepreneurship in schools? And what is the contribution of entrepreneurship to educating individuals with a focus on gender perspectives?

The empirical material consists of research material, reports, policy documents and interviews with pupils and teachers about issues related to self-image, abilities and future prospects. A total of 37 pupils from the eighth form of lower secondary school of whom 21 were girls and 16 boys and a total of 35 pupils from upper secondary school of which 25 were girls and 10 were boys participated in the study These pupils represented two different school programmes, PRIV (Programinriktat Individuellt Val, ['Programme-Oriented

(Leffler, Svedberg & Botha, 2010). Critical voices have been raised, however, claiming that the introduction of enterprise in school contexts is a way of concealing the increasing youth unemployment by transforming structural problems in society into a matter of influencing young people's attitudes (Shacklock *et al*., 2000; cf. also Johannisson *et al*., 2000). It would thus be a way of transferring the problems from a societal to an individual plane. Against this background, one may assume that the effort of launching entrepreneurship in schools may be seen as a mobilization strategy aimed at changing society in a specific direction (Leffler & Svedberg, 2005). On one hand, entrepreneurship is thus described as something good for both the individual and society (Stevenson & Lundström, 2002) while, on the other, it is questioned what relations between the

In a Swedish context and especially in Swedish schools, entrepreneurship and gender issues may be regarded as a challenge in several respects. Firstly, entrepreneurship as a concept is controversial in many ways, as it has ideological and political connotations. For example, in Sweden in the 1970s the entrepreneur represented the ugly face of capitalism and the predominant attitude to entrepreneurs was contempt (Johannisson *et al.*, 2010). The attitude to the concept then developed from denial to become more affirmative. Today entrepreneurship is expected to contribute to developing the welfare of Sweden and in many other countries as well as helping countries moving out of the economic crisis and is associated with societal growth (OECD, 1989). Secondly, Sweden as a country has a long tradition of gender equality work. The concept of 'gender equality' denotes what the relationship between women and men should be like and was introduced as a political recommendation in the middle of the 1970s (SOU 2005:66). The work for gender equality has had different foci in different periods. In the 1960s the focus was on women's access to the labour market, while in the 1970s women's working conditions were in focus. It was characteristic of these decades that an institutionalization of gender equality began and structures were created to raise the status of women. Since then, there have been a development and shift of traditional gendered professions to include both genders, but there has also been a development of new professions that may be even more gender

The purpose of the chapter is to problematize and discuss if entrepreneurship in schools can contribute and encourage gender crossing in pupils' choices of professions, and if so, in what ways education in entrepreneurship can develop young people's entrepreneurial capacities with a focus on gender. The research questions raised concern; what gender discourses are visible in entrepreneurship in schools? And what is the contribution of

The empirical material consists of research material, reports, policy documents and interviews with pupils and teachers about issues related to self-image, abilities and future prospects. A total of 37 pupils from the eighth form of lower secondary school of whom 21 were girls and 16 boys and a total of 35 pupils from upper secondary school of which 25 were girls and 10 were boys participated in the study These pupils represented two different school programmes, PRIV (Programinriktat Individuellt Val, ['Programme-Oriented

entrepreneurship to educating individuals with a focus on gender perspectives?

individual and society entrepreneurship symbolizes.

**2. Brief description of method and perspective** 

stereotyped.

Individual Choice']), which is an introduction programme for pupils who have too low marks for a national programme, and an Entrepreneurial programme. I also had a total of 8 teachers of whom 3 were women and 5 were men participating in the study. The interview study was conducted in spring 2008 and designed as an individual open letter based on some issues about self-knowledge, self-confidence, personal strengths and weaknesses and future plans.

In my way of analyzing and expressing myself I take a discourse analytical attitude, which means that I highlight expressions and statements in the text in order to describe how contexts, patterns and meanings are created, to elucidate what statements, concepts and theories conceptualize a certain area, in this case entrepreneurship in schools and gender. My theoretical points of departure for interpretations and analyses will be Michel Foucault's theories of discourse (Foucault, 1993, 2002a, 2002b) and theories of gender. Although Foucault has been criticised for being gender blind (Braidotti, 1991), there is research that has further developed Foucault for feminist analysis (see for example Lindström, 2005). I have chosen to use the concept of 'gender', which includes sex and gender at different levels: the biological, social, cultural and theoretical level (Sporre, 1999). In this study it is sometimes analytically profitable to use Judith Butler's concept of 'performativity' (Butler, 1997). According to the ethnologist Marie Nordberg, gender may be considered a performative practice, because "gender is something that comes into being through norms being repeated and practised" (Nordberg, 2005, 24). Nordberg shows in her thesis how discourse, hegemony and performativity can overlap. She thinks that while '*discourse* is the linguistic set of norms and *hegemony* is dominance and normalisation and the practice whereby a certain meaning is fixed, performativity is the act and process that creates and brings about certain subjects, experiences and practices' (Nordberg, 2005, 27). Why, for example, do we still talk about male and female businesspersons? Our mode of expression reveals what practices are possible and impossible respectively. Discourses contribute in this way to shaping our reality. By means of the concept of discourse, I will be able to show in my analysis how it is possible to talk about a certain topic, what is accepted or not, and how this manifests itself in practical activities (Foucault, 1993, 2002a; Whinther Jørgensen & Phillips, 2000). What may be regarded as true and false respectively and what can be said and who has the right to speak are made visible through various exclusion procedures (Foucault, 1993). Power and knowledge are linked together and the concept of power may be seen as a method, a technique working with normalisation and control (Foucault, 2002b). The power is both restrictive and productive, since some aspects of the world are omitted or subordinated. As such, aspects of power are of importance with respect to girls' self-image and what they express and also what strategies they develop for what they consider possible in their future.

#### **3. Entrepreneurship in schools**

Unemployment among young people and society's changing needs are reasons why the concept of 'enterprise' exists on most of the OECD countries' agendas today. Society requires creative individuals who can take initiative and responsibility. The meanings of the concepts of entrepreneurship and enterprise vary, however, which has been a problem in many different research disciplines. Considerable efforts have been made to appropriate and claim rather than explain entrepreneurship, which in turn has resulted in the concept

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 35

In accordance with society's development the concept of entrepreneurship has been widened and receives now attention beyond the sphere of economics. In the last few years the concept of entrepreneurship has started appearing in contexts other than economic ones and voices are raised for a widening of the concept of entrepreneurship to comprise all sectors of society (Leffler, 2009). Nowadays we do not only talk about economic entrepreneurs; instead we highlight societal entrepreneurs, cultural entrepreneurs as well as ecological entrepreneurs to show the widened meaning of the concept (Berglund, 2007). Entrepreneurship has become a way of acting and being, and being an entrepreneur is defined as an attitude to life and working life. Efforts at entrepreneurship and enterprise in education are being made all over Europe as well as in the rest of the world with varying contents and results. The focus has often been on pupils' skills and potential to start and run businesses. This is common in many countries (the Swedish National Agency for Education, 2010). Several countries stress the importance of entrepreneurship education for economic development and focus on the specific value of entrepreneurship education. Entrepreneurship is seen as an important factor not only for creating jobs but also for stimulating innovation in existing companies (Haftendorn & Salzano, 2003). Young Enterprise is an international familiar concept, which allows young people to learn to plan, to start and run a business and then finish them. Research within the field has mainly studied how teachers describe their different ways of incorporating an entrepreneurial perspective into their teaching. Previous studies have shown that teachers' knowledge of entrepreneurship is very limited and mainly connected to business, to the entrepreneurship discourse, and that they have difficulties in transforming entrepreneurship into an enterprising discourse (Leffler & Svedberg, 2005; Leffler, 2006, 2009; Berglund & Holmgren, 2007). One reason may hence be the connection with Young Enterprise. According to Young Enterprise in Swedish schools, it has been shown that female pupils in most cases succeed in starting companies but that they do not choose to develop and proceed with their

Another issue connected to entrepreneurship in school is whether or not entrepreneurship can be taught. Some researchers argue that entrepreneurship is an inherent ability and that children are born natural entrepreneurs. The schools' mission is thus to utilize and develop pupils' entrepreneurial abilities (Johannisson & Madsén, 1997; Johannisson *et al.*, 2000). The starting point for entrepreneurship in schools is thus that entrepreneurship, like everything else, can be taught. Entrepreneurial learning is described in terms of learning by doing, trial and error, problem solving and learning by experience, often outside the formal learning

Now, entrepreneurship is clearly written in international policy in the OECD, European Commission, UNESCO as the World Bank with common keywords such as creativity, initiative, problem-solving and innovation (Leffler, Svedberg & Botha, 2010). Several researchers claim that, with regard to entrepreneurship, lifelong learning and individual freedom of choice, among other things, many countries' educational policies are being standardized into what might be compared to a global educational model and curriculum

More than two decades after the OECD published their ideas in the report *Towards an enterprising culture*, the Swedish Government presented in spring 2009 a strategy for

companies, as male pupils do to a greater extent.

(Mahieu, 2006; Svedberg 2007; Leffler & Mahieu, 2010).

environments (Cope, 2005).

becoming increasingly ill-defined and all-inclusive (see among others Berglund, 2007; Bull *et al.,* 1995; Harwood 1982; Landström, 2000). According to the OECD (1989) and The European Commission (2002, 2004) entrepreneurship is about an approach to learning comprising all working methods that stimulate pupils' self-reliance, self-knowledge, creativity, energy, and ability to cooperate and communicate. The OECD (1989) report was followed by the Lisbon strategy 2000. The objective of the Lisbon Strategy is, among other things, to make the European Union the world's most competitive and dynamic knowledgebased economy. The strategy contains eight key competencies for lifelong learning, one of which is 'sense of initiative and entrepreneurship' and is described as the:

[A]bility to turn ideas into action. It involves creativity, innovation and risk-taking, as well as the ability to plan and manage projects in order to achieve objectives. The individual is aware of the context of their work and is able to seize opportunities which arise. It is the foundation for acquiring more specific skills and knowledge needed by those establishing or contributing to social or commercial activity. This should include awareness of ethical values and promote good governance (European Commission, 2006).

In the Lisbon strategy it was stated that entrepreneurial competences are fundamental and linked to education and lifelong learning. For this reason entrepreneurship is not to be regarded as a separate subject. A possible interpretation is that entrepreneurship may come also to influence the subject content, which makes it reasonable to ask: How should education in the different subjects be implemented in order to be regarded as entrepreneurial? Using the discourse theory, there seem to be two competing discourses (Leffler, 2006, 2009). There is one discourse on entrepreneurship that may be interpreted as the dominant and common way of understanding entrepreneurship related mainly to business, the entrepreneurial part, which is also regarded as a narrow perspective. The other discourse is connected to education, especially to primary and lower secondary education, the enterprising part or a broad perspective. But it is not that easy when understanding entrepreneurship in a school context. A clarification that should be primarily made is that entrepreneurship in teaching and learning contexts also contains these two parts: the enterprising part that in the first place is targeted at younger pupils and the entrepreneurial part that is chiefly intended for older pupils (Erkkilä, 2000; Johnson, 1988; Stevenson & Lundström, 2002, European Commision, 2004). The enterprising teaching and learning aims at developing the pupils' power of initiative, responsibility, creativity, self-confidence and ability to cooperate, while the entrepreneurial teaching and learning is oriented towards business and entrepreneurship (European Commission, 2004). According to the European Commission, these two discourses are connected to each other. Being allowed to develop one's enterprise is however regarded as a precondition of being able to work as a good entrepreneur. The struggle for schools is in many ways a question of how the dominant discourse is understood (Leffler, 2009). Hence, in many European countries there seem to be a general agreement that entrepreneurship education in general should include both an entrepreneurial and an enterprising approach, though there is still a greater focus on entrepreneurship in for example the US (Kourilsky & Wahlstad, 2003) and Great Britain (Deuchar, 2006) and South Africa (Nieman *et al.*, 2003). The ways of teaching and learning entrepreneurship in schools is thus dependent on the context and the aim and goal.

becoming increasingly ill-defined and all-inclusive (see among others Berglund, 2007; Bull *et al.,* 1995; Harwood 1982; Landström, 2000). According to the OECD (1989) and The European Commission (2002, 2004) entrepreneurship is about an approach to learning comprising all working methods that stimulate pupils' self-reliance, self-knowledge, creativity, energy, and ability to cooperate and communicate. The OECD (1989) report was followed by the Lisbon strategy 2000. The objective of the Lisbon Strategy is, among other things, to make the European Union the world's most competitive and dynamic knowledgebased economy. The strategy contains eight key competencies for lifelong learning, one of

[A]bility to turn ideas into action. It involves creativity, innovation and risk-taking, as well as the ability to plan and manage projects in order to achieve objectives. The individual is aware of the context of their work and is able to seize opportunities which arise. It is the foundation for acquiring more specific skills and knowledge needed by those establishing or contributing to social or commercial activity. This should include awareness of ethical values and promote good governance (European Commission,

In the Lisbon strategy it was stated that entrepreneurial competences are fundamental and linked to education and lifelong learning. For this reason entrepreneurship is not to be regarded as a separate subject. A possible interpretation is that entrepreneurship may come also to influence the subject content, which makes it reasonable to ask: How should education in the different subjects be implemented in order to be regarded as entrepreneurial? Using the discourse theory, there seem to be two competing discourses (Leffler, 2006, 2009). There is one discourse on entrepreneurship that may be interpreted as the dominant and common way of understanding entrepreneurship related mainly to business, the entrepreneurial part, which is also regarded as a narrow perspective. The other discourse is connected to education, especially to primary and lower secondary education, the enterprising part or a broad perspective. But it is not that easy when understanding entrepreneurship in a school context. A clarification that should be primarily made is that entrepreneurship in teaching and learning contexts also contains these two parts: the enterprising part that in the first place is targeted at younger pupils and the entrepreneurial part that is chiefly intended for older pupils (Erkkilä, 2000; Johnson, 1988; Stevenson & Lundström, 2002, European Commision, 2004). The enterprising teaching and learning aims at developing the pupils' power of initiative, responsibility, creativity, self-confidence and ability to cooperate, while the entrepreneurial teaching and learning is oriented towards business and entrepreneurship (European Commission, 2004). According to the European Commission, these two discourses are connected to each other. Being allowed to develop one's enterprise is however regarded as a precondition of being able to work as a good entrepreneur. The struggle for schools is in many ways a question of how the dominant discourse is understood (Leffler, 2009). Hence, in many European countries there seem to be a general agreement that entrepreneurship education in general should include both an entrepreneurial and an enterprising approach, though there is still a greater focus on entrepreneurship in for example the US (Kourilsky & Wahlstad, 2003) and Great Britain (Deuchar, 2006) and South Africa (Nieman *et al.*, 2003). The ways of teaching and learning entrepreneurship in schools is thus dependent on the context and the aim and goal.

which is 'sense of initiative and entrepreneurship' and is described as the:

2006).

In accordance with society's development the concept of entrepreneurship has been widened and receives now attention beyond the sphere of economics. In the last few years the concept of entrepreneurship has started appearing in contexts other than economic ones and voices are raised for a widening of the concept of entrepreneurship to comprise all sectors of society (Leffler, 2009). Nowadays we do not only talk about economic entrepreneurs; instead we highlight societal entrepreneurs, cultural entrepreneurs as well as ecological entrepreneurs to show the widened meaning of the concept (Berglund, 2007). Entrepreneurship has become a way of acting and being, and being an entrepreneur is defined as an attitude to life and working life. Efforts at entrepreneurship and enterprise in education are being made all over Europe as well as in the rest of the world with varying contents and results. The focus has often been on pupils' skills and potential to start and run businesses. This is common in many countries (the Swedish National Agency for Education, 2010). Several countries stress the importance of entrepreneurship education for economic development and focus on the specific value of entrepreneurship education. Entrepreneurship is seen as an important factor not only for creating jobs but also for stimulating innovation in existing companies (Haftendorn & Salzano, 2003). Young Enterprise is an international familiar concept, which allows young people to learn to plan, to start and run a business and then finish them. Research within the field has mainly studied how teachers describe their different ways of incorporating an entrepreneurial perspective into their teaching. Previous studies have shown that teachers' knowledge of entrepreneurship is very limited and mainly connected to business, to the entrepreneurship discourse, and that they have difficulties in transforming entrepreneurship into an enterprising discourse (Leffler & Svedberg, 2005; Leffler, 2006, 2009; Berglund & Holmgren, 2007). One reason may hence be the connection with Young Enterprise. According to Young Enterprise in Swedish schools, it has been shown that female pupils in most cases succeed in starting companies but that they do not choose to develop and proceed with their companies, as male pupils do to a greater extent.

Another issue connected to entrepreneurship in school is whether or not entrepreneurship can be taught. Some researchers argue that entrepreneurship is an inherent ability and that children are born natural entrepreneurs. The schools' mission is thus to utilize and develop pupils' entrepreneurial abilities (Johannisson & Madsén, 1997; Johannisson *et al.*, 2000). The starting point for entrepreneurship in schools is thus that entrepreneurship, like everything else, can be taught. Entrepreneurial learning is described in terms of learning by doing, trial and error, problem solving and learning by experience, often outside the formal learning environments (Cope, 2005).

Now, entrepreneurship is clearly written in international policy in the OECD, European Commission, UNESCO as the World Bank with common keywords such as creativity, initiative, problem-solving and innovation (Leffler, Svedberg & Botha, 2010). Several researchers claim that, with regard to entrepreneurship, lifelong learning and individual freedom of choice, among other things, many countries' educational policies are being standardized into what might be compared to a global educational model and curriculum (Mahieu, 2006; Svedberg 2007; Leffler & Mahieu, 2010).

More than two decades after the OECD published their ideas in the report *Towards an enterprising culture*, the Swedish Government presented in spring 2009 a strategy for

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 37

The definition points out that entrepreneurship is both an individual and a social issue, and the importance for schools to help pupils understand and discover the context, but also encourage pupils to think independently, solve problems and take responsibility. It's about an attitude to teaching and learning and it is meant to be visible throughout the education system.

In order to understand the problems with entrepreneurship in education and gender I will first give an overall picture of the relation between entrepreneurship and gender, what is meant by talking about gender, and what it implies to assume a gender perspective. In order to briefly summarise solid research work on sex, gender and entrepreneurship, it might be said that the point of departure is that the concept of 'gender' deals with relations between women and men and how its varied manifestations, causes and consequences are shaped (Thurén, 1996). Relations are created and re-created through individual and collective processes in the family, at work and in society at large. The debate about gender may be said to be about how we relate to the fact that humanity is divided into two groups and how as individuals we experience and describe our gender (Berg, 2000). Mythical pictures of what is typically female and typically male have always influenced and continue to influence us. These social constructions have an impact on our everyday life and thereby also on education. The gender system is constructed of two logics. One of these is precisely the dichotomy. The other is the hierarchy, that the man is the norm (Hirdman, 1988). It is the male norm that governs the picture of what characterises an entrepreneur, how an entrepreneur works and functions. The entrepreneur is generally regarded as a hero and groundbreaker. The female entrepreneur is described as something else (Ahl, 2002; Bruni *et al.*, 2004; Lewis, 2006). Entrepreneurship is thus an extremely gender-impregnated construction. Gender functions in entrepreneurship and enterprise in the same way as in the labour market and society at large. What is regarded as male and female respectively governs how the entrepreneurship is exercised in practice. Concepts traditionally associated with masculinity, e.g. 'competitive', 'active', 'independent', 'decision-making', 'stress tolerant' and 'self-confident', are also concepts identified as typical of an entrepreneur. The innovative, technical and economic aspects are placed in focus (Holmquist & Sundin, 2002). The masculine characteristics are regarded and defined as the norm and the feminine characteristics are then described as something else. The very fact that we choose to distinguish between enterprisers and female enterprisers indicates that women differ from the norm (Lewis, 2006). In addition several of the features that characterise an entrepreneur get an entirely different meaning if they are associated with women instead of with men. The positive meanings are e.g. more often male rather than female. The designation of 'enterpriser' entails that women do not get any self-evident identity confirmation through their enterprise, which men on the contrary get. The reason for this may be that individuals

Education, 2011, 9).

**4. Entrepreneurship and gender** 

An important task for the school is to provide a general but coherent view. The school should stimulate pupils' creativity, curiosity and self-confidence, as well as their desire to explore their own ideas and solve problems. Pupils should have the opportunity to take initiatives and responsibility, and develop their ability to work both independently and together with others. The school in doing this should contribute to pupils developing attitudes that promote entrepreneurship (Swedish National Agency for

entrepreneurship in education. This strategy was preceded by a number of different school projects in different municipalities in Sweden and was often designed as extracurricular activities (Leffler, 2006). As a background to what a Swedish enterprising culture means in comparison with that of other countries, Sweden has a low entrepreneurial activity. One reason for this is Sweden's demographic structure, with weak population growth. Other reasons are the large public sector, the sluggish labour market, underrepresentation of female entrepreneurs and 'denigration of education' (Leffler & Svedberg, 2005, 220). Research shows that there is a clear connection between educational level and entrepreneurship, and Sweden is characterized by a relatively small proportion of entrepreneurs with post-secondary education (Delmar & Aronsson, 2001). The political initiatives on the supranational level as well as on local levels resulted in a Swedish definition of entrepreneurship as a:

/…/ dynamic and social process where people, individually or in collaboration, identify opportunities and utilize them to reshape ideas into practical and goal-oriented activities in social, cultural or economic contexts. (the Swedish National Board for Industrial and Technical Development, 2004, p. 9)

In this definition, the emphasis is on the process. An individual can, alone or together with others, 'reshape ideas' and it is a matter of seeing opportunities and proceeding from ideas to actions. But the definition also shows a broad interpretation of entrepreneurship. It is not only related to an economic context; the definition also gives us the opportunity to think beyond and outside the economic sphere, as entrepreneurship also includes social and cultural contexts. As the guidelines from the Swedish government rely on this definition, the starting point is therefore that schools should also take responsibility for entrepreneurship and therefore entrepreneurship should be integrated throughout the education system (the Government Offices of Sweden, 2009). The entrance of entrepreneurship in schools is justified on the one hand to enhance the academic quality, and on the other hand to enhance responsiveness to market needs, and is clarified by the Government, who stresses the importance of highlighting schools' academic mission and closer cooperation with working life, for the purpose of giving young people better opportunities to meet tomorrow's challenges. Therefore cooperation and interaction with the surrounding community and active entrepreneurs are important in entrepreneurship teaching and learning. The pupils need to have role models to identify themselves with.

The gender issue is also visible in the strategy, as the Government points out that it is a fact that more young men than young women start up a business of their own, and for this reason, it is important to promote entrepreneurship among girls and young women. The Government also states that the foundation for developing an entrepreneurial approach is laid at an early age by encouraging girls' and boys' curiosity, creativity, selfconfidence and ability to take decisions. Further in this strategy the Government discusses the broad and the narrow perspectives by talking about 'certain aspects of entrepreneurship being more relevant in some parts of the education system than others'. This is the same recommendation that the European Commission has. In accordance with the broad aspect of entrepreneurship, the curriculum for Swedish primary and lower secondary education uses this definition as a guide for understanding the concept of entrepreneurship:

An important task for the school is to provide a general but coherent view. The school should stimulate pupils' creativity, curiosity and self-confidence, as well as their desire to explore their own ideas and solve problems. Pupils should have the opportunity to take initiatives and responsibility, and develop their ability to work both independently and together with others. The school in doing this should contribute to pupils developing attitudes that promote entrepreneurship (Swedish National Agency for Education, 2011, 9).

The definition points out that entrepreneurship is both an individual and a social issue, and the importance for schools to help pupils understand and discover the context, but also encourage pupils to think independently, solve problems and take responsibility. It's about an attitude to teaching and learning and it is meant to be visible throughout the education system.

#### **4. Entrepreneurship and gender**

36 Entrepreneurship - Gender, Geographies and Social Context

entrepreneurship in education. This strategy was preceded by a number of different school projects in different municipalities in Sweden and was often designed as extracurricular activities (Leffler, 2006). As a background to what a Swedish enterprising culture means in comparison with that of other countries, Sweden has a low entrepreneurial activity. One reason for this is Sweden's demographic structure, with weak population growth. Other reasons are the large public sector, the sluggish labour market, underrepresentation of female entrepreneurs and 'denigration of education' (Leffler & Svedberg, 2005, 220). Research shows that there is a clear connection between educational level and entrepreneurship, and Sweden is characterized by a relatively small proportion of entrepreneurs with post-secondary education (Delmar & Aronsson, 2001). The political initiatives on the supranational level as well as on local levels resulted in a Swedish

/…/ dynamic and social process where people, individually or in collaboration, identify opportunities and utilize them to reshape ideas into practical and goal-oriented activities in social, cultural or economic contexts. (the Swedish National Board for

In this definition, the emphasis is on the process. An individual can, alone or together with others, 'reshape ideas' and it is a matter of seeing opportunities and proceeding from ideas to actions. But the definition also shows a broad interpretation of entrepreneurship. It is not only related to an economic context; the definition also gives us the opportunity to think beyond and outside the economic sphere, as entrepreneurship also includes social and cultural contexts. As the guidelines from the Swedish government rely on this definition, the starting point is therefore that schools should also take responsibility for entrepreneurship and therefore entrepreneurship should be integrated throughout the education system (the Government Offices of Sweden, 2009). The entrance of entrepreneurship in schools is justified on the one hand to enhance the academic quality, and on the other hand to enhance responsiveness to market needs, and is clarified by the Government, who stresses the importance of highlighting schools' academic mission and closer cooperation with working life, for the purpose of giving young people better opportunities to meet tomorrow's challenges. Therefore cooperation and interaction with the surrounding community and active entrepreneurs are important in entrepreneurship teaching and learning. The pupils

The gender issue is also visible in the strategy, as the Government points out that it is a fact that more young men than young women start up a business of their own, and for this reason, it is important to promote entrepreneurship among girls and young women. The Government also states that the foundation for developing an entrepreneurial approach is laid at an early age by encouraging girls' and boys' curiosity, creativity, selfconfidence and ability to take decisions. Further in this strategy the Government discusses the broad and the narrow perspectives by talking about 'certain aspects of entrepreneurship being more relevant in some parts of the education system than others'. This is the same recommendation that the European Commission has. In accordance with the broad aspect of entrepreneurship, the curriculum for Swedish primary and lower secondary education uses this definition as a guide for understanding the concept of

definition of entrepreneurship as a:

Industrial and Technical Development, 2004, p. 9)

need to have role models to identify themselves with.

entrepreneurship:

In order to understand the problems with entrepreneurship in education and gender I will first give an overall picture of the relation between entrepreneurship and gender, what is meant by talking about gender, and what it implies to assume a gender perspective. In order to briefly summarise solid research work on sex, gender and entrepreneurship, it might be said that the point of departure is that the concept of 'gender' deals with relations between women and men and how its varied manifestations, causes and consequences are shaped (Thurén, 1996). Relations are created and re-created through individual and collective processes in the family, at work and in society at large. The debate about gender may be said to be about how we relate to the fact that humanity is divided into two groups and how as individuals we experience and describe our gender (Berg, 2000). Mythical pictures of what is typically female and typically male have always influenced and continue to influence us. These social constructions have an impact on our everyday life and thereby also on education. The gender system is constructed of two logics. One of these is precisely the dichotomy. The other is the hierarchy, that the man is the norm (Hirdman, 1988). It is the male norm that governs the picture of what characterises an entrepreneur, how an entrepreneur works and functions. The entrepreneur is generally regarded as a hero and groundbreaker. The female entrepreneur is described as something else (Ahl, 2002; Bruni *et al.*, 2004; Lewis, 2006). Entrepreneurship is thus an extremely gender-impregnated construction. Gender functions in entrepreneurship and enterprise in the same way as in the labour market and society at large. What is regarded as male and female respectively governs how the entrepreneurship is exercised in practice. Concepts traditionally associated with masculinity, e.g. 'competitive', 'active', 'independent', 'decision-making', 'stress tolerant' and 'self-confident', are also concepts identified as typical of an entrepreneur. The innovative, technical and economic aspects are placed in focus (Holmquist & Sundin, 2002). The masculine characteristics are regarded and defined as the norm and the feminine characteristics are then described as something else. The very fact that we choose to distinguish between enterprisers and female enterprisers indicates that women differ from the norm (Lewis, 2006). In addition several of the features that characterise an entrepreneur get an entirely different meaning if they are associated with women instead of with men. The positive meanings are e.g. more often male rather than female. The designation of 'enterpriser' entails that women do not get any self-evident identity confirmation through their enterprise, which men on the contrary get. The reason for this may be that individuals

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 39

The project plans also presupposed that the girls would increase their interest in something that could be regarded as typically traditionally male, while there was no comparable idea for the boys. It was presupposed that the girls would change and become more like boys

Another picture was not to problematize gender equality at all and thereby make gender completely invisible with regard to entrepreneurship in education, which the following

Stating that girls and boys are treated equally is common as regards gender equality. This idea has however turned out to be marred with two problems. Firstly, there is unawareness of how difficult it is in reality to treat girls and boys in the same way. We expect different things from girls and boys because we are so used to doing so (Hedlin, 2004). Secondly, the conditions for women and men are different and it may therefore be questioned whether the strategy of 'not making any difference' really is a gender equality measure. At the same time as schools think that they do not make any difference, they see a need for placing a gender perspective on issues concerning entrepreneurship. What this implied was clear neither in the project application nor in the evaluation that was later on

Yet another way of treating gender equality was to count how many girls and boys respectively had participated in the projects, since gender distribution was something the schools should state in their final reports. The following quotation shows such an example:

How is entrepreneurship in schools working, giving the purpose of encouraging entrepreneurial capacities among pupils? Is running a business a future thought? What is done for the girls? What is done for the boys? What is the contribution of entrepreneurship in schools in relation to young people's thoughts of their future and their future plans seen from a gender perspective? These questions highlight big challenges for schools working

In the general debate about gender differences and educational achievements, Sweden adheres to the same pattern as many other countries in the Western World (the Swedish National Agency for Education, 2006). One reason for the partially infected debate is that

**4.2 Young people's pictures of their future choice of study and occupation** 

There were on the whole just as many boys and girls that took part in the projects. As regards creativity we saw no difference between the genders (Leffler, 2006, p. 210). It is thus assumed here that there is gender equality if equal numbers of girls and boys participated. The result of the study shows that gender equality work together with entrepreneurship requires knowledge of both gender issues and entrepreneurship in order

Gender equality is a natural part of our school; we make no difference here between boys and girls. It is important, however, to place a special gender perspective on the issues concerning entrepreneurship in the teaching and in the practical project work

and not the other way round.

(Leffler, 2006, p. 209).

quotation exemplifies:

made of the school.

to be successful.

both with gender equality and entrepreneurship.

construct their identity based on available discourses. The male attributes can more easily be attributed to the entrepreneur, while the female attributes make it more difficult (Ahl, 2002). Gender can hence also be linked to power. On the one hand there is 'power as dominance' and on the other 'productive power' (Pettersson, 2002). Power may be regarded in terms of dominance or oppression, where power represents supremacy and subordination respectively, but power is also that which creates our social world and affects what the world looks like and what can be said and not said (Foucault, 2002c). Our social world is created through language in different practices. Power is thus both delimiting and productive, since some ways of talking about the world are left out or subordinated (Whinter Jørgensen & Phillips, 2000).

#### **4.1 Entrepreneurship in schools and gender**

As shown above research about gender and entrepreneurship points out that the entrepreneur and entrepreneurship are male-gender concepts. As regards entrepreneurship in school, it may still be considered an unexplored area, but the limited existing research has shown that gender perspectives on entrepreneurship in schools are avoided and absent (Leffler, 2006; Berglund & Holmgren, 2010). Entrepreneurial school projects are often aimed at increasing girls' interest in things that could be regarded as traditionally male, for example technology, while no comparable idea is expressed for boys. Earlier research shows that this is a challenging task (Leffler, 2006; Komulainen *et al.*, 2009).

In my thesis (Leffler, 2006) I studied entrepreneurship in primary and lower secondary school projects, of which one perspective that was problematized was gender. One of the points of departure of the studied entrepreneurial school projects was that they should contribute to increasing the gender equality between girls and boys. As mentioned above, gender equality is emphasised in Swedish society as well as in the Swedish curriculum, and it is thus expected that schools should actively work with gender equality. The following is written about gender equality in the Swedish curriculum:

The school should actively and consciously further equal rights and opportunities for women and men. The way in which girls and boys are treated and assessed in school, and the demands and expectations that are placed on them, contributes to their perception of gender differences. The school has a responsibility to counteract traditional gender patterns. It should thus provide scope for pupils to explore and develop their ability and their interests independently of gender affiliation (Swedish National Agency for Education, 2011 p 8).

What is stated in the text of the curriculum is that it is a matter of 'equal rights and opportunities', 'treatment and assessment of girls' and boys' and schools' mission to 'counteract traditional gender patterns'. The analysis clearly showed, however, what difficulties schools encountered when trying to pay attention to gender equality in the projects in question. There were no clear strategies for realising this aim in practice. Gender equality work was however more or less clearly stated as a goal in the schools' project plans. Among other things it was a matter of strengthening girls in various ways:

Special efforts will be made vis-à-vis girls /…/ one of the goals of the project is to create better prerequisites for to compete in the long term in male-dominated occupations (Leffler, 2006, p. 209).

construct their identity based on available discourses. The male attributes can more easily be attributed to the entrepreneur, while the female attributes make it more difficult (Ahl, 2002). Gender can hence also be linked to power. On the one hand there is 'power as dominance' and on the other 'productive power' (Pettersson, 2002). Power may be regarded in terms of dominance or oppression, where power represents supremacy and subordination respectively, but power is also that which creates our social world and affects what the world looks like and what can be said and not said (Foucault, 2002c). Our social world is created through language in different practices. Power is thus both delimiting and productive, since some ways of talking about the world are left out or subordinated

As shown above research about gender and entrepreneurship points out that the entrepreneur and entrepreneurship are male-gender concepts. As regards entrepreneurship in school, it may still be considered an unexplored area, but the limited existing research has shown that gender perspectives on entrepreneurship in schools are avoided and absent (Leffler, 2006; Berglund & Holmgren, 2010). Entrepreneurial school projects are often aimed at increasing girls' interest in things that could be regarded as traditionally male, for example technology, while no comparable idea is expressed for boys. Earlier research shows

In my thesis (Leffler, 2006) I studied entrepreneurship in primary and lower secondary school projects, of which one perspective that was problematized was gender. One of the points of departure of the studied entrepreneurial school projects was that they should contribute to increasing the gender equality between girls and boys. As mentioned above, gender equality is emphasised in Swedish society as well as in the Swedish curriculum, and it is thus expected that schools should actively work with gender equality. The following is

The school should actively and consciously further equal rights and opportunities for women and men. The way in which girls and boys are treated and assessed in school, and the demands and expectations that are placed on them, contributes to their perception of gender differences. The school has a responsibility to counteract traditional gender patterns. It should thus provide scope for pupils to explore and develop their ability and their interests independently of gender affiliation (Swedish

What is stated in the text of the curriculum is that it is a matter of 'equal rights and opportunities', 'treatment and assessment of girls' and boys' and schools' mission to 'counteract traditional gender patterns'. The analysis clearly showed, however, what difficulties schools encountered when trying to pay attention to gender equality in the projects in question. There were no clear strategies for realising this aim in practice. Gender equality work was however more or less clearly stated as a goal in the schools' project plans.

Special efforts will be made vis-à-vis girls /…/ one of the goals of the project is to create better prerequisites for to compete in the long term in male-dominated

Among other things it was a matter of strengthening girls in various ways:

(Whinter Jørgensen & Phillips, 2000).

**4.1 Entrepreneurship in schools and gender** 

that this is a challenging task (Leffler, 2006; Komulainen *et al.*, 2009).

written about gender equality in the Swedish curriculum:

National Agency for Education, 2011 p 8).

occupations (Leffler, 2006, p. 209).

The project plans also presupposed that the girls would increase their interest in something that could be regarded as typically traditionally male, while there was no comparable idea for the boys. It was presupposed that the girls would change and become more like boys and not the other way round.

Another picture was not to problematize gender equality at all and thereby make gender completely invisible with regard to entrepreneurship in education, which the following quotation exemplifies:

Gender equality is a natural part of our school; we make no difference here between boys and girls. It is important, however, to place a special gender perspective on the issues concerning entrepreneurship in the teaching and in the practical project work (Leffler, 2006, p. 209).

Stating that girls and boys are treated equally is common as regards gender equality. This idea has however turned out to be marred with two problems. Firstly, there is unawareness of how difficult it is in reality to treat girls and boys in the same way. We expect different things from girls and boys because we are so used to doing so (Hedlin, 2004). Secondly, the conditions for women and men are different and it may therefore be questioned whether the strategy of 'not making any difference' really is a gender equality measure. At the same time as schools think that they do not make any difference, they see a need for placing a gender perspective on issues concerning entrepreneurship. What this implied was clear neither in the project application nor in the evaluation that was later on made of the school.

Yet another way of treating gender equality was to count how many girls and boys respectively had participated in the projects, since gender distribution was something the schools should state in their final reports. The following quotation shows such an example:

There were on the whole just as many boys and girls that took part in the projects. As regards creativity we saw no difference between the genders (Leffler, 2006, p. 210).

It is thus assumed here that there is gender equality if equal numbers of girls and boys participated. The result of the study shows that gender equality work together with entrepreneurship requires knowledge of both gender issues and entrepreneurship in order to be successful.

How is entrepreneurship in schools working, giving the purpose of encouraging entrepreneurial capacities among pupils? Is running a business a future thought? What is done for the girls? What is done for the boys? What is the contribution of entrepreneurship in schools in relation to young people's thoughts of their future and their future plans seen from a gender perspective? These questions highlight big challenges for schools working both with gender equality and entrepreneurship.

#### **4.2 Young people's pictures of their future choice of study and occupation**

In the general debate about gender differences and educational achievements, Sweden adheres to the same pattern as many other countries in the Western World (the Swedish National Agency for Education, 2006). One reason for the partially infected debate is that

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 41

their own ambition serving as guidance for the future professional career. With the help of Butler (2007) we can see how girls' and boys' gender identity is strengthened through their acting in a certain way because they are girls and boys respectively. The identity's being is preceded by the action's doing. Through certain actions and behaviours gender is created as well as a conception of an identity that gives rise to certain actions. The language is of great importance. The language influences both how we think and what we are like. The language used in the information about the different upper secondary programmes builds up a female discourse about beauty and inner well-being at the individual level and a male discourse about the welfare of the whole of society at the collective level. Löfström (2007) thinks that if the future labour market will both require men in typical female occupations and women in typical male occupations, it is not sufficient to make prospective pupils choose non-traditionally; instead the structures behind the gender characteristics of the

What do young Swedish people then think about their abilities and their future prospects and what differences between the genders are discernible? These young people will be our future entrepreneurs and exhibit good self-confidence, responsibility, flexibility, ability to cooperate and risk-taking. When the young people in my study were to describe themselves and describe their abilities and think about what they needed to be better at, it turned out that in the answers among the girls in the eighth form there was a care-taking discourse. Among other things they answered that they were good at 'caring about others', 'putting people in a good mood', 'listening' and 'making jewellery'. What they needed to develop was to get better at 'daring more', 'talking to people', 'putting their foot down and believing in themselves'. The boys' answers contained a clear discourse about sports when they described themselves as being good at 'ice hockey', 'floorball' and 'athletics'. When they were to talk about what they needed to be better at, their answers changed more towards school achievements such as: 'need to get better at swotting and learning things at school' or 'get better at reading and writing'. These answers are in accordance with the discourse about boys and school achievements and the importance of gender equality for knowledge and development in Swedish schools (SOU 2010:99).The upper secondary pupils' answers differ from the primary and lower secondary pupils' through the pupils' answers being marked by the school's aesthetic profile. There are also differences among the girls' answers in the different programmes. The girls in PRIV ['Programme-Oriented Individual Choice'] are good at 'singing', 'acting', 'drawing', 'making up and dressing others' hair', while the girls in the Entrepreneurship Programme are good at 'pressing issues forwards', 'taking responsibility and managing on their own', 'getting on well with people' and arguing for their tings'. What the girls in PRIV think they need to get better at are 'living here and now', 'becoming more social' and 'music and notes'. On the other hand the boys' answers are more in agreement among the different upper secondary programmes. They answer that they are good at 'music', 'aesthetic subjects', 'film', but also at 'relaxing' and 'meeting people'. Like the boys in the primary and lower secondary school the boys in the upper secondary school thought that they needed to get better at 'managing school', 'swotting', 'oral accounts' and 'concentrating during lessons'. I was also interested in what the young people's plans for the future were like. The pupils in the eighth were also asked to tell me what upper secondary programme they were planning to apply for. The result is shown

programmes must be scrutinized.

below.

girls now exhibit better study results than boys previously did. This debate is also conducted in England, Australia and the USA. What distinguishes the current discussion from previous ones is that girls' lower study results were considered to lie on an intellectual plane, while today's discussion of boys' worse educational performance has to do with educational shortcomings. The report of the National Agency for Education, which is based on previous research, partially shows contradictory results. On the one hand research shows that schools have worked with trying to adapt themselves to boys' preconditions, but on the other hand later research shows that girls are now occupying more space and breaking traditional gender patterns. Schools are considered to be more adapted to girls, which is thereby regarded as a contributory reason for their higher educational performance. Research also shows that schools' expectations of girls and boys respectively influence their behaviours (Holm, 2008). Attitude investigations made in schools show however that girls have lower self-esteem than boys and that girls make higher demands on themselves than boys (Björnsson, 2005).

Despite formulations in policy documents and an active policy in the labour market, upper secondary schools in Sweden continue upholding their tradition of being strongly gender segregated (the Swedish National Agency for Education, 2006). Girls tend chiefly to choose programmes preparing for further studies, which is partly caused by some vocational programmes for girls having disappeared. As regards the vocational the tendency is that the gender segregation between the genders is increasing. The investigation of girls and boys making non-traditional choices shows that they 'drop out' more often and do not complete their studies. The problem is however not only that the pupils 'drop out' but that the schools do not support the young people who are after all interested in making non-traditional choices. The central question is what forms the basis of and is the reason for the young people dropping out. The traditional choices that are made may be seen as a reflection of the traditional expectations that are linked to various occupations. Upper secondary education, which in Sweden may now be regarded as a compulsory form of education, is far from being a gender-integrated form of education in view of the strong gender orientation that several upper secondary programmes have (Löfström, 2007).

By 'visiting' the Internet and reading about the different upper secondary programmes one can observe that the gender patterns are clearly confirmed in the introductory texts about the programmes and the pictorial material used in the information. One programme that doubtless is addressed to girls has the heading 'Unique specialisation of the craftsmanship programme' and starts with 'Are you interested in beauty and health?' We are further told that it is an education for pupils who are interested in working with people and contributing to greater quality of life with inner and outer beauty as a whole (http://www.gymnasium.se/Hantverksprogrammet\_HA\_Stylist\_146542.htm [2011-08-08]). A so-called entrepreneurship programme also has a clear feminine specialisation with a picture of a girl and the subheading 'Trade and service'. There are similar examples in programmes primarily addressing boys and not surprisingly these are about construction and technology. But now it is not a matter of inner and outer beauty but of occupations that will make it possible for society as a whole to function (http://www.gymnasium.se/Bygg\_och\_anlaeggningsprogrammet\_BA\_Anlaeggningsmask infoerare\_119889.htm [2011-08-08]). Former pupils (boys) talk about inner driving forces and

girls now exhibit better study results than boys previously did. This debate is also conducted in England, Australia and the USA. What distinguishes the current discussion from previous ones is that girls' lower study results were considered to lie on an intellectual plane, while today's discussion of boys' worse educational performance has to do with educational shortcomings. The report of the National Agency for Education, which is based on previous research, partially shows contradictory results. On the one hand research shows that schools have worked with trying to adapt themselves to boys' preconditions, but on the other hand later research shows that girls are now occupying more space and breaking traditional gender patterns. Schools are considered to be more adapted to girls, which is thereby regarded as a contributory reason for their higher educational performance. Research also shows that schools' expectations of girls and boys respectively influence their behaviours (Holm, 2008). Attitude investigations made in schools show however that girls have lower self-esteem than boys and that girls make higher demands on themselves than

Despite formulations in policy documents and an active policy in the labour market, upper secondary schools in Sweden continue upholding their tradition of being strongly gender segregated (the Swedish National Agency for Education, 2006). Girls tend chiefly to choose programmes preparing for further studies, which is partly caused by some vocational programmes for girls having disappeared. As regards the vocational the tendency is that the gender segregation between the genders is increasing. The investigation of girls and boys making non-traditional choices shows that they 'drop out' more often and do not complete their studies. The problem is however not only that the pupils 'drop out' but that the schools do not support the young people who are after all interested in making non-traditional choices. The central question is what forms the basis of and is the reason for the young people dropping out. The traditional choices that are made may be seen as a reflection of the traditional expectations that are linked to various occupations. Upper secondary education, which in Sweden may now be regarded as a compulsory form of education, is far from being a gender-integrated form of education in view of the strong gender orientation that several upper secondary programmes have

By 'visiting' the Internet and reading about the different upper secondary programmes one can observe that the gender patterns are clearly confirmed in the introductory texts about the programmes and the pictorial material used in the information. One programme that doubtless is addressed to girls has the heading 'Unique specialisation of the craftsmanship programme' and starts with 'Are you interested in beauty and health?' We are further told that it is an education for pupils who are interested in working with people and contributing to greater quality of life with inner and outer beauty as a whole (http://www.gymnasium.se/Hantverksprogrammet\_HA\_Stylist\_146542.htm [2011-08-08]). A so-called entrepreneurship programme also has a clear feminine specialisation with a picture of a girl and the subheading 'Trade and service'. There are similar examples in programmes primarily addressing boys and not surprisingly these are about construction and technology. But now it is not a matter of inner and outer beauty but of occupations that will make it possible for society as a whole to function (http://www.gymnasium.se/Bygg\_och\_anlaeggningsprogrammet\_BA\_Anlaeggningsmask infoerare\_119889.htm [2011-08-08]). Former pupils (boys) talk about inner driving forces and

boys (Björnsson, 2005).

(Löfström, 2007).

their own ambition serving as guidance for the future professional career. With the help of Butler (2007) we can see how girls' and boys' gender identity is strengthened through their acting in a certain way because they are girls and boys respectively. The identity's being is preceded by the action's doing. Through certain actions and behaviours gender is created as well as a conception of an identity that gives rise to certain actions. The language is of great importance. The language influences both how we think and what we are like. The language used in the information about the different upper secondary programmes builds up a female discourse about beauty and inner well-being at the individual level and a male discourse about the welfare of the whole of society at the collective level. Löfström (2007) thinks that if the future labour market will both require men in typical female occupations and women in typical male occupations, it is not sufficient to make prospective pupils choose non-traditionally; instead the structures behind the gender characteristics of the programmes must be scrutinized.

What do young Swedish people then think about their abilities and their future prospects and what differences between the genders are discernible? These young people will be our future entrepreneurs and exhibit good self-confidence, responsibility, flexibility, ability to cooperate and risk-taking. When the young people in my study were to describe themselves and describe their abilities and think about what they needed to be better at, it turned out that in the answers among the girls in the eighth form there was a care-taking discourse. Among other things they answered that they were good at 'caring about others', 'putting people in a good mood', 'listening' and 'making jewellery'. What they needed to develop was to get better at 'daring more', 'talking to people', 'putting their foot down and believing in themselves'. The boys' answers contained a clear discourse about sports when they described themselves as being good at 'ice hockey', 'floorball' and 'athletics'. When they were to talk about what they needed to be better at, their answers changed more towards school achievements such as: 'need to get better at swotting and learning things at school' or 'get better at reading and writing'. These answers are in accordance with the discourse about boys and school achievements and the importance of gender equality for knowledge and development in Swedish schools (SOU 2010:99).The upper secondary pupils' answers differ from the primary and lower secondary pupils' through the pupils' answers being marked by the school's aesthetic profile. There are also differences among the girls' answers in the different programmes. The girls in PRIV ['Programme-Oriented Individual Choice'] are good at 'singing', 'acting', 'drawing', 'making up and dressing others' hair', while the girls in the Entrepreneurship Programme are good at 'pressing issues forwards', 'taking responsibility and managing on their own', 'getting on well with people' and arguing for their tings'. What the girls in PRIV think they need to get better at are 'living here and now', 'becoming more social' and 'music and notes'. On the other hand the boys' answers are more in agreement among the different upper secondary programmes. They answer that they are good at 'music', 'aesthetic subjects', 'film', but also at 'relaxing' and 'meeting people'. Like the boys in the primary and lower secondary school the boys in the upper secondary school thought that they needed to get better at 'managing school', 'swotting', 'oral accounts' and 'concentrating during lessons'. I was also interested in what the young people's plans for the future were like. The pupils in the eighth were also asked to tell me what upper secondary programme they were planning to apply for. The result is shown below.

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 43

Number Programme Number Profession Number Programme Number Profession

 1 Psychologist 3 film, music 1 Do not

2 Teacher 5 Entreprene

1 Industry 1 Physical

Even if the above table is not very clear, since the gender distribution is more uneven than that of the primary and lower secondary pupils, it is interesting in several respects. The pupils are probably influenced by the fact that they attend a school with aesthetic specialisation; it is a choice they make when applying for a school with aesthetic specialisation. The girls attending PRIV regard themselves as future artistes. They will go out into the world and sing and become known. The boys in PRIV also look forward to something that has to do with aesthetics, but is not a matter of a solo career. Instead they want to make films and play in a pop band. The view of their future varies among the female upper secondary pupils in the Entrepreneurship programme. It is only one girl that has ideas outside what may be designated as traditionally female professions and she wants to work with something in industry. She also regards herself as creative and thinks that it is easy for her to get into contact with other people. The other girls keep themselves within a typically female job discourse. A relatively large proportion of the girls did not have any ideas about what they would do after completing their upper secondary education. Among the boys it is more difficult to discern any direction and whether they keep themselves

What is then the importance of the teachers in these contexts? The answers that the teachers in my study gave show a difference between female and male teachers. The female teachers

Upper secondary programme boys

5 PRIV 1st

form

urship 2nd form

1 Music

2 Do not

Future choice of profession boys

1 Teacher

1 Children and recreation

know

work

know

Future choice of profession girls

dance

media

Doctor/ psychologis

know

within or outside any typically male or female direction.

Table 2. Upper secondary pupils: programmes and their thoughts about their future

t

5 PRIV 1st form 5 music, art,

1 Culture,

4 Nursing:

 1 Lawyer 1 Pharmacist 1 Writer 2 Enterpriser 1 Design 6 Do not

Upper secondary programme girls

20 Entrepreneur ship 2nd form

working life.


Table 1. The 8th form: choice of studies and their thoughts of future working life.

As we can see it is only one of the girls who thinks of a programme that may be regarded as a non-traditional "girls' programme", and only one girl who is going to apply for a theoretical programme. The other girls are going to choose vocational programmes that may be regarded as typical "girls' programmes, in which child care is included, among other things. As regards their plans for the future most of the girls were rather vague and unclear in their answers and not related working life to the programmes they were planning to choose. 7 of the 21 girls did not know or had not thought so much about their future working life. The girls who had thought of Hotel and restaurant could imagine a future in a hotel or as a cook, but other suggestions that also emerged were working with small children or animals. Only one girl could imagine a creative profession as an interior designer if it generated money. The girl who was going to choose a theoretical programme saw herself as a lawyer in the future. As we can see most of the girls' ideas are dominated by a caring and service-oriented discourse. On the contrary the boys are going to apply for upper secondary programmes specialising in sport, technology, construction and trade. None of the boys intends to apply for something that may be regarded as non-traditionally male. Sports and then above all football and floorball are something that several of the boys can imagine as a future occupation, either as a professional or as a coach. It is a matter of earning a lot of money. To be able to work in various technological lines of business also attracts several of the boys. One of them could however think of himself as a future entrepreneur. Most of them were also clear about what they would like to do in their future working life and kept themselves within a sports and technology discourse.

The pupils in the upper secondary school were asked to tell me if they attended a programme that was their first choice or why they had ended up in precisely the programme they were now attending, and how they looked upon their future working life. The result is shown below:

Number Programme Number Profession Number Programme Number Profession

2 Design 2 Design 2 Construction 2 Outdoor

4 Aesthetic 1 Music 1 Vehicles 1 Actor 1 Theoretical 1 Lawyer 1 Science 1 Enterpriser

1 Aesthetic

Table 1. The 8th form: choice of studies and their thoughts of future working life.

3 Do not know

As we can see it is only one of the girls who thinks of a programme that may be regarded as a non-traditional "girls' programme", and only one girl who is going to apply for a theoretical programme. The other girls are going to choose vocational programmes that may be regarded as typical "girls' programmes, in which child care is included, among other things. As regards their plans for the future most of the girls were rather vague and unclear in their answers and not related working life to the programmes they were planning to choose. 7 of the 21 girls did not know or had not thought so much about their future working life. The girls who had thought of Hotel and restaurant could imagine a future in a hotel or as a cook, but other suggestions that also emerged were working with small children or animals. Only one girl could imagine a creative profession as an interior designer if it generated money. The girl who was going to choose a theoretical programme saw herself as a lawyer in the future. As we can see most of the girls' ideas are dominated by a caring and service-oriented discourse. On the contrary the boys are going to apply for upper secondary programmes specialising in sport, technology, construction and trade. None of the boys intends to apply for something that may be regarded as non-traditionally male. Sports and then above all football and floorball are something that several of the boys can imagine as a future occupation, either as a professional or as a coach. It is a matter of earning a lot of money. To be able to work in various technological lines of business also attracts several of the boys. One of them could however think of himself as a future entrepreneur. Most of them were also clear about what they would like to do in their future working life and kept themselves within a

The pupils in the upper secondary school were asked to tell me if they attended a programme that was their first choice or why they had ended up in precisely the programme they were now attending, and how they looked upon their future working life.

8th form boys (N=16) Choice of upper secondary programme

3 Sports 5 Sports

3 Technology 4 Technology;

2 Trade 3 Do not know

8th form boys (N=16) Future working life

> welder, car mechanic

work

8th form girls (N=21) Future working life

4 Hotel and

6 Teacher of young children

restaurant

know

8th form girls (N=21) Choice of upper secondary programme

5 Hotel and

5 Children and recreation

1 Hunting

2 Do not

restaurant

1 Hair dresser 7 Do not

and fishing

sports and technology discourse.

The result is shown below:

know


Table 2. Upper secondary pupils: programmes and their thoughts about their future working life.

Even if the above table is not very clear, since the gender distribution is more uneven than that of the primary and lower secondary pupils, it is interesting in several respects. The pupils are probably influenced by the fact that they attend a school with aesthetic specialisation; it is a choice they make when applying for a school with aesthetic specialisation. The girls attending PRIV regard themselves as future artistes. They will go out into the world and sing and become known. The boys in PRIV also look forward to something that has to do with aesthetics, but is not a matter of a solo career. Instead they want to make films and play in a pop band. The view of their future varies among the female upper secondary pupils in the Entrepreneurship programme. It is only one girl that has ideas outside what may be designated as traditionally female professions and she wants to work with something in industry. She also regards herself as creative and thinks that it is easy for her to get into contact with other people. The other girls keep themselves within a typically female job discourse. A relatively large proportion of the girls did not have any ideas about what they would do after completing their upper secondary education. Among the boys it is more difficult to discern any direction and whether they keep themselves within or outside any typically male or female direction.

What is then the importance of the teachers in these contexts? The answers that the teachers in my study gave show a difference between female and male teachers. The female teachers

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 45

and boys' situation and preconditions in schools and women's and men's situation and preconditions in the labour market turn out to have more than one connection. We observed earlier that entrepreneurship can be learned, that it is not something a person is born to and hence something that only a few people are privileged to practise. Both within and outside the walls of schools there are notions of girls' and boys' respective 'aptitude' for different subjects or ability to learn different things, which in turn influences attitudes and choices that are made. In addition conceptions of gender contribute to certain school subjects being given higher or lower status depending on what subject it is and what gender the teacher has (Silfver, 2010). Science and technology are subjects that traditionally enjoy high status, which in turn gives high status in the labour market. This implies that girls'/women's status can hence increase if they go in for technological and scientific subjects (Öhrn, 2004). Even if entrepreneurial learning in the main does aim at educating pupils to be enterprisers, there are insights about working life and gender that we need to take into consideration and be aware of in entrepreneurial education (see e.g. Ahl, 2004; Holmquist & Sundin, 2004). As mentioned above, research on entrepreneurship and gender clearly shows a connection with a traditional gender pattern, where male entrepreneurship represents the norm while female entrepreneurship is described as something else. Parallels are drawn between women's and men's situation in the labour market and as enterprisers, where women are chiefly active in the public sector and trade. This is recognisable in schools, since different efforts specially targeted at girls have for example been made as well as different measures aimed at increasing women's entrepreneurship in the labour market. In spite of this the gender segregation is still tangible as regards women's and men's choice of occupation. Generally it might be said that we still carry unspoken pictures within ourselves of what may be

Research shows that the gender perspective is invisible and implicit when it is about entrepreneurship in a school context. (Leffler, 2006; Komulainen *et al.*, 2009). In many places, both nationally and internationally various school projects or activities called entrepreneurship are being implemented (see e.g. Kourilsky & Walstad, 2003; Leffler, 2006). Several of these are conducted for the purpose of increasing girls' interest in technology, which may still be regarded as a male specialisation, while similar projects aimed at e.g. taking an interest in nursing professions are more rare (SOU 2010:99). In some of the technology projects implemented under the heading 'technology and entrepreneurship' there is a so-called gender equality perspective. In spite of the pedagogues' task in the teaching being to identify and work with what is considered gender stereotyped the gender aspect was still invisible. The teachers noticed that the pupils made choices based on gender, but did not participate actively in widening the pupils' spheres of action. There was a marked difference between rhetoric and practice, which is not unusual as regards entrepreneurship and gender (Skogh, 2007). Another Swedish study questions whether girls attending an entrepreneurial education led by a typical male entrepreneur really have really got an opportunity as 'entrepreneuses' to form their coming life, or if they have become followers of another male hero entrepreneur (Berglund & Holmgren, 2010). They think that such a simple thing as using 'eur' instead of 'euse' in the entrepreneur creates notions of male and female aspects. There are several occupational categories whose names are clearly gendered and hence 'doorkeepers' are formed for what governs the norm. Studies also show that the Swedish upper secondary programmes' specialisations are still strongly gender

regarded as typically female and typically male respectively.

'want to be helpful', 'create a positive working climate' and 'be flexible'. The male teachers introduce the concept of 'courage' by saying that they 'dare to test and develop the teaching and do new things' and that they have 'a clear structure' and distinguish between 'profession and private life'. In addition other studies show that most often there is a compact male and female dominance respectively among the teaching staff in the typically girls' and boys' programmes (Löfström, 2007). The classical discourses about what subjects women and men are expected to teach are strengthened. In the thesis *Taking and taking positions* the researcher has studied what discourses are at work in the science classrooms (Nyström, 2007). In the thesis it is stated that there is a hierarchical pattern not only among the different upper secondary programmes and among subjects but also between women and men who teach science. Female science teachers think that they are not considered fully competent by the pupils because they are women and are hence not expected to teach science. The researcher thinks that for this reason the teachers exist in two different worlds as regards both their own attitude to their subject and their relation to the pupils. Since language is an import part of forming a discourse, it is obvious that the dominating discourse about what is male and female respectively in subjects and attitudes to teaching further strengthens the gender segregation. Women represent the software and men the hardware. The female science teachers are in a subordinate position in the sense that they are not sufficiently masculine in their way of being and expressing themselves. From a pupils' perspective they are then given lower legitimacy as science teachers. A study of relations in schools points to teachers as co-creators of gender (Holm, 2008). The study shows that teachers often have notions of girls and boys, which governs their attitude towards the pupils in the daily educational practice. There are several studies that show that teachers' conceptions may contribute to certain forms of femininities and masculinities being actively strengthened while others are suppressed in the classroom (see e.g. Mac and Ghaill, 1994; Holm, 2007; Nyström, 2007).

#### **4.3 Entrepreneurship and gender equality**

According to the above reasoning and the directives given by the Swedish Government, entrepreneurship in schools is about the education being in phase with the societal development, and it is then a matter of qualities of learning, where pupils' creativity, ability to act, ability to cooperate and responsibility should develop in collaboration, not only with the classmates but also with the surrounding society. It is also a matter of the education giving qualities corresponding to the labour market's needs. In addition there is a need to make more women choose to be enterprisers. The Government also expressed the importance of the pupils getting role models by meeting active entrepreneurs. But it is not only this that is important as regards different forms of collaboration but also what role models we have in the working life/the surrounding world that influence or way of thinking and acting. It is therefore important also to widen both teachers' and pupils' intellectual horizon and make them think outside traditional gender structures as regards choice of education. According to the policy documents the mission of education is to counteract traditional gender structures and allow the pupils to develop abilities and interests regardless of their gender (the Ministry of Education 1994, 2011). Thus schools have a responsibility and a duty to promote gender equality work. What is then the connection between gender equality work and entrepreneurship in schools? The answer is that girls'

'want to be helpful', 'create a positive working climate' and 'be flexible'. The male teachers introduce the concept of 'courage' by saying that they 'dare to test and develop the teaching and do new things' and that they have 'a clear structure' and distinguish between 'profession and private life'. In addition other studies show that most often there is a compact male and female dominance respectively among the teaching staff in the typically girls' and boys' programmes (Löfström, 2007). The classical discourses about what subjects women and men are expected to teach are strengthened. In the thesis *Taking and taking positions* the researcher has studied what discourses are at work in the science classrooms (Nyström, 2007). In the thesis it is stated that there is a hierarchical pattern not only among the different upper secondary programmes and among subjects but also between women and men who teach science. Female science teachers think that they are not considered fully competent by the pupils because they are women and are hence not expected to teach science. The researcher thinks that for this reason the teachers exist in two different worlds as regards both their own attitude to their subject and their relation to the pupils. Since language is an import part of forming a discourse, it is obvious that the dominating discourse about what is male and female respectively in subjects and attitudes to teaching further strengthens the gender segregation. Women represent the software and men the hardware. The female science teachers are in a subordinate position in the sense that they are not sufficiently masculine in their way of being and expressing themselves. From a pupils' perspective they are then given lower legitimacy as science teachers. A study of relations in schools points to teachers as co-creators of gender (Holm, 2008). The study shows that teachers often have notions of girls and boys, which governs their attitude towards the pupils in the daily educational practice. There are several studies that show that teachers' conceptions may contribute to certain forms of femininities and masculinities being actively strengthened while others are suppressed in the classroom (see e.g. Mac and

According to the above reasoning and the directives given by the Swedish Government, entrepreneurship in schools is about the education being in phase with the societal development, and it is then a matter of qualities of learning, where pupils' creativity, ability to act, ability to cooperate and responsibility should develop in collaboration, not only with the classmates but also with the surrounding society. It is also a matter of the education giving qualities corresponding to the labour market's needs. In addition there is a need to make more women choose to be enterprisers. The Government also expressed the importance of the pupils getting role models by meeting active entrepreneurs. But it is not only this that is important as regards different forms of collaboration but also what role models we have in the working life/the surrounding world that influence or way of thinking and acting. It is therefore important also to widen both teachers' and pupils' intellectual horizon and make them think outside traditional gender structures as regards choice of education. According to the policy documents the mission of education is to counteract traditional gender structures and allow the pupils to develop abilities and interests regardless of their gender (the Ministry of Education 1994, 2011). Thus schools have a responsibility and a duty to promote gender equality work. What is then the connection between gender equality work and entrepreneurship in schools? The answer is that girls'

Ghaill, 1994; Holm, 2007; Nyström, 2007).

**4.3 Entrepreneurship and gender equality** 

and boys' situation and preconditions in schools and women's and men's situation and preconditions in the labour market turn out to have more than one connection. We observed earlier that entrepreneurship can be learned, that it is not something a person is born to and hence something that only a few people are privileged to practise. Both within and outside the walls of schools there are notions of girls' and boys' respective 'aptitude' for different subjects or ability to learn different things, which in turn influences attitudes and choices that are made. In addition conceptions of gender contribute to certain school subjects being given higher or lower status depending on what subject it is and what gender the teacher has (Silfver, 2010). Science and technology are subjects that traditionally enjoy high status, which in turn gives high status in the labour market. This implies that girls'/women's status can hence increase if they go in for technological and scientific subjects (Öhrn, 2004). Even if entrepreneurial learning in the main does aim at educating pupils to be enterprisers, there are insights about working life and gender that we need to take into consideration and be aware of in entrepreneurial education (see e.g. Ahl, 2004; Holmquist & Sundin, 2004). As mentioned above, research on entrepreneurship and gender clearly shows a connection with a traditional gender pattern, where male entrepreneurship represents the norm while female entrepreneurship is described as something else. Parallels are drawn between women's and men's situation in the labour market and as enterprisers, where women are chiefly active in the public sector and trade. This is recognisable in schools, since different efforts specially targeted at girls have for example been made as well as different measures aimed at increasing women's entrepreneurship in the labour market. In spite of this the gender segregation is still tangible as regards women's and men's choice of occupation. Generally it might be said that we still carry unspoken pictures within ourselves of what may be regarded as typically female and typically male respectively.

Research shows that the gender perspective is invisible and implicit when it is about entrepreneurship in a school context. (Leffler, 2006; Komulainen *et al.*, 2009). In many places, both nationally and internationally various school projects or activities called entrepreneurship are being implemented (see e.g. Kourilsky & Walstad, 2003; Leffler, 2006). Several of these are conducted for the purpose of increasing girls' interest in technology, which may still be regarded as a male specialisation, while similar projects aimed at e.g. taking an interest in nursing professions are more rare (SOU 2010:99). In some of the technology projects implemented under the heading 'technology and entrepreneurship' there is a so-called gender equality perspective. In spite of the pedagogues' task in the teaching being to identify and work with what is considered gender stereotyped the gender aspect was still invisible. The teachers noticed that the pupils made choices based on gender, but did not participate actively in widening the pupils' spheres of action. There was a marked difference between rhetoric and practice, which is not unusual as regards entrepreneurship and gender (Skogh, 2007). Another Swedish study questions whether girls attending an entrepreneurial education led by a typical male entrepreneur really have really got an opportunity as 'entrepreneuses' to form their coming life, or if they have become followers of another male hero entrepreneur (Berglund & Holmgren, 2010). They think that such a simple thing as using 'eur' instead of 'euse' in the entrepreneur creates notions of male and female aspects. There are several occupational categories whose names are clearly gendered and hence 'doorkeepers' are formed for what governs the norm. Studies also show that the Swedish upper secondary programmes' specialisations are still strongly gender

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 47

between girls and boys. These differences are of importance for the handling of a subject, attitudes to a subject and the ability to teach a subject (Silfver, 2010). By talking about and to girls and boys in different ways and making different demands on girls and boys, there is a great risk that what is 'typically' feminine and 'typically' masculine will be strengthened and preserved. It is thus a matter of knowledge that influences the treatment, how teachers treat pupils based on gender. Our rhetoric reflects our conceptions and we are therefore still talking about female enterprisers and enterprisers respectively, who in the latter case are presupposed to be men. Through knowledge and awareness of how we express ourselves, what we talk about and how we relate to girls and boys, we can contribute to opening new doors. Entrepreneurship in education is hence not only a matter of making more girls choose to be entrepreneurs, but it is also a matter of changing the notions of male and

In this chapter I have problematized and discussed questions concerning entrepreneurship in education and gender. My purpose was to study whether and in what way entrepreneurship in education might be able to contribute to more gender crossing ideas by describing the discourses surrounding entrepreneurship and gender. This is so far an unexplored area, and for this reason it is difficult to draw any far-reaching conclusions, and in addition the questions in this chapter tend to be more numerous than the answers. I have tried however to point out and hence visualise the problems that entrepreneurship in education and gender are surrounded by. The discourses that are visualised in entrepreneurship in education and gender show that gender carries a tradition where the man is the norm. The discourse is also based on education reflecting society and vice versa, which includes both teachers and pupils, but also on society being influenced and affected by the rising generation. What is the demand and what is the need, or to use a metaphor, what is the chicken and what is the egg in this issue? Discourses about occupations and gender influence pupils' choices of study programmes and occupations/ professions. In accordance with Butler's way of regarding identity as performative, that we experience ourselves as a woman or a man through our doings and actions, the gender differences between women and men are strengthened through the typically gender-coded upper secondary programmes. As long as the myth of an entrepreneurial person is based on a male enterpriser, girls will have difficulty asserting themselves as entrepreneurs. They will still be regarded as female entrepreneurs and hence also subordinate to the men. There is also a risk that girls' entrepreneurship is associated only with discourses such as beauty and nursing and that girls thereby find their entrepreneurial identity in these areas. The same applies to boys who want to make gender-crossing choices that are not included in a male discourse on entrepreneurship. If we are not observant of these problems, there is a risk that already known and ingrained gender patterns and gender structures will be further strengthened and become a part of the already established entrepreneurship discourse. Since entrepreneurship is supposed to run throughout the Swedish educational system where an entrepreneurial approach should form the basis of the teaching, one may wonder how this will affect the primary and lower and upper secondary education as regards encouraging girls and boys to develop entrepreneurial abilities such as self-confidence, enterprise, inventiveness, taking risks, responsibility and cooperation, abilities that are considered important for being able to be regarded as an entrepreneur. We could see that at

female characteristics in the labour market.

**5. Conclusion** 

segregated, which results in many programmes being typically divided into girls' and boys' programmes and in cross- gender choices being unusual (Fransson & Lindh, 2004; SOU 2004: 43). Theories of entrepreneurship describe the entrepreneurial individual as innovative, enterprising, energetic, seeking opportunities, risk taking and responsible (see e.g. Brockhouse, 1982; Landström, 2000). It is an individual with great self-confidence that dares to take risks and accept challenges, and for this reason it is important to find out how this is visualised and emphasised in entrepreneurial teaching. But what is it then that contributes to shaping an entrepreneurial individual regardless of gender?

We can take an example from the Swedish neighbouring country Finland, which was the first country in Europe to introduce fostering to entrepreneurship in education. Studies have been made there of how girls and boys regard themselves as future entrepreneurs by analysing narratives written by pupils in the ninth form in the writing competition *Good Enterprise* (Komulainen, *et al.*, 2009). What was striking in the pupils' narratives was that the girls chiefly wrote that their ideal notion of an entrepreneur was in the field of restaurant, café, tourism, care of animals, nursing and agriculture. The femininity that emerges in the girls' narratives is however not only the caring and service-minded middle-class woman, since there is also a picture of a glamorous woman seeing an opportunity to work on an international arena. The boys stressed ideas about technology, recreation services, IT and media. The masculinity that emerges in the boys' narratives is rather suggestive of the traditional working-class masculinity. The authors think that in a comparison between girls and boys the girls are still to be regarded as 'number two' as regards access to and entries into entrepreneurship. One conclusion drawn by the authors is that the mainstream in politics is about men without admitting this. Although the entrepreneur is presented as gender neutral in policy documents, the entrepreneur is a masculine construction that is normative, which implies that feminine characters are excluded from entrepreneurial ideals. The authors also assume that entrepreneurial teaching in schools is chiefly adapted to low achieving boys who exhibit the kind of courage and inventiveness that is required of entrepreneurs, and that it is these boys that are hence considered to be in need of entrepreneurial teaching. In entrepreneurial teaching these boys receive respect in contrast to the 'ordinary' teaching that fits girls better. What can we then learn from this study? Firstly we need to keep in mind that entrepreneurial learning includes both a *broad* and a *narrow* perspective. In this case it is a matter of the latter, i.e. an enterprising perspective, where the pupils regard themselves as prospective entrepreneurs in the sense of a selfemployed person. What is interesting from a gender perspective is then which lines of business girls and boys respectively identify themselves with. As we can see, it is based in this case on a traditional conception of gender. Secondly, if we take a broad perspective, the authors assume that education generally favours girls and that an entrepreneurial education favours low-achieving boys. It is not possible to draw any general conclusions about how this teaching is conducted; we can only note that the authors' conclusion is that it favours low achieving boys. The idea of entrepreneurial teaching is, however, that it should favour both low- and high-achieving pupils (OECD, 1989). In addition investigations show that girls are better at solving problems, cooperating and taking responsibility (SOU 2010:99), which are important abilities in entrepreneurial learning. A question that is relevant in this context is how entrepreneurship in education should contribute to traditional gender patterns not being strengthened and preserved? We end up again in the rhetoric and can observe that in both teachers' and pupils' statements there emerge notions of differences between girls and boys. These differences are of importance for the handling of a subject, attitudes to a subject and the ability to teach a subject (Silfver, 2010). By talking about and to girls and boys in different ways and making different demands on girls and boys, there is a great risk that what is 'typically' feminine and 'typically' masculine will be strengthened and preserved. It is thus a matter of knowledge that influences the treatment, how teachers treat pupils based on gender. Our rhetoric reflects our conceptions and we are therefore still talking about female enterprisers and enterprisers respectively, who in the latter case are presupposed to be men. Through knowledge and awareness of how we express ourselves, what we talk about and how we relate to girls and boys, we can contribute to opening new doors. Entrepreneurship in education is hence not only a matter of making more girls choose to be entrepreneurs, but it is also a matter of changing the notions of male and female characteristics in the labour market.

#### **5. Conclusion**

46 Entrepreneurship - Gender, Geographies and Social Context

segregated, which results in many programmes being typically divided into girls' and boys' programmes and in cross- gender choices being unusual (Fransson & Lindh, 2004; SOU 2004: 43). Theories of entrepreneurship describe the entrepreneurial individual as innovative, enterprising, energetic, seeking opportunities, risk taking and responsible (see e.g. Brockhouse, 1982; Landström, 2000). It is an individual with great self-confidence that dares to take risks and accept challenges, and for this reason it is important to find out how this is visualised and emphasised in entrepreneurial teaching. But what is it then that

We can take an example from the Swedish neighbouring country Finland, which was the first country in Europe to introduce fostering to entrepreneurship in education. Studies have been made there of how girls and boys regard themselves as future entrepreneurs by analysing narratives written by pupils in the ninth form in the writing competition *Good Enterprise* (Komulainen, *et al.*, 2009). What was striking in the pupils' narratives was that the girls chiefly wrote that their ideal notion of an entrepreneur was in the field of restaurant, café, tourism, care of animals, nursing and agriculture. The femininity that emerges in the girls' narratives is however not only the caring and service-minded middle-class woman, since there is also a picture of a glamorous woman seeing an opportunity to work on an international arena. The boys stressed ideas about technology, recreation services, IT and media. The masculinity that emerges in the boys' narratives is rather suggestive of the traditional working-class masculinity. The authors think that in a comparison between girls and boys the girls are still to be regarded as 'number two' as regards access to and entries into entrepreneurship. One conclusion drawn by the authors is that the mainstream in politics is about men without admitting this. Although the entrepreneur is presented as gender neutral in policy documents, the entrepreneur is a masculine construction that is normative, which implies that feminine characters are excluded from entrepreneurial ideals. The authors also assume that entrepreneurial teaching in schools is chiefly adapted to low achieving boys who exhibit the kind of courage and inventiveness that is required of entrepreneurs, and that it is these boys that are hence considered to be in need of entrepreneurial teaching. In entrepreneurial teaching these boys receive respect in contrast to the 'ordinary' teaching that fits girls better. What can we then learn from this study? Firstly we need to keep in mind that entrepreneurial learning includes both a *broad* and a *narrow* perspective. In this case it is a matter of the latter, i.e. an enterprising perspective, where the pupils regard themselves as prospective entrepreneurs in the sense of a selfemployed person. What is interesting from a gender perspective is then which lines of business girls and boys respectively identify themselves with. As we can see, it is based in this case on a traditional conception of gender. Secondly, if we take a broad perspective, the authors assume that education generally favours girls and that an entrepreneurial education favours low-achieving boys. It is not possible to draw any general conclusions about how this teaching is conducted; we can only note that the authors' conclusion is that it favours low achieving boys. The idea of entrepreneurial teaching is, however, that it should favour both low- and high-achieving pupils (OECD, 1989). In addition investigations show that girls are better at solving problems, cooperating and taking responsibility (SOU 2010:99), which are important abilities in entrepreneurial learning. A question that is relevant in this context is how entrepreneurship in education should contribute to traditional gender patterns not being strengthened and preserved? We end up again in the rhetoric and can observe that in both teachers' and pupils' statements there emerge notions of differences

contributes to shaping an entrepreneurial individual regardless of gender?

In this chapter I have problematized and discussed questions concerning entrepreneurship in education and gender. My purpose was to study whether and in what way entrepreneurship in education might be able to contribute to more gender crossing ideas by describing the discourses surrounding entrepreneurship and gender. This is so far an unexplored area, and for this reason it is difficult to draw any far-reaching conclusions, and in addition the questions in this chapter tend to be more numerous than the answers. I have tried however to point out and hence visualise the problems that entrepreneurship in education and gender are surrounded by. The discourses that are visualised in entrepreneurship in education and gender show that gender carries a tradition where the man is the norm. The discourse is also based on education reflecting society and vice versa, which includes both teachers and pupils, but also on society being influenced and affected by the rising generation. What is the demand and what is the need, or to use a metaphor, what is the chicken and what is the egg in this issue? Discourses about occupations and gender influence pupils' choices of study programmes and occupations/ professions. In accordance with Butler's way of regarding identity as performative, that we experience ourselves as a woman or a man through our doings and actions, the gender differences between women and men are strengthened through the typically gender-coded upper secondary programmes. As long as the myth of an entrepreneurial person is based on a male enterpriser, girls will have difficulty asserting themselves as entrepreneurs. They will still be regarded as female entrepreneurs and hence also subordinate to the men. There is also a risk that girls' entrepreneurship is associated only with discourses such as beauty and nursing and that girls thereby find their entrepreneurial identity in these areas. The same applies to boys who want to make gender-crossing choices that are not included in a male discourse on entrepreneurship. If we are not observant of these problems, there is a risk that already known and ingrained gender patterns and gender structures will be further strengthened and become a part of the already established entrepreneurship discourse. Since entrepreneurship is supposed to run throughout the Swedish educational system where an entrepreneurial approach should form the basis of the teaching, one may wonder how this will affect the primary and lower and upper secondary education as regards encouraging girls and boys to develop entrepreneurial abilities such as self-confidence, enterprise, inventiveness, taking risks, responsibility and cooperation, abilities that are considered important for being able to be regarded as an entrepreneur. We could see that at

Entrepreneurship in Schools and the Invisible of Gender: A Swedish Context 49

Bull, I., Howard, T. & Willard, G. (Eds.).(1995). Entrepreneurship: Perspectives on theory

Butler, J. (1997). Imitation and Gender Insubordination. In: The Second Wave. A reader in

Cope, J. (2005). Towards a Dynamic Learning Perspective of Entrepreneurship. Entrepreneurship Theory &Practice Journal. Vol. 29, No. 4 ,July pp. 373-397. Delmar, F. & Aronsson, M. (2001). Entreprenörskap i Sverige [Entrepreneurship in Sweden].

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present girls apply for typically feminine specialisations and boys for typically masculine specialisations in the upper secondary programmes. A further question is what role student and vocational counsellors have in schools' gender equality work. It may be safely said that there is a lot to be done in this area. In the folder *Jämställdhet och entreprenörskap i skolan* ['Gender equality and entrepreneurship in education'] we are exhorted to start thinking in new and different ways. If we want to achieve a different result, we will have to act in a different way by breaking traditional patterns; in this way gender equality and entrepreneurship are connected. Entrepreneurship as an attitude may hopefully contribute to our critically examining our taken-for-granted assumptions and contribute to our starting to think in a different way. By making gender invisible in entrepreneurship in education we risk strengthening and preserving traditional gender patterns instead of seeing entrepreneurship as a potential opening for changes not only as regards attitudes in the teaching but also in attitudes regarding gender. Taking risks is after all an essential part of entrepreneurship. Let taking risks serve as a guide as regards bridging traditional gender patterns and widening the scope of action for our girls and boys. In this way entrepreneurship in education can contribute to increasing gender equality not only between girls and boys in schools but hopefully in the labour market as well.

#### **6. References**


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**Part 2** 

**Geographies & Entrepreneurship** 

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**Part 2** 

**Geographies & Entrepreneurship** 

52 Entrepreneurship - Gender, Geographies and Social Context

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**4** 

*1,3Cyprus 2German* 

 **Social Entrepreneurship and Cross-Sectoral** 

Recent financial scandals and the ongoing global financial crisis not only cast dark clouds on the traditional paradigm of Western style capitalism but also call for entrepreneurs which regard economic activity and corporate social responsibility as mutually inclusive (anonymous, 2011). Some authors (i.e. Jamrozy, 2007) even suggest a corporate aim to be orientated towards the improvement of quality of life for all. These developments clearly point to a new mindset and school of entrepreneurs and an increased social importance (Thompson, 1999) of entrepreneurs reflected in the concept of social entrepreneurship which is still in its infancy stage. Against the background of the still ongoing transition of Central and Eastern European countries from a centrally planned economy to a market economy, this contribution suggests a synthesis and internal consistency between the concepts of cross-sectoral partnerships, social entrepreneurship and management and marketing as well as traditional entrepreneurship related concepts. The problems in CEE countries are illustrated by apparent gaps (Kaufmann, Davies and Schmidt, 1994) and in ethnic or societal conflicts, for example, in the Balkan or Caucasus region (Kaufmann, Zagorac and Sanchez, 2008). These multifaceted problems require the involvement of other than nongovernmental organizations due to the coherence of political, social and economic problems. Regarding previous research in Eastern Europe in this context, Kaufmann, Davies and Schmidt (1994) suggested resorting to 'synergy experience' for behavioral change. Unfortunately, there is a gap between the calls of the Millennium Declaration for the cooperation between the public sector, private and civil sector aiming to reduce the poverty levels in the world (Friedrich and Gale, 2004) and the concept of *Global Governance* for a cross-sectoral co-operation of politics, economy, science, civil society/NGOs and media for the development of a world order (Gruber, 2003) and its actual implementation on a local,

**1. Introduction** 

regional and national level.

**1.1 Setting the stage: A call for synthesis** 

**Partnerships in CEE Countries** 

Mewaldt Andrea2 and Sanchez Bengoa Dolores3

*Europa Universität Viadrina Diplom- Sozialpädagoge (FH),* 

*Fachhochschule München, Open Europe Consulting,* 

*2MBA Management and Marketing for Central and Eastern Europe,* 

Kaufmann Hans Ruediger1,

*1University of Nicosia School of Business,* 

*3Master in Education Bengoa Consulting,* 

## **Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries**

Kaufmann Hans Ruediger1,

Mewaldt Andrea2 and Sanchez Bengoa Dolores3 *1University of Nicosia School of Business, 2MBA Management and Marketing for Central and Eastern Europe, Europa Universität Viadrina Diplom- Sozialpädagoge (FH), Fachhochschule München, Open Europe Consulting, 3Master in Education Bengoa Consulting, 1,3Cyprus 2German* 

#### **1. Introduction**

#### **1.1 Setting the stage: A call for synthesis**

Recent financial scandals and the ongoing global financial crisis not only cast dark clouds on the traditional paradigm of Western style capitalism but also call for entrepreneurs which regard economic activity and corporate social responsibility as mutually inclusive (anonymous, 2011). Some authors (i.e. Jamrozy, 2007) even suggest a corporate aim to be orientated towards the improvement of quality of life for all. These developments clearly point to a new mindset and school of entrepreneurs and an increased social importance (Thompson, 1999) of entrepreneurs reflected in the concept of social entrepreneurship which is still in its infancy stage. Against the background of the still ongoing transition of Central and Eastern European countries from a centrally planned economy to a market economy, this contribution suggests a synthesis and internal consistency between the concepts of cross-sectoral partnerships, social entrepreneurship and management and marketing as well as traditional entrepreneurship related concepts. The problems in CEE countries are illustrated by apparent gaps (Kaufmann, Davies and Schmidt, 1994) and in ethnic or societal conflicts, for example, in the Balkan or Caucasus region (Kaufmann, Zagorac and Sanchez, 2008). These multifaceted problems require the involvement of other than nongovernmental organizations due to the coherence of political, social and economic problems. Regarding previous research in Eastern Europe in this context, Kaufmann, Davies and Schmidt (1994) suggested resorting to 'synergy experience' for behavioral change. Unfortunately, there is a gap between the calls of the Millennium Declaration for the cooperation between the public sector, private and civil sector aiming to reduce the poverty levels in the world (Friedrich and Gale, 2004) and the concept of *Global Governance* for a cross-sectoral co-operation of politics, economy, science, civil society/NGOs and media for the development of a world order (Gruber, 2003) and its actual implementation on a local, regional and national level.

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 57

As Corporate Social Responsibility provides the overarching theory for social entrepreneurship, the following paragraph sheds light on central pillars of this concept.

The concept of corporate social responsibility is in an evolving stage, positions on many CSR related issues are still diverse, and empirically tested holistic concepts to understand the issues involved are urgently required. There are many facets attributed to corporate social responsibility: "corporate social responsibility, corporate citizenship, corporate philanthropy, corporate giving, corporate community involvement, community relations, community affairs, community development, global citizenship, corporate societal marketing, society and business, social issues management, public policy and business, stakeholder management, corporate accountability, or corporate sustainability" (Garriga &

Moreover, Moir (2001) proposes additional issues related to corporate social responsibility, such as workplace (employees), marketplace (customers, suppliers), environment, ethics and human rights. Padmakshi, Platts and Gregory (2009), based on a synthesis of conceptual frameworks (Elkington, 1998, CSD Report 2001, Bradby, 2005, GRI Report, 2006, Labuschange et al., 2006, Elliot, 2006 in Padmakshi, Platts and Gregory, 2009, p. 6-14), suggest a framework integrating the interrelated concepts of social responsibility and sustainability for achieving a sustainability goal and further relate it to the food industry

Frederick (1986, 1994 cited in Moir, 2001) portrays a sequence of three CSR eras: the first two eras reflect the transition from an initial philosophical approach (social betterment) to one focusing on the corporate capacity for managerial action (corporate social responsiveness to social pressures); the 3rd CSR era is seen as relating to ethically inspired corporate decision making (corporate social rectitude). The following definitions illustrate that СSR is regarded to benefit both, the companies and society. Lantos' (2001, p. 600) states that CSR is the "organization's obligation to maximize its positive impact and minimize its negative effects in being a contributing member to society, with concern for society's long-term needs and wants". Dubbed by Elkington (1997), the triple bottom line (TBL) aims to measure corporate performance going beyond the common profit measures (Connolly, 2002; Slaper & Hall, 2011). TBL incorporates three performance indicators: social, ecological (or environmental) and financial. In essence, TBL measures "the impact of an organisation's activities on the world" (Savitz, 2006, p. xiii). Accordingly, Porter and Kramer (2011) suggest that societal issues should be targeted by business core objectives and should not be seen as a peripheral additional value. They call for a more advanced stage of social responsibility in terms of Creating Shared Value (CSV). In a nutshell, CSV creates economic value by combining the achievement of corporate needs with creating value for the society. This is supported by Robins (2008, p. 331 ) stating that "yet a growing number of voices in contemporary society, especially in the more prosperous economies of the world, are calling on business to contribute more than at present to

**2. Corporate Social Responsibility** 

sector.

*CSR, Ethics and Profits Intertwined* 

general public and social welfare".

Melé, 2004, Kotler & Lee, 2005, in Marquina, 2007, p. 5) .

In this context, civil society organizations (CSO) alone cannot avoid the emerging discrepancy between the development of city centers and the marginalization of rural regions. In addition, the currently isolated and emphasized focus on the civil sector in this respect faces resistance from the population which is still not familiar with these organizations. Newly to be designed development projects increasingly have to take country or even region specific forms of common civil, governmental and entrepreneurial engagement into consideration aiming to create self-organized and self-financing sustainable structures (localization). Eventually existing external role models cannot just be copied, but are suggested to be gradually internalized and adapted according to idiosyncratic local conditions calling for new exploratory, ethnographic and qualitative empirical research approaches. Attempting to bridge these gaps and solve the problems in a most efficient way, this contribution, in line with Grossman (2008), calls for a concerted action and an Across-the-Sectors Development Partnership integrating organizations of the civil society (CSO), governmental organizations and social entrepreneurs synergizing the contributions of the diverse actors when designing, financing and implementing appropriate strategies.

This proposal corresponds with the new public governance paradigm by integrating policy making (public administration) and effective service delivery processes (new public management) (Osborn, 2006, in Paerenson, 2011). If the assumption is accepted, that private sector managerial techniques can add to increased levels of effectiveness and efficiency of the respective service delivery processes, then entrepreneurship (Grossman, 2008) and, especially, social entrepreneurship might have a significant role to play (Paerenson, 2011). Due to its disequilibration role, entrepreneurship in general seems to be a valid concept to affirmatively cope with transitional situations (Kaufmann, 2009).

This research follows the most recent suggestions of Paerenson (2011) for future research to provide so far not existing empirical evidence on the criteria for impact evaluation of social entrepreneurship. It contributes to inform the current discourse on the actual effectiveness of social entrepreneurship raging between protagonists and opponents of the concept. Going beyond that suggestion, the paper intends to provide a holistic conceptual framework on the key success factors of effective social entrepreneurship differentiated by idiosyncratic Eastern European conditions and suggests criteria for impact assessment. For the aforementioned reasons, case studies in Central and Eastern Europe (Hungary, Bosnia and Herzegovina and Croatia) have been chosen as the most appropriate research method and settings. The case studies relate, for example, to addiction prevention in Bosnia Herzegovina or the reformation of governmental youth support in Hungary or informal adult education in Croatia. Due to the idiosyncratic macro, meso and micro environmental conditions in transition countries, compared to established economic settings, a differentiation of the, albeit scarce, theory on social entrepreneurship is anticipated. Based on a constructivist ontological background, the researchers provide empirical findings of participant observation (resulting from longstanding consultancy activities), in-depth group interviews and focus groups as the chosen ethnographic research techniques. The innovative findings analyzed by content analysis are suggested to inform educators and trainers of social entrepreneurs and create enhanced awareness for legislators on how to better support social entrepreneurship.

As Corporate Social Responsibility provides the overarching theory for social entrepreneurship, the following paragraph sheds light on central pillars of this concept.

### **2. Corporate Social Responsibility**

56 Entrepreneurship - Gender, Geographies and Social Context

In this context, civil society organizations (CSO) alone cannot avoid the emerging discrepancy between the development of city centers and the marginalization of rural regions. In addition, the currently isolated and emphasized focus on the civil sector in this respect faces resistance from the population which is still not familiar with these organizations. Newly to be designed development projects increasingly have to take country or even region specific forms of common civil, governmental and entrepreneurial engagement into consideration aiming to create self-organized and self-financing sustainable structures (localization). Eventually existing external role models cannot just be copied, but are suggested to be gradually internalized and adapted according to idiosyncratic local conditions calling for new exploratory, ethnographic and qualitative empirical research approaches. Attempting to bridge these gaps and solve the problems in a most efficient way, this contribution, in line with Grossman (2008), calls for a concerted action and an Across-the-Sectors Development Partnership integrating organizations of the civil society (CSO), governmental organizations and social entrepreneurs synergizing the contributions of the diverse actors when designing, financing and implementing

This proposal corresponds with the new public governance paradigm by integrating policy making (public administration) and effective service delivery processes (new public management) (Osborn, 2006, in Paerenson, 2011). If the assumption is accepted, that private sector managerial techniques can add to increased levels of effectiveness and efficiency of the respective service delivery processes, then entrepreneurship (Grossman, 2008) and, especially, social entrepreneurship might have a significant role to play (Paerenson, 2011). Due to its disequilibration role, entrepreneurship in general seems to be a valid concept to

This research follows the most recent suggestions of Paerenson (2011) for future research to provide so far not existing empirical evidence on the criteria for impact evaluation of social entrepreneurship. It contributes to inform the current discourse on the actual effectiveness of social entrepreneurship raging between protagonists and opponents of the concept. Going beyond that suggestion, the paper intends to provide a holistic conceptual framework on the key success factors of effective social entrepreneurship differentiated by idiosyncratic Eastern European conditions and suggests criteria for impact assessment. For the aforementioned reasons, case studies in Central and Eastern Europe (Hungary, Bosnia and Herzegovina and Croatia) have been chosen as the most appropriate research method and settings. The case studies relate, for example, to addiction prevention in Bosnia Herzegovina or the reformation of governmental youth support in Hungary or informal adult education in Croatia. Due to the idiosyncratic macro, meso and micro environmental conditions in transition countries, compared to established economic settings, a differentiation of the, albeit scarce, theory on social entrepreneurship is anticipated. Based on a constructivist ontological background, the researchers provide empirical findings of participant observation (resulting from longstanding consultancy activities), in-depth group interviews and focus groups as the chosen ethnographic research techniques. The innovative findings analyzed by content analysis are suggested to inform educators and trainers of social entrepreneurs and create enhanced awareness for legislators on how to better support social

affirmatively cope with transitional situations (Kaufmann, 2009).

appropriate strategies.

entrepreneurship.

The concept of corporate social responsibility is in an evolving stage, positions on many CSR related issues are still diverse, and empirically tested holistic concepts to understand the issues involved are urgently required. There are many facets attributed to corporate social responsibility: "corporate social responsibility, corporate citizenship, corporate philanthropy, corporate giving, corporate community involvement, community relations, community affairs, community development, global citizenship, corporate societal marketing, society and business, social issues management, public policy and business, stakeholder management, corporate accountability, or corporate sustainability" (Garriga & Melé, 2004, Kotler & Lee, 2005, in Marquina, 2007, p. 5) .

Moreover, Moir (2001) proposes additional issues related to corporate social responsibility, such as workplace (employees), marketplace (customers, suppliers), environment, ethics and human rights. Padmakshi, Platts and Gregory (2009), based on a synthesis of conceptual frameworks (Elkington, 1998, CSD Report 2001, Bradby, 2005, GRI Report, 2006, Labuschange et al., 2006, Elliot, 2006 in Padmakshi, Platts and Gregory, 2009, p. 6-14), suggest a framework integrating the interrelated concepts of social responsibility and sustainability for achieving a sustainability goal and further relate it to the food industry sector.

#### *CSR, Ethics and Profits Intertwined*

Frederick (1986, 1994 cited in Moir, 2001) portrays a sequence of three CSR eras: the first two eras reflect the transition from an initial philosophical approach (social betterment) to one focusing on the corporate capacity for managerial action (corporate social responsiveness to social pressures); the 3rd CSR era is seen as relating to ethically inspired corporate decision making (corporate social rectitude). The following definitions illustrate that СSR is regarded to benefit both, the companies and society. Lantos' (2001, p. 600) states that CSR is the "organization's obligation to maximize its positive impact and minimize its negative effects in being a contributing member to society, with concern for society's long-term needs and wants". Dubbed by Elkington (1997), the triple bottom line (TBL) aims to measure corporate performance going beyond the common profit measures (Connolly, 2002; Slaper & Hall, 2011). TBL incorporates three performance indicators: social, ecological (or environmental) and financial. In essence, TBL measures "the impact of an organisation's activities on the world" (Savitz, 2006, p. xiii). Accordingly, Porter and Kramer (2011) suggest that societal issues should be targeted by business core objectives and should not be seen as a peripheral additional value. They call for a more advanced stage of social responsibility in terms of Creating Shared Value (CSV). In a nutshell, CSV creates economic value by combining the achievement of corporate needs with creating value for the society. This is supported by Robins (2008, p. 331 ) stating that "yet a growing number of voices in contemporary society, especially in the more prosperous economies of the world, are calling on business to contribute more than at present to general public and social welfare".

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 59

example, according to Silberhorn and Warren's research (2007), in terms of CSR perspectives, exemplarily, British companies have been found to be more performancedriven in their primary activities, while German companies tend to be more value-and stakeholder-driven. Both, however, rate the performance perspective higher than the valueand stakeholder driven one. A further notable difference, for example, refers to corporate governance, compliance and sponsorship issues. Whereas British companies stronger emphasize corporate governance and compliance issues, German companies seem to put a

A further indication for the necessity of differentiating is provided by Baker (2004) comparing the American view on CSR with that of the European one: "In the United States, CSR has been defined much more in terms of a philanthropic model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving. The European model is much more focused on operating the core business in a socially responsible way, complemented by investment in

According to Crane and Matten (2007) ethical responsibilities are higher on the agenda in

Visser (2008) defines the main drivers for CSR in developing countries to be internal ones resulting from pressures within the country (cultural tradition, political reform, socioeconomic priorities, governance gaps, crisis response, market access) and external globally originated ones (international standardization, investment incentives, stakeholder activism

Referring to the concept of the growth machine in Eastern European transition countries, Kulcsar and Domokos (2005) reason a differentiation as to the Western environment by the socialist legacy, the influence of elite transformation and the strong influence of powerful external actors such as the state or international investors. A further reason for differentiation is provided by Tonoyan (2011) having investigated the East-West corruption gap. The author sees the reasons for corruption in less efficient financial and legal institutions with lacking enforcements, the perception of corruption as a generally existing business practice, and the existence of social networks, which might decrease opportunism.

As social entrepreneurs are in business to further social and environmental aims, many opportunities for teaming partnerships between companies, non-governmental organizations (NGOs), not-for-profit organizations, governmental agencies and social entrepreneurs emerged (Menon, 2005). Based on best practice cases in social entrepreneurship, Isaias and Kaufmann (2011) suggest complementing the Triple Bottom Approach with a network structure. This network with governments, municipalities or private companies should facilitate the growth of social entrepreneurship by providing funding, appropriate legislation frameworks, incubation centers and co-operation opportunities. This research is regarded to provide further suggestions for a conceptual

European businesses compared to the United States and developing countries.

stronger emphasis on sponsorship.

and supply chain).

*A Network Approach* 

underpinning of required network structures.

communities for solid business case reasons" (Baker, 2004).

Relating more specifically to corporate and internal effects, Holme (2010, p. 185) believes that "there is plenty of evidence that CSR activities can be beneficial for businesses and not for profit organizations even if carried out for compliance or philanthropic reasons." This is confirmed by Padmakshi, Platts and Gregory (2009, p. 14) referring to a "misconception of divide between social responsibility and profit maximization".

A more skeptical view of Smith (2007, p.186) could contribute to and ignite the ongoing discussion even more: "Some obligations are obvious, such as the obligation of the firm to serve the financial interests of shareholders and provide employee satisfaction. But other obligations are not as apparent, such as the firm's obligation to reduce pollution, educate consumers, or consume supplies in a timely manner. All affected parties claim some responsibility of the company, which may conflict with one another." Masaka (2008, p.17) adds that "genuine show of CSR is actually an illusion in the contemporary business environment. According to this reasoning, contemporary business operations are never inclined towards genuine concern for public interest because it is a good thing to do but simply because they ensure a conducive environment to make profits."

#### *CSR – A Strategic Approach*

In practice, CSR often consists of non-systematic programs and activities (Nola, in www.ceoforum.com.au/article-detail.cfm?cid=8449; Nielsen and Thompson, 2009, in Spence and Painter-Morland, 2010). However, Galbreath (2009) based on a wide ranging literature review links corporate social responsibility with formal strategic planning in that it requires systematic environmental monitoring, cross-functional co-ordination and integration to successfully meet stakeholder demands and high resource intensity. In the same vein, Misani (2010) calls for socially responsible firms achieving stakeholders' goodwill and differentiating themselves from other competitors. Accordingly, Husted and Allen (2001) indicate a direct positive relationship between CSR actions and competitive advantage, stating that the "right" CSR strategy is very likely to result in a higher possibility for obtaining competitive advantages.

A strategic approach is also reflected in the development and daily application of a set of rules, in other words, a code of conduct for corporate social responsibility. Crouch (2006, p. 1533) defines the CSR code as "the approach by firms that voluntarily takes account of the externalities produced by their market behavior".

Bondy et al. (2004) claim there are two main distinct types of CSR codes. An internal one is targeted at management and employees of the organization, and the external one is targeted mainly at external stakeholders such as suppliers, partners and representatives of the society. In this context, in 2000, the United Nations announced the creation of Global Compact. That is a voluntary association guiding corporations on CSR by ten principles relating to human rights, labor, the environment, and non corrupt business conduct. In addition, a created network of companies, NGOs, labor groups, and UN agencies can share ideas about how to create better corporate citizens (Blair et al, 2004).

#### *Reasons to Differentiate*

Being of considerable national and even global importance, CSR refers to political, economic and social levels with different countries having their differentiated perception on it. For example, according to Silberhorn and Warren's research (2007), in terms of CSR perspectives, exemplarily, British companies have been found to be more performancedriven in their primary activities, while German companies tend to be more value-and stakeholder-driven. Both, however, rate the performance perspective higher than the valueand stakeholder driven one. A further notable difference, for example, refers to corporate governance, compliance and sponsorship issues. Whereas British companies stronger emphasize corporate governance and compliance issues, German companies seem to put a stronger emphasis on sponsorship.

A further indication for the necessity of differentiating is provided by Baker (2004) comparing the American view on CSR with that of the European one: "In the United States, CSR has been defined much more in terms of a philanthropic model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving. The European model is much more focused on operating the core business in a socially responsible way, complemented by investment in communities for solid business case reasons" (Baker, 2004).

According to Crane and Matten (2007) ethical responsibilities are higher on the agenda in European businesses compared to the United States and developing countries.

Visser (2008) defines the main drivers for CSR in developing countries to be internal ones resulting from pressures within the country (cultural tradition, political reform, socioeconomic priorities, governance gaps, crisis response, market access) and external globally originated ones (international standardization, investment incentives, stakeholder activism and supply chain).

Referring to the concept of the growth machine in Eastern European transition countries, Kulcsar and Domokos (2005) reason a differentiation as to the Western environment by the socialist legacy, the influence of elite transformation and the strong influence of powerful external actors such as the state or international investors. A further reason for differentiation is provided by Tonoyan (2011) having investigated the East-West corruption gap. The author sees the reasons for corruption in less efficient financial and legal institutions with lacking enforcements, the perception of corruption as a generally existing business practice, and the existence of social networks, which might decrease opportunism.

#### *A Network Approach*

58 Entrepreneurship - Gender, Geographies and Social Context

Relating more specifically to corporate and internal effects, Holme (2010, p. 185) believes that "there is plenty of evidence that CSR activities can be beneficial for businesses and not for profit organizations even if carried out for compliance or philanthropic reasons." This is confirmed by Padmakshi, Platts and Gregory (2009, p. 14) referring to a "misconception of

A more skeptical view of Smith (2007, p.186) could contribute to and ignite the ongoing discussion even more: "Some obligations are obvious, such as the obligation of the firm to serve the financial interests of shareholders and provide employee satisfaction. But other obligations are not as apparent, such as the firm's obligation to reduce pollution, educate consumers, or consume supplies in a timely manner. All affected parties claim some responsibility of the company, which may conflict with one another." Masaka (2008, p.17) adds that "genuine show of CSR is actually an illusion in the contemporary business environment. According to this reasoning, contemporary business operations are never inclined towards genuine concern for public interest because it is a good thing to do but

In practice, CSR often consists of non-systematic programs and activities (Nola, in www.ceoforum.com.au/article-detail.cfm?cid=8449; Nielsen and Thompson, 2009, in Spence and Painter-Morland, 2010). However, Galbreath (2009) based on a wide ranging literature review links corporate social responsibility with formal strategic planning in that it requires systematic environmental monitoring, cross-functional co-ordination and integration to successfully meet stakeholder demands and high resource intensity. In the same vein, Misani (2010) calls for socially responsible firms achieving stakeholders' goodwill and differentiating themselves from other competitors. Accordingly, Husted and Allen (2001) indicate a direct positive relationship between CSR actions and competitive advantage, stating that the "right" CSR strategy is very likely to result in a higher possibility

A strategic approach is also reflected in the development and daily application of a set of rules, in other words, a code of conduct for corporate social responsibility. Crouch (2006, p. 1533) defines the CSR code as "the approach by firms that voluntarily takes account of the

Bondy et al. (2004) claim there are two main distinct types of CSR codes. An internal one is targeted at management and employees of the organization, and the external one is targeted mainly at external stakeholders such as suppliers, partners and representatives of the society. In this context, in 2000, the United Nations announced the creation of Global Compact. That is a voluntary association guiding corporations on CSR by ten principles relating to human rights, labor, the environment, and non corrupt business conduct. In addition, a created network of companies, NGOs, labor groups, and UN agencies can share

Being of considerable national and even global importance, CSR refers to political, economic and social levels with different countries having their differentiated perception on it. For

divide between social responsibility and profit maximization".

simply because they ensure a conducive environment to make profits."

*CSR – A Strategic Approach* 

for obtaining competitive advantages.

*Reasons to Differentiate* 

externalities produced by their market behavior".

ideas about how to create better corporate citizens (Blair et al, 2004).

As social entrepreneurs are in business to further social and environmental aims, many opportunities for teaming partnerships between companies, non-governmental organizations (NGOs), not-for-profit organizations, governmental agencies and social entrepreneurs emerged (Menon, 2005). Based on best practice cases in social entrepreneurship, Isaias and Kaufmann (2011) suggest complementing the Triple Bottom Approach with a network structure. This network with governments, municipalities or private companies should facilitate the growth of social entrepreneurship by providing funding, appropriate legislation frameworks, incubation centers and co-operation opportunities. This research is regarded to provide further suggestions for a conceptual underpinning of required network structures.

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 61

When it comes to teaching social entrepreneurship, Shockley and Frank (2010, p. 770)



These suggestions include but go beyond MacLagan's (1998, p.2) suggestion that such training is intended "not to convert 'unethical' individuals but rather to help the majority of essentially well-meaning people in organizations appreciate and understand the moral

The second stage of the research involved the empirical part which is provided in the next

Derived from the literature review, the following research questions guided the empirical

2. Does the CSR and Social Entrepreneurship approach applied in Eastern Europe reflect a

3. Should social entrepreneurship be differentiated as to Eastern European idiosyncrasies? 4. Has CSR and Social Entrepreneurship to be taught differently in Eastern Europe? 5. Do characteristics and competences of social entrepreneurs differ in Eastern Europe? 6. What are the implications of cross-sectoral partnerships on the effectiveness dimensions

7. Does Social Entrepreneurship make an impact in Eastern Europe and which criteria for

The aim of this research is to contribute to shorten the gap in existing literature related to provide empirical evidence and conceptualizations on the effectiveness of social entrepreneurship and its interplay with cross-sectoral partnerships in Eastern European

Based on a constructivist ontological background, the data collection was conducted applying the qualitative case study research method. According to Tellis (1997), Yin (2002), and Salkind (2006), the case study epitomizes three parts of a qualitative method: describing, understanding and explaining. Salkind (2006, p.205) suggested that case studies "are a unique way of capturing information about human behavior". Furthermore, he and

1. Is there a genuine care for public concerns or, in other words, is CSR of intrinsic or


introduces the care concept.

instrumental value?

strategic approach?

**4. Research methodology** 

Social Entrepreneurship in Eastern Europe

impact assessment can be elicited?

suggest

chapter.

stage:

settings.


(Ashcraft, 2008 in Shockley and Frank, 2010)

significance of events around them, and to respond appropriately".

#### **3. Social entrepreneurs- social capital and equilibrium builders**

Regarding a concise summary of the current and emergent schools of traditional entrepreneurship and its contribution to cope with transition situations, it is referred to Kaufmann (2009). Currently, a consensus on a clear or comprehensive definition of social entrepreneurship is urgently required (Martin & Osberg, 2007). This research follows the definition according to which social entrepreneurship aims to solve social problems by innovative solutions in organizational forms targeting either on profit or non-profit or by cross-sector co-operations blending profit and non-for- profit objectives (Paerenson, 2011, referring to Dees, 1998, Austin et al., 2006, Townsend and Hart, 2008; Ashoka, 2011; Skoll, 2011).

This definition reflects a major contribution of social entrepreneurship in terms of creating social capital, i.e. community projects by designing the co-operation of people devoted to a common purpose or mission (Fukuyama, 1995, in Thompson, 1999; Thompson, 1999; Thompson, Alvy and Lees, 2000; Grossman, 2008; Kaufmann, 2009; Paerenson, 2011) based on community values (Grossman, 2008). Relating to public management entrepreneurs in business improvement districts, Grossman (2008) found a combination of traditional entrepreneurial characteristics and social capital builders, a view supported by Drayton (US News, 2005) regarding social entrepreneurs as reformers.

Expanding on characteristics, attitudes and personality domains, Van Ryzin et al. (2009, p. 136) found by quantitative research that social entrepreneurs dispose of more social capital, "are happy people, interested in politics, giving to charities, extroverted, and more liberal in their political ideology". Furthermore, they are described as being innovative, ambitious, persistent, problem solvers rather than transferring problem solution to government or business sectors, and "persuading entire societies to take new leaps" (Ashoka, 2010, p. I in Makhlouf, 2011). Very relevant for the three cases of this research, Martin & Osberg (2007, p. 39) define the social entrepreneur as "someone who targets an unfortunate but stable equilibrium that causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who aims for and ultimately affects the establishment of a new stable equilibrium that secures permanent benefit for the targeted group and society at large." Due to the necessity of mutual trust building, Grossman (2008) calls for transcending the traditional business mindset with strategic community oriented business skills. The previous two suggestions are in line with Thompson's (1999) and Grossman's (2008) view that social entrepreneurship imaginatively revitalizes unused community resources to satisfy existing social needs which the welfare system could not meet, for example, due to budget constraints.

Regarding publications on key success factors in social entrepreneurship, Makhlouf (2011) refers to Morral's (2010) 4 C's:



60 Entrepreneurship - Gender, Geographies and Social Context

Regarding a concise summary of the current and emergent schools of traditional entrepreneurship and its contribution to cope with transition situations, it is referred to Kaufmann (2009). Currently, a consensus on a clear or comprehensive definition of social entrepreneurship is urgently required (Martin & Osberg, 2007). This research follows the definition according to which social entrepreneurship aims to solve social problems by innovative solutions in organizational forms targeting either on profit or non-profit or by cross-sector co-operations blending profit and non-for- profit objectives (Paerenson, 2011, referring to Dees, 1998, Austin et al., 2006, Townsend and Hart, 2008; Ashoka, 2011; Skoll,

This definition reflects a major contribution of social entrepreneurship in terms of creating social capital, i.e. community projects by designing the co-operation of people devoted to a common purpose or mission (Fukuyama, 1995, in Thompson, 1999; Thompson, 1999; Thompson, Alvy and Lees, 2000; Grossman, 2008; Kaufmann, 2009; Paerenson, 2011) based on community values (Grossman, 2008). Relating to public management entrepreneurs in business improvement districts, Grossman (2008) found a combination of traditional entrepreneurial characteristics and social capital builders, a view supported by Drayton (US

Expanding on characteristics, attitudes and personality domains, Van Ryzin et al. (2009, p. 136) found by quantitative research that social entrepreneurs dispose of more social capital, "are happy people, interested in politics, giving to charities, extroverted, and more liberal in their political ideology". Furthermore, they are described as being innovative, ambitious, persistent, problem solvers rather than transferring problem solution to government or business sectors, and "persuading entire societies to take new leaps" (Ashoka, 2010, p. I in Makhlouf, 2011). Very relevant for the three cases of this research, Martin & Osberg (2007, p. 39) define the social entrepreneur as "someone who targets an unfortunate but stable equilibrium that causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who aims for and ultimately affects the establishment of a new stable equilibrium that secures permanent benefit for the targeted group and society at large." Due to the necessity of mutual trust building, Grossman (2008) calls for transcending the traditional business mindset with strategic community oriented business skills. The previous two suggestions are in line with Thompson's (1999) and Grossman's (2008) view that social entrepreneurship imaginatively revitalizes unused community resources to satisfy existing social needs which the welfare system could not meet, for example, due to

Regarding publications on key success factors in social entrepreneurship, Makhlouf (2011)




**3. Social entrepreneurs- social capital and equilibrium builders** 

News, 2005) regarding social entrepreneurs as reformers.

2011).

budget constraints.

refers to Morral's (2010) 4 C's:

promises, and measurable outcomes

for the venture


When it comes to teaching social entrepreneurship, Shockley and Frank (2010, p. 770) suggest


Confirming the social motive of social entrepreneurs, Sundin (2011) additionally introduces the care concept.

These suggestions include but go beyond MacLagan's (1998, p.2) suggestion that such training is intended "not to convert 'unethical' individuals but rather to help the majority of essentially well-meaning people in organizations appreciate and understand the moral significance of events around them, and to respond appropriately".

The second stage of the research involved the empirical part which is provided in the next chapter.

Derived from the literature review, the following research questions guided the empirical stage:


#### **4. Research methodology**

The aim of this research is to contribute to shorten the gap in existing literature related to provide empirical evidence and conceptualizations on the effectiveness of social entrepreneurship and its interplay with cross-sectoral partnerships in Eastern European settings.

Based on a constructivist ontological background, the data collection was conducted applying the qualitative case study research method. According to Tellis (1997), Yin (2002), and Salkind (2006), the case study epitomizes three parts of a qualitative method: describing, understanding and explaining. Salkind (2006, p.205) suggested that case studies "are a unique way of capturing information about human behavior". Furthermore, he and

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 63

He started to build a wide net of volunteers who cared for the kids one by one and organised annual summer camps for children living in state's child care institutions all over Hungary. The foundation opened the Children and Youth Centre in the social hot spot of Szeged where the foundation is seated. The thought behind this initiative is that prevention is better than healing. The main services provided ranged from various leisure time activities, hot meals, health education, private lessons, drug prevention and crisis intervention. The most important aim is to dedicate attention to every child, as well as to

The values, that every child deserves to be loved and to be prepared for her/his future, were shared by the rapidly growing team members of volunteers. But nevertheless, the leading team was aware that the foundation's single activities would not change the child care

When Hungary accessed to the European Union in 2004, the building norms for the children homes were changed with every child getting some own space and the material base getting much better in the children homes. However, the pedagogical work still did not differ too much from the old communist measures which had not sufficiently respected the children's dignity and had not strengthened their personalities for a self-responsible and successful

The Ágota's research project's results presented in 2006 showed the entire disaster of social exclusion: Most of the children leaving the state's child care institutions became long life clients for social state care. They had no self-esteem or resilience, had very low education levels - mostly incomplete school or vocational training. Criminality and aggression belonged to their every day life. The very high number of Roma among them, being drawn from their families, missed cultural identity. The children's future dreams about a secure and trustful family life remained unfulfilled, but many unwished babies were born. Last but not least, the children of the state's child care system were stigmatised by the Hungarian

The staff in the children homes very often had no or too little pedagogical know-how and experience. In fact, education in the sense of enabling or empowering someone did not take place in the children homes. Although it was already forbidden by law, many children were still beaten and locked up. The personnel had no motivation for or satisfaction of their work. Therefore, the personnel's fluctuation was very high and the children missed caring persons

Facing these research results, the Ágota foundation decided to change the situation in a long-term process, going step by step, but in a sustainable way. The biggest challenge was to raise confidence inside the child care system, in the children homes of 10 governmental regions (Komitate), and as well as in their supervising institutions (Tergyesz). The Ágota team started a pilot project (2006-2009) with test groups from children homes which already participated in the summer camps. As a result, they developed the new pedagogictherapeutic method KÁSZPEM*®,* which was finally registered as the intellectual property and accredited by the Ministry of Education as training courses for professionals working in the state's child care system. For the accreditation the implementation of the quality

their mothers, fathers and teachers.

system and that concerted action was required.

live management when becoming adults.

society.

or psychological parents.

management system was obligatory.

Yin (2003) provided several reasons for using them: first, it focuses on a person, company or a country; second, it allows several techniques to be applied for gathering the information; third, it is perceived the best way to obtain rich, deep and microscopic information; fourth, compared to a survey method, the researcher has a better control over the research project; fifth, the case study is based on a real life context. Three Eastern European case studies have been explored over a period of 6 years (2006-2011). The case study settings were Hungary, Bosnia and Herzegovina and Croatia.

The research techniques used for the ethnographic qualitative case studies were focus groups (6 members of Ágota and 4 members of Narko-ne) and one group interview (two interviewees of Marijin Dvor Lužnica). The rationale for using focus group and group interview was that these techniques are regarded as flexible research techniques when listening to people, learn from them, getting rich context specific information and creating a line of communication between all research participants involved (i.e. Evmorfopoulou, 2000 in Wilson, 2009; Salkind, 2009).

Due to the fact that the focus group members could not speak very well German or English, the discussions were held in their mother tongue using interpreters. All terms had been clarified before hand to achieve common understanding and conceptual equivalence.

In the following presentations of the research findings, direct quotes of the participants are provided followed by an (R), meaning respondent and the respondent's number to care for anonymity. The data were analyzed using content analysis to elicit the main categories and sub-categories.

### **5. Research findings**

The following introduction of the respective cases, presents the reader with a description of the major activity of the respective organizations. The case studies reflect that philanthropic initiatives of social entrepreneurs can change state systems to the very, i.e. budgetary, benefit of these systems and the marginalized people in question. The cases mirror a very high level of dedication, commitment, empathy and passion, past experience and know how in the field, methodological competence, business administration, i.e. planning and marketing skills as well as the ability to successfully lobby the activities with political decision makers. This is culminating in Civil Society Organizations actually taking responsibilities, which initially were those of the state systems. Initial initiatives in this way, can experience national and even international radiation of the ideas and concepts.

#### *Results of Participant Observation*

#### **Case Study 1: Ágota Foundation – Reform of the State's Child and Youth Care in Hungary**.

The Ágota Foundation was created in December 1996 with the general objective to improve the situation of marginalised children and youth in Hungary, especially of children which were brought up in the state's child care system. The founder's János Kothencz' motivation was seeded in his own life experience having been growing up in the state's children homes.

Yin (2003) provided several reasons for using them: first, it focuses on a person, company or a country; second, it allows several techniques to be applied for gathering the information; third, it is perceived the best way to obtain rich, deep and microscopic information; fourth, compared to a survey method, the researcher has a better control over the research project; fifth, the case study is based on a real life context. Three Eastern European case studies have been explored over a period of 6 years (2006-2011). The case study settings were Hungary,

The research techniques used for the ethnographic qualitative case studies were focus groups (6 members of Ágota and 4 members of Narko-ne) and one group interview (two interviewees of Marijin Dvor Lužnica). The rationale for using focus group and group interview was that these techniques are regarded as flexible research techniques when listening to people, learn from them, getting rich context specific information and creating a line of communication between all research participants involved (i.e. Evmorfopoulou, 2000

Due to the fact that the focus group members could not speak very well German or English, the discussions were held in their mother tongue using interpreters. All terms had been

In the following presentations of the research findings, direct quotes of the participants are provided followed by an (R), meaning respondent and the respondent's number to care for anonymity. The data were analyzed using content analysis to elicit the main categories and

The following introduction of the respective cases, presents the reader with a description of the major activity of the respective organizations. The case studies reflect that philanthropic initiatives of social entrepreneurs can change state systems to the very, i.e. budgetary, benefit of these systems and the marginalized people in question. The cases mirror a very high level of dedication, commitment, empathy and passion, past experience and know how in the field, methodological competence, business administration, i.e. planning and marketing skills as well as the ability to successfully lobby the activities with political decision makers. This is culminating in Civil Society Organizations actually taking responsibilities, which initially were those of the state systems. Initial initiatives in this way, can experience national and even international

**Case Study 1: Ágota Foundation – Reform of the State's Child and Youth Care in Hungary**. The Ágota Foundation was created in December 1996 with the general objective to improve the situation of marginalised children and youth in Hungary, especially of children which were brought up in the state's child care system. The founder's János Kothencz' motivation was seeded in his own life experience having been growing up in

clarified before hand to achieve common understanding and conceptual equivalence.

Bosnia and Herzegovina and Croatia.

in Wilson, 2009; Salkind, 2009).

sub-categories.

**5. Research findings** 

radiation of the ideas and concepts.

*Results of Participant Observation* 

the state's children homes.

He started to build a wide net of volunteers who cared for the kids one by one and organised annual summer camps for children living in state's child care institutions all over Hungary. The foundation opened the Children and Youth Centre in the social hot spot of Szeged where the foundation is seated. The thought behind this initiative is that prevention is better than healing. The main services provided ranged from various leisure time activities, hot meals, health education, private lessons, drug prevention and crisis intervention. The most important aim is to dedicate attention to every child, as well as to their mothers, fathers and teachers.

The values, that every child deserves to be loved and to be prepared for her/his future, were shared by the rapidly growing team members of volunteers. But nevertheless, the leading team was aware that the foundation's single activities would not change the child care system and that concerted action was required.

When Hungary accessed to the European Union in 2004, the building norms for the children homes were changed with every child getting some own space and the material base getting much better in the children homes. However, the pedagogical work still did not differ too much from the old communist measures which had not sufficiently respected the children's dignity and had not strengthened their personalities for a self-responsible and successful live management when becoming adults.

The Ágota's research project's results presented in 2006 showed the entire disaster of social exclusion: Most of the children leaving the state's child care institutions became long life clients for social state care. They had no self-esteem or resilience, had very low education levels - mostly incomplete school or vocational training. Criminality and aggression belonged to their every day life. The very high number of Roma among them, being drawn from their families, missed cultural identity. The children's future dreams about a secure and trustful family life remained unfulfilled, but many unwished babies were born. Last but not least, the children of the state's child care system were stigmatised by the Hungarian society.

The staff in the children homes very often had no or too little pedagogical know-how and experience. In fact, education in the sense of enabling or empowering someone did not take place in the children homes. Although it was already forbidden by law, many children were still beaten and locked up. The personnel had no motivation for or satisfaction of their work. Therefore, the personnel's fluctuation was very high and the children missed caring persons or psychological parents.

Facing these research results, the Ágota foundation decided to change the situation in a long-term process, going step by step, but in a sustainable way. The biggest challenge was to raise confidence inside the child care system, in the children homes of 10 governmental regions (Komitate), and as well as in their supervising institutions (Tergyesz). The Ágota team started a pilot project (2006-2009) with test groups from children homes which already participated in the summer camps. As a result, they developed the new pedagogictherapeutic method KÁSZPEM*®,* which was finally registered as the intellectual property and accredited by the Ministry of Education as training courses for professionals working in the state's child care system. For the accreditation the implementation of the quality management system was obligatory.

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 65

After the fact finding phase, the positioning was made in the field of primary and secondary prevention of addiction where the concept of "Salutogenese" is focused on by strengthening the resilience factors (Buessers, 2009, referring to Aaron Antonovsky's research). In 2001, Narko-ne was founded in Sarajevo under the umbrella of the existing Franciscan welfare organisation "Bred of St. Anthony" what gave the new CSO certain security and recognition from the very beginning. Nevertheless, Sr. Madeleine became director of Narko-ne and the

The organisational development was less driven by strategies, but more by carrying out various projects. The first volunteers were committed to the pilot projects "Droga-tel" and "Peer group education" in schools. The first important steps for building the wider professional network was the further education of social workers and psychologists working in youth work in various cities of BiH. The intercultural creative summer weeks (IKS), annually held together with Swiss art students in small cities in Middle Bosnia, are already celebrating their 10 years anniversary in 2011, and are presented in the very interesting jubilee video about its history and local impacts on the multi-ethnic communities. The other important long-term ongoing projects are the "Intercity Theatre"; the pupils' journal "Preventeen"; and, finally, the student volunteering project "Older brother, older Sister" for social inclusion of children being registered at the governmental

The steadily growing net of volunteers is the conditio sine qua non for all Narko-Ne project work. The main projects' have their own logos, their own supporting local and international stakeholders which also renders an advantage to the organisational brand of Narko-ne.

Most of the projects were supported by know-how transfer from abroad by foreign lecturers and supervisors or by hospitation travels. Therefore, today Narko-ne is acknowledged as representing a form of specialised social entrepreneurship in the field of prevention of addiction, still being the only one and having a profound theoretical and practical background. Further education is a prerequisite for the Narko-ne personnel and volunteers. Clear defined objectives and work plans as well as published quality standards underline

The expertise of Narko-ne is asked for by donors and policy makers in the field of health or youth, alike. However, the social entrepreneurship is selective with becoming a member in networks. Sr. Madeleine focuses on the core mission and only joins networks when also Narko-ne may benefit from results or impacts or/ and when Narko-ne can significantly contribute. Selected networks with international mentors involved are: The NGO Council, the Coalition for Fair Education, the Anna Lindh Foundation and the CIDI project (Policy Dialogue for All Project). Selected networks on a local level are: Justice Network (Mreža pravde); Agreement plus (Sporazum plus); Network Volunteer Diary (Volonterski dnevnik);

The biggest challenge for Narko-Ne has been the team changes which are naturally occurring when inviting young professionals who are just starting their careers. In this situation, Narko-ne had to be very flexible, and it is still very difficult to build the middle management which undertakes duties like project development and acquiring funds. Sr.

organisation became the own independent brand.

social centres.

the professional standards.

Peace building network (Mreža izgradnje mira).

From this moment, the organisational structures started to differentiate and to grow. The work places were defined, the hierarchy established and the separated volunteers' network was founded. Ágota applied for subsidised personnel at the labour office in Szeged.

As a next step, the Ágota Adult Education Institution was founded as a special-purpose commercial activity. From its profits the foundation is benefitting and financing its core activities like summer camps and youth centre. A business plan was made to forecast and control the whole Ágota budget. Nowadays, the financial aim, to build an own financial source of income, is reached although not all the Komitate are included yet.

By extraordinary press and media work, the Ágota Foundation became famous in Hungary. The social entrepreneur Jánós Kothencz was speaking in the Hungarian Parliament received some high honours, and an awarded documentary movie about his life experience and mission was presented in the Hungarian cinemas. In 2011, the "National Conference on the State's Child Care System" was organized in Szeged with the Hungarian President Dr. Schmitt Pál as speaker.

The high publicity contributed to a mind change in the Hungarian society. On top, now it became possible what already was usual in other European countries: In accordance to the subsidiary principle, Ágota as civil society organisation (CSO) takes responsibility for state duties of child care and child protection. When the Ágota team got encouraged for this task at the FICE Conference *(FICE= International Federation of Educative Communities)*  in Helsinki 2008, it represented a new beginning, but the achievement seemed very far away yet.

However, already in 2010, the St. Ágota Foundation for Child Protection was founded, and is now undertaking by contract some services which were originally duties of the Tergyesz's like supervision of the children homes, further education of the educators and social workers and others. Currently, Janos is the supervisor of around 500 professionals in the child care system of two Komitate, other regions will follow.

Due to many requests, currently, Ágota is planning to go international. János Kothensz wants to sell the KÁSZPEM® Training Courses in Bulgaria, Romania and in the Ukraine. The target remains the same: changing the state's child care system to save the children.

#### **Case Study 2: Narko-ne Asscociation – Prevention of Addiction in Bosnia and Herzegovina**

In 2001, Sr. Madeleine Schildknecht TOR, the Franciscan nun from Switzerland came to Bosnia with the intention to contribute to the peace making and reconciliation process in the post war society of Bosnia and Herzegovina (BiH).

After the war in Bosnia and Herzegovina the problem of drug abuse was urgent but political stakeholders tried to ignore it. Neither in the national youth report nor in the EU reports the topic was mentioned. When Sr. Madeleine came to Banja Luka, at first she got acquainted with the sisters of the Holy Blood who just have been establishing the therapeutic community in their former Monastery of Alexandrovac. This experience was the starting point to think about addiction, therapy as well about the complementary services.

From this moment, the organisational structures started to differentiate and to grow. The work places were defined, the hierarchy established and the separated volunteers' network was founded. Ágota applied for subsidised personnel at the labour office in

As a next step, the Ágota Adult Education Institution was founded as a special-purpose commercial activity. From its profits the foundation is benefitting and financing its core activities like summer camps and youth centre. A business plan was made to forecast and control the whole Ágota budget. Nowadays, the financial aim, to build an own financial

By extraordinary press and media work, the Ágota Foundation became famous in Hungary. The social entrepreneur Jánós Kothencz was speaking in the Hungarian Parliament received some high honours, and an awarded documentary movie about his life experience and mission was presented in the Hungarian cinemas. In 2011, the "National Conference on the State's Child Care System" was organized in Szeged with the Hungarian President Dr.

The high publicity contributed to a mind change in the Hungarian society. On top, now it became possible what already was usual in other European countries: In accordance to the subsidiary principle, Ágota as civil society organisation (CSO) takes responsibility for state duties of child care and child protection. When the Ágota team got encouraged for this task at the FICE Conference *(FICE= International Federation of Educative Communities)*  in Helsinki 2008, it represented a new beginning, but the achievement seemed very far

However, already in 2010, the St. Ágota Foundation for Child Protection was founded, and is now undertaking by contract some services which were originally duties of the Tergyesz's like supervision of the children homes, further education of the educators and social workers and others. Currently, Janos is the supervisor of around 500 professionals in the

Due to many requests, currently, Ágota is planning to go international. János Kothensz wants to sell the KÁSZPEM® Training Courses in Bulgaria, Romania and in the Ukraine. The target remains the same: changing the state's child care system to save the children.

**Case Study 2: Narko-ne Asscociation – Prevention of Addiction in Bosnia and Herzegovina**  In 2001, Sr. Madeleine Schildknecht TOR, the Franciscan nun from Switzerland came to Bosnia with the intention to contribute to the peace making and reconciliation process in the

After the war in Bosnia and Herzegovina the problem of drug abuse was urgent but political stakeholders tried to ignore it. Neither in the national youth report nor in the EU reports the topic was mentioned. When Sr. Madeleine came to Banja Luka, at first she got acquainted with the sisters of the Holy Blood who just have been establishing the therapeutic community in their former Monastery of Alexandrovac. This experience was the starting point to think about addiction, therapy as well about the complementary

child care system of two Komitate, other regions will follow.

post war society of Bosnia and Herzegovina (BiH).

source of income, is reached although not all the Komitate are included yet.

Szeged.

Schmitt Pál as speaker.

away yet.

services.

After the fact finding phase, the positioning was made in the field of primary and secondary prevention of addiction where the concept of "Salutogenese" is focused on by strengthening the resilience factors (Buessers, 2009, referring to Aaron Antonovsky's research). In 2001, Narko-ne was founded in Sarajevo under the umbrella of the existing Franciscan welfare organisation "Bred of St. Anthony" what gave the new CSO certain security and recognition from the very beginning. Nevertheless, Sr. Madeleine became director of Narko-ne and the organisation became the own independent brand.

The organisational development was less driven by strategies, but more by carrying out various projects. The first volunteers were committed to the pilot projects "Droga-tel" and "Peer group education" in schools. The first important steps for building the wider professional network was the further education of social workers and psychologists working in youth work in various cities of BiH. The intercultural creative summer weeks (IKS), annually held together with Swiss art students in small cities in Middle Bosnia, are already celebrating their 10 years anniversary in 2011, and are presented in the very interesting jubilee video about its history and local impacts on the multi-ethnic communities. The other important long-term ongoing projects are the "Intercity Theatre"; the pupils' journal "Preventeen"; and, finally, the student volunteering project "Older brother, older Sister" for social inclusion of children being registered at the governmental social centres.

The steadily growing net of volunteers is the conditio sine qua non for all Narko-Ne project work. The main projects' have their own logos, their own supporting local and international stakeholders which also renders an advantage to the organisational brand of Narko-ne.

Most of the projects were supported by know-how transfer from abroad by foreign lecturers and supervisors or by hospitation travels. Therefore, today Narko-ne is acknowledged as representing a form of specialised social entrepreneurship in the field of prevention of addiction, still being the only one and having a profound theoretical and practical background. Further education is a prerequisite for the Narko-ne personnel and volunteers. Clear defined objectives and work plans as well as published quality standards underline the professional standards.

The expertise of Narko-ne is asked for by donors and policy makers in the field of health or youth, alike. However, the social entrepreneurship is selective with becoming a member in networks. Sr. Madeleine focuses on the core mission and only joins networks when also Narko-ne may benefit from results or impacts or/ and when Narko-ne can significantly contribute. Selected networks with international mentors involved are: The NGO Council, the Coalition for Fair Education, the Anna Lindh Foundation and the CIDI project (Policy Dialogue for All Project). Selected networks on a local level are: Justice Network (Mreža pravde); Agreement plus (Sporazum plus); Network Volunteer Diary (Volonterski dnevnik); Peace building network (Mreža izgradnje mira).

The biggest challenge for Narko-Ne has been the team changes which are naturally occurring when inviting young professionals who are just starting their careers. In this situation, Narko-ne had to be very flexible, and it is still very difficult to build the middle management which undertakes duties like project development and acquiring funds. Sr.

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 67

2007, the opening of Marijin Dvor Lužnica could be celebrated. This was hard because after socialism the nuns were not attributed such a social entrepreneurial role, neither by the

Moreover, the nuns did not have a pattern for their project development in their own country. hospitation visits abroad gave them some ideas about informal education houses or about the reconstruction of historical buildings, but the adaptation to the own, very much differing situation, was far from being easy. Overall, the project success was empowering

The Open Day with various programmes for all interested people was visited by more than

At that time, the main target group were defined as follows: religious groups, CSOs, companies and international groups. Reflecting on learning by doing, the target groups were shaped more precisely: senior groups and local and international, cultural and religious tourist groups. The share of companies using the facilities for conferences or

The problem the nuns are facing until today is related to the status as an education house which is different from the hotel business with other taxation and regulation rules. In this context, they face a restriction regarding accommodation without programmes whereas for the guidance in the castle Sr. Berislava Grabovac attended a course and got the licence. Summarizing, the entire business runs perfectly: In 2010, the nuns had their capacities nearly fully booked and, finally, the biggest future threat is also prevented: the planned highway will not run next to the Lužnica castle. After many visits and letters to public decision makers it will run down another way. The silence, nature and unique

The following narrative highlights the main emerging categories reflecting the key success factors of the three social entrepreneurship ventures. An emerging conceptualization will be

*a. Motivation- Recovering from an Identity Crisis: The Human Being, Political System and War, Recovering Human and Christian Values, Cultural Heritage, Personal Life Experience and* 

In order to start the challenging adventures of "changing the society for better" (R1-R12), specific key motivators existed. The motivators were mainly routed in the affection to the human being and/or experienced shock due to the detrimental consequences of political influences. As mentioned by several respondents (R7, R8, R9, R10), it was the war in BiH, which thrilled the need to take action and responsibility in their societies to change the situation. As reported by R11 and R12, the influence of socialism was crucial: "Christian and human values were destroyed in Socialism. The church and religious orders were in the underground" (R11). Hence, the motivators for the Informal Adult Education in Croatia were twofold: The first motivator refers to the recovery of Christian and human values by providing the old nuns living there in bad conditions with a dignified living surrounding

the nuns in what they were doing and gave them self-esteem.

1000 people. A press conference was held.

presentations was also continuously increasing.

characteristics of the location could be saved.

*Results of focus groups and group interview* 

provided after the narrative.

*Faith* 

church nor by the society.

Madeleine tries to see the bright side: She sees the advantage of this situation for Narko-ne in being always up-dated to the needs of young people, and a well-known and popular employer. But, an important open strategic question remains: who will be her successor when she will go in pension in some years? Or are there any promising growth strategies to bring Narko-ne and its projects onto the next future level of its development?

#### **Case Study 3: Marijin Dvor Lužnica - Informal Adult Education in Croatia**

In 1925, the Zagreb Province of the Sister of Charity of the Holy Vinzenz von Paul bought the baroque Castle of Lužnica including park and forests which they used as a home for the aged nuns. During socialist times, the property was confiscated, and only after the political change the nuns received it back.

Soon, it became obvious that the use of the castle as a home for the aged nuns was not possible any longer due to lacking hygienic, damaged heating, and so on. After a storm had damaged the castle's roof, the community was contemplating a new purpose respecting the nuns' charisma (social-caritative or educational missions) and supporting the local people. The nuns felt highly responsible for the cultural heritage.

After consultation, the nuns decided to establish the first Informal Adult Education House / Spiritual Centre of its kind in Croatia. The preparation has been taking six years, entailing the following works:


Construction, learning as well as fundraising that addressed public institutions, private donors and local companies had to go hand in hand.

The director, Sr. Miroslava Bradica and her team, that also changed from time to time, had to stand a lot of uncertainty and also to go through internal and external struggles before, in

Madeleine tries to see the bright side: She sees the advantage of this situation for Narko-ne in being always up-dated to the needs of young people, and a well-known and popular employer. But, an important open strategic question remains: who will be her successor when she will go in pension in some years? Or are there any promising growth strategies to

In 1925, the Zagreb Province of the Sister of Charity of the Holy Vinzenz von Paul bought the baroque Castle of Lužnica including park and forests which they used as a home for the aged nuns. During socialist times, the property was confiscated, and only after the political

Soon, it became obvious that the use of the castle as a home for the aged nuns was not possible any longer due to lacking hygienic, damaged heating, and so on. After a storm had damaged the castle's roof, the community was contemplating a new purpose respecting the nuns' charisma (social-caritative or educational missions) and supporting the local people.

After consultation, the nuns decided to establish the first Informal Adult Education House / Spiritual Centre of its kind in Croatia. The preparation has been taking six years, entailing

• Construction (renovating and rebuilding the castle with regard to monument protection including conference hall, seminar rooms, dining rooms and professional kitchen; construction of the new guest house including an architectural concept with 60 bedrooms and separated nuns' enclosure; and reconstruction of the park according to

• Conception (development of the education concept with four contextual pillars: religious education, ecological education, social and political education as well as

• Further education of the nuns in hotel management including e.g. leadership, HR management, process management, marketing, finance, bookkeeping) and in adult

• Preparing the business plan with the following revenue mix: booked seminars of the annual programmes, occupancies with own programmes, room rents without accommodation, exhibitions and presentations on other cultural events and charity concepts, castle's guidance, shop of monastery goods, café,…Revenues could also be

• Preparing the registration. The public law institution could be only established after

Construction, learning as well as fundraising that addressed public institutions, private

The director, Sr. Miroslava Bradica and her team, that also changed from time to time, had to stand a lot of uncertainty and also to go through internal and external struggles before, in

bring Narko-ne and its projects onto the next future level of its development? **Case Study 3: Marijin Dvor Lužnica - Informal Adult Education in Croatia** 

change the nuns received it back.

the following works:

the baroque plans)

cultural education)

The nuns felt highly responsible for the cultural heritage.

education (programmes, methodology, didactics) • Preparing the first year's education programme

generated by selling land to an interested company

donors and local companies had to go hand in hand.

enacting the law of adult education in Croatia in 2007.

2007, the opening of Marijin Dvor Lužnica could be celebrated. This was hard because after socialism the nuns were not attributed such a social entrepreneurial role, neither by the church nor by the society.

Moreover, the nuns did not have a pattern for their project development in their own country. hospitation visits abroad gave them some ideas about informal education houses or about the reconstruction of historical buildings, but the adaptation to the own, very much differing situation, was far from being easy. Overall, the project success was empowering the nuns in what they were doing and gave them self-esteem.

The Open Day with various programmes for all interested people was visited by more than 1000 people. A press conference was held.

At that time, the main target group were defined as follows: religious groups, CSOs, companies and international groups. Reflecting on learning by doing, the target groups were shaped more precisely: senior groups and local and international, cultural and religious tourist groups. The share of companies using the facilities for conferences or presentations was also continuously increasing.

The problem the nuns are facing until today is related to the status as an education house which is different from the hotel business with other taxation and regulation rules. In this context, they face a restriction regarding accommodation without programmes whereas for the guidance in the castle Sr. Berislava Grabovac attended a course and got the licence. Summarizing, the entire business runs perfectly: In 2010, the nuns had their capacities nearly fully booked and, finally, the biggest future threat is also prevented: the planned highway will not run next to the Lužnica castle. After many visits and letters to public decision makers it will run down another way. The silence, nature and unique characteristics of the location could be saved.

#### *Results of focus groups and group interview*

The following narrative highlights the main emerging categories reflecting the key success factors of the three social entrepreneurship ventures. An emerging conceptualization will be provided after the narrative.

*a. Motivation- Recovering from an Identity Crisis: The Human Being, Political System and War, Recovering Human and Christian Values, Cultural Heritage, Personal Life Experience and Faith* 

In order to start the challenging adventures of "changing the society for better" (R1-R12), specific key motivators existed. The motivators were mainly routed in the affection to the human being and/or experienced shock due to the detrimental consequences of political influences. As mentioned by several respondents (R7, R8, R9, R10), it was the war in BiH, which thrilled the need to take action and responsibility in their societies to change the situation. As reported by R11 and R12, the influence of socialism was crucial: "Christian and human values were destroyed in Socialism. The church and religious orders were in the underground" (R11). Hence, the motivators for the Informal Adult Education in Croatia were twofold: The first motivator refers to the recovery of Christian and human values by providing the old nuns living there in bad conditions with a dignified living surrounding

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 69

objectives, success indicators and methods for observation". The necessity to implement a quality system was commonly agreed upon by the three organizations. Accordingly, R6 it was needed for the accreditation process, it is applied in the management system, but not consciously on a daily basis but it should not be a point for further discussions at the moment. For R9 it is an issue which helps in gaining credibility: "it was important in the "Older brother, Older sister programme. The QM handbook gives us credibility from the international donors". Finally, in the Lužnica case, this quality management system is used for "getting

The leader's personality and charisma turned out to play a paramount role. In the case of Narko-Ne, the option of loosing their leader due to retirement may cause difficulties for the organization calling for sustainable leadership. R9 drew attention to this important issue by regretting that "in about five years Sr. Magdalena will retire; Narko-Ne is searching for solutions, either to survive as organization with new leadership or distributing the core programmes to other youth organisations / social organisations. In the case of Ágota, leadership had to be learned as explained by R4: "at the beginning, we were just a group of volunteers; we had to professionally familiarize with hierarchical structures and leadership. This was not an easy step". Nevertheless, after passage of some time, "today, we are a professional organization where the group of volunteers have their own important space; currently, the volunteers have grown their own small organisation, with own leadership

In terms of leadership development, R11 indicated that "the nuns studied or have been

In these challenging projects, special skills and abilities are required for their implementation. The following skills and attitudes have been agreed upon by all the respondents: learning by doing, power of endurance and frustration tolerance, flexibility and openness for change, cross-cultural communication, conflict solving and the ability to

A crucial issue in these projects proved to be the attraction of financial resources. Continuous financing had to be assured by one or a few private donors, for example, Renovabis from Germany, supporting the Hungarian and Croatian projects or Renovabis and international church institutions and organisations supporting Narko-ne. Another option is public funding. In the case of Ágota, R3 complained that "we had established the good public fundraising, but the amount of funds is steadily reducing". Concordantly, R10 of Narko-ne added: "we have steady public funding of 5%; we do not see that this is changing soon". A more optimistic view is expressed by R11 from Marijin Dvor Lužnica:

An interesting observation was made as to the respondents' views on staying independent to donor's policies. In this context, R8 mentioned that "the strategic approach of addiction

regular feedbacks from visitors and participants and prepared feedback sheets (R12).

*d. Leadership- specifically of volunteers* 

*e. Idiosyncratic Skills and Attitudes* 

'fight' (R1-R12).

inside of Ágota. They are still the base of our work" (R6).

trained in economics, law, education, marketing and tourism".

*f. Attracting Financial Resources- Balancing with Independence* 

"we have good chances to receive public funds due to our legal form".

and the second motivator to preserving cultural heritage. The castle where the nuns were living was expropriated, and therefore, so R 12 said that "we were longing for a place of peace, the location for encounter, also for the youth. Men needed a place to find themselves after Communism and war in some parts of our country". A different motivator drove (R1) to initiate this project: "it was based on my own life experience, I found enthusiastic people joining me".

For all the members of the Ágota foundation the opportunity to reform the child state care system in Hungary to the benefit of every child was the most salient motivator. The members of Narko-ne wanted to contribute to the peace making and reconciliation process in Bosnia and Herzegovina, social inclusion and addiction prevention.

The final motivator, which is the common denominator for all three projects, was faith. Exemplarily, R2 stressed that "faith belongs to the community so that we are always committed to our vision and mission. This is not restricted to working hours but expands to life and also to faith". For R7 faith was supportive "for respecting different believes" and for R12 faith was an obvious motivator due to "the nuns being the management team".

#### *b. Volunteers' Commitment*

The very high level of commitment is underpinned by the very high number of volunteers as already indicated by the previous factor. Importantly, the commitment is lived by all the volunteers who carry through the projects. R3 highlights that "Ágota volunteers have their own identity, being engaged, and smart, enthusiastic and a bit crazy". In the same vein, R9 of Narko-ne comments: "100% focus is on the volunteers, every project has own teams of volunteers". Regarding the Marijin Dvor Lužnica project, there are "the alumni's networks of volunteers (Internet based social network)" (R12) who carry all the work. For R11 it is clear that in this type of organization "it needs much more higher commitment than in other institutions". She further explained "that it is not a normal work place, it is a mission".

#### *c. Management- An Ambivalent Stance to Strategy*

The management of the projects embraced issues like having objectives in place indicated by R5: "everything starts from the top, without clear objectives there are no results". Objectives are followed by strategic development as mentioned by R10: "in 2006 we made our strategic plan. It gave us the important directions, but we considered it as more important than it turned out to be in practice". On the other hand, all three respondents underlined the importance having the defined mission and visions and as well conscious value proposition that volunteers and employees share alike (R1-R12).

Other managerial activities referred to process description, reflection on practice, change management, quality management systems e.g. "for accreditation stressed by R2, or "for defined quality standards as highlighted by R8 or project management including learning of how to apply for projects. A common emphasis of all respondents regarding the methodology was put on "learning by doing".

The importance of quality management closely related to the factor of 'organizational development to be described later was highlighted by several respondents. R5 commented that "the implementation of the monitoring system was an important milestone; we defined objectives, success indicators and methods for observation". The necessity to implement a quality system was commonly agreed upon by the three organizations. Accordingly, R6 it was needed for the accreditation process, it is applied in the management system, but not consciously on a daily basis but it should not be a point for further discussions at the moment. For R9 it is an issue which helps in gaining credibility: "it was important in the "Older brother, Older sister programme. The QM handbook gives us credibility from the international donors". Finally, in the Lužnica case, this quality management system is used for "getting regular feedbacks from visitors and participants and prepared feedback sheets (R12).

#### *d. Leadership- specifically of volunteers*

68 Entrepreneurship - Gender, Geographies and Social Context

and the second motivator to preserving cultural heritage. The castle where the nuns were living was expropriated, and therefore, so R 12 said that "we were longing for a place of peace, the location for encounter, also for the youth. Men needed a place to find themselves after Communism and war in some parts of our country". A different motivator drove (R1) to initiate this project: "it was based on my own life experience, I found enthusiastic people

For all the members of the Ágota foundation the opportunity to reform the child state care system in Hungary to the benefit of every child was the most salient motivator. The members of Narko-ne wanted to contribute to the peace making and reconciliation process

The final motivator, which is the common denominator for all three projects, was faith. Exemplarily, R2 stressed that "faith belongs to the community so that we are always committed to our vision and mission. This is not restricted to working hours but expands to life and also to faith". For R7 faith was supportive "for respecting different believes" and for

The very high level of commitment is underpinned by the very high number of volunteers as already indicated by the previous factor. Importantly, the commitment is lived by all the volunteers who carry through the projects. R3 highlights that "Ágota volunteers have their own identity, being engaged, and smart, enthusiastic and a bit crazy". In the same vein, R9 of Narko-ne comments: "100% focus is on the volunteers, every project has own teams of volunteers". Regarding the Marijin Dvor Lužnica project, there are "the alumni's networks of volunteers (Internet based social network)" (R12) who carry all the work. For R11 it is clear that in this type of organization "it needs much more higher commitment than in other institutions". She further explained "that it is not a normal work place, it is a mission".

The management of the projects embraced issues like having objectives in place indicated by R5: "everything starts from the top, without clear objectives there are no results". Objectives are followed by strategic development as mentioned by R10: "in 2006 we made our strategic plan. It gave us the important directions, but we considered it as more important than it turned out to be in practice". On the other hand, all three respondents underlined the importance having the defined mission and visions and as well conscious value proposition

Other managerial activities referred to process description, reflection on practice, change management, quality management systems e.g. "for accreditation stressed by R2, or "for defined quality standards as highlighted by R8 or project management including learning of how to apply for projects. A common emphasis of all respondents regarding the

The importance of quality management closely related to the factor of 'organizational development to be described later was highlighted by several respondents. R5 commented that "the implementation of the monitoring system was an important milestone; we defined

R12 faith was an obvious motivator due to "the nuns being the management team".

in Bosnia and Herzegovina, social inclusion and addiction prevention.

joining me".

*b. Volunteers' Commitment* 

*c. Management- An Ambivalent Stance to Strategy* 

that volunteers and employees share alike (R1-R12).

methodology was put on "learning by doing".

The leader's personality and charisma turned out to play a paramount role. In the case of Narko-Ne, the option of loosing their leader due to retirement may cause difficulties for the organization calling for sustainable leadership. R9 drew attention to this important issue by regretting that "in about five years Sr. Magdalena will retire; Narko-Ne is searching for solutions, either to survive as organization with new leadership or distributing the core programmes to other youth organisations / social organisations. In the case of Ágota, leadership had to be learned as explained by R4: "at the beginning, we were just a group of volunteers; we had to professionally familiarize with hierarchical structures and leadership. This was not an easy step". Nevertheless, after passage of some time, "today, we are a professional organization where the group of volunteers have their own important space; currently, the volunteers have grown their own small organisation, with own leadership inside of Ágota. They are still the base of our work" (R6).

In terms of leadership development, R11 indicated that "the nuns studied or have been trained in economics, law, education, marketing and tourism".

#### *e. Idiosyncratic Skills and Attitudes*

In these challenging projects, special skills and abilities are required for their implementation. The following skills and attitudes have been agreed upon by all the respondents: learning by doing, power of endurance and frustration tolerance, flexibility and openness for change, cross-cultural communication, conflict solving and the ability to 'fight' (R1-R12).

#### *f. Attracting Financial Resources- Balancing with Independence*

A crucial issue in these projects proved to be the attraction of financial resources. Continuous financing had to be assured by one or a few private donors, for example, Renovabis from Germany, supporting the Hungarian and Croatian projects or Renovabis and international church institutions and organisations supporting Narko-ne. Another option is public funding. In the case of Ágota, R3 complained that "we had established the good public fundraising, but the amount of funds is steadily reducing". Concordantly, R10 of Narko-ne added: "we have steady public funding of 5%; we do not see that this is changing soon". A more optimistic view is expressed by R11 from Marijin Dvor Lužnica: "we have good chances to receive public funds due to our legal form".

An interesting observation was made as to the respondents' views on staying independent to donor's policies. In this context, R8 mentioned that "the strategic approach of addiction

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 71

conferences, public events, e.g." Yearly Narko-ne Day, Yearly International Volunteering Day, Some Conferences in the "Older Brother, Older Sister" Programme (which are considered as milestones in the Narko-ne development)" (R7). Referring to advertising, R 11 referred to press and media work: "very important for us is to be in TV, e. g. tourism broadcasts, morning magazines, articles in journal of Croatian airlines; we have our media

Implying the importance of Customer Relationship Marketing and Internal Marketing, R8 of Narko-ne emphasized: "Because the media allow themselves to be taken by political interest, we are more cautious with marketing via media and are instead mainly focusing on "Human networking". Through our own "Preventeen" journal we are constantly visible in

In addition, political lobbying is considerably used as a marketing tool in the three projects. The way Ágota uses political lobbying is outlined by R2: "speeches in the Hungarian Parliament, member of youth councils, National Ágota Conference 2011 with presence of the Hungarian president, various ministries and stakeholders of the child care system". In the case of Lužnica, political lobbying "was needed to get our land and real estate back as a base for new projects (school, kindergarden, Marijin Dvor Luznica) indicated (R11). Lužnica was seriously endangered by the construction of the new close-by highway. The writing of more than 200 letters, holdings of many meetings with decision makers and stakeholder proved to be successful. Currently, the highway takes another route. A different view is taken by Narko-ne trying "to avoid political contacts and to stay neutral, but for public conferences we invite selected people from the political and administrative scene to involve them into our discussions" (R10). They are involved in networks, mouth to mouth propaganda from reliable and engaged people. R8 adds: "we also take part in the EU CIDI project (Policy Dialogue for All) as well as in the "Sporazum Plus Network" (the "Network Agreement Plus" will implement its activities through topical public forums, advocacy campaigns and other forms of democratic expression of opinions and joint actions of the civil society

As external support, consulting and coaching companies co-operated in the three projects. The contribution of consulting and coaching was perceived by R1 as "important to have impulses and reflection from outside". Concordantly, R2 confirmed that "we were pushed in some directions where we were still hesitating to go; but it turned out that it was the right way, and we accelerated the entire development, e.g. when integrating the educators to the pilot projects". A further contribution of the consulting co-operators was highlighted by R4: "consulting helped us to differentiate the tasks and share it in the team and further to build

Coaching and consulting expand their field of activities in the area of multicultural teams as referred to by R8: "consulting and coaching is always very, very important for the multiethnic team to get the view from outside. Up to 2006, we mostly had consultants from abroad (Germany, Switzerland). Now, we also have some local consultancies of good quality, and we invite them to work with us. We are satisfied with them. We also co-operate with the EU Tasco project that gives us many impulses (Tasco = The Technical Assistance

our main target group; the internal marketing is stronger than the outside".

*i. External Support: Coaching & Consulting Catalysts in the Initial Stage* 

manager".

organizations).

professional structures".

prevention is defined widely so that Narko-ne fits into many programmes or can easily adapt to them without loosing the key competence. We never had debts which are the temptation to do everything and not to keep the focus". In the case of Marijin Dvor Lužnica the situation is different, since they can already financially maintain themselves. In the case of Ágota, they explained that "we are working strategically on financial independence, which most probably will be reached in 1-2 years as stressed by R6.

#### *g. Organizational Development*

As first initial step to the organizational development all three social entrepreneurship ventures stated that the registration and receiving the legal form was very important. "Due to administrative requirements that was not an easy step" (R12). And R5 of Ágota pointed out that "legal advice was essential to various stage of our organizational development".

In relation to the overall organizational development, R2 indicated that short term lines for strategic guidelines allow them to keep flexible, whereas, on the other hand, long term time lines for strategy guidelines are considered "very important for being able to design the changes" (R5).

Due to the very transitional macro environment, R3 highlighted that "change management is constantly necessary". Referring as well to the organizational development is the issue of cooperation and networking which is rising in importance. Although Ágota and Narko-ne are aware of the potential benefits of networks and co- operations, both organizations are very careful in terms of selecting their business partners as indicated by R1: "We carefully select our partners. We can loose time and our good image when co-operating with the wrong partners. We concentrate on the "real" work compared to many CSO and networks having little or no results". The criteria for partner selection for Narko-ne are "to select some local and international ones where we are active and hope to have influence on policy making for our own benefit later on" (R8). Furthermore, they differentiate as to "the civil sector, where some CSOs should concentrate on advocacy, others on their key activities. Just networking and working on meta-structures is inefficient" (R10).

#### *h. Marketing- Traditional and Lobbying*

The positioning, a strategic marketing aspect, of the three projects has three factors in common: being unique, being first in the social market and choosing the right location. During the findings' analysis stage, the enthusiasm perceived by the respondents regarding themselves as pioneers in the field was very prominent. Similar statements sharing this pride of being a pioneer could be perceived. R7 stressed that "we are unique, we are first and it was important to go to Sarajevo". This statement is in line with that of R3: "being unique and being first in the social market". Similarly, R12 confirmed these views: "we are unique in Croatia; we are first and have calm and the outstanding location (the castle and the park).

As already indicated by the previous summary of the three case studies, Marketing, especially the marketing-mix, had been considerably applied. Commonly agreed upon by the members of the three projects were the use of homepages, internet based social networks, e.g. "we have alumni networks" indicated (R12). Flyers and brochures, fairs, open

prevention is defined widely so that Narko-ne fits into many programmes or can easily adapt to them without loosing the key competence. We never had debts which are the temptation to do everything and not to keep the focus". In the case of Marijin Dvor Lužnica the situation is different, since they can already financially maintain themselves. In the case of Ágota, they explained that "we are working strategically on financial independence,

As first initial step to the organizational development all three social entrepreneurship ventures stated that the registration and receiving the legal form was very important. "Due to administrative requirements that was not an easy step" (R12). And R5 of Ágota pointed out that "legal advice was essential to various stage of our organizational

In relation to the overall organizational development, R2 indicated that short term lines for strategic guidelines allow them to keep flexible, whereas, on the other hand, long term time lines for strategy guidelines are considered "very important for being able to design the

Due to the very transitional macro environment, R3 highlighted that "change management is constantly necessary". Referring as well to the organizational development is the issue of cooperation and networking which is rising in importance. Although Ágota and Narko-ne are aware of the potential benefits of networks and co- operations, both organizations are very careful in terms of selecting their business partners as indicated by R1: "We carefully select our partners. We can loose time and our good image when co-operating with the wrong partners. We concentrate on the "real" work compared to many CSO and networks having little or no results". The criteria for partner selection for Narko-ne are "to select some local and international ones where we are active and hope to have influence on policy making for our own benefit later on" (R8). Furthermore, they differentiate as to "the civil sector, where some CSOs should concentrate on advocacy, others on their key activities. Just

The positioning, a strategic marketing aspect, of the three projects has three factors in common: being unique, being first in the social market and choosing the right location. During the findings' analysis stage, the enthusiasm perceived by the respondents regarding themselves as pioneers in the field was very prominent. Similar statements sharing this pride of being a pioneer could be perceived. R7 stressed that "we are unique, we are first and it was important to go to Sarajevo". This statement is in line with that of R3: "being unique and being first in the social market". Similarly, R12 confirmed these views: "we are unique in Croatia; we are first and have calm and the outstanding location (the castle and

As already indicated by the previous summary of the three case studies, Marketing, especially the marketing-mix, had been considerably applied. Commonly agreed upon by the members of the three projects were the use of homepages, internet based social networks, e.g. "we have alumni networks" indicated (R12). Flyers and brochures, fairs, open

which most probably will be reached in 1-2 years as stressed by R6.

networking and working on meta-structures is inefficient" (R10).

*h. Marketing- Traditional and Lobbying* 

*g. Organizational Development* 

development".

changes" (R5).

the park).

conferences, public events, e.g." Yearly Narko-ne Day, Yearly International Volunteering Day, Some Conferences in the "Older Brother, Older Sister" Programme (which are considered as milestones in the Narko-ne development)" (R7). Referring to advertising, R 11 referred to press and media work: "very important for us is to be in TV, e. g. tourism broadcasts, morning magazines, articles in journal of Croatian airlines; we have our media manager".

Implying the importance of Customer Relationship Marketing and Internal Marketing, R8 of Narko-ne emphasized: "Because the media allow themselves to be taken by political interest, we are more cautious with marketing via media and are instead mainly focusing on "Human networking". Through our own "Preventeen" journal we are constantly visible in our main target group; the internal marketing is stronger than the outside".

In addition, political lobbying is considerably used as a marketing tool in the three projects. The way Ágota uses political lobbying is outlined by R2: "speeches in the Hungarian Parliament, member of youth councils, National Ágota Conference 2011 with presence of the Hungarian president, various ministries and stakeholders of the child care system". In the case of Lužnica, political lobbying "was needed to get our land and real estate back as a base for new projects (school, kindergarden, Marijin Dvor Luznica) indicated (R11). Lužnica was seriously endangered by the construction of the new close-by highway. The writing of more than 200 letters, holdings of many meetings with decision makers and stakeholder proved to be successful. Currently, the highway takes another route. A different view is taken by Narko-ne trying "to avoid political contacts and to stay neutral, but for public conferences we invite selected people from the political and administrative scene to involve them into our discussions" (R10). They are involved in networks, mouth to mouth propaganda from reliable and engaged people. R8 adds: "we also take part in the EU CIDI project (Policy Dialogue for All) as well as in the "Sporazum Plus Network" (the "Network Agreement Plus" will implement its activities through topical public forums, advocacy campaigns and other forms of democratic expression of opinions and joint actions of the civil society organizations).

#### *i. External Support: Coaching & Consulting Catalysts in the Initial Stage*

As external support, consulting and coaching companies co-operated in the three projects. The contribution of consulting and coaching was perceived by R1 as "important to have impulses and reflection from outside". Concordantly, R2 confirmed that "we were pushed in some directions where we were still hesitating to go; but it turned out that it was the right way, and we accelerated the entire development, e.g. when integrating the educators to the pilot projects". A further contribution of the consulting co-operators was highlighted by R4: "consulting helped us to differentiate the tasks and share it in the team and further to build professional structures".

Coaching and consulting expand their field of activities in the area of multicultural teams as referred to by R8: "consulting and coaching is always very, very important for the multiethnic team to get the view from outside. Up to 2006, we mostly had consultants from abroad (Germany, Switzerland). Now, we also have some local consultancies of good quality, and we invite them to work with us. We are satisfied with them. We also co-operate with the EU Tasco project that gives us many impulses (Tasco = The Technical Assistance

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 73

Motivation Volunteers' Marketing Management Leadership

Referring to research question 1, the statements in various paragraphs clearly underline that CSR and social entrepreneurship as to the three cases was strongly intrinsically rather than

Idiosyncratic Attracting Organization. External Cross-Sectoral

Development Support Co-operation

Referring to research question 2, ambiguous results could be found. Whereas vision, mission, objectives and strategies (i.e. change or quality management) seem to be generally appreciated, some statements imply a stronger emphasis on operations. This might be explained by a lack of existing knowledge structures, knowledge 'road maps', and experience. It is suggested that more strategic approaches resulting from the reflection on previous experience could usefully inform further projects. In terms of Marketing, growth or competitive strategies were not mentioned by the interviewees and could be a promising

Regarding research question 3, it is suggested that social entrepreneurship has to be differentiated due to an apparent identity crisis (Kaufmann, Zagorac, Sanchez, 2008) reflected, for example, by a loss of values and social identity roles of certain segments of society. This implies that new value systems have to be created or new societal roles to be accepted. The role of the media being still used for political influence is also seen a reason for differentiation. This finding has direct connotations with and implications on research questions 4 and 5. Tonoyan's (2011) corruption related findings were confirmed by this research and, additionally, call for differentiating social entrepreneurship as to Eastern

Regarding research question 4 on training & development, Ashcrafts, Makhlouf's, Sundin's and MacLagan's views, as provided in the literature review, were confirmed by the research. It is suggested to focus on management and leadership for the middle management relating to project management, international teamwork, career planning, leading intrinsically motivated volunteers, fund application, importance of legal form for organizational development,

Fig. 1. Successful Social Entrepreneurship in Eastern Europe

 Successful Social Entrepreneurship in Eastern Europe

 *Core Category* 

**Success** 

 Financial Resources

**6. Research questions and derived recommendation** 

instrumentally driven.

 Skills and Attributes

Commitment

route to follow.

European conditions.

for Civil Society Organisations). Finally, for R11 and R12, Consulting/ Coaching were very important at the initial stage in the meantime they are learning by doing.

#### *j. Cross- Sectoral Co-operation*

The final success factor is dedicated to the cross-sectoral co-operation. Many different institutions were contributing to the success of these projects. To start with, there is cooperation with church institutions. (R3) specifies "dioceses and parishes, contacts to single priests, receiving strong support from the local bishop and having Renovabis as donor". R7 further comments in this respect: "for us the inter-religious council is important. Other church institutions are sometimes too close to political parties, and they have a nationalistic attitude". On the other hand, the main donors are coming from international church organisations (e.g. Renovabis, Caritas, parishes). Further cross-sectoral co-operations relate to public administrations and governmental organisations. R2 mentions different public entities which provided an enriching experience for the project members: "we have learned a lot from the public sector and have now a lot of contributions from this sector". Amongst the public entities are municipalities, local offices, family help centres, various ministries (all for child care and fundraising), accreditation office (for programmes and institutional accreditation), centre of employment (for applying for new staff with funded salaries). Cooperation with industry representatives and SMEs are "mainly for funding or in-kind funding, e.g. the summer camp, playhouse, publications 10% to 20% of the action budget. The private sector is very sensitive and open to our needs and problems", explained (R6). R10 confirms the contribution in kind.

R1 expressed his concern related to these co-operations with Civil Society actors: "we are cautious with too many co-operations. Many NGOs do not really work, but get funds (corruption). We also avoid tender consortia in order to not get in danger to cheat. We cooperated with just two foundations and the Roma Agency, and we are the formal member of KIFE, which is the relict of former times". Due to this precaution and lack of trust, R4 stressed that "the biggest challenge was building confidence with the public sector. In the public sector, there is the very high bureaucracy for fighting corruption. It blocks us a lot". In line with this criticism, R9 added "the public sector is strictly hierarchical. The work places get inherited which encourages laziness, but in all sectors you also find highly motivated people".

Exemplifying an advantage in the cooperation with the civil society it was mentioned that "Bred of St. Anthony is important because they are helpful in fundraising and they are close to the people; during our co-operation they changed, now they also employ, as a catholic organization, Muslims and employed some of our students"(R7).

For R11 and R12, there is no doubt regarding the importance of these co-operations. They highlighted that "without cooperation in all sectors we do not survive. It is our daily life. May be there are differences or even difficulties, but we are not focusing on them. We have to work together and we do. It is simply a necessity".

The following figure 1 conceptualizes the categories elicited by the content analysis representing the key success factors of the social entrepreneurship projects in Eastern Europe.

for Civil Society Organisations). Finally, for R11 and R12, Consulting/ Coaching were very

The final success factor is dedicated to the cross-sectoral co-operation. Many different institutions were contributing to the success of these projects. To start with, there is cooperation with church institutions. (R3) specifies "dioceses and parishes, contacts to single priests, receiving strong support from the local bishop and having Renovabis as donor". R7 further comments in this respect: "for us the inter-religious council is important. Other church institutions are sometimes too close to political parties, and they have a nationalistic attitude". On the other hand, the main donors are coming from international church organisations (e.g. Renovabis, Caritas, parishes). Further cross-sectoral co-operations relate to public administrations and governmental organisations. R2 mentions different public entities which provided an enriching experience for the project members: "we have learned a lot from the public sector and have now a lot of contributions from this sector". Amongst the public entities are municipalities, local offices, family help centres, various ministries (all for child care and fundraising), accreditation office (for programmes and institutional accreditation), centre of employment (for applying for new staff with funded salaries). Cooperation with industry representatives and SMEs are "mainly for funding or in-kind funding, e.g. the summer camp, playhouse, publications 10% to 20% of the action budget. The private sector is very sensitive and open to our needs and problems", explained (R6).

R1 expressed his concern related to these co-operations with Civil Society actors: "we are cautious with too many co-operations. Many NGOs do not really work, but get funds (corruption). We also avoid tender consortia in order to not get in danger to cheat. We cooperated with just two foundations and the Roma Agency, and we are the formal member of KIFE, which is the relict of former times". Due to this precaution and lack of trust, R4 stressed that "the biggest challenge was building confidence with the public sector. In the public sector, there is the very high bureaucracy for fighting corruption. It blocks us a lot". In line with this criticism, R9 added "the public sector is strictly hierarchical. The work places get inherited which encourages laziness, but in all sectors you also find highly

Exemplifying an advantage in the cooperation with the civil society it was mentioned that "Bred of St. Anthony is important because they are helpful in fundraising and they are close to the people; during our co-operation they changed, now they also employ, as a catholic

For R11 and R12, there is no doubt regarding the importance of these co-operations. They highlighted that "without cooperation in all sectors we do not survive. It is our daily life. May be there are differences or even difficulties, but we are not focusing on them. We have

The following figure 1 conceptualizes the categories elicited by the content analysis representing the key success factors of the social entrepreneurship projects in Eastern

organization, Muslims and employed some of our students"(R7).

to work together and we do. It is simply a necessity".

important at the initial stage in the meantime they are learning by doing.

*j. Cross- Sectoral Co-operation* 

R10 confirms the contribution in kind.

motivated people".

Europe.

Fig. 1. Successful Social Entrepreneurship in Eastern Europe

#### **6. Research questions and derived recommendation**

Referring to research question 1, the statements in various paragraphs clearly underline that CSR and social entrepreneurship as to the three cases was strongly intrinsically rather than instrumentally driven.

Referring to research question 2, ambiguous results could be found. Whereas vision, mission, objectives and strategies (i.e. change or quality management) seem to be generally appreciated, some statements imply a stronger emphasis on operations. This might be explained by a lack of existing knowledge structures, knowledge 'road maps', and experience. It is suggested that more strategic approaches resulting from the reflection on previous experience could usefully inform further projects. In terms of Marketing, growth or competitive strategies were not mentioned by the interviewees and could be a promising route to follow.

Regarding research question 3, it is suggested that social entrepreneurship has to be differentiated due to an apparent identity crisis (Kaufmann, Zagorac, Sanchez, 2008) reflected, for example, by a loss of values and social identity roles of certain segments of society. This implies that new value systems have to be created or new societal roles to be accepted. The role of the media being still used for political influence is also seen a reason for differentiation. This finding has direct connotations with and implications on research questions 4 and 5. Tonoyan's (2011) corruption related findings were confirmed by this research and, additionally, call for differentiating social entrepreneurship as to Eastern European conditions.

Regarding research question 4 on training & development, Ashcrafts, Makhlouf's, Sundin's and MacLagan's views, as provided in the literature review, were confirmed by the research. It is suggested to focus on management and leadership for the middle management relating to project management, international teamwork, career planning, leading intrinsically motivated volunteers, fund application, importance of legal form for organizational development,

Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 75



Based on three qualitatively researched case studies on marginalized human groups in Hungary, Bosnia and Herzegovina and Croatia, this research provides the key success factors for and suggests factors to assess the impact of social entrepreneurship and crosssectoral co-operation in Eastern European settings. Whereas, Morral's (2010) model on key success factors seems to be generally confirmed, a more detailed differentiation of all the four variables as to Eastern European idiosyncrasies is suggested. A commonality, however, was found regarding the general categories of motivation, marketing (in terms of communication) and leadership (in terms of commitment). As to Morral's variable of 'connection' and Kaufmann's, Davies', and Schmidt's (1994) variable of 'synergy experience', a differentiation of the conceptualization in an Eastern European context as to volunteers, external support and cross-sectoral co-operation is urgently recommended. Additionally, the variables of management, idiosyncratic skills and attributes, attracting financial resources and organizational development have been found to be relevant in Eastern European social entrepreneurship. The necessity to differentiate conceptualizations in the field is also due an identity crisis which social entrepreneurship seems to able to overcome. Innovative contributions also refer to newly provided characteristics of social entrepreneurships and differentiated teaching and training content and methodologies. To make the overall cross-sectoral partnership process more smooth and trusting, it is recommended to include an education provider from the meta level (i.e. university) to act as a multidisciplinary catalyst for this urgently required construct and to improve effectiveness

Anonymous, (2011), Social Entrepreneurs Offer Different Model, *Strategic Direction*, Vol. 27,

Ashcraft, 2008 in Shockley, G.E. and Frank, P.M. (2010), Virgil's Aeneas as the Quintessential

Ashoka, 2010, in Makhlouf, H.H. (2011). Social Entrepreneurship: Generating Solutions to

Entrepreneurship 23 (2010 special issue):pp. 769-784

Ashoka (2011), "What is a Social Entrepreneur?" Retrieved from http://ashoka.org/social\_entrepreneur

Social Entrepreneur: Juxtaposing Selections from Epic Poetry and Entrepreneurship Theory to Teach Social Entrepreneurship. Journal of Small Business and

Global Challenges. International Journal of Management and Information Systems





and efficiency levels even more.

Nr. 6, pp. 15-18

15.1 (First Quarter 1-8)

**8. References** 

identity crisis

**7. Conclusions** 

strategy development, organizational hierarchies. Whereas transformational leadership focusing on visions, values and empowerment seems to reap very good results in terms of commitment, also instrumental leadership (i.e. in terms of strategy development) is recommended. For social entrepreneurs from non-entrepreneurship or non- management background a more comprehensive and basic education and training in all management and leadership roles is suggested. Regarding the teaching and training methodology, a more inductive rather than deductive approach is suggested due to the often mentioned emphasis on 'learning by doing' and a lack of existing knowledge structures.

With respect to question 5 on differentiated characteristics for Eastern European social entrepreneurs, a social- charitative feature, perceiving an educational mission as well as charisma can be mentioned Other characteristics and competences to be differentiated refer to 'learning by doing', frustration tolerance, cultural communication, conflict solving, lobbying, and pioneering. Further aspects refer to the ability to attract resources, both financial as well as good will and commitment, is suggested by the findings. The strive for continuous independence of social entrepreneurs in Eastern Europe is a commonality they share with traditional entrepreneurs. Latter aspect could be phrased as a very interesting leadership competence as to start a social movement.

Research question 6 was referred to in the paragraph on cross-sectoral co-operation. As a positive implication, the influence of church institutions, both as entrepreneurs and donators was highlighted. Positive implications were also attributed to the public sector, which was perceived as sensitive to social entrepreneurs' needs and providing supportive experience being even crucial for the social entrepreneurs' survival. The co-operation with the industry and SMEs referred mainly to funding and in-kind funding. The view towards the civil societies was ambiguous with negative implications referring to corruption and implicit high bureaucracy requiring the generation of mutual trust and selective choice of networks. From this finding, which points to a 'bottle neck' of cross- sectoral co-operation, it is recommended to expand training and teaching activities on the civil society actors as well. Ideally, an objective and multidisciplinary education provider, i.e. university, is recommended to inform, manage and train all partners involved in the cross- sectoral cooperation relating also to research question 4.

Regarding the assessment of impact factors of social entrepreneurship (research question 7), the findings entailed the following suggestions for measuring the impact of social entrepreneurship in Eastern Europe:


#### **7. Conclusions**

74 Entrepreneurship - Gender, Geographies and Social Context

strategy development, organizational hierarchies. Whereas transformational leadership focusing on visions, values and empowerment seems to reap very good results in terms of commitment, also instrumental leadership (i.e. in terms of strategy development) is recommended. For social entrepreneurs from non-entrepreneurship or non- management background a more comprehensive and basic education and training in all management and leadership roles is suggested. Regarding the teaching and training methodology, a more inductive rather than deductive approach is suggested due to the often mentioned emphasis

With respect to question 5 on differentiated characteristics for Eastern European social entrepreneurs, a social- charitative feature, perceiving an educational mission as well as charisma can be mentioned Other characteristics and competences to be differentiated refer to 'learning by doing', frustration tolerance, cultural communication, conflict solving, lobbying, and pioneering. Further aspects refer to the ability to attract resources, both financial as well as good will and commitment, is suggested by the findings. The strive for continuous independence of social entrepreneurs in Eastern Europe is a commonality they share with traditional entrepreneurs. Latter aspect could be phrased as a very interesting

Research question 6 was referred to in the paragraph on cross-sectoral co-operation. As a positive implication, the influence of church institutions, both as entrepreneurs and donators was highlighted. Positive implications were also attributed to the public sector, which was perceived as sensitive to social entrepreneurs' needs and providing supportive experience being even crucial for the social entrepreneurs' survival. The co-operation with the industry and SMEs referred mainly to funding and in-kind funding. The view towards the civil societies was ambiguous with negative implications referring to corruption and implicit high bureaucracy requiring the generation of mutual trust and selective choice of networks. From this finding, which points to a 'bottle neck' of cross- sectoral co-operation, it is recommended to expand training and teaching activities on the civil society actors as well. Ideally, an objective and multidisciplinary education provider, i.e. university, is recommended to inform, manage and train all partners involved in the cross- sectoral co-

Regarding the assessment of impact factors of social entrepreneurship (research question 7), the findings entailed the following suggestions for measuring the impact of social




on 'learning by doing' and a lack of existing knowledge structures.

leadership competence as to start a social movement.

operation relating also to research question 4.


stakeholders




approaches leading to more sustainable outcomes - creation of intellectual property to be publicly accredited

entrepreneurship in Eastern Europe:

Based on three qualitatively researched case studies on marginalized human groups in Hungary, Bosnia and Herzegovina and Croatia, this research provides the key success factors for and suggests factors to assess the impact of social entrepreneurship and crosssectoral co-operation in Eastern European settings. Whereas, Morral's (2010) model on key success factors seems to be generally confirmed, a more detailed differentiation of all the four variables as to Eastern European idiosyncrasies is suggested. A commonality, however, was found regarding the general categories of motivation, marketing (in terms of communication) and leadership (in terms of commitment). As to Morral's variable of 'connection' and Kaufmann's, Davies', and Schmidt's (1994) variable of 'synergy experience', a differentiation of the conceptualization in an Eastern European context as to volunteers, external support and cross-sectoral co-operation is urgently recommended. Additionally, the variables of management, idiosyncratic skills and attributes, attracting financial resources and organizational development have been found to be relevant in Eastern European social entrepreneurship. The necessity to differentiate conceptualizations in the field is also due an identity crisis which social entrepreneurship seems to able to overcome. Innovative contributions also refer to newly provided characteristics of social entrepreneurships and differentiated teaching and training content and methodologies. To make the overall cross-sectoral partnership process more smooth and trusting, it is recommended to include an education provider from the meta level (i.e. university) to act as a multidisciplinary catalyst for this urgently required construct and to improve effectiveness and efficiency levels even more.

#### **8. References**


Social Entrepreneurship and Cross-Sectoral Partnerships in CEE Countries 77

Evmorfopoulou, K. (2000) in Wilson, D. (2009) 'What Price Respect'- Exploring the Notion of

Frederick, W.C. (1994) in Moir, L. (2001) "What do we mean by corporate social

Friedrich, A. G. and Gale, V. E., (2004), Public-Private-Partnership, W. Bertelsmann Verlag,

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**5** 

*1,2USA 3Austria* 

**Motives for Entrepreneurship:** 

Josiane Fahed-Sreih1 and David Pistrui2,3 *1Department of Business Studies School of Business, Lebanese American University Byblos, Lebanon,* 

> *2Acumen Dynamics, LLC, Chicago, 3Austrian Economics Center Vienna,*

**The Case of Lebanese Family Businesses** 

Family businesses are the engine that drives socioeconomic development and wealth creation around the world, and entrepreneurship is a key driver of family businesses. The ability to build and keep the business running over generations is a major element of family business continuity and is influential in strategic execution, innovation, and growth. Entrepreneurial family businesses are a primary source of job creation (Shanker & Astrachan, 1996) in market economies where resources are allocated via supply and demand. In Lebanon, family businesses constitute 85% of the private sector, accounting for 1.05 million of 1.24 million jobs (Fahed-Sreih, 2006). The family unit is usually the only intact institution capable of sustaining entrepreneurial activities in Lebanon following

Lebanon provides a unique experiment where to explore entrepreneurship, family business, and SME development. Lebanese firms went through years of war and survived the massive destruction. Given the instability in the country in recent decades, it comes as no surprise that Lebanon has low scores when it comes to economic performance. Accordingly, researchers have a chance to spot, survey, and analyze the personality of new Lebanese entrepreneurs, the enterprises they are building, and family network

The general research question posed is: "What are the characteristics attributes, and growth orientations of Lebanese entrepreneurs and what relationships, roles, and contributions do

This study explores four dimensions shaping entrepreneurial characteristics and orientations: (a) the psychographic motives and demographic attributes of the entrepreneur, (b) the types of businesses being started, as well as their ownership structure and method of

family and culture play in the development of private SMEs?"

**1. Introduction 1.1 Overview** 

civil war.

involvement.


## **Motives for Entrepreneurship: The Case of Lebanese Family Businesses**

Josiane Fahed-Sreih1 and David Pistrui2,3

*1Department of Business Studies School of Business, Lebanese American University Byblos, Lebanon, 2Acumen Dynamics, LLC, Chicago, 3Austrian Economics Center Vienna, 1,2USA 3Austria* 

#### **1. Introduction**

#### **1.1 Overview**

80 Entrepreneurship - Gender, Geographies and Social Context

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Thompson, J., Alvy, G. and Lees, A., (2000), Social Entrepreneurship- a New Look at the People and the Potential, *Management Decision*, Vol. 38, Nr. 5, pp. 28-38 Tonoyan, V. (2011), Corruption and entrepreneurship: how formal and informal institutions

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US News & World Report. 2005. "The Social Entrepreneur Bill Drayton." 31-10. Retrieved from http://www.usnews.com/usnews/news/articles/051031/31drayton.htm Van Ryzin, G.G., Grossman, S., DiPadova-Stocks, and Bergrud, E..(2009), Portrait of the Social Entrepreneur: Statistical Evidence from a US Panel. Voluntas. 20:129-140 Visser, W. (2008), " CSR Drivers: The Forces Shaping Corporate Sustainability and Responsibility", CSR International Inspiration Series, No. 3Available at:

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shape small firm behavior in transition and mature market economies. Strategic

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39-48

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*Workplace Learning*, Vol. 11, Nr. 6, pp. 209-224

Family businesses are the engine that drives socioeconomic development and wealth creation around the world, and entrepreneurship is a key driver of family businesses. The ability to build and keep the business running over generations is a major element of family business continuity and is influential in strategic execution, innovation, and growth. Entrepreneurial family businesses are a primary source of job creation (Shanker & Astrachan, 1996) in market economies where resources are allocated via supply and demand. In Lebanon, family businesses constitute 85% of the private sector, accounting for 1.05 million of 1.24 million jobs (Fahed-Sreih, 2006). The family unit is usually the only intact institution capable of sustaining entrepreneurial activities in Lebanon following civil war.

Lebanon provides a unique experiment where to explore entrepreneurship, family business, and SME development. Lebanese firms went through years of war and survived the massive destruction. Given the instability in the country in recent decades, it comes as no surprise that Lebanon has low scores when it comes to economic performance. Accordingly, researchers have a chance to spot, survey, and analyze the personality of new Lebanese entrepreneurs, the enterprises they are building, and family network involvement.

The general research question posed is: "What are the characteristics attributes, and growth orientations of Lebanese entrepreneurs and what relationships, roles, and contributions do family and culture play in the development of private SMEs?"

This study explores four dimensions shaping entrepreneurial characteristics and orientations: (a) the psychographic motives and demographic attributes of the entrepreneur, (b) the types of businesses being started, as well as their ownership structure and method of

Motives for Entrepreneurship: The Case of Lebanese Family Businesses 83

unit. Finally, the family creates its own culture, in which family creates a motivating force that is central to private enterprise formation and enterprise preservation across successive

Dunkelberg and Cooper (1982) argue that growth orientation in and of itself represent an important entrepreneurial characteristic. Carland et al. (1984) suggest that planned growth is an important method of differentiating entrepreneurs from small business owners. This research intends to build on the work of Pistrui et al., (1997), Gundry and Welsch (2001), and Pistrui (2002) by advancing the understanding of how family participation and involvement affect growth orientations and expansion plans of Lebanese entrepreneurially led enterprises.

It is known in Lebanon and in the Arab world, that family business is a way to improve a family's social standing (Fahed-Sreih, 2006, p.206). This special way of managing a business in Arab countries relates to the socioeconomic and cultural backgrounds of these families

Usually succession is not openly discussed, older generation tend to keep in management, and refuse to give the power as long as they can stay in business. Lebanese family firms tend to exhibit perseverance, follow a path of self-reliance, and, despite the turmoil of war and

sually it is difficult for researches to collect data in developed countries with transitional economy. Having survived harsh wars, occupation and ongoing uncertainty, Lebanese firms are unenthusiastic to fill surveys. Besides, most enterprises are very cautious in sharing details of their companies. To overcome these obstacles, personal interviews were required. Drawing from the database of registered and active Lebanese entrepreneurially led enterprises on file with the Lebanese American University's Institute for Family and Entrepreneurial Business, a series of 112 in-depth personal interviews was conducted over a twelve-month period between May 2006-07. The interviews took place at the business premises with the founder, president, or CEO. Interviewees were assured of complete

The Entrepreneurial Profile Questionnaire (EPQ) was utilized as a data collection instrument. The EPQ was designed to survey the effect of individual, societal, and environmental factors on entrepreneurship and family business development by collecting a combination of demographic information and extensive detail related to characteristics and orientations. The EPQ was successfully piloted and validated through a series of studies in Romania (Pistrui, 2002, Pistrui et al., 1997), Germany (Pistrui et al., 2003, Wintermantel, 1999), Venezuela (Pistrui et al., 1999), South Africa (Welsch et al., 1996), the United States (Gundry et al., 2001, ), and China (Pistrui et al., 2006). The EPQ has been independently validated as a valuable data collection tool in transition economies such as post-communist

**4. Where are we from growth orientation, entrepreneurship, and family** 

**5. Lebanese culture, family dynamics, and business development** 

destruction, express optimism (Fahed-Sreih, 2006).

generations.

(Ali, 1993).

confidentiality.

Eastern and Central Europe.

**participation?** 

establishment, (c) family and enterprise relationships related to participation and influence including employment, investment, and advice, and (d) how family participation shapes and influences the growth intentions and expansion plans of Lebanese entrepreneurs.

By understanding how social forces affect entrepreneurial motives, we expect to find how culture influences and helps in starting a private enterprise. This study explores demographic aspects (age, education and experience), and how they help in starting a new business.

### **2. Entrepreneurship in a shaky economy**

Since ancient times, Lebanese then called Phoenicians; Lebanon was the center of commerce In the Middle east region. The country was famous for its marketing skills and its educated inhabitants. Before the 1970s, Lebanon's per capita income was similar to that of Southern Europe (Plamodon, 2004). This created a sophisticated consumer base, particularly in and around Beirut, Lebanon's capital.

Twenty years of civil war damaged Lebanon's infrastructure and cut its GNP output by half. After the war ended in 1991, Lebanon main source of income was tourism and banking. Following the September 11, 2001 attacks, Lebanon was seen as the secure place for the Arabs for deposits because of its banking secrecy and was no longer in war. Unfortunately, the assassination of Prime minister Rafic Hariri in February 2005 and afterward bombings major setbacks. Given its security crisis, Lebanon's GDP growth in the first quarter of 2005 was zero (The Daily Star, 2005).

Israeli occupation from 1978 to 2000 and Syrian occupation from 1978 to spring 2005 have left Lebanon with enormous political and financial problems to solve, including physical and social infrastructural reconstruction. The unexpected 34-day Israel-Hizbullah war in July 2006 further distressed the Lebanese economy. The 34 days of fighting killed 1200 Lebanese, destroyed 15,000 homes, and cost the economy approximately twelve billion dollars (The Economist, 2006). The Israeli-Hizbullah conflict caused an estimated \$3.6 billion in infrastructural damage during July and August 2006, and internal Lebanese political tensions continue to hamper economic activity (CIA, 2007). It is within this unstable framework wherein this study was undertaken.

#### **3. The socioeconomic process of entrepreneurship and the role of the family**

The family plays an important stabilizing role in social and economic value creation and trans generational wealth perpetuation processes (Habbershon & J. Pistrui, 2002).

Families play an important role during start-up and business development. This study assesses two general areas: 1) what is the direct role of family in the process of developing new venture, and 2) what is the direct role of family in the growth and expansion plans.

Family serves three major functions in its social system. First, it plays an economic role, (Steier, 2003) pointed out the substantial role that familial ties play in the entrepreneurial process, as the family represents a valuable repository of socio-economic resources. Family represents a learning element that teaches and passes on skills that encourage economic development. Secondly, family establishes a moral system, which helps the conduct of the

establishment, (c) family and enterprise relationships related to participation and influence including employment, investment, and advice, and (d) how family participation shapes and influences the growth intentions and expansion plans of Lebanese entrepreneurs.

By understanding how social forces affect entrepreneurial motives, we expect to find how culture influences and helps in starting a private enterprise. This study explores demographic aspects (age, education and experience), and how they help in starting a new

Since ancient times, Lebanese then called Phoenicians; Lebanon was the center of commerce In the Middle east region. The country was famous for its marketing skills and its educated inhabitants. Before the 1970s, Lebanon's per capita income was similar to that of Southern Europe (Plamodon, 2004). This created a sophisticated consumer base, particularly in and

Twenty years of civil war damaged Lebanon's infrastructure and cut its GNP output by half. After the war ended in 1991, Lebanon main source of income was tourism and banking. Following the September 11, 2001 attacks, Lebanon was seen as the secure place for the Arabs for deposits because of its banking secrecy and was no longer in war. Unfortunately, the assassination of Prime minister Rafic Hariri in February 2005 and afterward bombings major setbacks. Given its security crisis, Lebanon's GDP growth in the first quarter of 2005

Israeli occupation from 1978 to 2000 and Syrian occupation from 1978 to spring 2005 have left Lebanon with enormous political and financial problems to solve, including physical and social infrastructural reconstruction. The unexpected 34-day Israel-Hizbullah war in July 2006 further distressed the Lebanese economy. The 34 days of fighting killed 1200 Lebanese, destroyed 15,000 homes, and cost the economy approximately twelve billion dollars (The Economist, 2006). The Israeli-Hizbullah conflict caused an estimated \$3.6 billion in infrastructural damage during July and August 2006, and internal Lebanese political tensions continue to hamper economic activity (CIA, 2007). It is within this unstable

**3. The socioeconomic process of entrepreneurship and the role of the family**  The family plays an important stabilizing role in social and economic value creation and

Families play an important role during start-up and business development. This study assesses two general areas: 1) what is the direct role of family in the process of developing new venture, and 2) what is the direct role of family in the growth and expansion plans.

Family serves three major functions in its social system. First, it plays an economic role, (Steier, 2003) pointed out the substantial role that familial ties play in the entrepreneurial process, as the family represents a valuable repository of socio-economic resources. Family represents a learning element that teaches and passes on skills that encourage economic development. Secondly, family establishes a moral system, which helps the conduct of the

trans generational wealth perpetuation processes (Habbershon & J. Pistrui, 2002).

business.

**2. Entrepreneurship in a shaky economy** 

framework wherein this study was undertaken.

around Beirut, Lebanon's capital.

was zero (The Daily Star, 2005).

unit. Finally, the family creates its own culture, in which family creates a motivating force that is central to private enterprise formation and enterprise preservation across successive generations.

#### **4. Where are we from growth orientation, entrepreneurship, and family participation?**

Dunkelberg and Cooper (1982) argue that growth orientation in and of itself represent an important entrepreneurial characteristic. Carland et al. (1984) suggest that planned growth is an important method of differentiating entrepreneurs from small business owners. This research intends to build on the work of Pistrui et al., (1997), Gundry and Welsch (2001), and Pistrui (2002) by advancing the understanding of how family participation and involvement affect growth orientations and expansion plans of Lebanese entrepreneurially led enterprises.

#### **5. Lebanese culture, family dynamics, and business development**

It is known in Lebanon and in the Arab world, that family business is a way to improve a family's social standing (Fahed-Sreih, 2006, p.206). This special way of managing a business in Arab countries relates to the socioeconomic and cultural backgrounds of these families (Ali, 1993).

Usually succession is not openly discussed, older generation tend to keep in management, and refuse to give the power as long as they can stay in business. Lebanese family firms tend to exhibit perseverance, follow a path of self-reliance, and, despite the turmoil of war and destruction, express optimism (Fahed-Sreih, 2006).

sually it is difficult for researches to collect data in developed countries with transitional economy. Having survived harsh wars, occupation and ongoing uncertainty, Lebanese firms are unenthusiastic to fill surveys. Besides, most enterprises are very cautious in sharing details of their companies. To overcome these obstacles, personal interviews were required.

Drawing from the database of registered and active Lebanese entrepreneurially led enterprises on file with the Lebanese American University's Institute for Family and Entrepreneurial Business, a series of 112 in-depth personal interviews was conducted over a twelve-month period between May 2006-07. The interviews took place at the business premises with the founder, president, or CEO. Interviewees were assured of complete confidentiality.

The Entrepreneurial Profile Questionnaire (EPQ) was utilized as a data collection instrument. The EPQ was designed to survey the effect of individual, societal, and environmental factors on entrepreneurship and family business development by collecting a combination of demographic information and extensive detail related to characteristics and orientations. The EPQ was successfully piloted and validated through a series of studies in Romania (Pistrui, 2002, Pistrui et al., 1997), Germany (Pistrui et al., 2003, Wintermantel, 1999), Venezuela (Pistrui et al., 1999), South Africa (Welsch et al., 1996), the United States (Gundry et al., 2001, ), and China (Pistrui et al., 2006). The EPQ has been independently validated as a valuable data collection tool in transition economies such as post-communist Eastern and Central Europe.

Motives for Entrepreneurship: The Case of Lebanese Family Businesses 85

*Category Total Mean (SD) Mean (SD) Diff.* 

education 16.09 15.05 (3.56) 17.38 (1.82) 0.0264\*

experience 15.51 17.17 (14.79) 5.80 (5.36) 0.0000\*\*\*

experience 17.22 19.31 (15.04) 5.88 (5.99) 0.0000\*\*\* Age 41.41 43.29 (14.74) 31.19 (8.83) 0.0000\*\*\*

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Lebanese entrepreneurs have an average of 17 years of work experience. As Table 2 shows, Lebanese entrepreneurs were found to have close to 16 years of business experience (15.51 years on average). Male entrepreneurs have over eleven years more business experience than females. This reflects the fact that it is only within the last decade that Lebanese women have emerged as an active entrepreneurial group. These findings suggest that Lebanon has a deep-rooted entrepreneurial class and an emerging new group of dynamic female

The family is at the heart of the Lebanese society. Per Table 3, the family plays an important role in enterprise formation and development. These findings support the studies of Fahed-Sreih (2004), Wellman (2001), Sik et al. (1999), Poutziouris et al. (1997), and Pistrui et al. (1997, 2002, 2006), which show that the family plays a central role in venture development in

transitional economies that have experienced severe socioeconomic turmoil.

Question: 0 1 2 3 4+ Mean (SD) Question 1 20% 30% 19% 9% 7% 1.80 (1.60) Question 2 30% 19% 25% 8% 2% 3.40 (14.30) Question 3 53% 11% 18% 5% 3% 0.94 (1.25)

Table 3. Family and Enterprise Relationships – Investment and Employment

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Eighty percent of the firms interviewed have one or more family members investing in the business. Further indication of the importance of family involvement in funding start-ups is the fact that 50% of the firms surveyed have more than one family investor, and 15% have over four. Family employees are also active in enterprise creation, development, and operation. 70% of the companies surveyed employ at least one member of the family on a full-time basis.

*Question 1: How many family members are investors in your enterprise? Question 2: How many family members are full-time employees in your firm? Question 3: How many family members are part-time employees in your firm?* 

**Total** 112 93 19

Table 2. Demographic Profile: Business and Work Experience

N=112 \*\*\*α = 0.001, \*\* α = 0.01, \* α = 0.05

**8. Family and enterprise relationships** 

Years of

Years of business

Years of work

entrepreneurs.

 *Male Female Sign.* 

#### **6. Lebanese entrepreneurial motives**

In Table 1, the mean ratings of the top ten motive-based attributes were arranged in descending order, including the standard deviations. Given the fact that the attributes are not independent, a standard T-test of means was used to determine whether the overall mean ratings were different. Results verify that the attributes differ significantly in importance. The results suggest that Lebanese entrepreneurs are motivated by the need for independence and personal flexibility, family well-being, and the desire for high-income levels. Family security and family life also appear to be central motivating forces.


N= 112; Range: 1-5 \*\*\*α = 0.001, \*\*α= 0.01, \*α = 0.05

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Table 1. Top Ten Reasons and Motives for Entrepreneurship

Lebanese entrepreneurs are motivated to provide security and to generate the income necessary to create and protect a strong family life. This finding is consistent with the works of Melikian and Diab (1959, 1974), Barakat (1977), Diab (1980), Faour (1998), and Fahed-Sreih (2006), which document the family as the most important social entity among all social institutions in Lebanon. Lebanese entrepreneurs clearly have a unique set of motivational attributes when compared to other transition economies that have suffered socioeconomic turmoil.

#### **7. Demographic profile: Business and work experience**

Table 2 indicates the profile of our sample. The average age of our sample of Lebanese entrepreneurs is approximately 41 years old. Survey results suggest that entrepreneurship is not an exclusively male activity in Lebanon. Over fifteen percent (16.82%) of the entrepreneurs surveyed were women, which is similar to findings in China (Pistrui et al., 2006, 2005), Romania (Pistrui et al., 1997), and Hungary (Hisrich & Fulop, 1997). Furthermore, Fahed-Sreih (2006) points out that although men have historically dominated Lebanese culture, women are entering the work force and starting businesses.

Overall, Lebanese entrepreneurs have a high level of education. The vast majority have a college education, with women having about two years more education than men. It is clear is that Lebanese culture places great value on education and learning.



N=112 \*\*\*α = 0.001, \*\* α = 0.01, \* α = 0.05

84 Entrepreneurship - Gender, Geographies and Social Context

In Table 1, the mean ratings of the top ten motive-based attributes were arranged in descending order, including the standard deviations. Given the fact that the attributes are not independent, a standard T-test of means was used to determine whether the overall mean ratings were different. Results verify that the attributes differ significantly in importance. The results suggest that Lebanese entrepreneurs are motivated by the need for independence and personal flexibility, family well-being, and the desire for high-income

levels. Family security and family life also appear to be central motivating forces.

*Item Mean (SD)*  1. To be my own boss, to work for myself. 3.93 (.945)\*\*\* 2. To make better use of my training or skills. 3.89 (.902)\*\*\* 3. To give myself, my husband/wife and children security. 3.87 (.973)\*\*\* 4. Desire to have high earnings. 3.87 (.893)\*\*\* 5. To have greater flexibility in my personal and family life. 3.87 (.940)\*\*\* 6. To achieve something and get recognition for it. 3.86 (.887)\*\*\* 7. To make a direct contribution to the success of a company. 3.86 (1.036)\*\*\* 8. To be able to develop an idea for a product or a business. 3.85 (.848)\*\*\* 9. To control my own time. 3.85 (.859)\*\*\* 10. To have the opportunity to lead, rather than be led by others. 3.84 (.924)\*\*\*

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Lebanese entrepreneurs are motivated to provide security and to generate the income necessary to create and protect a strong family life. This finding is consistent with the works of Melikian and Diab (1959, 1974), Barakat (1977), Diab (1980), Faour (1998), and Fahed-Sreih (2006), which document the family as the most important social entity among all social institutions in Lebanon. Lebanese entrepreneurs clearly have a unique set of motivational attributes when compared to other transition economies that have suffered socioeconomic

Table 2 indicates the profile of our sample. The average age of our sample of Lebanese entrepreneurs is approximately 41 years old. Survey results suggest that entrepreneurship is not an exclusively male activity in Lebanon. Over fifteen percent (16.82%) of the entrepreneurs surveyed were women, which is similar to findings in China (Pistrui et al., 2006, 2005), Romania (Pistrui et al., 1997), and Hungary (Hisrich & Fulop, 1997). Furthermore, Fahed-Sreih (2006) points out that although men have historically dominated

Overall, Lebanese entrepreneurs have a high level of education. The vast majority have a college education, with women having about two years more education than men. It is clear

**6. Lebanese entrepreneurial motives** 

N= 112; Range: 1-5 \*\*\*α = 0.001, \*\*α= 0.01, \*α = 0.05

turmoil.

Table 1. Top Ten Reasons and Motives for Entrepreneurship

**7. Demographic profile: Business and work experience** 

Lebanese culture, women are entering the work force and starting businesses.

is that Lebanese culture places great value on education and learning.

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Table 2. Demographic Profile: Business and Work Experience

Lebanese entrepreneurs have an average of 17 years of work experience. As Table 2 shows, Lebanese entrepreneurs were found to have close to 16 years of business experience (15.51 years on average). Male entrepreneurs have over eleven years more business experience than females. This reflects the fact that it is only within the last decade that Lebanese women have emerged as an active entrepreneurial group. These findings suggest that Lebanon has a deep-rooted entrepreneurial class and an emerging new group of dynamic female entrepreneurs.

#### **8. Family and enterprise relationships**

The family is at the heart of the Lebanese society. Per Table 3, the family plays an important role in enterprise formation and development. These findings support the studies of Fahed-Sreih (2004), Wellman (2001), Sik et al. (1999), Poutziouris et al. (1997), and Pistrui et al. (1997, 2002, 2006), which show that the family plays a central role in venture development in transitional economies that have experienced severe socioeconomic turmoil.


*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Table 3. Family and Enterprise Relationships – Investment and Employment

Eighty percent of the firms interviewed have one or more family members investing in the business. Further indication of the importance of family involvement in funding start-ups is the fact that 50% of the firms surveyed have more than one family investor, and 15% have over four. Family employees are also active in enterprise creation, development, and operation. 70% of the companies surveyed employ at least one member of the family on a full-time basis.

Motives for Entrepreneurship: The Case of Lebanese Family Businesses 87

This illustrates the strength of family within the entrepreneurial development of SMEs in Lebanon. Approximately twenty percent of respondents indicated that they purchased their enterprise. It would be interesting to know if they were purchased outright or from family

The findings of this study suggest that Lebanese entrepreneurs are either creating new family enterprises or carrying on the family business as part of a succession process. The results of this study suggest that over 80% of the entrepreneurs surveyed are leading family businesses. It is evident that there will be an emerging need for succession and continuity assistance as

Following the post-war economy, the Lebanese entrepreneurs are supervising the rebuilding and development process, filling the voids and gaps, responding to the marketplace demand, and disrupting the geo-political grip imposed by Syrian and Israeli occupation. Three types of business activity, construction (24.30%), retail (17.76%), and professional services (15.89%), were found to dominate the sample (see Table 4). These three

The study focuses on how family participation in employment and financial investment,

\*\*\*α 0.001 \*\*α 0.01 \* α 0.05 N = 112 Range 1-5 *Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Table 5. Growth Intentions and Expansion Plans

these businesses mature and integrate additional family members into their operations.

indexes represented well over half (57.95%) of those enterprises surveyed.

**12. Family participation, growth Intentions, and expansion plans** 

influence growth intentions and expansion plans of Lebanese entrepreneurs.

 Item Mean (SD) 1. Adding operating space. 3.88 (1.07)\*\*\* 2. Acquiring new equipment. 3.72 (1.01)\*\*\* 3. Selling to a new market. 3.71 (1.21)\*\*\* 4. Expand current facilities. 3.68 (1.12)\*\*\* 5. Expanding distribution channels. 3.65 (1.17)\*\*\* 6. Adding specialized employees. 3.64 (1.16)\*\*\* 7. Expanding advertising and promotion. 3.61 (1.04)\*\*\* 8. Researching new markets. 3.53 (1.05)\*\*\* 9. Redesigning layout. 3.52 (1.07)\*\*\* 10. Upgrading computer systems. 3.50 (1.05)\*\*\* 11. Adding a new product or service. 3.49 (1.23)\*\*\* 12. Replace present equipment. 3.47 (1.11)\*\*\* 13. Computerizing current operations. 3.47 (1.06)\*\*\* 14. Expanding scope of operating activities. 3.41 (1.13)\*\*\* 15. Redesigning operating methods. 3.30 (1.14)\*\*\* 16. Offsite training for employees. 3.28 (1.20)\*\*\* 17. Seeking additional financing. 3.18 (1.22)\*\*\* 18. Seeking professional advice. 3.16 (1.18)\*\*\*

members as part of a succession process.

**11. Business activities of lebanese entrepreneurs** 

Approximately 35% employ two or more family members on a full-time basis. In contrast, the majority of Lebanese enterprises did not employ family members on a part-time basis.

Employment is seen as a family's obligation. Fahed-Sreih (2006) reported that there was a strong relationship between Lebanese families and their enterprises. Businesses are viewed as an extension of the family.

#### **9. Type of business organization**

The is 41% sole proprietorships, 37 % corporations and 20% limited liability companies (see table 4). These facts indicate that entrepreneurially led SMEs are closely held private enterprises built on family and extended family financial support.

#### **10. Method of establishment**


N = 112

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Table 4. Business Organization and Activities of Lebanese Entrepreneurs

Slightly over half (52.34%) of the entrepreneurs surveyed originated their enterprises. As Table 4 shows, almost one third of these entrepreneurs (28.04%) inherited their business.

Approximately 35% employ two or more family members on a full-time basis. In contrast, the

Employment is seen as a family's obligation. Fahed-Sreih (2006) reported that there was a strong relationship between Lebanese families and their enterprises. Businesses are viewed

The is 41% sole proprietorships, 37 % corporations and 20% limited liability companies (see table 4). These facts indicate that entrepreneurially led SMEs are closely held private

enterprises built on family and extended family financial support.

Sole proprietorship 41.00 Corporation 37.10 Limited liability company (LLC) 20.00 Partnership 1.90 Total 100.00

Originate 52.34 Inherit 28.04 Purchase 19.62 Total 100.00

1. Construction 24.30 2. Retail 17.76 3. Professional services 15.89 4. Computer/technology 14.02 5. Financial/insurance 11.21 6. Service organization 7.48 7. Transportation 5.61 8. Distribution 2.80 9. Manufacturer 0.93 Total 100.00

**Business Activities of Lebanese Entrepreneurs** 

*Registered as: Percent of Total* 

*Technique Percent of Total* 

 *Business activities Percent of Total* 

Table 4. Business Organization and Activities of Lebanese Entrepreneurs

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Slightly over half (52.34%) of the entrepreneurs surveyed originated their enterprises. As Table 4 shows, almost one third of these entrepreneurs (28.04%) inherited their business.

majority of Lebanese enterprises did not employ family members on a part-time basis.

as an extension of the family.

**9. Type of business organization** 

**10. Method of establishment Type of Business Organization** 

**Method of Establishment** 

N = 112

This illustrates the strength of family within the entrepreneurial development of SMEs in Lebanon. Approximately twenty percent of respondents indicated that they purchased their enterprise. It would be interesting to know if they were purchased outright or from family members as part of a succession process.

The findings of this study suggest that Lebanese entrepreneurs are either creating new family enterprises or carrying on the family business as part of a succession process. The results of this study suggest that over 80% of the entrepreneurs surveyed are leading family businesses. It is evident that there will be an emerging need for succession and continuity assistance as these businesses mature and integrate additional family members into their operations.

#### **11. Business activities of lebanese entrepreneurs**

Following the post-war economy, the Lebanese entrepreneurs are supervising the rebuilding and development process, filling the voids and gaps, responding to the marketplace demand, and disrupting the geo-political grip imposed by Syrian and Israeli occupation. Three types of business activity, construction (24.30%), retail (17.76%), and professional services (15.89%), were found to dominate the sample (see Table 4). These three indexes represented well over half (57.95%) of those enterprises surveyed.

### **12. Family participation, growth Intentions, and expansion plans**

The study focuses on how family participation in employment and financial investment, influence growth intentions and expansion plans of Lebanese entrepreneurs.


*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Table 5. Growth Intentions and Expansion Plans

Motives for Entrepreneurship: The Case of Lebanese Family Businesses 89

example, the squared multiple correlations (SMC) of 0.526 in H1 reveal that FP explains 52.6% of variance in EU. The path coefficient in H1 is 0.756. All paths are statistically

> Squared Multiple correlation

EquipUpg 0.526 0.725 \*\*\*

BusDev 0.761 0.872 \*\*\*

OpExp 0.484 0.695 \*\*\*

ITUpg 0.408 0.639 \*\*\*

MktExp 0.508 0.713 \*\*\*

MktDev 0.662 0.814 \*\*\*

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al,* 

**16. So what- practical implications for entrepreneurs and policy makers** 

Lebanon represents both unique opportunities and challenges to enterprises large and small. There are many emerging opportunities to work with Lebanese entrepreneurs both at home and abroad. This research provides helpful insights that have sensible applications for

This study was made on a small sample of Lebanese entrepreneurs in a traumatic post-war economy. Although it shows part of the Lebanese society, it provides one remarkable caution and distrust permeating Lebanese society. The insights provided in this research mark a rare and in-depth examination into the engine driving the reconstruction of the post-

This study highlights the vital need for the Lebanese government to support the Lebanese companies with financial resources, services and create innovative programs. This is critical for the growth of new businesses, as well as the continuity and succession of larger, more

war economy, with family participation serving as a strong component.

Standardized regression coefficient

p-value

significant at the 0.001 level.

Hypothesis Testing the relationship between

H1 FP has a positive impact on

H2 FP has a positive impact on

H3 FP has a positive impact on

H4 FP has a positive impact on

H5 FP has a positive impact on

H6 FP has a positive impact on

entrepreneurs and businesses in general.

Table 6. Summary of the Parameters for the Research Model

\*\*\* denotes p<0.001

**17. Conclusion** 

established companies.

*2010)* 

The growth model was developed, tested, and confirmed the validity of a growth model based on entrepreneurs' intentions to implement specific attributes associated with market expansion, technological upgrades, and operation/production expansion. Based on this research, we hypothesize that family participation in the business has a positive impact and encourages entrepreneurial growth intentions and expansion plans. Growth intentions and expansion plans were measured along eighteen items as presented in table 5.

#### **13. Structural equation modeling**

The research model was tested using covariance–based Structural Equation Modeling (SEM). The evaluation on the measurement model includes an exploratory factor analysis to identify the constructs and examine the convergent and discriminant validity of the research instrument. The evaluation on the structural model consists of estimation of path coefficients and their associated significance p-value. Squared multiple correlations (SMC) are calculated to know the proportion of explained variance in the each construct. Finally, the evaluation of the overall model is on the overall goodness-of-fit for SEM.

SEM is a powerful multivariate technique that facilitates the testing of psychometric properties of the scales used to measure unobserved variables (constructs) as well as estimate the parameters of a structural model, which is the magnitude and direction of the relationship among the model variables (Bollen 1989, Genfen et al. 2000, Hair et al. 1998). SEM embodies two interrelated models. The measurement model represents the relationships between the observed items and their constructs measured by these items, while the structural model represents the paths among a set of dependent and independent variables.

#### **14. Assessment of the structural model**

The structural model shown in Figure 1 provides the hypothesized relationships between Family Participation (FP) and the growth constructs. As previously discussed, we hypothesized that Lebanese cultural traditions encourage family participation. This in turn has a positive impact on entrepreneurial growth intentions and expansion plans. Thus, we will further define and dissect the specific types of growth constructs and how FP affects these subsets. The hypotheses were tested by SEM, using the input model in AMOS (Analysis for Moments Structures), as shown in Figure 2. The Maximum Likelihood function was used to estimate the model parameters.

#### **15. The impact of family participation, growth intentions and expansion plans**

Family participation in the business has a positive impact and encourages the entrepreneurial development and expansion. Participation of the family in employment and investment, revealed to be encouraging too. These findings conclude that new emerging family businesses tend to expand and grow which lead to witness a transition from war and foreign occupation to an open market economy.

Six specific growth constructs have been identified and validated in these entrepreneurially led family enterprises. Using AMOS 5.0.1, we obtained the results presented in Table 6. For example, the squared multiple correlations (SMC) of 0.526 in H1 reveal that FP explains 52.6% of variance in EU. The path coefficient in H1 is 0.756. All paths are statistically significant at the 0.001 level.


\*\*\* denotes p<0.001

88 Entrepreneurship - Gender, Geographies and Social Context

The growth model was developed, tested, and confirmed the validity of a growth model based on entrepreneurs' intentions to implement specific attributes associated with market expansion, technological upgrades, and operation/production expansion. Based on this research, we hypothesize that family participation in the business has a positive impact and encourages entrepreneurial growth intentions and expansion plans. Growth intentions and

The research model was tested using covariance–based Structural Equation Modeling (SEM). The evaluation on the measurement model includes an exploratory factor analysis to identify the constructs and examine the convergent and discriminant validity of the research instrument. The evaluation on the structural model consists of estimation of path coefficients and their associated significance p-value. Squared multiple correlations (SMC) are calculated to know the proportion of explained variance in the each construct. Finally,

SEM is a powerful multivariate technique that facilitates the testing of psychometric properties of the scales used to measure unobserved variables (constructs) as well as estimate the parameters of a structural model, which is the magnitude and direction of the relationship among the model variables (Bollen 1989, Genfen et al. 2000, Hair et al. 1998). SEM embodies two interrelated models. The measurement model represents the relationships between the observed items and their constructs measured by these items, while the structural model represents the paths among a set of dependent and independent

The structural model shown in Figure 1 provides the hypothesized relationships between Family Participation (FP) and the growth constructs. As previously discussed, we hypothesized that Lebanese cultural traditions encourage family participation. This in turn has a positive impact on entrepreneurial growth intentions and expansion plans. Thus, we will further define and dissect the specific types of growth constructs and how FP affects these subsets. The hypotheses were tested by SEM, using the input model in AMOS (Analysis for Moments Structures), as shown in Figure 2. The Maximum Likelihood function

**15. The impact of family participation, growth intentions and expansion plans**  Family participation in the business has a positive impact and encourages the entrepreneurial development and expansion. Participation of the family in employment and investment, revealed to be encouraging too. These findings conclude that new emerging family businesses tend to expand and grow which lead to witness a transition from war and

Six specific growth constructs have been identified and validated in these entrepreneurially led family enterprises. Using AMOS 5.0.1, we obtained the results presented in Table 6. For

expansion plans were measured along eighteen items as presented in table 5.

the evaluation of the overall model is on the overall goodness-of-fit for SEM.

**13. Structural equation modeling** 

**14. Assessment of the structural model** 

was used to estimate the model parameters.

foreign occupation to an open market economy.

variables.

*Source: Family and Cultural Factors impacting Entrepreneurship in war time Lebanon, (Fahed-Sreih et al, 2010)* 

Table 6. Summary of the Parameters for the Research Model

#### **16. So what- practical implications for entrepreneurs and policy makers**

Lebanon represents both unique opportunities and challenges to enterprises large and small. There are many emerging opportunities to work with Lebanese entrepreneurs both at home and abroad. This research provides helpful insights that have sensible applications for entrepreneurs and businesses in general.

#### **17. Conclusion**

This study was made on a small sample of Lebanese entrepreneurs in a traumatic post-war economy. Although it shows part of the Lebanese society, it provides one remarkable caution and distrust permeating Lebanese society. The insights provided in this research mark a rare and in-depth examination into the engine driving the reconstruction of the postwar economy, with family participation serving as a strong component.

This study highlights the vital need for the Lebanese government to support the Lebanese companies with financial resources, services and create innovative programs. This is critical for the growth of new businesses, as well as the continuity and succession of larger, more established companies.

Motives for Entrepreneurship: The Case of Lebanese Family Businesses 91

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1(7), 1-78.

XV (3): 223-237.

**18. References** 

84.

Texas Press.


**6** 

*Brazil* 

**Entrepreneurship:** 

*Federal University of São Carlos,* 

**Geographies and Social Context** 

Elaine Da Silveira Leite and Natalia Maximo e Melo

This paper presents some researches' results conducted by the authors between 2006 and 2010. It aims to analyze the process in which entrepreneurship rose in Brazil, focus on SEBRAE (Brazilian Service of Support *for* Micro and Small Enterprises). It is an institution whose origin is associated with government policies, principally, between 1970 and 1980.

Since the 1970s, the media, newspaper and best-seller books have been reported the entrepreneurship as an economic practice that promotes national economy development. According to Swedberg (2001), entrepreneurship movement spread around the world without regard to differences in the countries, their mindset and values related to economic

There are many social aspects that favored the rise of entrepreneurship in several countries such as the revival of small and medium enterprises (SMEs), changes in political and economic ideology after Thatcher and Reagan government (1979-1980) and the passage of Keynesianism, which promoted pro-market policies. The unemployment, which has haunted this period, also encouraged the perception that new businesses could create jobs in

In the U.S., entrepreneurship was already discussed since the 1950s. However, the researches about the SMEs were not directly linked to the entrepreneurship; it focuses on the SMEs as creator of employment. SEBRAE is the main institution responsible for conducting quantitative research that addressed the topic of micro and small enterprises in

Serva (2002) realized a literature review and pointed out that the entrepreneurship is often puzzled with small enterprises issues in Brazil. The author has mapped entrepreneurship's courses in Brazilian universities. As a result, it was noted that by the 1980's, the first business courses deal with companies issues, and after, they were renamed to emphasize

In this way, Brazilian academic researchers about entrepreneurship also focus on small and micro enterprises. These researches aim to evaluate the entrepreneurial businessmen contrasting their actions and performances established by the academic literature about entrepreneurship. Other studies emphasize the introduction of technology in micro and

Brazil. These surveys have been served as empirical material for academic studies.

**1. Introduction** 

and social activities.

scale (Swedberg, 2001).

what is called entrepreneurship.

Welsch H., and Pistrui, D., (1996). Essential Elements in Entrepreneurship Development in South Africa: An Analysis of Affecting Factors, *International Council for Small Business, 41st World Conference Proceedings*, Stockholm, Sweden, June 16-19, 105- 127.

## **Entrepreneurship: Geographies and Social Context**

Elaine Da Silveira Leite and Natalia Maximo e Melo *Federal University of São Carlos, Brazil* 

#### **1. Introduction**

92 Entrepreneurship - Gender, Geographies and Social Context

Welsch H., and Pistrui, D., (1996). Essential Elements in Entrepreneurship Development

127.

 in South Africa: An Analysis of Affecting Factors, *International Council for Small Business, 41st World Conference Proceedings*, Stockholm, Sweden, June 16-19, 105-

> This paper presents some researches' results conducted by the authors between 2006 and 2010. It aims to analyze the process in which entrepreneurship rose in Brazil, focus on SEBRAE (Brazilian Service of Support *for* Micro and Small Enterprises). It is an institution whose origin is associated with government policies, principally, between 1970 and 1980.

> Since the 1970s, the media, newspaper and best-seller books have been reported the entrepreneurship as an economic practice that promotes national economy development. According to Swedberg (2001), entrepreneurship movement spread around the world without regard to differences in the countries, their mindset and values related to economic and social activities.

> There are many social aspects that favored the rise of entrepreneurship in several countries such as the revival of small and medium enterprises (SMEs), changes in political and economic ideology after Thatcher and Reagan government (1979-1980) and the passage of Keynesianism, which promoted pro-market policies. The unemployment, which has haunted this period, also encouraged the perception that new businesses could create jobs in scale (Swedberg, 2001).

> In the U.S., entrepreneurship was already discussed since the 1950s. However, the researches about the SMEs were not directly linked to the entrepreneurship; it focuses on the SMEs as creator of employment. SEBRAE is the main institution responsible for conducting quantitative research that addressed the topic of micro and small enterprises in Brazil. These surveys have been served as empirical material for academic studies.

> Serva (2002) realized a literature review and pointed out that the entrepreneurship is often puzzled with small enterprises issues in Brazil. The author has mapped entrepreneurship's courses in Brazilian universities. As a result, it was noted that by the 1980's, the first business courses deal with companies issues, and after, they were renamed to emphasize what is called entrepreneurship.

> In this way, Brazilian academic researchers about entrepreneurship also focus on small and micro enterprises. These researches aim to evaluate the entrepreneurial businessmen contrasting their actions and performances established by the academic literature about entrepreneurship. Other studies emphasize the introduction of technology in micro and

Entrepreneurship: Geographies and Social Context 95

In Latin America, there is not much separation between management and other administrative activities, the bureaucratic norms are weak, the personal characteristics are more valued than the organizational skills, and the managers are recruited based on family relationships. It is interest to observe that national and foreign authors believed that traditional companies were not a good business model. It justified their exclusion in relation

Until the 1970s, the illustrative factor of national modernity was concentrated in large companies. It was in large companies that new technologies and better jobs were found in that period. The small enterprises were dependent on big companies. Considered as large thumbnails, small enterprises would present a general tendency to become great, otherwise,

Even in the 1970s, the academic studies were developed based on the informal economy notion, in which it was defined as an easy way to get into businesses. The ownership was individual or controlled by families, the production was based on small-scale, the technology was adapted, and the markets were competitive and unregulated. In this

The economic activities, that did not fit the rhetoric capital versus labor, did not emerge in the literature or appear classified as belonging to the informal economy were activities considered transitional to the wage labor. They were temporary activities realized by migrants that came from rural places or other countries. That is, activities related to the lack of job. By the way, it was stated that these activities would tend to come to an end or to

In the 1970s, not all banks employed a definition to describe the company size (small, medium and large - but not micro enterprises at that time). This frame served the purposes of defining the credit market to businesses. In that moment, there was no goverment legislation to define the tax laws. In this period, it appears the CEBRAE (Center for Management Assistance to Small and Medium Enterprises), the first government entity to support small and medium enterprises, in which the main goal was to support the credit

According to the IBGE (Brazilian Institute of Geography and Statistics), it was in the 1980s, that Brazil had witnessed a slowdown of economic growth accompanied by an increase unemployment level. In this moment, small enterprises became an alternative occupation and it brought the first initiatives that favored the rise of micro and small enterprises. As a result, it become institutionalized the company categories by their size that improve

From 1990's, small enterprises issues reached the media and SEBRAE (Brazilian Service to Support Micro and Small Enterprises) replaced the CEBRAE, which ceased to exist in 1989s.

It also marked the history of small enterprises institutionalization as company category and also the advances in some political system, for example, unions, associations and the emergence of discussions forum. In summary, the initiatives that have institutionalized small enterprises in Brazil: First Small Enterprises Law (1984); Inclusion of SME's in the Federal Constitution (1988); Establishment of credit lines coming from the public sector;

These were two important factors to the entrepreneurship institutionalization.

to incentive and support programs, both by public policies and private bank.

economic sphere that small enterprises were located in the national economy.

reduce as long as the industrialization move forward in Brazil.

it would tend to fail.

orientation.

incentives and tax laws.

small enterprises in order to achieve greater competitiveness. There is also another perspective that understands entrepreneurship as a set of strategies such as creation, growth and survival of micro and small enterprises. An additional group of authors were concerned with entrepreneurship as a discipline; they were dedicated to analyze education programs at universities and the rise of other institutions that promote the entrepreneurship.

Finally, there are also academics works that adhere to the peculiarities of projects driven by ethnic and minority groups such as women. Consequently, there are various social actors that make reference to entrepreneurship as a way to tackle the economic problems presented in some developing country. They are researchers, consultants, journalists, etc. This scenario led us to investigate the origin of this phenomenon in Brazil. After all, if the entrepreneurship had no stimulus, how was it been developed in Brazil?

The process that stimulates the entrepreneurship also is concerned symbolically in promoting national economic growth. To comprehend the entrepreneurship dynamic is important to be familiar with the small enterprises progress issues. So, it is also important to understand the Brazilian economy scenario since 1970s.

#### **2. Theories of economic development and small enterprises issues**

In the 1970s, the academic literature suggested that the debate around national development was the transition from a rural economy to an urban and industrial economy. The national policies points were the industrialization process and new forms of labor occupation that emerged in that scenario (Abramo and Miller, 1995).

Diniz and Boschi (1978) present that, in the 1930s, the literature take for granted the industrial irrelevance in the Brazilian economy sphere, as well as, the political corporate elite insignificance that marked that decade. The authors traced some considerations about small enterprises spread that formed a single market from wage labor. Diniz and Boschi explained that there were large numbers of small enterprises composing the industrial sector, but the large enterprise already formed a solid business elite.

In spite of this, the academic literature until the 1970s focused on analysis that related capital *versus* labor, in which the intermediate layers as small enterprises owners had no place in national economic development or the small enterprises were consider merely to illustrate the corporate elite as having a political power (Wanderley, 1999).

Brazil, when compared with companies from developed countries, appeared as a pattern of "traditional" companies, because they were related to family management. Within the modernization, Brazilian companies should go through a rational process of management. Therefore, Cardoso (1964) studied the Brazilian economy modernization, regarding not only the transition from agrarian to industrial economy, but also the internal transformations that occurred in Brazilian industry.

Cardoso's effort expressed the perception that symbolically involved Brazilian companies in 1960s and 1970s. The idea that family businesses predominate in Brazil and Latin America was also reproduced in the academic literature. Lipset (2000), for example, established an evaluation between North-American and Latin American literature, as a result, it pointed out that there were differences among the cultures related to the organizational level and the companies' management.

small enterprises in order to achieve greater competitiveness. There is also another perspective that understands entrepreneurship as a set of strategies such as creation, growth and survival of micro and small enterprises. An additional group of authors were concerned with entrepreneurship as a discipline; they were dedicated to analyze education programs

Finally, there are also academics works that adhere to the peculiarities of projects driven by ethnic and minority groups such as women. Consequently, there are various social actors that make reference to entrepreneurship as a way to tackle the economic problems presented in some developing country. They are researchers, consultants, journalists, etc. This scenario led us to investigate the origin of this phenomenon in Brazil. After all, if the

The process that stimulates the entrepreneurship also is concerned symbolically in promoting national economic growth. To comprehend the entrepreneurship dynamic is important to be familiar with the small enterprises progress issues. So, it is also important to

In the 1970s, the academic literature suggested that the debate around national development was the transition from a rural economy to an urban and industrial economy. The national policies points were the industrialization process and new forms of labor occupation that

Diniz and Boschi (1978) present that, in the 1930s, the literature take for granted the industrial irrelevance in the Brazilian economy sphere, as well as, the political corporate elite insignificance that marked that decade. The authors traced some considerations about small enterprises spread that formed a single market from wage labor. Diniz and Boschi explained that there were large numbers of small enterprises composing the industrial

In spite of this, the academic literature until the 1970s focused on analysis that related capital *versus* labor, in which the intermediate layers as small enterprises owners had no place in national economic development or the small enterprises were consider merely to

Brazil, when compared with companies from developed countries, appeared as a pattern of "traditional" companies, because they were related to family management. Within the modernization, Brazilian companies should go through a rational process of management. Therefore, Cardoso (1964) studied the Brazilian economy modernization, regarding not only the transition from agrarian to industrial economy, but also the internal transformations that

Cardoso's effort expressed the perception that symbolically involved Brazilian companies in 1960s and 1970s. The idea that family businesses predominate in Brazil and Latin America was also reproduced in the academic literature. Lipset (2000), for example, established an evaluation between North-American and Latin American literature, as a result, it pointed out that there were differences among the cultures related to the organizational level and

at universities and the rise of other institutions that promote the entrepreneurship.

entrepreneurship had no stimulus, how was it been developed in Brazil?

**2. Theories of economic development and small enterprises issues** 

understand the Brazilian economy scenario since 1970s.

emerged in that scenario (Abramo and Miller, 1995).

occurred in Brazilian industry.

the companies' management.

sector, but the large enterprise already formed a solid business elite.

illustrate the corporate elite as having a political power (Wanderley, 1999).

In Latin America, there is not much separation between management and other administrative activities, the bureaucratic norms are weak, the personal characteristics are more valued than the organizational skills, and the managers are recruited based on family relationships. It is interest to observe that national and foreign authors believed that traditional companies were not a good business model. It justified their exclusion in relation to incentive and support programs, both by public policies and private bank.

Until the 1970s, the illustrative factor of national modernity was concentrated in large companies. It was in large companies that new technologies and better jobs were found in that period. The small enterprises were dependent on big companies. Considered as large thumbnails, small enterprises would present a general tendency to become great, otherwise, it would tend to fail.

Even in the 1970s, the academic studies were developed based on the informal economy notion, in which it was defined as an easy way to get into businesses. The ownership was individual or controlled by families, the production was based on small-scale, the technology was adapted, and the markets were competitive and unregulated. In this economic sphere that small enterprises were located in the national economy.

The economic activities, that did not fit the rhetoric capital versus labor, did not emerge in the literature or appear classified as belonging to the informal economy were activities considered transitional to the wage labor. They were temporary activities realized by migrants that came from rural places or other countries. That is, activities related to the lack of job. By the way, it was stated that these activities would tend to come to an end or to reduce as long as the industrialization move forward in Brazil.

In the 1970s, not all banks employed a definition to describe the company size (small, medium and large - but not micro enterprises at that time). This frame served the purposes of defining the credit market to businesses. In that moment, there was no goverment legislation to define the tax laws. In this period, it appears the CEBRAE (Center for Management Assistance to Small and Medium Enterprises), the first government entity to support small and medium enterprises, in which the main goal was to support the credit orientation.

According to the IBGE (Brazilian Institute of Geography and Statistics), it was in the 1980s, that Brazil had witnessed a slowdown of economic growth accompanied by an increase unemployment level. In this moment, small enterprises became an alternative occupation and it brought the first initiatives that favored the rise of micro and small enterprises. As a result, it become institutionalized the company categories by their size that improve incentives and tax laws.

From 1990's, small enterprises issues reached the media and SEBRAE (Brazilian Service to Support Micro and Small Enterprises) replaced the CEBRAE, which ceased to exist in 1989s. These were two important factors to the entrepreneurship institutionalization.

It also marked the history of small enterprises institutionalization as company category and also the advances in some political system, for example, unions, associations and the emergence of discussions forum. In summary, the initiatives that have institutionalized small enterprises in Brazil: First Small Enterprises Law (1984); Inclusion of SME's in the Federal Constitution (1988); Establishment of credit lines coming from the public sector;

Entrepreneurship: Geographies and Social Context 97

From the 1990s, SEBRAE introduced a program to encourage entrepreneurship that is linked to UN (United Nations Organization). This program, Empretec, is applied in several countries to stimulate economic development from individual behavior. And, it is the base for all other entrepreneurship programs elaborated by SEBRAE. The Empretec will be the

Entrepreneurship was a conventional subject from economic theory. Schumpeter (1982) is considered the classical theorist of entrepreneurship. He suggests that the connection between innovation and business leadership generates economic development,

Schumpeter has two articles about entrepreneurship. The first is the second chapter of his book "Theory of Economic Development" and the second article is a paper prepared for a Handbook in 1928. The first is the his best known work. In the first edition of his book, Schumpeter presented a more heroic entrepreneur concept and its activities. He also affirms that some people present characteristics to be an entrepreneur while others do not have the

In addition, there is a recent psychological bias known as behaviorism, in which the characteristic of the entrepreneur goes beyond the creative and innovative skills. For the behaviorist, the entrepreneur is also the man who organizes the firm and increases its productive capacity. McClelland, the principal representative of the behaviorists, sustains the notion that it is through these entrepreneur activities that is possible to achieve economic development. From this perspective, individuals frequently tend to seek for improvement

This perspective stresses a combination between economic variables such as technology, capital, etc. and psychological attributes. The entrepreneur pointed out by Schumpeter is no longer an economic function located in a given time into the economic cycle, but now, the behaviorist perspective presented that the entrepreneur becomes a kind of human being.

In this sense, the small enterprises have become embedded in the economic development project and the entrepreneur became an important economic actor that needs to be stimulated to reach the success. This new circumstances could be explained by the concepts of entrepreneurship and entrepreneurs that have been studied and motivated by academic

In general, the notion of entrepreneurship began to be massively spread to the global society from the 60's, especially after the UN (United Nations Organization) published as unsatisfactory some results about financial incentives given to developing countries. Therefore, UN has been relied on surveys conducted by behavioral psychologists, especially Dr. David McClelland that also acts together with USAID (United States Agengy for International Development), in which pointed out that individuals who are motivated have

The behavioral research conducted by McClelland was used by MSI (Management Systems International) consulting firm that elaborated a methodology for behavioral training. This

subject of the next chapter.

same competence.

theories.

better performances.

**4. Entrepreneurship and Empretec** 

and individual progress (McClelland, 1961).

theoretically, it contrasts with the neoclassical perspective.

Law n. 9317, which established special tax by company size (1996); Law n. 9841, which established the status of SME's (1999); Establishment of a SME's Permanent Forum (1999).

The SME's was considered a kind of traditional company, but it survived from the imperatives of capital. Today, SME's formed an economic niche with potential great to stimulate modernization and economic development in Brazil.

#### **3. The rise of SEBRAE**

The Brazilian economic process that incorporated small enterprises as part of the national economic development agenda is essential to comprehend the rise of Cebrae, an institution that is the principal proponent of entrepreneurship nowadays in Brazil.

The CEBRAE, an institution that emerged in the 1970s, as a state apparatus, gained preeminence when the national economic policies established by a dictatorial government were seeking to promote industrialization. The rise of CEBRAE/SEBRAE is the main focus of this paper, because it was consider one of the principal institutions recognized to stimulate the entrepreneurship in Brazil. This institution has gone through several historical phases as the economic policies of governments have changed, but it was always linked to the prospect of national development.

CEBRAE was constituted as a government structure from 1972 to 1990. While the organization was linked to the State, it operated mainly credit programs focus on credit concession and managerial assistance through consulting activities. The credit was granted by BNDE (National Bank for Economic Development) and Regional Development Banks, administered by the government.

This structure was changed in 1990, when CEBRAE was transformed into an autonomous social service institution. In other words, it became part of parastatal organizations and its name was changed to SEBRAE. Throughout its history, this institution has operated credit policies for industry, but as the national development policy changes to other sectors, SEBRAE needed to ensure its position, so it was necessary to SEBRAE accompany the scenario changes. "SEBRAE came into being in 1972 as result of a pioneer initiative of many institutions that encourage entrepreneurship in the country.1"

These organizational changes followed the restructuring of companies trend in the 1990s, requiring that SEBRAE programs must be changed. In this point of view, SEBRAE introduced the entrepreneurship program and it also transformed the old programs into the entrepreneurial perspectives.

Therefore, entrepreneurship became associated with the historic of the institution and it is also part of the national economic scenario, in which large companies went through restructuring process, because the levels of unemployment rates were increasing in that period. The small enterprises promotion had the entrepreneurship theme as a slogan that appeared associated to the national development program in the 1990s.

<sup>1</sup> Information taken from:

http://www.sebrae.com.br/customizado/sebrae/institucional/sebrae-in-english. June, 2011.

Law n. 9317, which established special tax by company size (1996); Law n. 9841, which established the status of SME's (1999); Establishment of a SME's Permanent Forum (1999). The SME's was considered a kind of traditional company, but it survived from the imperatives of capital. Today, SME's formed an economic niche with potential great to

The Brazilian economic process that incorporated small enterprises as part of the national economic development agenda is essential to comprehend the rise of Cebrae, an institution

The CEBRAE, an institution that emerged in the 1970s, as a state apparatus, gained preeminence when the national economic policies established by a dictatorial government were seeking to promote industrialization. The rise of CEBRAE/SEBRAE is the main focus of this paper, because it was consider one of the principal institutions recognized to stimulate the entrepreneurship in Brazil. This institution has gone through several historical phases as the economic policies of governments have changed, but it was always linked to

CEBRAE was constituted as a government structure from 1972 to 1990. While the organization was linked to the State, it operated mainly credit programs focus on credit concession and managerial assistance through consulting activities. The credit was granted by BNDE (National Bank for Economic Development) and Regional Development Banks,

This structure was changed in 1990, when CEBRAE was transformed into an autonomous social service institution. In other words, it became part of parastatal organizations and its name was changed to SEBRAE. Throughout its history, this institution has operated credit policies for industry, but as the national development policy changes to other sectors, SEBRAE needed to ensure its position, so it was necessary to SEBRAE accompany the scenario changes. "SEBRAE came into being in 1972 as result of a pioneer initiative of many

These organizational changes followed the restructuring of companies trend in the 1990s, requiring that SEBRAE programs must be changed. In this point of view, SEBRAE introduced the entrepreneurship program and it also transformed the old programs into the

Therefore, entrepreneurship became associated with the historic of the institution and it is also part of the national economic scenario, in which large companies went through restructuring process, because the levels of unemployment rates were increasing in that period. The small enterprises promotion had the entrepreneurship theme as a slogan that

stimulate modernization and economic development in Brazil.

institutions that encourage entrepreneurship in the country.1"

appeared associated to the national development program in the 1990s.

http://www.sebrae.com.br/customizado/sebrae/institucional/sebrae-in-english. June, 2011.

that is the principal proponent of entrepreneurship nowadays in Brazil.

**3. The rise of SEBRAE** 

the prospect of national development.

administered by the government.

entrepreneurial perspectives.

1 Information taken from:

From the 1990s, SEBRAE introduced a program to encourage entrepreneurship that is linked to UN (United Nations Organization). This program, Empretec, is applied in several countries to stimulate economic development from individual behavior. And, it is the base for all other entrepreneurship programs elaborated by SEBRAE. The Empretec will be the subject of the next chapter.

#### **4. Entrepreneurship and Empretec**

Entrepreneurship was a conventional subject from economic theory. Schumpeter (1982) is considered the classical theorist of entrepreneurship. He suggests that the connection between innovation and business leadership generates economic development, theoretically, it contrasts with the neoclassical perspective.

Schumpeter has two articles about entrepreneurship. The first is the second chapter of his book "Theory of Economic Development" and the second article is a paper prepared for a Handbook in 1928. The first is the his best known work. In the first edition of his book, Schumpeter presented a more heroic entrepreneur concept and its activities. He also affirms that some people present characteristics to be an entrepreneur while others do not have the same competence.

In addition, there is a recent psychological bias known as behaviorism, in which the characteristic of the entrepreneur goes beyond the creative and innovative skills. For the behaviorist, the entrepreneur is also the man who organizes the firm and increases its productive capacity. McClelland, the principal representative of the behaviorists, sustains the notion that it is through these entrepreneur activities that is possible to achieve economic development. From this perspective, individuals frequently tend to seek for improvement and individual progress (McClelland, 1961).

This perspective stresses a combination between economic variables such as technology, capital, etc. and psychological attributes. The entrepreneur pointed out by Schumpeter is no longer an economic function located in a given time into the economic cycle, but now, the behaviorist perspective presented that the entrepreneur becomes a kind of human being.

In this sense, the small enterprises have become embedded in the economic development project and the entrepreneur became an important economic actor that needs to be stimulated to reach the success. This new circumstances could be explained by the concepts of entrepreneurship and entrepreneurs that have been studied and motivated by academic theories.

In general, the notion of entrepreneurship began to be massively spread to the global society from the 60's, especially after the UN (United Nations Organization) published as unsatisfactory some results about financial incentives given to developing countries. Therefore, UN has been relied on surveys conducted by behavioral psychologists, especially Dr. David McClelland that also acts together with USAID (United States Agengy for International Development), in which pointed out that individuals who are motivated have better performances.

The behavioral research conducted by McClelland was used by MSI (Management Systems International) consulting firm that elaborated a methodology for behavioral training. This

Entrepreneurship: Geographies and Social Context 99

Entrepreneurial Culture (EUCD). Some SEBRAE instructors also helped to implement the entrepreneurship program in other countries like Romania, Jordan, northern Italy, Angola,

Empretec is the basis for the entrepreneurship programs developed by SEBRAE. In this sense, it is important to understand how Empretec training is been conducted and what means entrepreneurship nowadays. These issues will be elaborated in the next chapter.

Having started in 1988, Empretec is now operating in 10 countries (Argentina, Brazil, Chile, Colombia, Ghana, Morocco, Nigeria, Uruguay, Venezuela and Zimbabwe). Well over 10,000 "empretecos" (one third of them women) have participated in ED

Empretec is a program that provides training in entrepreneurship for small and medium enterprises in developing countries. Its activities involve the delivery of motivational and technical seminars, the provision of advisory services and the development of national and

The Empretec seminars usually have six days trainning. Over 100 thousand people have taken the Empretec in Brazil5. The seminar focuses on entrepreneurs or people who decided to open their own business. Initiatives in seeking opportunities, aptitude to take risks, persistence and objectivity in goal setting are some of the behaviors focused on the course.

Programmers can also help to orient educators and the educational curricula to the relevance of entrepreneurship development. Vocational schools and university programmers, especially in such fields as business and engineering, can encourage students to apply their skills by starting new businesses and they can assist them in doing so. At the primary and secondary levels, it may be most appropriate to focus on

The seminar has different activities such as dynamics interaction and lectures with professors and it also is supported by fictional stories as motivational tool. It is possible found the entrepreneur in different activities, that is, there are several reasons and means to be entrepreneur, but the final result is the individual ability to become an entrepreneur that

These fictional stories symbolic have the capacity to change the perception about the social world, emphasizing the existence of different social actors that figure as an entrepreneur,

In:http://www.undp.mn/publications/essentials/document/english/EssentialsEntrepreneurship2.pd

In:http://www.undp.mn/publications/essentials/document/english/EssentialsEntrepreneurship2.pd

Mozambique, etc.

**5. The entrepreneurship by Empretec** 

workshops and related follow-up services3.

developing entrepreneurial attitudes6.

3 Entrepreneurship Development

6 Entrepreneurship Development

f . UNCTAD. P. 08.

f . UNCTAD. P. 07

<sup>4</sup> *Ibid*. 5 Ibid.

is measured by its economic success not by social context.

international networks serving the needs of entrepreneurs4.

coaching is composed of behavioral dynamics and it is applied in many countries, especially in the developing ones. This program was named Empretec. In Brazil, it is applied by SEBRAE since 1993.

The Empretec methodology (developed by David McClelland at Harvard University) is based on the finding that everyone has an inner motivation to improve. This "motive for action" is divided into three motivational categories: achievement, affiliation, and power2.

There are 10 Personal Entrepreneurial Competencies, which form the basis of the Empretec Training Workshop. The 10 competencies are: Opportunity-seeking and initiative, Persistence, Fulfilling of commitments, Demand for quality and efficiency, Calculated risktaking, Goal-setting, Information-seeking, Systematic planning and monitoring, Persuasion and networking, Independence and self-confidence.

Empretec is presented by UNCTAD as a program that aim to promote small and medium enterprises as well as business skills. It can be applied to different people from businessmen to government officials. The Empretec Foundation in Argentina, the entity that applies the program in the country, discloses that the Empretec was created to foster entrepreneurship in developing countries.

The Empretec program should be requested to the UNCTAD to be implemented in the countries. The entity is responsible to evaluate and to select what local organizations could apply the program. After, the methodology be transferred to the partner institutions or Empretec national centers, it is expected that the next workshops would be implemented by the local team, but within the UNCTAD Program framework.

Although, there is no other entrepreneurship program that replaces the Empretec. By the way, it is possible to find some alternatives programs that stimulate entrepreneurship skills. The Empretec suffers from high competition. The Universities have been developed entrepreneurship programs and consulting firms that are interest to enter in the educational entrepreneurship market.

In 1991, the Empretec was developed by the State Bank of Rio Grande do Sul (Banresul) in Brazil. In 1993, it was implemented by SEBRAE, today there is about 550 locations around the country. In UNCTAD's report, Brazil has been highlighted to conduct significant numbers of seminars about the topic. Moreover, Brazil also held international events every year.

The Empretec plays a central role in the activities of SEBRAE. The other courses offered by SEBRAE are also shaped by Empretec content, for example, "Know how to be an endeavor" and "Learning to endeavor". The material distributed also aggregated the entrepreneur subject, but focus on different audiences.

SEBRAE also incorporated the entrepreneurship into its organizational structure, programs and transformed the Education Unit in the Education Unit and Development of

<sup>2</sup> Source UNCTAD, 2011.

coaching is composed of behavioral dynamics and it is applied in many countries, especially in the developing ones. This program was named Empretec. In Brazil, it is applied by

There are 10 Personal Entrepreneurial Competencies, which form the basis of the Empretec Training Workshop. The 10 competencies are: Opportunity-seeking and initiative, Persistence, Fulfilling of commitments, Demand for quality and efficiency, Calculated risktaking, Goal-setting, Information-seeking, Systematic planning and monitoring, Persuasion

Empretec is presented by UNCTAD as a program that aim to promote small and medium enterprises as well as business skills. It can be applied to different people from businessmen to government officials. The Empretec Foundation in Argentina, the entity that applies the program in the country, discloses that the Empretec was created to foster entrepreneurship

The Empretec program should be requested to the UNCTAD to be implemented in the countries. The entity is responsible to evaluate and to select what local organizations could apply the program. After, the methodology be transferred to the partner institutions or Empretec national centers, it is expected that the next workshops would be implemented by

Although, there is no other entrepreneurship program that replaces the Empretec. By the way, it is possible to find some alternatives programs that stimulate entrepreneurship skills. The Empretec suffers from high competition. The Universities have been developed entrepreneurship programs and consulting firms that are interest to enter in the educational

In 1991, the Empretec was developed by the State Bank of Rio Grande do Sul (Banresul) in Brazil. In 1993, it was implemented by SEBRAE, today there is about 550 locations around the country. In UNCTAD's report, Brazil has been highlighted to conduct significant numbers of seminars about the topic. Moreover, Brazil also held international events every

The Empretec plays a central role in the activities of SEBRAE. The other courses offered by SEBRAE are also shaped by Empretec content, for example, "Know how to be an endeavor" and "Learning to endeavor". The material distributed also aggregated the entrepreneur

SEBRAE also incorporated the entrepreneurship into its organizational structure, programs and transformed the Education Unit in the Education Unit and Development of

The Empretec methodology (developed by David McClelland at Harvard University) is based on the finding that everyone has an inner motivation to improve. This "motive for action" is divided into three motivational categories: achievement, affiliation, and

SEBRAE since 1993.

power2.

in developing countries.

entrepreneurship market.

2 Source UNCTAD, 2011.

subject, but focus on different audiences.

year.

and networking, Independence and self-confidence.

the local team, but within the UNCTAD Program framework.

Entrepreneurial Culture (EUCD). Some SEBRAE instructors also helped to implement the entrepreneurship program in other countries like Romania, Jordan, northern Italy, Angola, Mozambique, etc.

Empretec is the basis for the entrepreneurship programs developed by SEBRAE. In this sense, it is important to understand how Empretec training is been conducted and what means entrepreneurship nowadays. These issues will be elaborated in the next chapter.

#### **5. The entrepreneurship by Empretec**

Having started in 1988, Empretec is now operating in 10 countries (Argentina, Brazil, Chile, Colombia, Ghana, Morocco, Nigeria, Uruguay, Venezuela and Zimbabwe). Well over 10,000 "empretecos" (one third of them women) have participated in ED workshops and related follow-up services3.

Empretec is a program that provides training in entrepreneurship for small and medium enterprises in developing countries. Its activities involve the delivery of motivational and technical seminars, the provision of advisory services and the development of national and international networks serving the needs of entrepreneurs4.

The Empretec seminars usually have six days trainning. Over 100 thousand people have taken the Empretec in Brazil5. The seminar focuses on entrepreneurs or people who decided to open their own business. Initiatives in seeking opportunities, aptitude to take risks, persistence and objectivity in goal setting are some of the behaviors focused on the course.

Programmers can also help to orient educators and the educational curricula to the relevance of entrepreneurship development. Vocational schools and university programmers, especially in such fields as business and engineering, can encourage students to apply their skills by starting new businesses and they can assist them in doing so. At the primary and secondary levels, it may be most appropriate to focus on developing entrepreneurial attitudes6.

The seminar has different activities such as dynamics interaction and lectures with professors and it also is supported by fictional stories as motivational tool. It is possible found the entrepreneur in different activities, that is, there are several reasons and means to be entrepreneur, but the final result is the individual ability to become an entrepreneur that is measured by its economic success not by social context.

These fictional stories symbolic have the capacity to change the perception about the social world, emphasizing the existence of different social actors that figure as an entrepreneur,

<sup>3</sup> Entrepreneurship Development

In:http://www.undp.mn/publications/essentials/document/english/EssentialsEntrepreneurship2.pd f . UNCTAD. P. 08.

<sup>4</sup> *Ibid*. 5 Ibid.

<sup>6</sup> Entrepreneurship Development

In:http://www.undp.mn/publications/essentials/document/english/EssentialsEntrepreneurship2.pd f . UNCTAD. P. 07

Entrepreneurship: Geographies and Social Context 101

Aldrich, H.E. "Entrepreneurship." In: SWEDBERG, Richard; SMELSER, Neil (org), *Handbook* 

Boltanski, L; Chiapello, E. El Nuevo Espíritu del Capitalismo*.* In: *Cuestiones de Antagonismo*,

Cardoso, F. H. *Empresário industrial e desenvolvimento econômico no Brasil*. São Paulo: Difusão

Cassiolato, J.E.; Lastres, H.M.M. O foco em arranjos produtivos e inovativos locais de micro

Colbari, A. *A retórica do empreendedorismo e a formação para o trabalho na sociedade brasileira*,

\_\_\_\_\_. *Trabalho, auto-emprego e pequeno negócio: reconfigurando as estratégias de capacitação profissional e de desenvolvimento local*. XXX Encontro Anual da Anpocs, 2006. Cypriano, C. A. Pequena empresa, desenvolvimento social e ação institucionalizadora do

Diniz, Eli; Boschi, Renato R. *Empresariado nacional e Estado no Brasil.* Rio de Janeiro: Forense-

Dornelas, J. C. A. *Empreendedorismo: transformando idéias em negócios*. Rio de Janeiro: Elsevier,

Fligstein, N. O mercado enquanto política: uma abordagem político-cultural às instituições

Granovetter, Mark. The Economic Sociology of Firms and Entrepreneurs. In: Swedberg,

Lipset. Seymour M. Values and Entrepreneurship in the Americas. In: Swedberg, R.(org.)

Lopes, Eliana B. M. *O SEBRAE e as relações público - privado no Brasil.* Dissertação de

López-Ruiz, O.J. *Da ética protestante ao ethos empresarial: "capital humano" e "* 

Martinelli, Alberto. "Entrepreneurship and Management". In Smelser, Neil and Swedberg,

em www.cebrap.org.br. Acessado em 23 de janeiro de 2008.

McClelland, David C.. *The achieving society.* New York: Free Press, 1967

Grun, Roberto. Em busca da nova pequena burguesia brasileira. *Dados*, 2000, vol.43, no. Huczynski, A. *Management Gurus: what makes them and how to become one.* London and New

de mercado. In: Marques, R, Peixoto, João( org). *A nova Sociologia Econômica*. Oeiras:

R.(org.) *Entrepreneurship: the social sciense view*. New York: The Oxford University

*Entrepreneurship: the social sciense view*. New York: The Oxford University Press,

*empreendedorismo" como valores sociais*. Seminário CEBRAP, Fev/ 2007. Disponível

Richard (editors). *The Handbook of Economic Sociology*. Princeton: Princeton

Sebrae. Tese de Doutorado, Escola de Administração, UFBA, 2004.

e pequenas empresas. In: Lastres, H. M. M. (Org.); Cassiolato, J. E. (Org.); Maciel, M. L. (Org.). *Pequena empresa: cooperação e desenvolvimento local.* Rio de Janeiro:

VIII Congresso Luso-Afro-Brasileiro de Ciências Sociais, Universidade de Coimbra,

Bourdieu, Pierre. *O Poder Simbólico*. Tradução de Fernando Tomaz. Lisboa Difel, 1989.

\_\_\_\_\_. O campo econômico. In: *Política e Sociedade.*n.6, abril de 2005.

Foundation, 2004.

Akal: Madrid, 2002.

Européia do Livro, 1972.

Relume Dumará, 2003.

Universitária, 1978.

Celta Editora, 2003

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University Press.1994.

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2000.

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16 a 18 de setembro de 2004.

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for example, housewife and unemployed. The types of entrepreneurs (housewife and unemployed) present different ways to carry out economic activity, such as, reasons (opportunity, necessity) and means (underutilized resources, technological competence).

Thus, it evidences that the entrepreneurship content spread by Empretec organizes the relationship of individuals between themselves and the world, performing individual qualities perceptions. What makes people from different social classes and activities be identified (and identify themselves) as entrepreneurs is the characteristics shared by the same social meanings setting, even if they lead failure or success.

#### **6. Final considerations**

Currently, there are a lot of advertising, publishing books and magazines, TV shows and universities that spread the entrepreneurship; what makes the term and the ideas that it carries embedness in social thoughts. This dynamic makes the term seems a natural characteristic of individual.

The Empretec training, as well as events, lectures, media, success stories, which are in vogue by the 2000s, aims to spread a belief that ensure adherence to voluntary activities of individuals capitalist as well as the social construction of an new ethic that recognized as "good" or "fair" the entrepreneurship. And so, it produces a cultural change that alters practices and perceptions about the economic world and social development in Brazil.

Entrepreneurship, as a way of reframing the small enterprises and labor world, values informal activities, people that was excluded from business world and banned from formal employment. Even if the objective conditions of the social structure do not change deeply, at least, it changes how they are socially viewed, that is, the excluded individuals move to the positive pole, or at least, the individual have the option to transform his economic condition.

In Brazil, SEBRAE is an institution that expresses the social process and condenses the new social values that allows entrepreneurship be developed in Brazil. SEBRAE via entrepreneurship have been aggregated a public which had no support and social legitimacy to become an entrepreneur.

Instead of a definitive conclusion, this study allows us to raise questions about the economic development in Brazil. Does it possible understand the entrepreneur behavior as an issue that expresses national economic development? Now, within the entrepreneurship movement, is the individual economic success a single factor in the country?

#### **7. References**


for example, housewife and unemployed. The types of entrepreneurs (housewife and unemployed) present different ways to carry out economic activity, such as, reasons (opportunity, necessity) and means (underutilized resources, technological competence).

Thus, it evidences that the entrepreneurship content spread by Empretec organizes the relationship of individuals between themselves and the world, performing individual qualities perceptions. What makes people from different social classes and activities be identified (and identify themselves) as entrepreneurs is the characteristics shared by the

Currently, there are a lot of advertising, publishing books and magazines, TV shows and universities that spread the entrepreneurship; what makes the term and the ideas that it carries embedness in social thoughts. This dynamic makes the term seems a natural

The Empretec training, as well as events, lectures, media, success stories, which are in vogue by the 2000s, aims to spread a belief that ensure adherence to voluntary activities of individuals capitalist as well as the social construction of an new ethic that recognized as "good" or "fair" the entrepreneurship. And so, it produces a cultural change that alters practices and perceptions about the economic world and social development in Brazil.

Entrepreneurship, as a way of reframing the small enterprises and labor world, values informal activities, people that was excluded from business world and banned from formal employment. Even if the objective conditions of the social structure do not change deeply, at least, it changes how they are socially viewed, that is, the excluded individuals move to the positive pole, or at least, the individual have the option to transform his economic condition. In Brazil, SEBRAE is an institution that expresses the social process and condenses the new social values that allows entrepreneurship be developed in Brazil. SEBRAE via entrepreneurship have been aggregated a public which had no support and social

Instead of a definitive conclusion, this study allows us to raise questions about the economic development in Brazil. Does it possible understand the entrepreneur behavior as an issue that expresses national economic development? Now, within the entrepreneurship

Abramo, Laís e Montero, Cecília. A sociologia do Trabalho na América Latina: paradigmas

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movement, is the individual economic success a single factor in the country?

same social meanings setting, even if they lead failure or success.

**6. Final considerations** 

characteristic of individual.

legitimacy to become an entrepreneur.

*contextos.* Rio de Janeiro: FGV, 2006.

**7. References** 

65-83.


\_\_\_\_\_. O campo econômico. In: *Política e Sociedade.*n.6, abril de 2005.


**7** 

*Romania* 

**Does Romania Have a Chance to** 

*2Association for Promoting Electronic Technology, APTE,* 

Alexandru Borcea1 and Rosemari Fuica2

**Join the Innovation Driven Economy?** 

*1Romanian Association for Electronic & Software Industry, ARIES,* 

After two decades of democracy and four and a half year joining the EU, Romania's economic performance is still lagging behind almost all EU member states. Overheating its economy two years before and one year after joining EU, with an average annual GDP growth of over 6%, at the end of 2008, Romania was bitterly stroked by the world financial crisis. Unaccustomed with economic forecasts and foresights, low cohesion of its business environment, and lack of vision, Romania pasted the crisis in confusion and low self trust. But crisis almost past away and Romania is still not finding its own way and its place in EU and the world economy. The well trained workforce of the country is used efficiently mainly by foreign organizations, or left the country. Real cooperation between research organizations, universities and industry, almost doesn't exist. With a traditional regional low trust in government and own trade and professional organizations, it will be hard for

And new challenges are rising at the horizon. The developed countries observed that innovation driven countries past much easier the crisis than followers and strengthen their research and innovation policies and programs. More than this, the BRIC countries, which are counting for almost the half of the world population, developed and put in place very ambitious programs which have to bring those countries in 2020 to the innovation driven economy. The "Europe 2020" and the Chinese development program, for the same time horizon, which have to create 60% of the 2020 Chinese GDP by innovation, are good

The concern about the chance of Romania and the measures to be taken to guide our country to the innovation driven economy is lasting from more than 15 years. The Romanian Association for Electronic and Software Industry - ARIES, and The Association for Promoting Electronic Technology - APTE made several surveys, studies, strategies and policy papers to support the innovation process and culture for the electronic and software industry of

As methodology we used, both for analysis and synthesis of the strategies and policy papers the model developed by Prof. Michael Porter. But in the surveys we used also questions which came from our members and stakeholders, which reflect their needs and aspirations too. For the level of trust, which we are considering to be a crucial factor for how to shape

the Romanian companies to be competitive in the future.

**1. Introduction** 

examples of those challenges.

Romania.


## **Does Romania Have a Chance to Join the Innovation Driven Economy?**

Alexandru Borcea1 and Rosemari Fuica2 *1Romanian Association for Electronic & Software Industry, ARIES, 2Association for Promoting Electronic Technology, APTE, Romania* 

#### **1. Introduction**

102 Entrepreneurship - Gender, Geographies and Social Context

Montaño, C. *Microempresa na era da Globalização uma abordagem histórico-crítica*. 2 ed. São

Noronha,E.G. *"*Informal" Ilegal, Injusto: percepções do mercado de trabalho no Brasil*.*

Portes, A. "The informal economy and its paradoxes", *in* N. Smelser e R. Swedberg (orgs), *The handbook of economic sociology*, Princeton, Princeton University Press, 1996 Polanyi, K. The economy as instited process. In: *The sociology of economic life*. Granovetter,

Ralio, Vanise R. Z. *Consultoria e Cooperativismo: cooperativa de consultores e espaço de consultoria brasileiro*. Dissertação Mestrado em Engenharia de Produção : UFSCar: 2007 Serva, Mauricio. Contribuição da sociologia econômica à teoria das organizações. *Revista* 

Smelser, N. e R. Swedberg. The sociological perspective on the economy in: *The Handbook of* 

Schumpeter, J. A. *Teoria do desenvolvimento econômico: uma investigação sobre lucros, capital, crédito, juro e o ciclo econômico*. Serie Economistas. São Paulo: Abril Cultural. 1982. Silva, Nilson Carlos Duarte da. *Valorização da formação da cultura empreendedora dentro da* 

Souza Neto, Bezamat. *Contribuição e Elementos para um Metamodelo Empreendedor Brasileiro: O* 

Wanderley, F. Pequenos negócios, industrialização local e redes de relações econômicas:

Weber, Max. *A Ética Protestante e o Espírito do Capitalismo*. São Paulo: Martin Claret, 2001

*universidade. Um estudo de casos: UFSC, UFMG e PUC-Rio*. ( dissertação de mestrado

*Empreendedorismo de Necessidade do Virador*. [Tese - Universidade Federal do Rio de

uma revisão bibliográfica em sociologia econômica. *BIB*, Rio de Janeiro, nO.48, 2O

*Revista Brasileira de Ciências Sociais*. Nov. 2003 Vol. 20, nº 53.

Mark; Swedberg, Richard (orgs). Boulder: Westview Press, 1992

*Economic Sociology*. Princeton: Princeton University Press. 1994.

*Sociedade Estado. Vol. VXVII (1). Brasília, 2002* 

– Dep Eng. Produção) São Carlos: UFSCar, 2002.

Janeiro] COPPE, Rio de Janeiro, 2003.

semestre de 1999, pp. 15-49

Paulo: Cortez, 2001

After two decades of democracy and four and a half year joining the EU, Romania's economic performance is still lagging behind almost all EU member states. Overheating its economy two years before and one year after joining EU, with an average annual GDP growth of over 6%, at the end of 2008, Romania was bitterly stroked by the world financial crisis. Unaccustomed with economic forecasts and foresights, low cohesion of its business environment, and lack of vision, Romania pasted the crisis in confusion and low self trust.

But crisis almost past away and Romania is still not finding its own way and its place in EU and the world economy. The well trained workforce of the country is used efficiently mainly by foreign organizations, or left the country. Real cooperation between research organizations, universities and industry, almost doesn't exist. With a traditional regional low trust in government and own trade and professional organizations, it will be hard for the Romanian companies to be competitive in the future.

And new challenges are rising at the horizon. The developed countries observed that innovation driven countries past much easier the crisis than followers and strengthen their research and innovation policies and programs. More than this, the BRIC countries, which are counting for almost the half of the world population, developed and put in place very ambitious programs which have to bring those countries in 2020 to the innovation driven economy. The "Europe 2020" and the Chinese development program, for the same time horizon, which have to create 60% of the 2020 Chinese GDP by innovation, are good examples of those challenges.

The concern about the chance of Romania and the measures to be taken to guide our country to the innovation driven economy is lasting from more than 15 years. The Romanian Association for Electronic and Software Industry - ARIES, and The Association for Promoting Electronic Technology - APTE made several surveys, studies, strategies and policy papers to support the innovation process and culture for the electronic and software industry of Romania.

As methodology we used, both for analysis and synthesis of the strategies and policy papers the model developed by Prof. Michael Porter. But in the surveys we used also questions which came from our members and stakeholders, which reflect their needs and aspirations too. For the level of trust, which we are considering to be a crucial factor for how to shape

Does Romania Have a Chance to Join the Innovation Driven Economy? 105

A significant lag behind is registered still in open innovation and technology transfer. If in the most developed countries university innovation means over 50% revenues, in Romania, technology transfer, spin offs and acquisition of innovative companies are almost inexistent. The Romanian universities and research centers do not passed a radical transformation to become real resource centers for human resources or new products for the market. Their research and innovation experience and know how of them are still missing and the trust of

If we are taking into consideration that Israel is producing more than 45% of its GDP from innovation, and the 2020 horizon of China is to produce more than 60% of its GDP by

A significant lack of government services to support the competitiveness of the companies acting in the country and especially a low interest and appetite of the local governments to rise and support the local competitiveness is also an impediment for the self trust of the companies. Science and technology parks are totally missing, and the related support services of the governments, which abound in the developed countries, are also missing. For this reason, the clustering and their synergetic effects are in an incipient phased

However it has to be mentioned the program of the Ministry of Economy, Commerce and Business Environment to support the internationalization of the Romanian companies by trade missions and participation at international fairs of more than 500 companies per year, and the branding of different industries, which really has a real impact in contracting on foreign markets and on the image and trust in our country. In the last three years of crisis the export of our country rose over 50%, in contrast to the domestic market which

A similar important vector for the competitiveness of the Romanian companies, during the integration fever, was also the significant growth of the internal market, which became four times larger as before this process, assuring more market and product expertise for the emerging domestic companies and the size of the FDIs. A significant importance of this extension was the public and private investment in the information and knowledge society. 2009 started with the financial crisis, strongly moderating the explosive expansion of the Romanian companies. Companies like Siemens and Alcatel Lucent diminished significantly their operation in Romania. Recently, Nokia closed its production facility in our country. All MNC which operate in our country significantly diminished their expenses, beginning with promotion and ending with the operational ones. Luxurious headquarters are not anymore

Even if the Romanian companies do not reported significant drawbacks, they had to reduce their manpower or to freeze it at the level before the crisis. A large number of SMEs, especially micro enterprises closed the doors. Even if they are not employing a significant number of human resources, the signal given by them was very negative, especially for the young entrepreneurs. However, in full period of crisis, a number of companies, especially

Despite the strong negative effects, the crisis revealed that the old chip qualified labor offer of Romania, in the close neighborhood of Western Europe, is not anymore competitive and a new approach focused on innovation is the only reliable and lasting solution of any

the innovative ones, reported significant growth and increase of employee's number.

a fashion and a significant number of employees had to change their job.

innovation, we can imagine at which challenges are obliged the Romanian industry.

the business environment in their competences is also very low.

development.

diminished more than 15%.

company acting in our country.

the policy papers, we used the recommended questionnaire by Steven Covey in his book "The speed of trust". We consider that the culture issue, particularly the culture of innovation, is all the time the crucial factor to make a study or a policy paper which could shake and move people ahead.

Our intention is to follow the entire value chain of the Romanian business environment and to reveal the most important factors which jeopardize our way to the innovation driven economy and to design a road map which have to overcome most of our challenges. The resulting documents are not used only for advocacy purposes, but also to develop new services to the membership, or to shape the existing ones to the changing needs of them.

For the moment we succeeded to analyze the national system of innovation, by gathering information on the trade legislation, rules, national and European programs, which are very influential and effective in our country, on research, IP, technology transfer and best practices from the entire world. Surveys we did mainly on the general data of our companies, human resources, cultural issues and the perception of our members regarding programs to be implemented or university curricula for engineering.

In the future we are intending to extend our research on more sophisticated issues like clustering, cooperation synergies and new cultural approaches. We hope that in the future we will be able to make a research frame which will allowed us to conduct at least annually the surveys, to reshape each year our strategy and services to the membership.

#### **2. Overall description of the Romanian economy**

Embraced by the European integration fever, and the opportunities offered by it, Romanian and foreign companies, especially those coming from European Union, massively invested in sales, production and R&D capacities in the country. The business opportunities of the companies, domestic and foreign, overstressed the demand especially that related to the human resources. The human resources engaged in the industry rose almost three times, and the sophistication rose significantly especially in the foreign companies which have invested in Romania. Locations like Bucharest, Cluj Napoca and Timisoara were been considerate as cities with major lack of qualified human resources. The pressure of the demand raised the net wages of the high tech organizations, from about 400 Euros/month to almost 1.000 Euros/month. Even the number of graduates from the technical universities doubled in this period, 8.000 graduates/year, the number of university professors and the investment in university R&D, do not raised in the same proportion. According to a survey made by ARIES and the "Politehnica" University of Bucharest, the content and quality of the university curricula are considered totally inadequate to the actual needs of the employers.

In accordance with the actual FDI rates and domestic new investments, the sophistication of the demand of human resources raised also significantly. Not only foreign MNC like Infineon, Continental, Microchip, Freescale and others invested in R&D, but many spin offs from those companies multiplied the know how which people got during their employment or expats coming back to their homeland to exploit the experience they got abroad. All those investments raised the capacity of the country to participate in the European research Framework Program and in other international and domestic programs. Even if the Romanian participation in those programs is still modest, each year we encounter significant growth and improvement.

the policy papers, we used the recommended questionnaire by Steven Covey in his book "The speed of trust". We consider that the culture issue, particularly the culture of innovation, is all the time the crucial factor to make a study or a policy paper which could

Our intention is to follow the entire value chain of the Romanian business environment and to reveal the most important factors which jeopardize our way to the innovation driven economy and to design a road map which have to overcome most of our challenges. The resulting documents are not used only for advocacy purposes, but also to develop new services to the membership, or to shape the existing ones to the changing needs of them.

For the moment we succeeded to analyze the national system of innovation, by gathering information on the trade legislation, rules, national and European programs, which are very influential and effective in our country, on research, IP, technology transfer and best practices from the entire world. Surveys we did mainly on the general data of our companies, human resources, cultural issues and the perception of our members regarding

In the future we are intending to extend our research on more sophisticated issues like clustering, cooperation synergies and new cultural approaches. We hope that in the future we will be able to make a research frame which will allowed us to conduct at least annually

Embraced by the European integration fever, and the opportunities offered by it, Romanian and foreign companies, especially those coming from European Union, massively invested in sales, production and R&D capacities in the country. The business opportunities of the companies, domestic and foreign, overstressed the demand especially that related to the human resources. The human resources engaged in the industry rose almost three times, and the sophistication rose significantly especially in the foreign companies which have invested in Romania. Locations like Bucharest, Cluj Napoca and Timisoara were been considerate as cities with major lack of qualified human resources. The pressure of the demand raised the net wages of the high tech organizations, from about 400 Euros/month to almost 1.000 Euros/month. Even the number of graduates from the technical universities doubled in this period, 8.000 graduates/year, the number of university professors and the investment in university R&D, do not raised in the same proportion. According to a survey made by ARIES and the "Politehnica" University of Bucharest, the content and quality of the university curricula are considered totally inadequate to the actual needs of the employers. In accordance with the actual FDI rates and domestic new investments, the sophistication of the demand of human resources raised also significantly. Not only foreign MNC like Infineon, Continental, Microchip, Freescale and others invested in R&D, but many spin offs from those companies multiplied the know how which people got during their employment or expats coming back to their homeland to exploit the experience they got abroad. All those investments raised the capacity of the country to participate in the European research Framework Program and in other international and domestic programs. Even if the Romanian participation in those programs is still modest, each year we encounter significant

programs to be implemented or university curricula for engineering.

**2. Overall description of the Romanian economy** 

the surveys, to reshape each year our strategy and services to the membership.

shake and move people ahead.

growth and improvement.

A significant lag behind is registered still in open innovation and technology transfer. If in the most developed countries university innovation means over 50% revenues, in Romania, technology transfer, spin offs and acquisition of innovative companies are almost inexistent. The Romanian universities and research centers do not passed a radical transformation to become real resource centers for human resources or new products for the market. Their research and innovation experience and know how of them are still missing and the trust of the business environment in their competences is also very low.

If we are taking into consideration that Israel is producing more than 45% of its GDP from innovation, and the 2020 horizon of China is to produce more than 60% of its GDP by innovation, we can imagine at which challenges are obliged the Romanian industry.

A significant lack of government services to support the competitiveness of the companies acting in the country and especially a low interest and appetite of the local governments to rise and support the local competitiveness is also an impediment for the self trust of the companies. Science and technology parks are totally missing, and the related support services of the governments, which abound in the developed countries, are also missing. For this reason, the clustering and their synergetic effects are in an incipient phased development.

However it has to be mentioned the program of the Ministry of Economy, Commerce and Business Environment to support the internationalization of the Romanian companies by trade missions and participation at international fairs of more than 500 companies per year, and the branding of different industries, which really has a real impact in contracting on foreign markets and on the image and trust in our country. In the last three years of crisis the export of our country rose over 50%, in contrast to the domestic market which diminished more than 15%.

A similar important vector for the competitiveness of the Romanian companies, during the integration fever, was also the significant growth of the internal market, which became four times larger as before this process, assuring more market and product expertise for the emerging domestic companies and the size of the FDIs. A significant importance of this extension was the public and private investment in the information and knowledge society.

2009 started with the financial crisis, strongly moderating the explosive expansion of the Romanian companies. Companies like Siemens and Alcatel Lucent diminished significantly their operation in Romania. Recently, Nokia closed its production facility in our country. All MNC which operate in our country significantly diminished their expenses, beginning with promotion and ending with the operational ones. Luxurious headquarters are not anymore a fashion and a significant number of employees had to change their job.

Even if the Romanian companies do not reported significant drawbacks, they had to reduce their manpower or to freeze it at the level before the crisis. A large number of SMEs, especially micro enterprises closed the doors. Even if they are not employing a significant number of human resources, the signal given by them was very negative, especially for the young entrepreneurs. However, in full period of crisis, a number of companies, especially the innovative ones, reported significant growth and increase of employee's number.

Despite the strong negative effects, the crisis revealed that the old chip qualified labor offer of Romania, in the close neighborhood of Western Europe, is not anymore competitive and a new approach focused on innovation is the only reliable and lasting solution of any company acting in our country.

Does Romania Have a Chance to Join the Innovation Driven Economy? 107

but especially at the early states, by standards, rules and laws, later on by techniques and technologies. As more powerful was the innovation, as larger and more lasting was the society which made it. That type of innovation for the development of societies and communities, by specialized institutions for security, regulation and law, locally or central, are mutually recognized by any member of the community, accepted as universal standards. The narrow sense of innovation, even if it is totally dependent on the broader sense, means mostly technology and process innovation, more recently also business model innovation, and very recently, coming back to the roots, social innovation. The most important components of the innovation, analyzed by most countries, and on which are concentrated

We are willing to stress on the crucial importance of the innovation culture and attitude,

The most important challenges of the technology, process and business model innovation, of any nation, are the financing of the human resources education, the R&D activities and infrastructure, and the development and assimilation of new standards. Also challenges are related to the access to the information, diffusion and communication of information, intellectual property right, and the increase of the learning capacity of people during there entire lifecycle. If in the twenty century, government responsibility on innovation was mainly in the most developed nations, today, almost al governments are dealing with this issue because it became a life or death problem. In less than two decades, half of the people of the world will live in an innovation driven economy. And social innovation and culture of innovation will become crucial to support national or community global competitiveness. If in the previous subchapters we describe the challenges in a general sense, because they are common for any nation, in the following subchapters we will refer more specific to our

The Romanian university education is based on a French German model from the beginning of the twenty century, largely accepted and implemented by many countries from central and Eastern Europe. It is a model which brought outstanding outcomes supporting the modernization of this part of Europe. The competitiveness of its graduates was been worldwide recognized during the last century, and still used as fresh and educated human resources in the most developed countries. Several scientist from this region were been excellent researchers recognized in the entire world, and even Nobel Prize awarded, including Romanians. Examples as Henry Coanda, which made in France the first jet propulsion airplane of the world, and Prof. Gheorghe Samachisa which developed several patents for the flash memory, or Prof. Gheorghe Palade in California which was awarded with Nobel Prize for his contribution to the physics are only few of the outstanding Romanian scientist recognized worldwide. And many others, less known are enriching the

But the university education system was not reformed from about 70 years. Doe to the old and strong organizational culture, it was almost impossible to reform anything in the university educational system. Not even the Bolognia Declaration adoption, or any other type of reform do not succeeded. In general, any change came up against with hostility.

the majority of policies, are education of human resources and R&D.

human knowledge heritage in our country and worldwide.

which make the difference between nations.

country.

**3.2.2 Education** 

### **3. Chalanges and dificulties**

#### **3.1 Globalization**

After a decade of the twenty first century the entire world face unprecedented challenges of his history. Traditional and emergent or modern cultures of the entire world are fertilizing and influencing each other, creating by synergetic effects new cultures, approaches and thinking stiles. Doe to the modern transportation and communication means, people and cultures are in permanent contact in real time. Effectively, perception and understanding distortions are coming from cultural and thinking stiles differences of the different actors of the world. The internet and other communication means, included people all over the world, not far away isolated, in the world communication concert.

Surely, the thinking and the decision making stile or responsibility assuming and the competitiveness of nations are strongly influenced by the globalization. If today we are speaking about regional, national or transnational competitiveness like European Union, North America or Far East, surely, in several decades we will speak about global competitiveness of the communities as vectors of world development and stability.

But globalization has also quantitative and structural effects which, in the near future, will strongly influence the quality of our life. In less than two or three decades, billions of people will be integrated in the innovation driven economy, and billions of people around the world will work and think in a global knowledge environment. If today we are speaking about a targeted 3% of the GDP, the biggest part of the innovation and knowledge in the developed countries, probably in few decades, those activities will count over 50% of the world GDP. Generation and valuation of knowledge will be the most important activity of the world.

The most important challenges of the globalization are linked to the individual readiness to understand globalization phenomenon and structures, to shape measures and take decisions, and to have the capacity of analysis, synthesis, integration and implementation, in accordance with the needs and cultures of the national, regional and professional communities which they are representing. Also the organic structure of the communities and the rise and speed up of their analytic, synthetic and harmonization capacity will be in the near future crucial because pioneering will surpass the follower's strategy.

#### **3.2 National system of innovation**

#### **3.2.1 Innovation**

Innovation was, is and will be the universal vector of development and competitiveness of the human communities, from the beginning of history to the end of the human kind. Communication and information in a broader sense, and the related technologies, were been and still are the innovation drivers in the entire world. From the beginning of history and today, there are no groups of people or communities to impose them self in front of others without innovation. From the abstracting, formalization, processing, diffusion and infusion of information, to the modern technologies, everything is related to innovation. This essential innovation, brought people much closer to each other, developing synergetic effects for the development of the social structures, communities and welfare, which permitted the innovation for other common needs.

Even if it appear to be exaggerated, in the modern sense of the notion's acceptance, the support and diffusion systems of innovation are present also at the early human societies, but especially at the early states, by standards, rules and laws, later on by techniques and technologies. As more powerful was the innovation, as larger and more lasting was the society which made it. That type of innovation for the development of societies and communities, by specialized institutions for security, regulation and law, locally or central, are mutually recognized by any member of the community, accepted as universal standards.

The narrow sense of innovation, even if it is totally dependent on the broader sense, means mostly technology and process innovation, more recently also business model innovation, and very recently, coming back to the roots, social innovation. The most important components of the innovation, analyzed by most countries, and on which are concentrated the majority of policies, are education of human resources and R&D.

We are willing to stress on the crucial importance of the innovation culture and attitude, which make the difference between nations.

The most important challenges of the technology, process and business model innovation, of any nation, are the financing of the human resources education, the R&D activities and infrastructure, and the development and assimilation of new standards. Also challenges are related to the access to the information, diffusion and communication of information, intellectual property right, and the increase of the learning capacity of people during there entire lifecycle. If in the twenty century, government responsibility on innovation was mainly in the most developed nations, today, almost al governments are dealing with this issue because it became a life or death problem. In less than two decades, half of the people of the world will live in an innovation driven economy. And social innovation and culture of innovation will become crucial to support national or community global competitiveness.

If in the previous subchapters we describe the challenges in a general sense, because they are common for any nation, in the following subchapters we will refer more specific to our country.

#### **3.2.2 Education**

106 Entrepreneurship - Gender, Geographies and Social Context

After a decade of the twenty first century the entire world face unprecedented challenges of his history. Traditional and emergent or modern cultures of the entire world are fertilizing and influencing each other, creating by synergetic effects new cultures, approaches and thinking stiles. Doe to the modern transportation and communication means, people and cultures are in permanent contact in real time. Effectively, perception and understanding distortions are coming from cultural and thinking stiles differences of the different actors of the world. The internet and other communication means, included people all over the

Surely, the thinking and the decision making stile or responsibility assuming and the competitiveness of nations are strongly influenced by the globalization. If today we are speaking about regional, national or transnational competitiveness like European Union, North America or Far East, surely, in several decades we will speak about global

But globalization has also quantitative and structural effects which, in the near future, will strongly influence the quality of our life. In less than two or three decades, billions of people will be integrated in the innovation driven economy, and billions of people around the world will work and think in a global knowledge environment. If today we are speaking about a targeted 3% of the GDP, the biggest part of the innovation and knowledge in the developed countries, probably in few decades, those activities will count over 50% of the world GDP. Generation and valuation of knowledge will be the most important activity of the world.

The most important challenges of the globalization are linked to the individual readiness to understand globalization phenomenon and structures, to shape measures and take decisions, and to have the capacity of analysis, synthesis, integration and implementation, in accordance with the needs and cultures of the national, regional and professional communities which they are representing. Also the organic structure of the communities and the rise and speed up of their analytic, synthetic and harmonization capacity will be in

Innovation was, is and will be the universal vector of development and competitiveness of the human communities, from the beginning of history to the end of the human kind. Communication and information in a broader sense, and the related technologies, were been and still are the innovation drivers in the entire world. From the beginning of history and today, there are no groups of people or communities to impose them self in front of others without innovation. From the abstracting, formalization, processing, diffusion and infusion of information, to the modern technologies, everything is related to innovation. This essential innovation, brought people much closer to each other, developing synergetic effects for the development of the social structures, communities and welfare, which

Even if it appear to be exaggerated, in the modern sense of the notion's acceptance, the support and diffusion systems of innovation are present also at the early human societies,

the near future crucial because pioneering will surpass the follower's strategy.

competitiveness of the communities as vectors of world development and stability.

world, not far away isolated, in the world communication concert.

**3. Chalanges and dificulties** 

**3.2 National system of innovation** 

permitted the innovation for other common needs.

**3.2.1 Innovation** 

**3.1 Globalization** 

The Romanian university education is based on a French German model from the beginning of the twenty century, largely accepted and implemented by many countries from central and Eastern Europe. It is a model which brought outstanding outcomes supporting the modernization of this part of Europe. The competitiveness of its graduates was been worldwide recognized during the last century, and still used as fresh and educated human resources in the most developed countries. Several scientist from this region were been excellent researchers recognized in the entire world, and even Nobel Prize awarded, including Romanians. Examples as Henry Coanda, which made in France the first jet propulsion airplane of the world, and Prof. Gheorghe Samachisa which developed several patents for the flash memory, or Prof. Gheorghe Palade in California which was awarded with Nobel Prize for his contribution to the physics are only few of the outstanding Romanian scientist recognized worldwide. And many others, less known are enriching the human knowledge heritage in our country and worldwide.

But the university education system was not reformed from about 70 years. Doe to the old and strong organizational culture, it was almost impossible to reform anything in the university educational system. Not even the Bolognia Declaration adoption, or any other type of reform do not succeeded. In general, any change came up against with hostility.

Does Romania Have a Chance to Join the Innovation Driven Economy? 109

reputation. Nevertheless a significant shift in attitude and culture related to the new world

Before the First World War, we can not speak about a competitive Romanian R&D, even if the second industrial revolution already consecrated the universities as main vector of knowledge and innovation for the new competitive industries of US and Germany. Between the two World Wars, on the base of the German model, the university research is developed, mainly for the natural sciences and the first state owned foundations for research funding appears. Still, most of the Romanian scientist distinguishes oneself in the developed

After the Second World War, especially in the sixtieth and seventieth, were been funded very numerous technology research institutes, based on the Soviet model, very similar to the German one. The major differences between the German and the Soviet model was the strict political control of the hierarchy of the institutes, not all the time based on competences, a strict isolation from the university research and from each other, and an unnatural command of the state. In contrast, the German model means national foundations controlling individual institutes linked in a network and strongly related to the needs of the stakeholders and related to the university research. The university research was strongly diminished and restricted. The disjunction between universities and research institutes brought different evaluation standards and equivalents. Simple researcher was equivalent with university assistant, Principal Researcher III with lecturer which had to have also a doctoral degree and Principal Researcher I, equivalent with university professor, even if the first do not had to prove didactical activities. Those differences implied, during the time, excessive over employment, reduction of interest for innovation and focus on marginal themes and missions, implying a very low

The quasi general collapse of the Romanian industry in the first five years of democracy, the diminishing of the GDP with over 50% and the general confusion, characterizing that period, implied a systematic lowering of the government research funds for more than ten years. The number of researcher drastically diminished, several research institutes were been sold (privatized) especially for real estate interests and many researchers emigrated to US and other developed countries, mainly in Europe, or reoriented them self toward universities, private companies and other activities. The patenting activity is also

At the beginning of the twenty first century, the first university research oriented programs was launched. Also the first sophisticated and innovation driven public procurement appears mainly in the field of information and knowledge society, implying Romanian workforce for their development. The constant positive growth of the Romanian economy and the European integration perspective in 2007 brought significant resources to the Romanian budget. The public research funds rose in that period from 0.1% of the GDP to almost 0.8% in 2008. Also the share of the university research reached 70% of all public research funds. Unfortunately, the crisis stroke bitterly our country and the R&D public fund dropped again to around 0.2% of the GDP. In compensation, the Romanian participation in the European Framework Programs rose, and the first innovation driven projects in the frame of the Structural Funds appears, supporting the competitiveness of the

efficiency of innovation; too many efforts for insignificant outcomes.

tendencies will be the key to success.

countries like France, Germany and UK.

diminishing significantly in that period.

Romanian economy and of the companies.

**3.2.3 R & D** 

Even if the entire world is concerned about the life long learning, and the European Commission released significant funds for it through numerous programs, the corresponding curricular development are very poor at the Romanian universities.

If in the first decade after the revolution this approach do not harm, because the entire Romanian economy dropped over 50% and nobody cared about, in the first decade of the twenty first century, the industry began to rise rapidly, benefiting from significant foreign and domestic investments, the tensions between the business and university environments rose significantly. The communication between the two environments is relatively poor doe to the lake of associative structures. The exchange of experiences, content and good practices are poor and mainly based on interpersonal communication and not on communication between communities which are caring about each other.

First 2004, ARIES, The Romanian Association for Electronic and Software Industry, a trade professional organization, articulated the first innovation related strategy of the industry, university education and research included. Later on was funded the EPETRAN association of the electronic faculties of Romania, which is a forum of best practice sharing and communication with the industry. This initiatives and the fundation of the Export Council and more recently the National Competitiveness Council, where university, industry and public bodies are gathering discussing about the future developments and cooperation are real hopes of our country for its future competitiveness and community cohesion. Also very encouraging is the recent Employers Commission of ARACIS, the national university accreditation body of Romania, which comprise professional, trade professional and companies, concerned about the new European standards of accreditation.

If in the last decade of the twenty century and the first decade of the twenty first century, the main preoccupation of the Romanian universities was the assimilation of the triple size number of students, by enlarging the existing old universities and new universities, the next decade, the most important thing to be solved, will be the adaptation and matching of the university curricula to the real needs of the stakeholders and the development of the competitive research capabilities to support the national innovation effort.

The previous strategy, to raise the number of students and graduates was adequate for the business model based on chip labor cost. Entering the European Union, the business opportunities diversified and sophisticated very much, the old model beginning to show its limits. Companies which came to Romania several years ago for the educated chip labor cost are leaving more and more our country, and more and more domestic and foreign companies are investing and orienting toward innovation.

The most important challenges related to the human resources competitiveness and the sustainable curricular structures are determined by the structure of the professional organizations of the two environments, the quality and competitiveness of their content, the intensity and quality of their cooperation and trust and synergy between them. The introduction of a demand based funding of the public universities and faculties will motivate surely the opening of the universities to the business environment, which will drastically lower the actual conservative behavior. Also imposing evaluation criterions of the public universities related to the post university curricula for life long learning, to the research outcomes to support the national innovation and cooperation for knowledge and best practice sharing with the business environment will strengthen the interest of both parts to cooperate in their benefit and the trust which have to speed up their efficiency and reputation. Nevertheless a significant shift in attitude and culture related to the new world tendencies will be the key to success.

#### **3.2.3 R & D**

108 Entrepreneurship - Gender, Geographies and Social Context

Even if the entire world is concerned about the life long learning, and the European Commission released significant funds for it through numerous programs, the

If in the first decade after the revolution this approach do not harm, because the entire Romanian economy dropped over 50% and nobody cared about, in the first decade of the twenty first century, the industry began to rise rapidly, benefiting from significant foreign and domestic investments, the tensions between the business and university environments rose significantly. The communication between the two environments is relatively poor doe to the lake of associative structures. The exchange of experiences, content and good practices are poor and mainly based on interpersonal communication and not on communication

First 2004, ARIES, The Romanian Association for Electronic and Software Industry, a trade professional organization, articulated the first innovation related strategy of the industry, university education and research included. Later on was funded the EPETRAN association of the electronic faculties of Romania, which is a forum of best practice sharing and communication with the industry. This initiatives and the fundation of the Export Council and more recently the National Competitiveness Council, where university, industry and public bodies are gathering discussing about the future developments and cooperation are real hopes of our country for its future competitiveness and community cohesion. Also very encouraging is the recent Employers Commission of ARACIS, the national university accreditation body of Romania, which comprise professional, trade professional and

If in the last decade of the twenty century and the first decade of the twenty first century, the main preoccupation of the Romanian universities was the assimilation of the triple size number of students, by enlarging the existing old universities and new universities, the next decade, the most important thing to be solved, will be the adaptation and matching of the university curricula to the real needs of the stakeholders and the development of the

The previous strategy, to raise the number of students and graduates was adequate for the business model based on chip labor cost. Entering the European Union, the business opportunities diversified and sophisticated very much, the old model beginning to show its limits. Companies which came to Romania several years ago for the educated chip labor cost are leaving more and more our country, and more and more domestic and foreign

The most important challenges related to the human resources competitiveness and the sustainable curricular structures are determined by the structure of the professional organizations of the two environments, the quality and competitiveness of their content, the intensity and quality of their cooperation and trust and synergy between them. The introduction of a demand based funding of the public universities and faculties will motivate surely the opening of the universities to the business environment, which will drastically lower the actual conservative behavior. Also imposing evaluation criterions of the public universities related to the post university curricula for life long learning, to the research outcomes to support the national innovation and cooperation for knowledge and best practice sharing with the business environment will strengthen the interest of both parts to cooperate in their benefit and the trust which have to speed up their efficiency and

companies, concerned about the new European standards of accreditation.

competitive research capabilities to support the national innovation effort.

companies are investing and orienting toward innovation.

corresponding curricular development are very poor at the Romanian universities.

between communities which are caring about each other.

Before the First World War, we can not speak about a competitive Romanian R&D, even if the second industrial revolution already consecrated the universities as main vector of knowledge and innovation for the new competitive industries of US and Germany. Between the two World Wars, on the base of the German model, the university research is developed, mainly for the natural sciences and the first state owned foundations for research funding appears. Still, most of the Romanian scientist distinguishes oneself in the developed countries like France, Germany and UK.

After the Second World War, especially in the sixtieth and seventieth, were been funded very numerous technology research institutes, based on the Soviet model, very similar to the German one. The major differences between the German and the Soviet model was the strict political control of the hierarchy of the institutes, not all the time based on competences, a strict isolation from the university research and from each other, and an unnatural command of the state. In contrast, the German model means national foundations controlling individual institutes linked in a network and strongly related to the needs of the stakeholders and related to the university research. The university research was strongly diminished and restricted. The disjunction between universities and research institutes brought different evaluation standards and equivalents. Simple researcher was equivalent with university assistant, Principal Researcher III with lecturer which had to have also a doctoral degree and Principal Researcher I, equivalent with university professor, even if the first do not had to prove didactical activities. Those differences implied, during the time, excessive over employment, reduction of interest for innovation and focus on marginal themes and missions, implying a very low efficiency of innovation; too many efforts for insignificant outcomes.

The quasi general collapse of the Romanian industry in the first five years of democracy, the diminishing of the GDP with over 50% and the general confusion, characterizing that period, implied a systematic lowering of the government research funds for more than ten years. The number of researcher drastically diminished, several research institutes were been sold (privatized) especially for real estate interests and many researchers emigrated to US and other developed countries, mainly in Europe, or reoriented them self toward universities, private companies and other activities. The patenting activity is also diminishing significantly in that period.

At the beginning of the twenty first century, the first university research oriented programs was launched. Also the first sophisticated and innovation driven public procurement appears mainly in the field of information and knowledge society, implying Romanian workforce for their development. The constant positive growth of the Romanian economy and the European integration perspective in 2007 brought significant resources to the Romanian budget. The public research funds rose in that period from 0.1% of the GDP to almost 0.8% in 2008. Also the share of the university research reached 70% of all public research funds. Unfortunately, the crisis stroke bitterly our country and the R&D public fund dropped again to around 0.2% of the GDP. In compensation, the Romanian participation in the European Framework Programs rose, and the first innovation driven projects in the frame of the Structural Funds appears, supporting the competitiveness of the Romanian economy and of the companies.

Does Romania Have a Chance to Join the Innovation Driven Economy? 111

synergetic entities and clustering services like science and technology parks, business incubators and related support services for mach making, internationalization, technology transfer, IP and many others. The Silicon Valley initiative around the Stanford University demonstrated its viability and sustainability over the time. Its success inspired and still is

By multiplying the success of Silicon Valley in many other states, the US created a strong network nationwide, which was enriched later on with other networks of technology transfer services, national laboratories and consulting services. Also private fund were been attracted and new institutes were been created to facilitate the diffusion of knowledge, new

During its development, by assuming new functions and missions, the European Union developed also such networks like Enterprise Europe Network or funds to support common strategies and to facilitate synergies and clustering. Compared with US, the EU is focusing mainly on know how transfer, knowledge and best practice diffusion and valuation of the R&D outcomes in the frame of the Union. The national initiatives could be supported by structural funds or they could be the responsibility of the national governments. Both, US and EU created independent specialized institutions like National Science Foundation and

Unfortunately, out of several Romanian organizations involved in several European support programs, Romania is not excelling at this chapter too. Except of several enthusiasts, which have also European experience, the National Science, Technology and Innovation Agency's program turned out mostly in real estate business as real support of the Romanian innovation. The main challenges of the Romanian innovation support infrastructure are related to the public private partnership, finance of the national research institutes or laboratories, financing facilitation, support services and business ethics including cultural and attitude shift toward the world best practices. At national level those issues are almost unknown. Identification of the needs related to R&D and innovation, in public private partnership, and design and financing of the corresponding services in accordance with the local needs and conditions could support in the near future the local and national innovation and competitiveness.

In my country business ethics is a foreign notion. Corporate social responsibility means mainly a responsibility related to employees and is mandatory by law. Company is a money producing machine and if it is possible, as easiest could be. Competition means a brutal fight against it. Quality is good if you need a label on it. Cooperation has to be avoided as possible. Community is very important if they could give money. And the good examples could go on. Several years ago, speaking to a German deputy in the European Parliament, I was amazed by his reaction at my question about the concern of this Parliament on business ethics. His face expressed likes "what the hell is this". As fresh graduate of a special training on business ethics at George Washington University, I was sincerely surprised about his reaction. But I past over and I never were been surprised when somebody do not understand what about I'm speaking. At that occasion I learned that I have not to be surprised when other people are thinking otherwise as my self, but I have to make an effort

business foundation, and externalization of studies and specific strategies.

inspiring the entire world.

European Innovation Institute.

**3.2.5 Culture and cohesion issues** 

to understand what they really meant.

Unfortunately not even this flourishing period, which lasted five years, do not brought significant structural changes to Romanian R&D. The R&D outcomes, both from universities and research center network, are still not valuated by technology transfer, spin offs or on the IP market.

In this very moment, The National Agency for Science, Technology and Innovation, is the main public financing institution of the Romanian R&D. The organization is leaded from the beginning by people coming from the old research institutes and from the universities, with insufficient knowledge and low commitment to the real needs of the emerging Romanian industry or other stakeholders. Their constant conservative attitude to preserve the survival, interests and the former "status quo" of these organizations, delay the reform. The cooperation with the business environment is almost inexistent. In comparison with ARACIS, the national body for higher education accreditation and other government and nongovernmental organizations, this one do not expressed any interest for the cooperation with the business environment or other stakeholders to improve the situation.

It have also to mention that the business environment don't was really interested about the outcomes of the Romanian research, being focused on the low cost labor opportunity which is not requiring too much sophistication or innovation. First in the last two years, doe to the rise of the wages and lower interest for chip labor cost in this region, companies began to switch for more innovation and IP development.

The main challenges for the Romanian R&D are related to structural changes, attitudes and overall and organizational culture and behavior. So long as the stakeholders, companies, local authorities and government organizations interested in sophisticated public acquisitions, do not have the authority to say anything for the structure and destination of the research funds, and can't step in anyhow for the evaluation and attribution methods of the funds, a significant change or improvement are not to be expected. The link of the R&D activity with the innovation support infrastructure, based on performance criterions is essential to ensure the efficient valuation of its outcomes.

#### **3.2.4 The innovation support infrastructure**

Even if the second industrial revolution is strongly related to R&D, research were been made mainly in own research laboratories by vertical integration or by close cooperation with the university environment. The third industrial revolution brought new actors like SMEs, and new attitudes and business models like specialized R&D companies and institutions and externalization of those activities to specialized organizations. Based on the US experience and success, after the Second World War, by its massive investments in military R&D with extensions through spin offs and technology transfer to civil applications, all developed countries, and recently almost all states of the world, implied them self directly more and more to support the national competitiveness by public financing of the R&D activities. Missis Chancellor, Angela Merkel, at the opening ceremony of CeBIT 2010, sad that Germany will spend in that year 3% of its GDP for R&D. All the states from the world are currently in an unprecedented competition to find the required funds to support directly the national effort for R&D.

But very soon, everybody stated that this financing is not enough if they are not putting other efforts to support the speed up of the rapid valuation on the market of the R&D activities' outcomes by supporting innovation. From the early fifties of the twenties century, US begun to build with public funds and public private partnership the cohesion and

Unfortunately not even this flourishing period, which lasted five years, do not brought significant structural changes to Romanian R&D. The R&D outcomes, both from universities and research center network, are still not valuated by technology transfer, spin offs or on the

In this very moment, The National Agency for Science, Technology and Innovation, is the main public financing institution of the Romanian R&D. The organization is leaded from the beginning by people coming from the old research institutes and from the universities, with insufficient knowledge and low commitment to the real needs of the emerging Romanian industry or other stakeholders. Their constant conservative attitude to preserve the survival, interests and the former "status quo" of these organizations, delay the reform. The cooperation with the business environment is almost inexistent. In comparison with ARACIS, the national body for higher education accreditation and other government and nongovernmental organizations, this one do not expressed any interest for the cooperation

It have also to mention that the business environment don't was really interested about the outcomes of the Romanian research, being focused on the low cost labor opportunity which is not requiring too much sophistication or innovation. First in the last two years, doe to the rise of the wages and lower interest for chip labor cost in this region, companies began to

The main challenges for the Romanian R&D are related to structural changes, attitudes and overall and organizational culture and behavior. So long as the stakeholders, companies, local authorities and government organizations interested in sophisticated public acquisitions, do not have the authority to say anything for the structure and destination of the research funds, and can't step in anyhow for the evaluation and attribution methods of the funds, a significant change or improvement are not to be expected. The link of the R&D activity with the innovation support infrastructure, based on performance criterions is

Even if the second industrial revolution is strongly related to R&D, research were been made mainly in own research laboratories by vertical integration or by close cooperation with the university environment. The third industrial revolution brought new actors like SMEs, and new attitudes and business models like specialized R&D companies and institutions and externalization of those activities to specialized organizations. Based on the US experience and success, after the Second World War, by its massive investments in military R&D with extensions through spin offs and technology transfer to civil applications, all developed countries, and recently almost all states of the world, implied them self directly more and more to support the national competitiveness by public financing of the R&D activities. Missis Chancellor, Angela Merkel, at the opening ceremony of CeBIT 2010, sad that Germany will spend in that year 3% of its GDP for R&D. All the states from the world are currently in an unprecedented competition to find the required

But very soon, everybody stated that this financing is not enough if they are not putting other efforts to support the speed up of the rapid valuation on the market of the R&D activities' outcomes by supporting innovation. From the early fifties of the twenties century, US begun to build with public funds and public private partnership the cohesion and

with the business environment or other stakeholders to improve the situation.

switch for more innovation and IP development.

essential to ensure the efficient valuation of its outcomes.

funds to support directly the national effort for R&D.

**3.2.4 The innovation support infrastructure** 

IP market.

synergetic entities and clustering services like science and technology parks, business incubators and related support services for mach making, internationalization, technology transfer, IP and many others. The Silicon Valley initiative around the Stanford University demonstrated its viability and sustainability over the time. Its success inspired and still is inspiring the entire world.

By multiplying the success of Silicon Valley in many other states, the US created a strong network nationwide, which was enriched later on with other networks of technology transfer services, national laboratories and consulting services. Also private fund were been attracted and new institutes were been created to facilitate the diffusion of knowledge, new business foundation, and externalization of studies and specific strategies.

During its development, by assuming new functions and missions, the European Union developed also such networks like Enterprise Europe Network or funds to support common strategies and to facilitate synergies and clustering. Compared with US, the EU is focusing mainly on know how transfer, knowledge and best practice diffusion and valuation of the R&D outcomes in the frame of the Union. The national initiatives could be supported by structural funds or they could be the responsibility of the national governments. Both, US and EU created independent specialized institutions like National Science Foundation and European Innovation Institute.

Unfortunately, out of several Romanian organizations involved in several European support programs, Romania is not excelling at this chapter too. Except of several enthusiasts, which have also European experience, the National Science, Technology and Innovation Agency's program turned out mostly in real estate business as real support of the Romanian innovation.

The main challenges of the Romanian innovation support infrastructure are related to the public private partnership, finance of the national research institutes or laboratories, financing facilitation, support services and business ethics including cultural and attitude shift toward the world best practices. At national level those issues are almost unknown. Identification of the needs related to R&D and innovation, in public private partnership, and design and financing of the corresponding services in accordance with the local needs and conditions could support in the near future the local and national innovation and competitiveness.

#### **3.2.5 Culture and cohesion issues**

In my country business ethics is a foreign notion. Corporate social responsibility means mainly a responsibility related to employees and is mandatory by law. Company is a money producing machine and if it is possible, as easiest could be. Competition means a brutal fight against it. Quality is good if you need a label on it. Cooperation has to be avoided as possible. Community is very important if they could give money. And the good examples could go on.

Several years ago, speaking to a German deputy in the European Parliament, I was amazed by his reaction at my question about the concern of this Parliament on business ethics. His face expressed likes "what the hell is this". As fresh graduate of a special training on business ethics at George Washington University, I was sincerely surprised about his reaction. But I past over and I never were been surprised when somebody do not understand what about I'm speaking. At that occasion I learned that I have not to be surprised when other people are thinking otherwise as my self, but I have to make an effort to understand what they really meant.

Does Romania Have a Chance to Join the Innovation Driven Economy? 113

I decided to be not scared or subjugated by this judgment but to be honest and straight on, to be able to have clear mind and clear judgment for the best recommendations and consulting I can make, first to the community of my association's members, and secondly to the Export Promotion Council and the National Council for Competitiveness. The same approach I used to improve the national and European quality standards of the national body for higher education accreditation ARACIS, and the funding body of the Romanian higher education research UEFISCDI. I already developed five policy papers in Romanian,

From all challenges from the end of each chapter and subchapter I believe that the most important is about culture and attitudes. I already told to the reviewers from the World Bank on the performance of the National Agency for Research, Technology and Innovation, that doesn't make sense to raise the research funds before structural, cultural and attitude change, in accordance with the real needs and challenges of the stakeholders and the larger community of our nation, are not put in place. I'm also deeply convinced that those changes have to be made inside the beneficiary organizations, private or public. Financing have to

Citing Peter Drucker who sad that the most important thing of our recent history is not the internet, or any other technology, but that people are less and less dependent and more and more have the opportunity to chose, and for the first time in the history, tremendous number of people, which rapidly growth, will lead them self, I understand that as people are getting more independent from each other, as much they have to care about their communities. Starting from this point I strongly believe that a concerted and harmonized triple helix public private partnership for any major concern of our nation, have to be put in place. Not only one part is responsible for what is happening among the community

However, I'm strongly confident that solving these fundamental problems, it will be piece of

Yes for sure, Romania has a chance to join the innovation driven economy. Romania have to find his way among the most developed countries of the world, but he have to play his role,

In the Global Innovation Performance 2009 report, Romania RANKS 61st. Also in Total Entrepreneurial Activity Ranked by Country, Romania has 4.3%, compared to world average of 10,6%1. Also Romania ranks 5th lowest in the world in terms of feeling that hard work brings adequate returns , ranking lower than the Eastern European average, lowest in

ELAN projects's main objective is to promote entrepreneurship in Romanian electronics industry, the electronics packaging education, and technological transfer, to offer

1 2nd report on Entrepreneurial Activities in Romania: executive summary for the year 2008, Total Entrepreneurial Activity Ranked by Country - TEA by Country Measures Entrepreneurial Activity as a

of which content I used in this article.

come after competence and efficiency are proved.

members or with the community as a whole, but everybody.

to be confident in him self and to get the trust of others.

the world.2

Percent of GDP.

2 Gallup World Poll , January 2011

cake to get the right solutions for any challenges mentioned by this article.

**4.1 Empirical data - entrepreneurial spirit within ELAN project participants** 

In general, if people would perform they have to get trust from others. Other way they remain isolated and the speed of growth is lowered by a factor dependant on trust. Trust means not only competences but also common feelings in a common space of language and culture. As higher the trust is and as stronger the empathy between each other, so better and higher is the efficiency between individuals, organizations and communities and the benefits are in the same proportion. Each individual from out of seven billion people in the world are thinking differently, but they have common tools like language and culture to understand and synergize each other.

Leading more than hundred Romanian trade missions abroad, I learned that before to make any step forward you have to understand the culture of your counterpart and to offer something which is valued within his culture. And your work is never ending because different people have different culture and different communities have different culture. Taking into account these things and consulting our membership, I observed that the efficiency of our delegation rose from event to event.

For example Germans in Europe have a very strong culture. They are very confident to each other, but if somebody is coming from a culture they do not understand they begin to be very mindful. There culture is based on common unwritten standards which are taught as young children in a common sense. For people whom are growing up in this culture, it is very unusual to understand somebody more relaxed and much more flexible in interpreting things and thoughts.

Romania is located in a region with a more relaxed behavior and less formalized culture with a low community cohesion. People are more own centered as community centered. But they want to be included in the larger concert of the world. They want to be trusted, they want to be efficient and innovative and they want to be accepted as they are. Everything is O.K., but for the last whish they have to strive bitterly.

The main challenges for the Romanian people are the big effort to understand what really is valued in the culture of others, and radically change their own culture and attitude. They have to understand the culture of the larger community of innovators or any other community they think to be part and to change attitude to shall more empathy and to have more engagement towards that communities. As any other culture, for sure, the Romanians have also values which could be valued within others culture and they have to strive for it. If they could be proud of their nation's heritage they will be able to conquer other's heart.

#### **4. Conclusions**

Several years ago I participated at a European conference on R&D and innovation. Presenting the overall situation of this issue, a lady from DG research told to the audience of the conference that Romania and two other countries of the union are not striving enough for their competitiveness and they are "no chance lands". Even if I understood what she meant because she gave facts and figures compared to the other countries outcomes, being Romanian, I was very frustrated. I'm not blaming her because she told this before a large international audience, because I had the feeling that she was very honest, but I still not feeling good when I remember about this case. This event was for me the determination to understand really the situation, and if it is possible to contribute to my nations improvement. It was also the moment to start my research and to find solutions for my nation.

In general, if people would perform they have to get trust from others. Other way they remain isolated and the speed of growth is lowered by a factor dependant on trust. Trust means not only competences but also common feelings in a common space of language and culture. As higher the trust is and as stronger the empathy between each other, so better and higher is the efficiency between individuals, organizations and communities and the benefits are in the same proportion. Each individual from out of seven billion people in the world are thinking differently, but they have common tools like language and culture to

Leading more than hundred Romanian trade missions abroad, I learned that before to make any step forward you have to understand the culture of your counterpart and to offer something which is valued within his culture. And your work is never ending because different people have different culture and different communities have different culture. Taking into account these things and consulting our membership, I observed that the

For example Germans in Europe have a very strong culture. They are very confident to each other, but if somebody is coming from a culture they do not understand they begin to be very mindful. There culture is based on common unwritten standards which are taught as young children in a common sense. For people whom are growing up in this culture, it is very unusual to understand somebody more relaxed and much more flexible in interpreting

Romania is located in a region with a more relaxed behavior and less formalized culture with a low community cohesion. People are more own centered as community centered. But they want to be included in the larger concert of the world. They want to be trusted, they want to be efficient and innovative and they want to be accepted as they are. Everything is

The main challenges for the Romanian people are the big effort to understand what really is valued in the culture of others, and radically change their own culture and attitude. They have to understand the culture of the larger community of innovators or any other community they think to be part and to change attitude to shall more empathy and to have more engagement towards that communities. As any other culture, for sure, the Romanians have also values which could be valued within others culture and they have to strive for it. If they could be proud of their nation's heritage they will be able to conquer other's heart.

Several years ago I participated at a European conference on R&D and innovation. Presenting the overall situation of this issue, a lady from DG research told to the audience of the conference that Romania and two other countries of the union are not striving enough for their competitiveness and they are "no chance lands". Even if I understood what she meant because she gave facts and figures compared to the other countries outcomes, being Romanian, I was very frustrated. I'm not blaming her because she told this before a large international audience, because I had the feeling that she was very honest, but I still not feeling good when I remember about this case. This event was for me the determination to understand really the situation, and if it is possible to contribute to my nations improvement. It was also the moment

understand and synergize each other.

things and thoughts.

**4. Conclusions** 

efficiency of our delegation rose from event to event.

O.K., but for the last whish they have to strive bitterly.

to start my research and to find solutions for my nation.

I decided to be not scared or subjugated by this judgment but to be honest and straight on, to be able to have clear mind and clear judgment for the best recommendations and consulting I can make, first to the community of my association's members, and secondly to the Export Promotion Council and the National Council for Competitiveness. The same approach I used to improve the national and European quality standards of the national body for higher education accreditation ARACIS, and the funding body of the Romanian higher education research UEFISCDI. I already developed five policy papers in Romanian, of which content I used in this article.

From all challenges from the end of each chapter and subchapter I believe that the most important is about culture and attitudes. I already told to the reviewers from the World Bank on the performance of the National Agency for Research, Technology and Innovation, that doesn't make sense to raise the research funds before structural, cultural and attitude change, in accordance with the real needs and challenges of the stakeholders and the larger community of our nation, are not put in place. I'm also deeply convinced that those changes have to be made inside the beneficiary organizations, private or public. Financing have to come after competence and efficiency are proved.

Citing Peter Drucker who sad that the most important thing of our recent history is not the internet, or any other technology, but that people are less and less dependent and more and more have the opportunity to chose, and for the first time in the history, tremendous number of people, which rapidly growth, will lead them self, I understand that as people are getting more independent from each other, as much they have to care about their communities. Starting from this point I strongly believe that a concerted and harmonized triple helix public private partnership for any major concern of our nation, have to be put in place. Not only one part is responsible for what is happening among the community members or with the community as a whole, but everybody.

However, I'm strongly confident that solving these fundamental problems, it will be piece of cake to get the right solutions for any challenges mentioned by this article.

Yes for sure, Romania has a chance to join the innovation driven economy. Romania have to find his way among the most developed countries of the world, but he have to play his role, to be confident in him self and to get the trust of others.

#### **4.1 Empirical data - entrepreneurial spirit within ELAN project participants**

In the Global Innovation Performance 2009 report, Romania RANKS 61st. Also in Total Entrepreneurial Activity Ranked by Country, Romania has 4.3%, compared to world average of 10,6%1. Also Romania ranks 5th lowest in the world in terms of feeling that hard work brings adequate returns , ranking lower than the Eastern European average, lowest in the world.2

ELAN projects's main objective is to promote entrepreneurship in Romanian electronics industry, the electronics packaging education, and technological transfer, to offer

 1 2nd report on Entrepreneurial Activities in Romania: executive summary for the year 2008, Total Entrepreneurial Activity Ranked by Country - TEA by Country Measures Entrepreneurial Activity as a Percent of GDP.

<sup>2</sup> Gallup World Poll , January 2011

Does Romania Have a Chance to Join the Innovation Driven Economy? 115

Out of 100%, 26% never thought to a business, 3.53% thought to a business, made some steps and renounced, 55.32% are thinking to a business, 6.04% are on the way to start a business, 3.86% have started or undertaken a business in the last 3 years, and it is alive, 2.40% started or undertaken a business more then 3 years ago and it is alive, and 2.48%

Male participants have higher entrepreneurial spirit compared to female participants 76.78%

• started or have undertaken a business in the last 3 years and it is alive 4.11%/3.39%; • have started or undertaken a business more then 3 years ago and it is alive 2.54%/1.42%.

• started some time ago a business, but now are not anymore an entrepreneur 2.54%/2.34%. Entrepreneurial spirit is higher among highly skilled professionals (Post Arts and Trade

The difference is less significant between male and female participants for those who:

started some time ago a business, but now I they are not anymore an entrepreneur .

There is a difference between male and female participants for those who:

• thought about a business, made some steps and gave up 3.56%/3.47%,

Fig. 1. Entrepreneurial spirit within ELAN project participants

• never thought about a business 23.77% / 31.23%; • are on the way to start a business 7.29%/3.71%;

• are thinking about a business 55.81%/54.42%,

Schools – 16,67%, PhD – 16,46, Post PhD -14,29)

/23.21%.

technological and technical support for innovative SMEs, in order to compensate the small entrepreneurs number (~50% of the European average).

In this context, data collected during the implementation of the strategic project "Promoting the entrepreneurial spirit within the Romanian electronics industry", co-financed by European Social Fund (ESF), can give us an idea about the entrepreneurial spirit of the participants. 3628 participants to the campaign for promoting the entrepreneurial spirit "Be an entrepreneur!" answered the question: "Are you an entrepreneur?"



Table 1. Participants grouped by gender, educational level, age, labor market status, place of residence.

technological and technical support for innovative SMEs, in order to compensate the small

In this context, data collected during the implementation of the strategic project "Promoting the entrepreneurial spirit within the Romanian electronics industry", co-financed by European Social Fund (ESF), can give us an idea about the entrepreneurial spirit of the participants. 3628 participants to the campaign for promoting the entrepreneurial spirit "Be

ELAN participants Statistics Total Female Male

Lower SecondaryBottom of Form 91 11 80

 Arts and Trade SchoolBottom of Form 39 7 32 Post Arts and Trade Schools 18 3 15

Lower cycle of HighschoolBottom of Form 576 226 350 Upper secondary school 1434 456 978 Post Uper Secondary 62 22 40 Bachelor 1038 390 648 Master of science 284 130 154 PhD 79 23 56 Post PhD 7 0 7

25 – 44 871 359 512 45 – 54 298 119 179 55 – 64 159 57 102 over 64 13 2 11

inactives 2086 691 1395 Entrepreneurs 112 26 86 Self-employment 76 16 60 Members of an agricultural / cooperative 2 2 0 Employees 1351 533 818

Bottom of Form 1 0 1

rural 472 186 286

Residence urban 3156 1082 2074

Table 1. Participants grouped by gender, educational level, age, labor market status, place of

Total 3628 1268 2360

Age 15 – 24 2289 731 1558

Unemployed including unregistered unemployed persons

entrepreneurs number (~50% of the European average).

2. No, I thought to, made some steps and renounced

3. No, but I am thinking to a business 4. Yes, I am on the way to start a business

Top of Form

Top of Form

Top of Form

1. Never thought to

Education level

Labor market status

residence.

an entrepreneur!" answered the question: "Are you an entrepreneur?"

5. Yes, I have started or undertaken a business in the last 3 years, and it is alive 6. Yes, I have started or undertaken a business more then 3 years ago and it is alive 7. No, I started some time ago a business, but now I am not anymore an entrepreneur

Fig. 1. Entrepreneurial spirit within ELAN project participants

Out of 100%, 26% never thought to a business, 3.53% thought to a business, made some steps and renounced, 55.32% are thinking to a business, 6.04% are on the way to start a business, 3.86% have started or undertaken a business in the last 3 years, and it is alive, 2.40% started or undertaken a business more then 3 years ago and it is alive, and 2.48% started some time ago a business, but now I they are not anymore an entrepreneur .

Male participants have higher entrepreneurial spirit compared to female participants 76.78% /23.21%.

There is a difference between male and female participants for those who:


The difference is less significant between male and female participants for those who:


Entrepreneurial spirit is higher among highly skilled professionals (Post Arts and Trade Schools – 16,67%, PhD – 16,46, Post PhD -14,29)

Does Romania Have a Chance to Join the Innovation Driven Economy? 117

Fig. 3. Elan participant's entrepreneurial spirit by age

Entrepreneurs are not 'born'….rather they 'become' through the experiences of their lives.

Fig. 2. Elan participant's entrepreneurial spirit by education

Fig. 2. Elan participant's entrepreneurial spirit by education

Entrepreneurs are not 'born'….rather they 'become' through the experiences of their lives.

Does Romania Have a Chance to Join the Innovation Driven Economy? 119

Fig. 5. Elan participant's entrepreneurial spirit by gender

Fig. 4. Elan participant's entrepreneurial spirit by labor market status

Fig. 4. Elan participant's entrepreneurial spirit by labor market status

Fig. 5. Elan participant's entrepreneurial spirit by gender

**8** 

*Spain* 

**Immigrant Entrepreneurs in Spain Concepts, Kinds of Business and** 

Ángeles Arjona Garrido and Juan Carlos Checa Olmos

The development of ethnic economies, a business formula which immigrant groups create for themselves, connects their home country and their destination, configuring a transnational economic influence (Moldenhauer, 2005; Roudometof, 2005; Vertovec, 2004; Waldinger, 2010; Wong, 2004), which consolidates migratory fields. Thus what is known as the enterprising "bourgeois" sometimes overcomes the idea of the anachronism of selfemployment (Vidich & Bensman, 1960), since for some groups, it arises as a successful economic and social formula. On the other hand, immigrants form a new urban subclass (Clark, 1998). Therefore, some researchers have suggested that by entering the labor market as self-employed, they have more economic possibilities (Light and Gold, 2000; Werbner,

The success of these ethnic economies, such as the Koreans in Los Angeles or Cubans in Miami, is due mainly to the effort of owners and their employees, although in some cases they have also benefited from public aid. In any case, to open a business, the entrepreneur has to mobilize all the resources available to him, from the startup of certain ethnic strategies and design of the economic project within the opportunity structure and group

The entrepreneur sacrifices himself and is self-exploited, which extends to his family and/or co-ethnic employees as well, working long days, without holidays and with very little vacation. This is more evident when there is a hostile host context (Portes & Böröcz, 1992), due to the difficulty in consolidating a business network in a primary segment, by setting up

In fact, in a hostile context, most of the immigrants are on the lowest levels of the fragmented market, where at most, small businesses develop in which the owners are middleman minorities. In such cases, Bonacich (1972; 1973; 1975) describes an starting situation in which there is not much development, and even stagnation, around the

The phenomenon of immigrant entrepreneurs is not exclusive to the United States. It has also expanded to other geographic areas of the planet, especially European cities. With no attempt at being complete, see the studies on the subject by Aldrich et al. (1983) on different

**1. Introduction** 

1980) and break with situations generating exclusion.

characteristics (Waldinger et al., 1990).

small dominant businesses.

proliferation of entrepreneurs.

**Advances in Research** 

*Universidad de Almería,* 

#### **5. References**


## **Immigrant Entrepreneurs in Spain Concepts, Kinds of Business and Advances in Research**

Ángeles Arjona Garrido and Juan Carlos Checa Olmos *Universidad de Almería, Spain* 

#### **1. Introduction**

120 Entrepreneurship - Gender, Geographies and Social Context

[1] Prof. Michael Porter; *Competitive Advantage of Nations*; Ed. The Free Press, 1990/ ISBN 0-

[3] Prof. Clayton M. Christensen; *Disrupting Class (How disruptive innovation will change the* 

[4] Prof. Stephen R. Covey; *The 8th Habit. From Effectiveness to Greatness*; Ed,. Alfa, 2006/ISBN

[5] Prof. Stephen R. Covey; *The Seven Habits of Highly Effective People*; Ed,. Alfa, 2011/ISBN

[6] Stephen M.R. Covey; *The Speed of Trust*; Ed. Free Press 2008/ ISBN 13:978-0-7432-9730-1 [7] Prof. Franz Josef Rademacher; *Balance or Distruction*; Ed. Oekosoziales Forum Europa

[8] Prof. Franz Josef Rademacher; *Global Marshal Plan*; Ed. Global Marshal Foundation 2004/

[11] Prof. Thomas L. Friedman; *The World is Flat*; Ed. Douglas & Mc Intire 2004/ISBN 978-1-

[12] Hamel Gary & C.K. Prahalad; *Competing for the Future*; Ed. HBR 1994/ ISBN 0-87584-

[15] Prof. Henry Chesbrough; *Open Innovation (Researching a new paradigme*); Ed. Oxford

[16] Stuart Peters; *National Systems of Innovation (Creatng high tech industries)*; Ed. Palgrave

[17] Jan Fagerberg, David C. Mowery, Richard R Nelson; *The Oxford Handbook of Innovation*;

[18] The Boston Consulting Group*; On Strategy*; Ed. John Wiley & Sons 2006 /ISBN 978-0-

[19] Richard H. K. Vietor; *How Countries Compete (Strategy, structure, and government in the* 

[20] Robert Shapiro; *Futurecast 2020 (A global vision of Tomorrow*); Ed. Profile Books LTD 2008

[21] Andrew Craine & Dirk Matten; *Business Ethics*; Ed. Oxford University Press 2004/ ISBN

[22] http://europa.eu/press\_room/pdf/complet\_en\_barroso\_\_\_007\_-\_europe\_2020\_-

[23] http://www.proinno-europe.eu/inno-metrics/page/innovation-union-scoreboard-

[13] Prof. Noam Chomsky; *Hegemony or Survival*; Ed. Owl Books 2003/ isbn 0-8050-7688-3 [14] Prof. Henry Chesbrough; *Open Innovation (The new imperative for creating and profiting* 

[2] Prof. Michael Porter; *On Competition*; Ed. HBR 1998/ ISBN 0-87584-795-1

[9] Jim Collins; *Good to Great*; Ed. Harper Business 2001/ ISBN 0-06-662099-6 [10] Peter F Drucker; *People and Performance*; Ed. HBR 2007/ ISBN 978-1-4221-2065-1

*from Technology*; Ed. HBS /ISBN 1-4221-0283-1

University Press 2008/ ISBN 978-0--19-929072-7

Ed Oxford University Press 2005 /ISBN 978-0-19-926455-1

*global economy*); Ed. HBS 2007 / ISBN 978-1-4221-1035-5

 union/index\_en.cfm?section=competitiveness-report&year=2011 [25] http://ec.europa.eu/research/innovation-union/pdf/innovation-union-

McMilan 2006/ ISBN-13: 978-1-4039-4614-0

*World learns)*; Ed. Mc Grow Hill, 2008/ ISBN 978-0-07-159206-2

**5. References** 

684-84147-9

(10) 973-724-053-7

978-973-724-338-6

ISBN 3-9809723-0-5

55365-175-8

471-75722-1

9780199284993

\_en\_version.pdf

2010

/ ISBN 978-1-86197-968-1

[24] http://ec.europa.eu/research/innovation-

communication\_en.pdf

716-1

2004/ ISBN 3-200-00079-1

The development of ethnic economies, a business formula which immigrant groups create for themselves, connects their home country and their destination, configuring a transnational economic influence (Moldenhauer, 2005; Roudometof, 2005; Vertovec, 2004; Waldinger, 2010; Wong, 2004), which consolidates migratory fields. Thus what is known as the enterprising "bourgeois" sometimes overcomes the idea of the anachronism of selfemployment (Vidich & Bensman, 1960), since for some groups, it arises as a successful economic and social formula. On the other hand, immigrants form a new urban subclass (Clark, 1998). Therefore, some researchers have suggested that by entering the labor market as self-employed, they have more economic possibilities (Light and Gold, 2000; Werbner, 1980) and break with situations generating exclusion.

The success of these ethnic economies, such as the Koreans in Los Angeles or Cubans in Miami, is due mainly to the effort of owners and their employees, although in some cases they have also benefited from public aid. In any case, to open a business, the entrepreneur has to mobilize all the resources available to him, from the startup of certain ethnic strategies and design of the economic project within the opportunity structure and group characteristics (Waldinger et al., 1990).

The entrepreneur sacrifices himself and is self-exploited, which extends to his family and/or co-ethnic employees as well, working long days, without holidays and with very little vacation. This is more evident when there is a hostile host context (Portes & Böröcz, 1992), due to the difficulty in consolidating a business network in a primary segment, by setting up small dominant businesses.

In fact, in a hostile context, most of the immigrants are on the lowest levels of the fragmented market, where at most, small businesses develop in which the owners are middleman minorities. In such cases, Bonacich (1972; 1973; 1975) describes an starting situation in which there is not much development, and even stagnation, around the proliferation of entrepreneurs.

The phenomenon of immigrant entrepreneurs is not exclusive to the United States. It has also expanded to other geographic areas of the planet, especially European cities. With no attempt at being complete, see the studies on the subject by Aldrich et al. (1983) on different

Immigrant Entrepreneurs in Spain Concepts, Kinds of Business and Advances in Research 123

American environment, to which would have to be added the theory of mixed

The culturalist current (Bonacich, 1973), pioneering in this field, argues that certain immigrant groups have an *optional affinity* to the qualities required for business success, or in other words, immigrants choose self-employment either because of their merchant tradition or for religious reasons that provide the individual with wide knowledge in

The second current is the *ecological* type. Its arguments present two lines of analysis. The first are based on a comparison of modern and subsidiary economies in the hands of a small business class. In the second, the crucial factor is the patterns of spatial succession, first among neighboring residents and later, in the small class devoted to business (Aldrich, 1975). Therefore, opening ethnic businesses is only done when there are services and job offers which the overall economy does not satisfy. This situation derives from progressive abandonment of small businesses by the native population to enter a more profitable general market. Thus immigrants occupy labor niches in spaces that have been vacated

In the third place the *interactive* approach is determined by economic hypotheses. Their original proposition maintains that there is a connection between the internal resources which the community enjoys and the external opportunity structure. That is, selfemployment as a response to labor segmentation and blocked opportunities affecting immigrants, although it depends on adaptation of the groups that can offer to what their consumers demand (Waldinger, 1984), an idea which basically comes from the ecological

This theory suggests that ethnic businesses proliferate in industries where there is a balance between the demands of economic development and the informal resources of the ethnic population (Light & Rosenstein, 1995). The owners of ethnic businesses thus have a favorable position for competing with native owners. This integrating current is the most accepted and recognized in American literature. It is less applicable to Europe because the institutional framework and the economic and political context in which the entrepreneur

Finally, as a consequence of the above, in the European framework, explanations arise that emphasize the host context and legal-regulatory frameworks as essential components in forming ethnic entrepreneurs. This model, called *mixed embeddedness*, originated in the studies by Kloosterman et al. (1999). For these theorists, ethnic economies depend on the adaptation of what groups can offer and what they are allowed to offer, more than the relationship between consumer demand and what the groups try to market, as in the North

In view of the above, Kloosterman himself (2000) established a typology of embedded models. The first to appear is the *Neo-American Model*, typical of the United States and which is repeated in Australia, Ireland and England, covering countries where economic adaptation has undergone transcendental development and high ratios of employment are accompanied by low salaries, with very little government control over redistribution and provision of public services. On these premises, it is very attractive for immigrants to set up

embeddedness developed in Europe.

exercising their profession.

(vacancy chain).

hypotheses.

enters are undervalued.

American model.

cities in the United Kingdom, Werbner (1980) on Manchester, Blaschke & Ersöz (1986) on Berlín, Rekers & Van Kempen (2000), and Kloosterman (2000) on Amsterdam. Jan Rath (2002) for a comparative analysis of Europe and the United States (Paris, London, the West Midlands, Amsterdam, New York, Miami and Los Angeles), Dinh (2006), Goldring (2006) and Vuddamalay (2007) on Paris, Hillmann (2006) on Berlin, Serra (2009) for a study that reviews recent literature on ethnic business landscapes in metropolitan areas in North America, Australia and Europe, and Kloosterman & Rath (2010) for a review of OECD1 countries. In Spain, the proliferation of this type of business initiative has also been studied for over a decade, as discussed below.

However, the forms of incorporating self-employment in Europe are very different from North America, due to the host context, and variation in the opportunity structure. Therefore, explanatory paradigms must be reformulated and/or adapted for them to be valid in these countries.

In Spain, the case is even more complicated for two basic reasons. One, the short time that has gone by since it has become a host country, hardly twenty-five years, and two, the labor market structure, where immigrant labor enters secondary segment niches that are precarious, unstable and temporary (Carrasco, 1999; Colectivo IOE and Fernández, 2007; Pajares; 2010).

In spite of the above, a wide variety of ethnic businesses that supply co-ethnic and other immigrants are starting to appear. This is happening in the neighborhoods of Lavapiés (Madrid), Ciudad Vella (Barcelona), Port of Alicante, and the historical city centers of Seville, Almería, Valencia and Zaragoza.

Although the characteristics of these businesses are not comparable to North America or Central Europe, either in number of businesses and employees, or invoicing, income and economic involvement, they nevertheless share certain traits, such as the spatial concentration of ethnic communities (Checa, 2007; Echazarra, 2009; Fullaondo, 2008; Martínez, 1998), the proliferation of businesses thanks to that concentration and the use of public space to do it in (Monnet, 2000), their mostly co-ethnic customers, and the use of certain strategies in the economic project.

Thus Spanish research in what is commonly called the ethnic economy has begun to increase, to the point where at present there are at least half a dozen monographs and over twenty articles and as many chapters in books. Therefore, the purpose of this text is to review the main studies published in Spain to see the application of the different theoretical paradigms and the conceptual typology of the immigrant self-employment phenomenon.

#### **2. Prior theoretical perspectives: the demand for implementing a new model for the Spanish case**

There are a multitude of currents explaining the appearance of business initiatives by immigrants in the societies where they settle. However, the most suitable classification distinguishes between culturalist, ecological and interactive approaches typical of the

<sup>1</sup> In 2010, a joint study on immigrant entrepreneurs in the OECD (Open for Business Migrant Entrepreneurship in OECD Countries) was published. It is a review of the labor insertion by selfemployment in various countries in the developed world. However, there is no chapter on Spain.

cities in the United Kingdom, Werbner (1980) on Manchester, Blaschke & Ersöz (1986) on Berlín, Rekers & Van Kempen (2000), and Kloosterman (2000) on Amsterdam. Jan Rath (2002) for a comparative analysis of Europe and the United States (Paris, London, the West Midlands, Amsterdam, New York, Miami and Los Angeles), Dinh (2006), Goldring (2006) and Vuddamalay (2007) on Paris, Hillmann (2006) on Berlin, Serra (2009) for a study that reviews recent literature on ethnic business landscapes in metropolitan areas in North America, Australia and Europe, and Kloosterman & Rath (2010) for a review of OECD1 countries. In Spain, the proliferation of this type of business initiative has also been studied

However, the forms of incorporating self-employment in Europe are very different from North America, due to the host context, and variation in the opportunity structure. Therefore, explanatory paradigms must be reformulated and/or adapted for them to be

In Spain, the case is even more complicated for two basic reasons. One, the short time that has gone by since it has become a host country, hardly twenty-five years, and two, the labor market structure, where immigrant labor enters secondary segment niches that are precarious, unstable and temporary (Carrasco, 1999; Colectivo IOE and Fernández, 2007;

In spite of the above, a wide variety of ethnic businesses that supply co-ethnic and other immigrants are starting to appear. This is happening in the neighborhoods of Lavapiés (Madrid), Ciudad Vella (Barcelona), Port of Alicante, and the historical city centers of

Although the characteristics of these businesses are not comparable to North America or Central Europe, either in number of businesses and employees, or invoicing, income and economic involvement, they nevertheless share certain traits, such as the spatial concentration of ethnic communities (Checa, 2007; Echazarra, 2009; Fullaondo, 2008; Martínez, 1998), the proliferation of businesses thanks to that concentration and the use of public space to do it in (Monnet, 2000), their mostly co-ethnic customers, and the use of

Thus Spanish research in what is commonly called the ethnic economy has begun to increase, to the point where at present there are at least half a dozen monographs and over twenty articles and as many chapters in books. Therefore, the purpose of this text is to review the main studies published in Spain to see the application of the different theoretical paradigms and the conceptual typology of the immigrant self-employment phenomenon.

**2. Prior theoretical perspectives: the demand for implementing a new model** 

There are a multitude of currents explaining the appearance of business initiatives by immigrants in the societies where they settle. However, the most suitable classification distinguishes between culturalist, ecological and interactive approaches typical of the

1 In 2010, a joint study on immigrant entrepreneurs in the OECD (Open for Business Migrant Entrepreneurship in OECD Countries) was published. It is a review of the labor insertion by selfemployment in various countries in the developed world. However, there is no chapter on Spain.

for over a decade, as discussed below.

Seville, Almería, Valencia and Zaragoza.

certain strategies in the economic project.

**for the Spanish case** 

valid in these countries.

Pajares; 2010).

American environment, to which would have to be added the theory of mixed embeddedness developed in Europe.

The culturalist current (Bonacich, 1973), pioneering in this field, argues that certain immigrant groups have an *optional affinity* to the qualities required for business success, or in other words, immigrants choose self-employment either because of their merchant tradition or for religious reasons that provide the individual with wide knowledge in exercising their profession.

The second current is the *ecological* type. Its arguments present two lines of analysis. The first are based on a comparison of modern and subsidiary economies in the hands of a small business class. In the second, the crucial factor is the patterns of spatial succession, first among neighboring residents and later, in the small class devoted to business (Aldrich, 1975). Therefore, opening ethnic businesses is only done when there are services and job offers which the overall economy does not satisfy. This situation derives from progressive abandonment of small businesses by the native population to enter a more profitable general market. Thus immigrants occupy labor niches in spaces that have been vacated (vacancy chain).

In the third place the *interactive* approach is determined by economic hypotheses. Their original proposition maintains that there is a connection between the internal resources which the community enjoys and the external opportunity structure. That is, selfemployment as a response to labor segmentation and blocked opportunities affecting immigrants, although it depends on adaptation of the groups that can offer to what their consumers demand (Waldinger, 1984), an idea which basically comes from the ecological hypotheses.

This theory suggests that ethnic businesses proliferate in industries where there is a balance between the demands of economic development and the informal resources of the ethnic population (Light & Rosenstein, 1995). The owners of ethnic businesses thus have a favorable position for competing with native owners. This integrating current is the most accepted and recognized in American literature. It is less applicable to Europe because the institutional framework and the economic and political context in which the entrepreneur enters are undervalued.

Finally, as a consequence of the above, in the European framework, explanations arise that emphasize the host context and legal-regulatory frameworks as essential components in forming ethnic entrepreneurs. This model, called *mixed embeddedness*, originated in the studies by Kloosterman et al. (1999). For these theorists, ethnic economies depend on the adaptation of what groups can offer and what they are allowed to offer, more than the relationship between consumer demand and what the groups try to market, as in the North American model.

In view of the above, Kloosterman himself (2000) established a typology of embedded models. The first to appear is the *Neo-American Model*, typical of the United States and which is repeated in Australia, Ireland and England, covering countries where economic adaptation has undergone transcendental development and high ratios of employment are accompanied by low salaries, with very little government control over redistribution and provision of public services. On these premises, it is very attractive for immigrants to set up

Immigrant Entrepreneurs in Spain Concepts, Kinds of Business and Advances in Research 125

that distinguish these merchants from the Spaniards, namely, ethnic social networks, ingroup solidarity, family support, co-ethnic clientele and employees, etc. The idea is to make the best use of their ethnicity and the group they belong to their commercial advantage.

Moreras (1999) and Aramburu (2002) show a similar ecological situation in the Ciudad Vella neighborhood of Barcelona. Giménez, 2000, Cebrián, Bodega & Bordonado (2004) do so in the historical center of Madrid, in the zone of Lavapiés, Arjona (2004) in the El Puche neighborhood of Almería, where there is a proliferation of local businesses that have been vacated by natives, generating an economic revitalization in neighborhoods that were

The Neo-American embedded model coincides with the hypotheses of the interactive current and, due to the lack of a suitable reference for the Spanish environment, only a few studies have used it as the hypothesis for their work. Thus Moreras (1999) shows how the interactive paradigm has some goodness in the explanation of the insertion of Muslims in the meat market in Barcelona, especially in the deployment of ethnic strategies: family help, long hours, specialization in products, urban location, etc. Solé & Parella (2005:99) suggest a phenomenon in Catalonia that "suggests the North American model, in which self-

Martínez (2009) also works with a connection between group resources (class and ethnic) and immigrant family businesses. This author finds that companies are structured based on three dimensions: the family as a class resource, the family as an ethnic resource and, finally among her results she emphasizes that the role of the woman in the immigrant family business is fundamental, since in addition to her children's socialization, she covers

Along a similar line, Arjona & Checa (2006), based on an interactive model, found that for open businesses in the Province of Almería the role of the host context is more important in the opportunity structure than the characteristics of the groups, which tips the balance

However, the most outstanding thing about research in Spain is that it is not based on any single or particular model, but take as its reference some of the variables to explain why business works, especially the use of social networks, or in other cases leaves open some questions that must be resolved with the consolidation of the phenomenon and later scientific contributions. For example, Gómez (2007) studies small immigrant trade in four neighborhoods in Madrid. In one of his starting hypotheses, he seeks to verify whether immigrant companies and services share the basic strategies of small merchants in a native neighborhood based especially on the use of information and resources acquired from their social capital. His results highlight that these small companies were outside of the circles of the large firms that govern markets, and work based on group solidarity. That is, the same

Serra (2006) also describes the social implications of businesses in Barcelona, showing that the main agent of neighborhood economic revitalization is mainly the neighbors themselves, who prefer the nearest shops and direct communication. Furthermore, these entrepreneurs supply products and services that immigrants cannot find anywhere else. This makes them profitable in the face of outside competition from supercenters and native businesses in

employment arises as an attractive option for the most enterprising immigrants."

absences from the business of her husband or oldest sons.

toward the model of social embedment.

products offered are acquired by their compatriots.

general.

clearly declining.

a business, to the point where in some cities and in certain minorities, the ratio of selfemployment is higher than among natives.

Secondly, the *Rhineland* model is present in Austria, France, Luxembourg and Germany. This approach is contrary to the above: high salaries and secure employment in exchange for high unemployment, which leads to strong state control on migratory flows, with strong impediments and obstacles for immigrants entering the labor market. It is a model, therefore, characterized by a double *insider/outsider* structure. In this case, the ratio of immigrant self-employment is no higher than among natives (Haller, 2004).

Finally, the *Nordic Model*, characteristic of Denmark and Sweden, is based on strong control of the economy and industrial network by the State, similar to the Rhineland model, but the true difference is in the welfare state and gender equality. In this model, the proliferation of ethnic entrepreneurs is lower than in the other cases. With the regulation of labor relations and equality policies, immigrants choose to enter the open economy market.

It may be observed that an considerable theoretical effort has been made to fit to the social and economic reality of entrepreneurs. So now how do they fit the Spanish case? Is there specificity in the self-employment of immigrants in Spain? To answer these questions we review some of the most relevant studies on the Spanish case and try to place them in the theoretical perspective where they originate. Although on no few occasions, researchers overlap in different perspectives, since, in fact, we are dealing with a multifactor reality and, in others, no model is taken as a reference.

The studies by Crespo (2006) and Sow (2004) have a culturist focus. Both study selfemployment of Senagalese "Móodu-Móodu" in itinerant sales, finding that they maintain their business traditions at their destination. Part of the products offered and put on the market are even from Senegal or other countries, like Belgium, supplied by other Senegalese. Behind all of this there is a hidden network of solidarity and support founded on a religious philosophy of in-group self-help.

Similarly, among the Chinese in Spain there is an outstanding enterprising spirit (Beltrán, 2006) which had already been acquired in China, although once at their destination, their businesses are directed toward an open market, such as restaurants or everything-for-0.60€ stores, since their main customers are Spanish. At the same time the type of open business in Spain does not usually coincide with those at home. The decision to set themselves up as self-employed is maintained by help from their own group and because the service they offer is very competitive compared to others run by Spaniards or other nationalities, which gives them a large clientele.

Research in Madrid by Cebrián & Bodega (2002) has an ecological perspective, since they analyze abandonment of commercial spaces by the national population and explain how those business niches are recovered by immigrants, even sometimes offering the same services. They therefore describe the process of succession which was already shown in the classical studies of the Chicago School. However, these authors leave open the following questions: First, what components would differentiate ethnic communities in creating this type of establishment, and second, what components differentiate the business activity of minorities from the natives in the same type of business?

The answers should help distinguish successful businesses of some minorities from the failure of others, where the authors note cultural elements. Furthermore, the characteristics

a business, to the point where in some cities and in certain minorities, the ratio of self-

Secondly, the *Rhineland* model is present in Austria, France, Luxembourg and Germany. This approach is contrary to the above: high salaries and secure employment in exchange for high unemployment, which leads to strong state control on migratory flows, with strong impediments and obstacles for immigrants entering the labor market. It is a model, therefore, characterized by a double *insider/outsider* structure. In this case, the ratio of

Finally, the *Nordic Model*, characteristic of Denmark and Sweden, is based on strong control of the economy and industrial network by the State, similar to the Rhineland model, but the true difference is in the welfare state and gender equality. In this model, the proliferation of ethnic entrepreneurs is lower than in the other cases. With the regulation of labor relations

It may be observed that an considerable theoretical effort has been made to fit to the social and economic reality of entrepreneurs. So now how do they fit the Spanish case? Is there specificity in the self-employment of immigrants in Spain? To answer these questions we review some of the most relevant studies on the Spanish case and try to place them in the theoretical perspective where they originate. Although on no few occasions, researchers overlap in different perspectives, since, in fact, we are dealing with a multifactor reality and,

The studies by Crespo (2006) and Sow (2004) have a culturist focus. Both study selfemployment of Senagalese "Móodu-Móodu" in itinerant sales, finding that they maintain their business traditions at their destination. Part of the products offered and put on the market are even from Senegal or other countries, like Belgium, supplied by other Senegalese. Behind all of this there is a hidden network of solidarity and support founded

Similarly, among the Chinese in Spain there is an outstanding enterprising spirit (Beltrán, 2006) which had already been acquired in China, although once at their destination, their businesses are directed toward an open market, such as restaurants or everything-for-0.60€ stores, since their main customers are Spanish. At the same time the type of open business in Spain does not usually coincide with those at home. The decision to set themselves up as self-employed is maintained by help from their own group and because the service they offer is very competitive compared to others run by Spaniards or other nationalities, which

Research in Madrid by Cebrián & Bodega (2002) has an ecological perspective, since they analyze abandonment of commercial spaces by the national population and explain how those business niches are recovered by immigrants, even sometimes offering the same services. They therefore describe the process of succession which was already shown in the classical studies of the Chicago School. However, these authors leave open the following questions: First, what components would differentiate ethnic communities in creating this type of establishment, and second, what components differentiate the business activity of

The answers should help distinguish successful businesses of some minorities from the failure of others, where the authors note cultural elements. Furthermore, the characteristics

immigrant self-employment is no higher than among natives (Haller, 2004).

and equality policies, immigrants choose to enter the open economy market.

employment is higher than among natives.

in others, no model is taken as a reference.

on a religious philosophy of in-group self-help.

minorities from the natives in the same type of business?

gives them a large clientele.

that distinguish these merchants from the Spaniards, namely, ethnic social networks, ingroup solidarity, family support, co-ethnic clientele and employees, etc. The idea is to make the best use of their ethnicity and the group they belong to their commercial advantage.

Moreras (1999) and Aramburu (2002) show a similar ecological situation in the Ciudad Vella neighborhood of Barcelona. Giménez, 2000, Cebrián, Bodega & Bordonado (2004) do so in the historical center of Madrid, in the zone of Lavapiés, Arjona (2004) in the El Puche neighborhood of Almería, where there is a proliferation of local businesses that have been vacated by natives, generating an economic revitalization in neighborhoods that were clearly declining.

The Neo-American embedded model coincides with the hypotheses of the interactive current and, due to the lack of a suitable reference for the Spanish environment, only a few studies have used it as the hypothesis for their work. Thus Moreras (1999) shows how the interactive paradigm has some goodness in the explanation of the insertion of Muslims in the meat market in Barcelona, especially in the deployment of ethnic strategies: family help, long hours, specialization in products, urban location, etc. Solé & Parella (2005:99) suggest a phenomenon in Catalonia that "suggests the North American model, in which selfemployment arises as an attractive option for the most enterprising immigrants."

Martínez (2009) also works with a connection between group resources (class and ethnic) and immigrant family businesses. This author finds that companies are structured based on three dimensions: the family as a class resource, the family as an ethnic resource and, finally among her results she emphasizes that the role of the woman in the immigrant family business is fundamental, since in addition to her children's socialization, she covers absences from the business of her husband or oldest sons.

Along a similar line, Arjona & Checa (2006), based on an interactive model, found that for open businesses in the Province of Almería the role of the host context is more important in the opportunity structure than the characteristics of the groups, which tips the balance toward the model of social embedment.

However, the most outstanding thing about research in Spain is that it is not based on any single or particular model, but take as its reference some of the variables to explain why business works, especially the use of social networks, or in other cases leaves open some questions that must be resolved with the consolidation of the phenomenon and later scientific contributions. For example, Gómez (2007) studies small immigrant trade in four neighborhoods in Madrid. In one of his starting hypotheses, he seeks to verify whether immigrant companies and services share the basic strategies of small merchants in a native neighborhood based especially on the use of information and resources acquired from their social capital. His results highlight that these small companies were outside of the circles of the large firms that govern markets, and work based on group solidarity. That is, the same products offered are acquired by their compatriots.

Serra (2006) also describes the social implications of businesses in Barcelona, showing that the main agent of neighborhood economic revitalization is mainly the neighbors themselves, who prefer the nearest shops and direct communication. Furthermore, these entrepreneurs supply products and services that immigrants cannot find anywhere else. This makes them profitable in the face of outside competition from supercenters and native businesses in general.

Immigrant Entrepreneurs in Spain Concepts, Kinds of Business and Advances in Research 127

and affecting, above all, construction. At both times, salaries are low, especially in the labor niches where immigrants enter. Border controls are also lighter in times of expansion and stronger in times of crisis. These realities invite immigrants to set up their own businesses, in times of expansion to take advantage of the economic boom and that their co-ethnics are working, increasing their purchasing power. That is why a qualitative study by Parella (2004:7) found that some of the subjects interviewed did not use self-employment as way out in an emergency, but rather as an attractive option for the most enterprising immigrants,

But also, and in an attempt to escape from some of the characteristics of the secondary market which are accentuated during times of crisis, ethnic entrepreneurs take advantage of premises vacated by Spaniards because of the low profitability of the offer on the market. Moreras (1999:221) says, "…this type of [commercial] initiative has taken advantage of the crisis, adapting to it, as a way of finding a way to place itself on the market. They have discovered that under these circumstances, the native competition would not be very strong and that they could overcome it easily by applying certain strategies (long work day, selfexploitation, family business, credit to customers, wholesale and retail sales, etc.) and offering a very specific type of product to attract customers from their own group, while not

Moreover, in this situation, the immigrant entrepreneur who knows the social context and the unsatisfied demand will try to cover those gaps in products and services which the general economy does not, or does so at high cost (Arjona, 2008; Arjona and Checa, 2006b; Beltrán, Oso & Ribas, 2006; Buckcley, 1998; Cavalcanti, 2007; Gómez 2007; Oso & Ribas,

In any case, once they decide on self-employment as an economic strategy, foreigners must

The first has to do with the conditions required for registration in the Special Regime for Self-employed Workers. To start with, a residence and work permit are required2, at the same time all the administrative authorizations corresponding to the activity intended, including legalization of academic degree and membership in a professional society if applicable. These conditions are not required of all foreigners, since there are conventions or agreements with some countries for starting business in Spain (see Arjona, 2006). But as a general rule, the immigrant who intends to settle in Spain as a self-employed worker has to demonstrate first, employment generated by the activity to be performed, second, provision of capital to the national economy, third, sufficiency of investment, fourth, professional qualification, and fifth, contribution of new technologies; apart from compliance with the general regulations applicable to the rest of the nationals. Even when a new economic activity is going to be started up, the Government may deny the residence visa for self

2 Work permits for self employment may be: Type d (original), valid for one year, for a concrete activity and only a geographic area. Type D (renewed), which authorizes any self-employment activity throughout the national territory, this type is valid for two years. This permit Type D (renewed) may be acquired by holders of a Type d permit at its expiration. Finally Type E may be acquired at the expiration of D (renewed), also for a period of two years and authorizes any enterprising activity

overcome an enormous number of contextual hurdles, both external and internal.

analogous to what occurs in North American society.

employment without having to provide a reason for it.

throughout the national territory (Art. 69.2. Immigration Law).

limited to it."

2004).

Labajo (2007) examines the relevance of immigration as innovative commercial distribution in Madrid. In his study, he describes the retail business as responding increasingly to the new demands of immigrants, either by adapting its offer of value, or by immigrant integration as entrepreneurs. In Madrid, García et al. (2006) also describe the characteristics of entrepreneurs and the strategies they deploy to make their businesses work, in particular, intergroup solidarity and supply of ethnic products.

These situations explain the proliferation of *halal* butchers, bazaars, tearooms, groceries, etc. that are set up in both co-ethnic neighborhoods and places with through traffic. For example, Sempere (2000) in Alicante and Arjona (2006) in Almería, cities which connect Europe and North Africa by ship, have found that many shops supply immigrants that go and come between their homes and destinations. Some itinerant entrepreneurs even trade between the shores of the Mediterranean.

Aramburu (2002) goes a step further when he suggests why these businesses are different from natives whose businesses are also based on family and solidarity. Responding to the distinctive trait of some immigrant shops with respect to natives, there is a certain tendency to expand. Once the business gets going, the owner often opens other shops, putting uncles, cousins, nephews or trusted friends who had worked for them previously in charge. In other words, a school of entrepreneurs is created, as suggested by Waldinger (1993). Thus the fragmentation of family businesses finds its own way of independent economic integration, which protects them from the subordination and discrimination immigrants are often subject to in the salaried job market.

Torres (2006) analyzes businesses in Russafa (Valencia) based on the consolidation of informal networks in each group. He notes that shops not only serve as points of information, money or goods, but are also places for socializing. Commercial areas adopt one form or another according to the culture of the group they come from, the type of business, the insertion strategy, and the different uses they make of the neighborhood. Thus a "geographic boundary" becomes a space for socializing.

After this succinct analysis of previous studies done in Spain, it is clear that although certain elements coincide, new theoretical contributions are necessary to explain a very specific, definite reality, in which the singularities of the host context and regulatory framework differentiate it from other places. The Spanish situation does therefore not respond to any of the three wide interpretive theoretical models.

Based on the characteristics of the Spanish labor market, such as self-employment, which is described below, we attempt to formulate a model more responsive to the Spanish situation, which continuing with English nomenclature, is called the *South-European Model* (Arjona & Checa, 2006a) and which later research and consolidation of the phenomenon will have to refine, especially in local or particular case studies.

The Spanish labor market is characterized, among many other things, by being highly flexible and irregular, which makes it possible in times of expansion for its gross domestic product to grow more than in countries such as Germany or France, even though there is high unemployment, except in secondary markets, e.g., agriculture and construction. And in times of recession, such as the present one, its growth is much less than in most of the countries in the OECD, and its employment rate much higher, surpassing twenty percent,

Labajo (2007) examines the relevance of immigration as innovative commercial distribution in Madrid. In his study, he describes the retail business as responding increasingly to the new demands of immigrants, either by adapting its offer of value, or by immigrant integration as entrepreneurs. In Madrid, García et al. (2006) also describe the characteristics of entrepreneurs and the strategies they deploy to make their businesses work, in particular,

These situations explain the proliferation of *halal* butchers, bazaars, tearooms, groceries, etc. that are set up in both co-ethnic neighborhoods and places with through traffic. For example, Sempere (2000) in Alicante and Arjona (2006) in Almería, cities which connect Europe and North Africa by ship, have found that many shops supply immigrants that go and come between their homes and destinations. Some itinerant entrepreneurs even trade

Aramburu (2002) goes a step further when he suggests why these businesses are different from natives whose businesses are also based on family and solidarity. Responding to the distinctive trait of some immigrant shops with respect to natives, there is a certain tendency to expand. Once the business gets going, the owner often opens other shops, putting uncles, cousins, nephews or trusted friends who had worked for them previously in charge. In other words, a school of entrepreneurs is created, as suggested by Waldinger (1993). Thus the fragmentation of family businesses finds its own way of independent economic integration, which protects them from the subordination and discrimination immigrants are

Torres (2006) analyzes businesses in Russafa (Valencia) based on the consolidation of informal networks in each group. He notes that shops not only serve as points of information, money or goods, but are also places for socializing. Commercial areas adopt one form or another according to the culture of the group they come from, the type of business, the insertion strategy, and the different uses they make of the neighborhood. Thus

After this succinct analysis of previous studies done in Spain, it is clear that although certain elements coincide, new theoretical contributions are necessary to explain a very specific, definite reality, in which the singularities of the host context and regulatory framework differentiate it from other places. The Spanish situation does therefore not respond to any of

Based on the characteristics of the Spanish labor market, such as self-employment, which is described below, we attempt to formulate a model more responsive to the Spanish situation, which continuing with English nomenclature, is called the *South-European Model* (Arjona & Checa, 2006a) and which later research and consolidation of the phenomenon will have to

The Spanish labor market is characterized, among many other things, by being highly flexible and irregular, which makes it possible in times of expansion for its gross domestic product to grow more than in countries such as Germany or France, even though there is high unemployment, except in secondary markets, e.g., agriculture and construction. And in times of recession, such as the present one, its growth is much less than in most of the countries in the OECD, and its employment rate much higher, surpassing twenty percent,

intergroup solidarity and supply of ethnic products.

between the shores of the Mediterranean.

often subject to in the salaried job market.

a "geographic boundary" becomes a space for socializing.

the three wide interpretive theoretical models.

refine, especially in local or particular case studies.

and affecting, above all, construction. At both times, salaries are low, especially in the labor niches where immigrants enter. Border controls are also lighter in times of expansion and stronger in times of crisis. These realities invite immigrants to set up their own businesses, in times of expansion to take advantage of the economic boom and that their co-ethnics are working, increasing their purchasing power. That is why a qualitative study by Parella (2004:7) found that some of the subjects interviewed did not use self-employment as way out in an emergency, but rather as an attractive option for the most enterprising immigrants, analogous to what occurs in North American society.

But also, and in an attempt to escape from some of the characteristics of the secondary market which are accentuated during times of crisis, ethnic entrepreneurs take advantage of premises vacated by Spaniards because of the low profitability of the offer on the market. Moreras (1999:221) says, "…this type of [commercial] initiative has taken advantage of the crisis, adapting to it, as a way of finding a way to place itself on the market. They have discovered that under these circumstances, the native competition would not be very strong and that they could overcome it easily by applying certain strategies (long work day, selfexploitation, family business, credit to customers, wholesale and retail sales, etc.) and offering a very specific type of product to attract customers from their own group, while not limited to it."

Moreover, in this situation, the immigrant entrepreneur who knows the social context and the unsatisfied demand will try to cover those gaps in products and services which the general economy does not, or does so at high cost (Arjona, 2008; Arjona and Checa, 2006b; Beltrán, Oso & Ribas, 2006; Buckcley, 1998; Cavalcanti, 2007; Gómez 2007; Oso & Ribas, 2004).

In any case, once they decide on self-employment as an economic strategy, foreigners must overcome an enormous number of contextual hurdles, both external and internal.

The first has to do with the conditions required for registration in the Special Regime for Self-employed Workers. To start with, a residence and work permit are required2, at the same time all the administrative authorizations corresponding to the activity intended, including legalization of academic degree and membership in a professional society if applicable. These conditions are not required of all foreigners, since there are conventions or agreements with some countries for starting business in Spain (see Arjona, 2006). But as a general rule, the immigrant who intends to settle in Spain as a self-employed worker has to demonstrate first, employment generated by the activity to be performed, second, provision of capital to the national economy, third, sufficiency of investment, fourth, professional qualification, and fifth, contribution of new technologies; apart from compliance with the general regulations applicable to the rest of the nationals. Even when a new economic activity is going to be started up, the Government may deny the residence visa for self employment without having to provide a reason for it.

<sup>2</sup> Work permits for self employment may be: Type d (original), valid for one year, for a concrete activity and only a geographic area. Type D (renewed), which authorizes any self-employment activity throughout the national territory, this type is valid for two years. This permit Type D (renewed) may be acquired by holders of a Type d permit at its expiration. Finally Type E may be acquired at the expiration of D (renewed), also for a period of two years and authorizes any enterprising activity throughout the national territory (Art. 69.2. Immigration Law).

Immigrant Entrepreneurs in Spain Concepts, Kinds of Business and Advances in Research 129

Finally, the concept of ethnic enclave economy comes from the literature on the segmented labor market (Piore, 1974), where several elements are added to the ethnic economy concept (Zhou, 2004). In the first place, permanence of the business, in the second, the economic activities are not exclusively trade, but also include production activities directed at a general market, in the third place, the commercial variety that overcomes the succession of labor niches abandoned by the natives, and finally, the territorial variable, that is, businesses must be concentrated in a certain physical area where their networks are also located

Therefore, studies on ethnic economy still originate in the theory of middleman minorities (see, e.g., Kim, 2003 and Yeung, 1999), although the economic independence of immigrants and ethnic minorities are now analyzed to a greater extent and not only the middleman minorities. Furthermore, the different concepts analyzed do not make specific allusion to the regimen of holding businesses and ethnic control. Light and Gold (2000:5) suggest that, "These definitions are only valid to describe the *ethnic ownership economy*, which is only one component of the ethnic economy and the enclave and is not extensive to the whole." An *ethnic ownership economy* is defined by the ownership of the business. This leads to hiring coethnic employees and a wider margin of profit for the owner. On the other hand, "*ethniccontrolled economies* exist when and to the extent that the co-ethnic employers exert an appreciable and persistent economic power on workplaces due to their numbers, concentration and organization, and possibly external political or economic power" (Light & Gold, 2000:23). Thus these immigrants have the ability to make decisions on subjects related to salaries or contractual relationships that govern the relationships between workers and

Moreover, both the ethnic-controlled economy and the ethnic ownership economy have formal, informal and illegal subsectors (Tienda & Raijman, 2000). The formal sector is made up of businesses that pay their taxes and are officially registered. The informal sector includes businesses which produce legal goods and merchandise, but do not pay taxes and are not officially recognized. The illegal subsector consists of businesses that manufacture or distribute prohibited products or merchandise including drugs, gambling and forged

This description of the typology of businesses makes it possible to specify the typology of ethnic entrepreneurs in Spain. Thus, in many of the zones studied in Spain, insertion of immigrant labor as self-employed, in the beginning, fits in the concept of the middleman minorities, as described above, entrepreneurs who set up a business that is needed in a certain area: a Chinese restaurant, a telephone booth center, money transfers, etc., where customers are not necessarily co-ethnic. As these are open businesses, where both the location and the product offered are intended to attract a mixed clientele, natives and immigrants, the entrepreneurs who are the most successful are those with restaurants, and by nationality, mostly the Argentines and Chinese (Arjona & Checa; 2005; Beltrán, 2000;

However, there are also studies that concentrate on enclave entrepreneurs because their businesses are in segregated neighborhoods where the majority of the inhabitants are coethnic or other immigrants. So they become the main customers. This is the case of the *halal* butcher shops of Pakistanis in Barcelona and Madrid, Moroccans in Almería, etc. (Aramburu, 2002; Arjona, 2006; Moreras, 2002; Solé, Parella & Cavalcanti, 2007), Latin

(Logan, Alba & Stults, 2003).

the owner.

documents.

Gómez, 2007).

The second is that in addition to the limitations and/or conditions imposed by the *Ley de Extranjería* (Immigration Law) (Trinidad, 2003), local governments may also impede setting up a business, either through their administrative demands, or because of pressure from national entrepreneurs. This causes many businesses to be set up illegally, and their location and activity to be known only to their co-ethnic customers (Arjona, 2006; Arjona, Checa & Acién; 2005; Sempere, 2003; Sow, 2004).

Doubtless, in addition to all these governmental requirements which have a dissuasive effect on the immigrant, is the demand of having sufficient economic resources, which it is understood that only the fewest applications of this type of permit have. The business strategy, in this case, is to set up an informal business, which is what happens with home services, such as technical repairs, hairdressing, clothes, door-to-door sales, etc.

Immigrant entrepreneurs in Spain must thus surpass a considerable number of legal barriers imposed by governments, from national to local, as well as economic impediments and social rejection as foreigners and competitors. Thus all these elements combine in a new model which is different from others in the international framework.

#### **3. Types of business and profile of the immigrant entrepreneur in Spain**

Analysis of the different concepts that have arisen in establishing businesses by foreigners is a complicated task. There is, nevertheless, a certain consensus in international literature around the conceptual network that attempts to explain different situations within the ethnic economy, such as middleman minorities, enclave entrepreneurship and ethnic enclave economy.

The main characteristic that defines middleman minorities is self-employment in family businesses located in poor neighborhoods or immigrant ghettos, occupying the labor niches in the secondary sector vacated by natives. At present, they have begun to enter middle class neighborhoods with activities in the service sector, but establishing hardly any ties to the social structures of the community their economic activities are directed at.

Enclave entrepreneurs are defined mainly by co-ethnicity in both use of social structures and location. That is, they are businesses that operate in immigrant neighborhoods where the majority are co-ethnics. This is not the case of the middleman minorities, and there is a system of social relationships which makes them self-sufficient, which is where the hypothesis of ethnic solidarity gains in strength.

The concept of *ethnic economy* derives from the theory of middleman minorities (Bonacich, 1973). When Bonacich & Modell (1980) developed the concept of ethnic economy, they differentiated employment that arises from the general economy from employment which the minority creates for itself. The immigrant at destination enters in a divided labor market, which is determined by ethnic antagonism. The ethnic economy is defined as the economy that includes any immigrant who is an employer, self-employed or who is employed by coethnic businesses. In this sense, "The context of an ethnic economy is defined by race, ethnicity or national origin, characterized by acquiring advantages from the relationships between owners of businesses and owners and workers of the same national origin," (Logan, Alba & McNulty, 1994: 698).

The second is that in addition to the limitations and/or conditions imposed by the *Ley de Extranjería* (Immigration Law) (Trinidad, 2003), local governments may also impede setting up a business, either through their administrative demands, or because of pressure from national entrepreneurs. This causes many businesses to be set up illegally, and their location and activity to be known only to their co-ethnic customers (Arjona, 2006; Arjona, Checa &

Doubtless, in addition to all these governmental requirements which have a dissuasive effect on the immigrant, is the demand of having sufficient economic resources, which it is understood that only the fewest applications of this type of permit have. The business strategy, in this case, is to set up an informal business, which is what happens with home

Immigrant entrepreneurs in Spain must thus surpass a considerable number of legal barriers imposed by governments, from national to local, as well as economic impediments and social rejection as foreigners and competitors. Thus all these elements combine in a new

Analysis of the different concepts that have arisen in establishing businesses by foreigners is a complicated task. There is, nevertheless, a certain consensus in international literature around the conceptual network that attempts to explain different situations within the ethnic economy, such as middleman minorities, enclave entrepreneurship and ethnic

The main characteristic that defines middleman minorities is self-employment in family businesses located in poor neighborhoods or immigrant ghettos, occupying the labor niches in the secondary sector vacated by natives. At present, they have begun to enter middle class neighborhoods with activities in the service sector, but establishing hardly any ties to

Enclave entrepreneurs are defined mainly by co-ethnicity in both use of social structures and location. That is, they are businesses that operate in immigrant neighborhoods where the majority are co-ethnics. This is not the case of the middleman minorities, and there is a system of social relationships which makes them self-sufficient, which is where the

The concept of *ethnic economy* derives from the theory of middleman minorities (Bonacich, 1973). When Bonacich & Modell (1980) developed the concept of ethnic economy, they differentiated employment that arises from the general economy from employment which the minority creates for itself. The immigrant at destination enters in a divided labor market, which is determined by ethnic antagonism. The ethnic economy is defined as the economy that includes any immigrant who is an employer, self-employed or who is employed by coethnic businesses. In this sense, "The context of an ethnic economy is defined by race, ethnicity or national origin, characterized by acquiring advantages from the relationships between owners of businesses and owners and workers of the same national origin,"

the social structures of the community their economic activities are directed at.

hypothesis of ethnic solidarity gains in strength.

(Logan, Alba & McNulty, 1994: 698).

**3. Types of business and profile of the immigrant entrepreneur in Spain** 

services, such as technical repairs, hairdressing, clothes, door-to-door sales, etc.

model which is different from others in the international framework.

Acién; 2005; Sempere, 2003; Sow, 2004).

enclave economy.

Finally, the concept of ethnic enclave economy comes from the literature on the segmented labor market (Piore, 1974), where several elements are added to the ethnic economy concept (Zhou, 2004). In the first place, permanence of the business, in the second, the economic activities are not exclusively trade, but also include production activities directed at a general market, in the third place, the commercial variety that overcomes the succession of labor niches abandoned by the natives, and finally, the territorial variable, that is, businesses must be concentrated in a certain physical area where their networks are also located (Logan, Alba & Stults, 2003).

Therefore, studies on ethnic economy still originate in the theory of middleman minorities (see, e.g., Kim, 2003 and Yeung, 1999), although the economic independence of immigrants and ethnic minorities are now analyzed to a greater extent and not only the middleman minorities. Furthermore, the different concepts analyzed do not make specific allusion to the regimen of holding businesses and ethnic control. Light and Gold (2000:5) suggest that, "These definitions are only valid to describe the *ethnic ownership economy*, which is only one component of the ethnic economy and the enclave and is not extensive to the whole." An *ethnic ownership economy* is defined by the ownership of the business. This leads to hiring coethnic employees and a wider margin of profit for the owner. On the other hand, "*ethniccontrolled economies* exist when and to the extent that the co-ethnic employers exert an appreciable and persistent economic power on workplaces due to their numbers, concentration and organization, and possibly external political or economic power" (Light & Gold, 2000:23). Thus these immigrants have the ability to make decisions on subjects related to salaries or contractual relationships that govern the relationships between workers and the owner.

Moreover, both the ethnic-controlled economy and the ethnic ownership economy have formal, informal and illegal subsectors (Tienda & Raijman, 2000). The formal sector is made up of businesses that pay their taxes and are officially registered. The informal sector includes businesses which produce legal goods and merchandise, but do not pay taxes and are not officially recognized. The illegal subsector consists of businesses that manufacture or distribute prohibited products or merchandise including drugs, gambling and forged documents.

This description of the typology of businesses makes it possible to specify the typology of ethnic entrepreneurs in Spain. Thus, in many of the zones studied in Spain, insertion of immigrant labor as self-employed, in the beginning, fits in the concept of the middleman minorities, as described above, entrepreneurs who set up a business that is needed in a certain area: a Chinese restaurant, a telephone booth center, money transfers, etc., where customers are not necessarily co-ethnic. As these are open businesses, where both the location and the product offered are intended to attract a mixed clientele, natives and immigrants, the entrepreneurs who are the most successful are those with restaurants, and by nationality, mostly the Argentines and Chinese (Arjona & Checa; 2005; Beltrán, 2000; Gómez, 2007).

However, there are also studies that concentrate on enclave entrepreneurs because their businesses are in segregated neighborhoods where the majority of the inhabitants are coethnic or other immigrants. So they become the main customers. This is the case of the *halal* butcher shops of Pakistanis in Barcelona and Madrid, Moroccans in Almería, etc. (Aramburu, 2002; Arjona, 2006; Moreras, 2002; Solé, Parella & Cavalcanti, 2007), Latin

Immigrant Entrepreneurs in Spain Concepts, Kinds of Business and Advances in Research 131

on their human capital, just as it reduces their possibilities for ascension and promotion. Therefore, group characteristics and individual initiatives are slowed down by the opportunity structures which are not inclined toward the installation of ethnic businesses

In spite of the above, one of the most valued alternatives among immigrants is setting up a business of their own due to the transnational character, commercial and cultural ties are maintained with their home country and with other countries or regions, and the economic and social success this provides. A combination of transnationalism (Checa & Arjona, 2009), spatial concentration (Arjona & Checa, 2007), use of networks and ethnic solidarity compensates for (Cebrián & Bodega; 2002; Solé, Parella & Cavalcanti, 2007) the regulatory "hostility" imposed by the host context, which slows down the appearance of ethnic

However, from the internal labor relations in this market, characteristics typical of labor niches in other segmented markets and hostile reception are also observed (Riesco, 2004).

To summarize, as discussed above, the various studies carried out in Spain show that we are facing the particularity of a small business economy with profitability subject to several conditions. In the first place, the diversity of products offered. Most of the businesses offer their customers a multitude of services or products to maximize their resources and increase profit. In the second place, business hours are unscheduled. Opening and closing adapt to their customers, so most of the sales are when their co-ethnics and other immigrants finish their workday. In the third place, there are no salaries when the employ is a family member, child or wife, or they are low when the employee is a co-ethnic non-family member. And fourth, they are precarious and illegal. Employers, only on numbered occasions, register their workers. So the true alternative is for owners or managers, however, for the co-ethnic

The definitely novel nature of this phenomenon in Spain and its particularities require a theoretical model to explain how it functions. The text proposes one called the *South-European Model*, which because entrepreneurship is still incipient in Spain could be reformulated over time, especially if the role of the host context changes and the characteristics of groups become more important, and human and social capital as opportunity structures are defined. Therefore, research in new questions must continue to shed light on the explanatory model and the concepts used: Will the Spanish labor market stop being a hostile host context? Will there be a noticeable increase in ethnic businesses, and will they lead to ethnic economic enclaves? How will labor relations between employer and their co-ethnics develop? And finally, will the ethnic economy become an alternative for employers and employees? And how have immigrant businesses been affected by the

In any case, the transformation of the Spanish urban landscape based on the proliferation of ethnic businesses is already an indisputable reality which is revitalizing the neighborhoods where they have been set up, as these entrepreneurs have reactivated trade in zones of the city that were heading toward poverty. Consumers must take advantage of this economic coincidence and understand the enterprising initiatives of

(Arjona, 2006; Solé & Parella, 2005).

employees, it is a school of entrepreneurship.

current economic crisis?

immigrants as an opportunity.

economies.

American groceries and music shops, Romanian cafes and bars, etc. (Arjona & Checa, 2008; Sáiz; 2005; Torres, 2006).

Although in view of the characteristics of the businesses, could we speak of ethnic economies in Spain? Studies done up to now show an incipient situation, as there is quantitative and qualitative leap of middleman minorities and enclave entrepreneurs to vertical and horizontal multiplication of businesses, to larger shares of co-ethnic participation as employees (Arjona, 2005; Riesco, 2004; Solé & Parella, 2005), and a transnational logic in their activity (Arjona & Checa, 2009). This shows, in any case, that there is an incipient ethnic economy, consolidation of which will depend on the future economic situation and of the regulatory patterns of the Spanish State.

There is no doubt that in Spain there are no ethnic economic enclaves. The host context described above, where legal and governmental impediments are determinant, and the short time since the first businesses were set up, prevent us from being optimistic insofar as immigrants consolidating economically around ethnic economic enclaves; keep in mind that this phenomenon is rare even in other areas of Europe.

Finally, it should be emphasized that both ethnic ownership and ethnic control businesses do exist in Spain. Among the first, because of their number are the *halal* butcher shops, who supply meet to both Muslims and other immigrants, groceries and restaurants or bars, where typically ethnic products are offered (Arjona, 2006; Moreras, 2002; Solé & Parella, 2005). Ethnic-control businesses respond mostly to money transfer and telephony. They are the property of large multinational businesses in the sector that put an immigrant in charge to attract customers.

Likewise, and as a result of bureaucratic and economic impediments that this economic activity bears, a network of informal businesses is being generated that is fattening the underground economy. This includes hairdressers, bars, and other services offered in private homes, in cities, evading taxes and other legal requirements. Such clandestine businesses are known only to their customers and advertising and communications for access to them is through ethnic networks.

#### **4. Discussion and conclusions**

Spain, in its still recent condition as a host country for immigrants and with a hostile host context, is emerging on a first level of development of ethnic economies. Certainly, there is no Spanish city where we could speak of a *favorable* host context, that is, where professionals are able to enter job positions of leadership and entrepreneurs become prosperous around an ethnic economic enclave.

This leads to neither an interactive theoretical model arising out of an American model, or the European social embeddedness explaining precisely what is happening in Spain, and by extension, the countries in the south of Europe with similar characteristics. Therefore, a new paradigm is required, called the South-European Model, to explain the dynamics of the Spanish labor market and the scant opportunities for enterprising immigrants not from the European Union.

This is like that because immigrants in Spain enter a segmented labor market (Colectivo IOÉ, 2001; Gualda, 2005; Pajares, 2010). This reality limits them in large part to depending

American groceries and music shops, Romanian cafes and bars, etc. (Arjona & Checa, 2008;

Although in view of the characteristics of the businesses, could we speak of ethnic economies in Spain? Studies done up to now show an incipient situation, as there is quantitative and qualitative leap of middleman minorities and enclave entrepreneurs to vertical and horizontal multiplication of businesses, to larger shares of co-ethnic participation as employees (Arjona, 2005; Riesco, 2004; Solé & Parella, 2005), and a transnational logic in their activity (Arjona & Checa, 2009). This shows, in any case, that there is an incipient ethnic economy, consolidation of which will depend on the future

There is no doubt that in Spain there are no ethnic economic enclaves. The host context described above, where legal and governmental impediments are determinant, and the short time since the first businesses were set up, prevent us from being optimistic insofar as immigrants consolidating economically around ethnic economic enclaves; keep in mind that

Finally, it should be emphasized that both ethnic ownership and ethnic control businesses do exist in Spain. Among the first, because of their number are the *halal* butcher shops, who supply meet to both Muslims and other immigrants, groceries and restaurants or bars, where typically ethnic products are offered (Arjona, 2006; Moreras, 2002; Solé & Parella, 2005). Ethnic-control businesses respond mostly to money transfer and telephony. They are the property of large multinational businesses in the sector that put an immigrant in charge

Likewise, and as a result of bureaucratic and economic impediments that this economic activity bears, a network of informal businesses is being generated that is fattening the underground economy. This includes hairdressers, bars, and other services offered in private homes, in cities, evading taxes and other legal requirements. Such clandestine businesses are known only to their customers and advertising and communications for

Spain, in its still recent condition as a host country for immigrants and with a hostile host context, is emerging on a first level of development of ethnic economies. Certainly, there is no Spanish city where we could speak of a *favorable* host context, that is, where professionals are able to enter job positions of leadership and entrepreneurs become prosperous around

This leads to neither an interactive theoretical model arising out of an American model, or the European social embeddedness explaining precisely what is happening in Spain, and by extension, the countries in the south of Europe with similar characteristics. Therefore, a new paradigm is required, called the South-European Model, to explain the dynamics of the Spanish labor market and the scant opportunities for enterprising immigrants not from the

This is like that because immigrants in Spain enter a segmented labor market (Colectivo IOÉ, 2001; Gualda, 2005; Pajares, 2010). This reality limits them in large part to depending

economic situation and of the regulatory patterns of the Spanish State.

this phenomenon is rare even in other areas of Europe.

access to them is through ethnic networks.

**4. Discussion and conclusions** 

an ethnic economic enclave.

European Union.

Sáiz; 2005; Torres, 2006).

to attract customers.

on their human capital, just as it reduces their possibilities for ascension and promotion. Therefore, group characteristics and individual initiatives are slowed down by the opportunity structures which are not inclined toward the installation of ethnic businesses (Arjona, 2006; Solé & Parella, 2005).

In spite of the above, one of the most valued alternatives among immigrants is setting up a business of their own due to the transnational character, commercial and cultural ties are maintained with their home country and with other countries or regions, and the economic and social success this provides. A combination of transnationalism (Checa & Arjona, 2009), spatial concentration (Arjona & Checa, 2007), use of networks and ethnic solidarity compensates for (Cebrián & Bodega; 2002; Solé, Parella & Cavalcanti, 2007) the regulatory "hostility" imposed by the host context, which slows down the appearance of ethnic economies.

However, from the internal labor relations in this market, characteristics typical of labor niches in other segmented markets and hostile reception are also observed (Riesco, 2004).

To summarize, as discussed above, the various studies carried out in Spain show that we are facing the particularity of a small business economy with profitability subject to several conditions. In the first place, the diversity of products offered. Most of the businesses offer their customers a multitude of services or products to maximize their resources and increase profit. In the second place, business hours are unscheduled. Opening and closing adapt to their customers, so most of the sales are when their co-ethnics and other immigrants finish their workday. In the third place, there are no salaries when the employ is a family member, child or wife, or they are low when the employee is a co-ethnic non-family member. And fourth, they are precarious and illegal. Employers, only on numbered occasions, register their workers. So the true alternative is for owners or managers, however, for the co-ethnic employees, it is a school of entrepreneurship.

The definitely novel nature of this phenomenon in Spain and its particularities require a theoretical model to explain how it functions. The text proposes one called the *South-European Model*, which because entrepreneurship is still incipient in Spain could be reformulated over time, especially if the role of the host context changes and the characteristics of groups become more important, and human and social capital as opportunity structures are defined. Therefore, research in new questions must continue to shed light on the explanatory model and the concepts used: Will the Spanish labor market stop being a hostile host context? Will there be a noticeable increase in ethnic businesses, and will they lead to ethnic economic enclaves? How will labor relations between employer and their co-ethnics develop? And finally, will the ethnic economy become an alternative for employers and employees? And how have immigrant businesses been affected by the current economic crisis?

In any case, the transformation of the Spanish urban landscape based on the proliferation of ethnic businesses is already an indisputable reality which is revitalizing the neighborhoods where they have been set up, as these entrepreneurs have reactivated trade in zones of the city that were heading toward poverty. Consumers must take advantage of this economic coincidence and understand the enterprising initiatives of immigrants as an opportunity.

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**9** 

Wilfred Isak April

*Namibia* 

*University of Namibia, Windhoek,* 

**Exploring Entrepreneurial Initiatives** 

**Among New African Nations: Reflecting** 

**Upon the Entrepreneurial Culture of Ghana** 

**and Namibia – Two Former German Colonies** 

In the 'olden' days Africa was well known for its numerous challenges. In a 'new' Africa, the continent aims in addressing its challenges and develop essential strategies which will lead to the development of the continent. This chapter seeks to explore the entrepreneurial initiatives that occur in two African nations namely; Ghana and Namibia and the role culture plays in shaping entrepreneurship in Africa. The term entrepreneurship is derived from a French verb *'entreprendre'* meaning to take one's own hand and do something (Nieman et.al, 2009). In this chapter the author further explores this initial definition from

In addition this chapter explores the significant difference in terms of entrepreneurship between Ghana and Namibia and why the Western African nation of Ghana who received independence in 1960 has a lower literacy compared to Namibia who gained independence

This chapter will first look into the background of Ghana then Namibia. The methodology employed to conduct the study will be discussed to the greatest detail. Thereafter economies of these two nations will be explored, followed by a distinctive comparison. The chapter will

This West African nation of Ghana was initially part of 'Togoland'; a nation which was a German protectorate from 1884-1914. Togoland initially constitute two nations, the nation of Togo and a major part of the Volta Region District, Ghana. These colonies were formed during the imperialism period of Germany, which was also known as the scramble for Africa. Germany occupied Togoland for less than three decades and the German colonial period ended on August 6, 1914, however French and British troops invaded the territory on August 7, 1914. Although Ghana is relatively small in size, the nation has earned a special

be summarized with conclusions and recommendations for further research.

**2. Background on the two African economies (Ghana and Namibia)** 

**1. Introduction** 

an African context.

21 years ago.

**2.1 Ghana** 


## **Exploring Entrepreneurial Initiatives Among New African Nations: Reflecting Upon the Entrepreneurial Culture of Ghana and Namibia – Two Former German Colonies**

Wilfred Isak April *University of Namibia, Windhoek, Namibia* 

#### **1. Introduction**

136 Entrepreneurship - Gender, Geographies and Social Context

Trinidad, M. L. (2003), "El trabajo por cuenta propia de los extranjeros en España",

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Zhou, M. (2004). "Revisiting ethnic entrepreneurship: convergences, controversies and

strategies", Waldinger y otros, Ethnic Entrepreneurs, Immigrants business in

New Social Spaces in Global Cities: A Case-study of the 'Little India' of París», en Berggren, E.; Likić-Brborić, T.; Trimikliniotis, G.. Irregular Migration, Informal Labour and Community: a Challege for Europe. Maastrich: Shaker Publishing. Wong, LL. (2004). "Taiwanese Immigrant entrepreneurs in Canada and Transnational Social

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conceptual advancements". International Migration Review, 407-445, Internet:

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Journal of Urban and Regional Research, 23, 103-127.

http://www.findarticles.com/p/articles/mi\_qa3668.

Vidich, A. & Bensman, J. (1960). The organization man, Anchor, Garden City.

In the 'olden' days Africa was well known for its numerous challenges. In a 'new' Africa, the continent aims in addressing its challenges and develop essential strategies which will lead to the development of the continent. This chapter seeks to explore the entrepreneurial initiatives that occur in two African nations namely; Ghana and Namibia and the role culture plays in shaping entrepreneurship in Africa. The term entrepreneurship is derived from a French verb *'entreprendre'* meaning to take one's own hand and do something (Nieman et.al, 2009). In this chapter the author further explores this initial definition from an African context.

In addition this chapter explores the significant difference in terms of entrepreneurship between Ghana and Namibia and why the Western African nation of Ghana who received independence in 1960 has a lower literacy compared to Namibia who gained independence 21 years ago.

This chapter will first look into the background of Ghana then Namibia. The methodology employed to conduct the study will be discussed to the greatest detail. Thereafter economies of these two nations will be explored, followed by a distinctive comparison. The chapter will be summarized with conclusions and recommendations for further research.

#### **2. Background on the two African economies (Ghana and Namibia)**

#### **2.1 Ghana**

This West African nation of Ghana was initially part of 'Togoland'; a nation which was a German protectorate from 1884-1914. Togoland initially constitute two nations, the nation of Togo and a major part of the Volta Region District, Ghana. These colonies were formed during the imperialism period of Germany, which was also known as the scramble for Africa. Germany occupied Togoland for less than three decades and the German colonial period ended on August 6, 1914, however French and British troops invaded the territory on August 7, 1914. Although Ghana is relatively small in size, the nation has earned a special

Exploring Entrepreneurial Initiatives Among New African Nations:

**3. Education or literacy levels in Ghana and Namibia** 

entrepreneurial activity which occurs in an economy.

**3.1 Education in Ghana** 

**3.2 Education in Namibia** 

Reflecting Upon the Entrepreneurial Culture of Ghana and Namibia – Two Former German Colonies 139

Immunodeficiency Virus (HIV)/ Acquired Immune Deficiency Syndrome (AIDS) with fifteen percent (15%) of the adult population infected by HIV in 2007 (Pikkarainen, 2004: 11).

This section of this chapter will briefly outline the education or literacy levels of these two economies, as the dimension of education is strongly associated with the level of

In Ghana the education system has been very formal since the country attained independence in 1960 and there is little room to integrate the cultural constituents in a classroom setting, due to the challenge faced by native educators to integrate local cultural systems into the mainstream curriculum. This makes the system relatively similar to patterns of education which were followed during the period of colonialism. Schools or any training institutions used minimal self-initiative when conveying academic material to the participants. Instructors find it difficult to convey academic material in a local cultural context, because they are not equipped to do so. The nation of Ghana appeared to have lower literacy levels compared to Namibia which gained independence during the last twenty one (21) years. Literacy levels in Ghana could be relatively low because individuals are not taught content which they can relate and apply to their daily living circumstances. The Ghanaian people spoken to for the purpose of this research are of the opinion that changes which were prevalent at independence of Ghana did not follow a gradual pattern, which integrated people of color, ethnicity and race. The language dimension also has an important role to play when viewing the changes in the Ghanaian economy after independence. English is the official language used in the country; however the integration of local languages into mainstream business activities can help the economy to prosper.

Soon after independence; education and literacy programmes in Namibia underwent two fundamental phases due to colonization. Initially the invasion of the Germans had a fundamental influence on the education and literacy programmes followed by a long period of South African (Dutch) colonial rule. At Namibian independence educational and literacy programmes were not phase out indefinitely, however the process followed a gradual pattern of change or transformation. At independence most of the Namibian elderly people were employed by white settlers or employed in mines where most of them were

Upon gaining independence the government of the Republic of Namibia did not phase out all the educational and literacy programmes indefinitely as the process was conducted following a gradual transformation. This was mainly to ensure that all citizens were given an equal opportunity to be part of the transformation process, regardless of race, sex or gender (in short ensuring that the diverse nationalities within the country are fully represented an catered for). In a similar fashion schools and adult literacy programs have streams for various languages, and learners have the opportunity to learn at their own pace

accustomed to speak Afrikaans (similar to Dutch or German).

place in the hearts of many African people. The nations were known as Golden Coast, from the days of the Asante's federation, Ghana has served as a role model for a number of African nations, mostly due to resistance to colonial conquest. Ghana was the first African nation to receive independence on 6 March 1957 in sub-Saharan Africa. The capital city of Ghana is Accra, and the nation has a land area of 238,537 square kilometers (Turner, 2009). It is illustrated in the literature that fifty (50%) of the Ghanaian people are Christians, while the remaining population constitutes Muslims and other traditional religions.

The primary interest of Germany in Ghana was due to the nation's abundance and richness in crops such as cacao, coffee and cotton. During this period the colonial administrators brought with them scientific methods which ensured efficient and effective cultivation of crops which made it easier for the crops to be exported. Prior to the occupancy of Germany, Ghana had well established infrastructure most of which was destroyed during World War I. Given the current situation in Ghana it appears that no strong initiative measures were employed to rebuild the infrastructure of the country to date.

#### **2.2 Namibia**

The Southern African nation: *Namibia* was previously known as South West Africa whose western border is the Atlantic Ocean, and shares land borders with Angola and Zambia to the north, Botswana to the east and South Africa to the south and east. Namibia is a relatively large and sparsely populated country and is the 31st largest country in the world. The country is divided into thirteen (13) regions; the Caprivi, Kavango, Kunene, Omusati, Ohangwena, Oshana and Oshikoto regions in the north, the Omaheke, Otjozondjupa, Erongo, and Khomas region in central areas, and the Hardap and Kara's regions in Southern Namibia (Republic of Namibia, 2010).

Namibia has it's diverse history embedded in a rich culture. It was first ruled by Germany, and after the First World War (I) the newly formed League of Nations gave the mandate for governing Namibia to Britain. This mandate was managed by South Africa on behalf of Britain, and came into effect in 1921, and this was the beginning of South African control over Namibia. In 1973 the South West African People's Organization (SWAPO) was the official representative of the Namibian people. Followed by political unrest and internal violence, South Africa installed an interim administration in Namibia in 1985. Namibia gained full independence from South Africa on 21st March 1990, following Namibian War of Independence.

Namibia is a member state of the United Nations (UN), the South African Development Community (SADC), the African Union (AU), and the Commonwealth of Nations (Republic of Namibia, 2010). The total population of Namibia is 2million and a stable multiparty parliamentary democracy. It is the second least densely populated country in the world. English is the official language used for business communication but other recognized and widely spoken languages include: Oshiwambo, Herero, Setswana, and German amongst many others. The Namibian dollar is the official currency used in Namibia. Its capital city and the largest city is Windhoek. The backbone of the Namibian economy is driven by agriculture, herding, tourism and mining of gem diamonds, uranium, gold and silver production. Close to fifty percent (50%) of the population lives below the international poverty line, and the nation has suffered heavily from the effects of Human Immunodeficiency Virus (HIV)/ Acquired Immune Deficiency Syndrome (AIDS) with fifteen percent (15%) of the adult population infected by HIV in 2007 (Pikkarainen, 2004: 11).

### **3. Education or literacy levels in Ghana and Namibia**

This section of this chapter will briefly outline the education or literacy levels of these two economies, as the dimension of education is strongly associated with the level of entrepreneurial activity which occurs in an economy.

#### **3.1 Education in Ghana**

138 Entrepreneurship - Gender, Geographies and Social Context

place in the hearts of many African people. The nations were known as Golden Coast, from the days of the Asante's federation, Ghana has served as a role model for a number of African nations, mostly due to resistance to colonial conquest. Ghana was the first African nation to receive independence on 6 March 1957 in sub-Saharan Africa. The capital city of Ghana is Accra, and the nation has a land area of 238,537 square kilometers (Turner, 2009). It is illustrated in the literature that fifty (50%) of the Ghanaian people are Christians, while

The primary interest of Germany in Ghana was due to the nation's abundance and richness in crops such as cacao, coffee and cotton. During this period the colonial administrators brought with them scientific methods which ensured efficient and effective cultivation of crops which made it easier for the crops to be exported. Prior to the occupancy of Germany, Ghana had well established infrastructure most of which was destroyed during World War I. Given the current situation in Ghana it appears that no strong initiative measures were

The Southern African nation: *Namibia* was previously known as South West Africa whose western border is the Atlantic Ocean, and shares land borders with Angola and Zambia to the north, Botswana to the east and South Africa to the south and east. Namibia is a relatively large and sparsely populated country and is the 31st largest country in the world. The country is divided into thirteen (13) regions; the Caprivi, Kavango, Kunene, Omusati, Ohangwena, Oshana and Oshikoto regions in the north, the Omaheke, Otjozondjupa, Erongo, and Khomas region in central areas, and the Hardap and Kara's regions in Southern

Namibia has it's diverse history embedded in a rich culture. It was first ruled by Germany, and after the First World War (I) the newly formed League of Nations gave the mandate for governing Namibia to Britain. This mandate was managed by South Africa on behalf of Britain, and came into effect in 1921, and this was the beginning of South African control over Namibia. In 1973 the South West African People's Organization (SWAPO) was the official representative of the Namibian people. Followed by political unrest and internal violence, South Africa installed an interim administration in Namibia in 1985. Namibia gained full independence from South Africa on 21st March 1990, following Namibian War of

Namibia is a member state of the United Nations (UN), the South African Development Community (SADC), the African Union (AU), and the Commonwealth of Nations (Republic of Namibia, 2010). The total population of Namibia is 2million and a stable multiparty parliamentary democracy. It is the second least densely populated country in the world. English is the official language used for business communication but other recognized and widely spoken languages include: Oshiwambo, Herero, Setswana, and German amongst many others. The Namibian dollar is the official currency used in Namibia. Its capital city and the largest city is Windhoek. The backbone of the Namibian economy is driven by agriculture, herding, tourism and mining of gem diamonds, uranium, gold and silver production. Close to fifty percent (50%) of the population lives below the international poverty line, and the nation has suffered heavily from the effects of Human

the remaining population constitutes Muslims and other traditional religions.

employed to rebuild the infrastructure of the country to date.

**2.2 Namibia** 

Independence.

Namibia (Republic of Namibia, 2010).

In Ghana the education system has been very formal since the country attained independence in 1960 and there is little room to integrate the cultural constituents in a classroom setting, due to the challenge faced by native educators to integrate local cultural systems into the mainstream curriculum. This makes the system relatively similar to patterns of education which were followed during the period of colonialism. Schools or any training institutions used minimal self-initiative when conveying academic material to the participants. Instructors find it difficult to convey academic material in a local cultural context, because they are not equipped to do so. The nation of Ghana appeared to have lower literacy levels compared to Namibia which gained independence during the last twenty one (21) years. Literacy levels in Ghana could be relatively low because individuals are not taught content which they can relate and apply to their daily living circumstances.

The Ghanaian people spoken to for the purpose of this research are of the opinion that changes which were prevalent at independence of Ghana did not follow a gradual pattern, which integrated people of color, ethnicity and race. The language dimension also has an important role to play when viewing the changes in the Ghanaian economy after independence. English is the official language used in the country; however the integration of local languages into mainstream business activities can help the economy to prosper.

#### **3.2 Education in Namibia**

Soon after independence; education and literacy programmes in Namibia underwent two fundamental phases due to colonization. Initially the invasion of the Germans had a fundamental influence on the education and literacy programmes followed by a long period of South African (Dutch) colonial rule. At Namibian independence educational and literacy programmes were not phase out indefinitely, however the process followed a gradual pattern of change or transformation. At independence most of the Namibian elderly people were employed by white settlers or employed in mines where most of them were accustomed to speak Afrikaans (similar to Dutch or German).

Upon gaining independence the government of the Republic of Namibia did not phase out all the educational and literacy programmes indefinitely as the process was conducted following a gradual transformation. This was mainly to ensure that all citizens were given an equal opportunity to be part of the transformation process, regardless of race, sex or gender (in short ensuring that the diverse nationalities within the country are fully represented an catered for). In a similar fashion schools and adult literacy programs have streams for various languages, and learners have the opportunity to learn at their own pace

Exploring Entrepreneurial Initiatives Among New African Nations:

**5. Entrepreneurial initiatives in Ghana and Namibia** 

knowledge which is conducted by indigenous people (Dana, 2005).

**5.2 Entrepreneurial initiatives in Namibia** 

were conducted to verify information or data

**5.1 Ghanaian entrepreneurial initiatives** 

products impossible.

Reflecting Upon the Entrepreneurial Culture of Ghana and Namibia – Two Former German Colonies 141

lasted for about 15 to 20 minutes. Most of the research pertaining to Ghana was obtained through desk research, and twenty Namibians were interviewed to obtain information on Namibia. The respondents were very eager to be part of the research and also very cooperative. To ensure consistency, reliability and quality, data was consistently updated and verified. Whenever the researcher came across conflicting ideas follow up interviews

Ghana's government has a vision of accelerated and sustained economic growth which aims at providing equal opportunities for all Ghanaians. According to Mitchell (2006b) the West African nation of Ghana is currently seen as one of the most underprivileged regions in the world. This could be viewed and judged in terms of the commonest yardstick, gross national product or by certain measures which pertains to human development. These measures include life expectancy, education, food security and adequate access to clean and safe drinking water. There are local food products or commodities which the Ghanaians trade with namely; cassava however to movement of products from one destination to another. However effective and effective service delivery is complicated by poor communication networks and great distances which make the movement of both people and

Entrepreneurial activity in Ghana refers to the degree to which the citizens of Ghana find ways and means to produce food and local consumption of commodities for individuals within the nation to benefit the community. Like a number of other nations in West Africa, Ghana's economy is primarily based on agriculture. Cacao is the main product exported from Ghana and is the main source of external revenue. Approximately close to fifty percent (50%) of the Ghanaian gross domestic product constitute agriculture, forestry and fishing, while the manufacturing and mining industries contribute twenty percent (20%) of the GDP. Wholesale and retail trade add 12%, services constitute 14% while transport and communications contribute 4% to the GDP. Regardless of this well laid distribution of resources across the various sectors, natural and in some situations skilled human resources at its disposal the Ghanaian economy was still unable to sustain its growth. The downspin of the economy has been symptomatic of the political turmoil and social unease which pervaded in the past and continued to persist in the neighboring countries of West Africa (Pellow and Chazan, 1986: 4). When we study local communities in Ghana at a community level most of the enterprises falls within the category of micro, small and medium entrepreneurship, with an employment capacity of close to seventy (70%) of the Ghanaian labor force. Some communities engage in farming, art, craft, grow crops, carpentry, just to name a few. This form of entrepreneurial initiatives practiced by these communities is a good illustration of indigenous entrepreneurship. Entrepreneurship based on self-

Namibia is rich in mineral deposits namely; uranium, diamonds, silver, tin, zinc. Most of the Namibian population is employed in the agricultural sector. It is critical to highlight at this

in native language, followed by Afrikaans and German. Although English is the official language most Namibians are multilingual and this is made possible by the manner through which the government integrated new educational programmes after independence. This does not imply that Namibia has the best education system in Africa, the country is also faced with its challenges, but there is a vision of change and hope that Namibians are striving to achieve.

#### **4. Research methodology**

Being explanatory in nature this chapter aims to reveal the cultural differences between Ghana and Namibia. This chapter will give a general vision of Ghana and Namibia based on other sources and academic literature. It was wise for the researcher to select both qualitative and quantitative research methods to write up this chapter. Qualitative research techniques capture rich meaning of the respondents in their own words. Quantitative methodologies allowed the researcher to obtain information about the people of Namibia and Ghana in a fast and orderly manner. In addition quantitative methodologies will clearly illustrate why there is such a distinctive difference in terms of entrepreneurial orientation amongst these two nations, given the fact that Ghana was a prime role model for most African nations. When the researcher employs quantitative techniques the focus is on how rather than why? 'How come Ghana's entrepreneurial initiatives are much lower than that of Namibia?

The technique of participant observation was also employed for this research, with the methodological mandate of being technically sensitive. This technique was only employed for the Namibian participants, as the lack of research funding did not enable the researcher to conduct the study in Ghana. Participant observation is a good research technique as it enables the researcher to grasp an understanding of entrepreneurship and its social context (Bruyn, 1966; Jorgensen, 1993, and Spradley, 1997). The use of participant observation was very critical to obtain information about the Namibian respondents because, according to the African concept of "Ubuntu", the individual is part of the society and the individual's survival depends on that society (Mbigi, 2005).

Secondary printed sources were also reviewed to derive information for this chapter, in particular to get information on Ghana, as it was not possible for the researcher to conduct the study in Ghana. An extensive literature survey was conducted to capture information on both nations. The methodology enabled the researcher to review secondary literature and record possible and meaningful insights. Interviews were identified through snowball sampling. As explained by Muller-Wille and Hukkinen (1999), In snowball sampling of interviewees, those already interviewed identify who else they think should be interviewed'. According to Goodman (1961) interviewing only stops when the last respondents suggest only individual's names by others. Prior to conducting the interviews the interviewer tried to build a trusting relationship with the respondents ensuring that correct and accurate information about Ghana and Namibia is obtained.

The researcher developed a clear interview guide which constitutes open ended questions and close questions to capture a rich and meaningful understanding of what people say in their own words, about the entrepreneurial initiatives of these nations, their own experiences and the way forward envisaged for the respective nations. Interviews generally lasted for about 15 to 20 minutes. Most of the research pertaining to Ghana was obtained through desk research, and twenty Namibians were interviewed to obtain information on Namibia. The respondents were very eager to be part of the research and also very cooperative. To ensure consistency, reliability and quality, data was consistently updated and verified. Whenever the researcher came across conflicting ideas follow up interviews were conducted to verify information or data

### **5. Entrepreneurial initiatives in Ghana and Namibia**

#### **5.1 Ghanaian entrepreneurial initiatives**

140 Entrepreneurship - Gender, Geographies and Social Context

in native language, followed by Afrikaans and German. Although English is the official language most Namibians are multilingual and this is made possible by the manner through which the government integrated new educational programmes after independence. This does not imply that Namibia has the best education system in Africa, the country is also faced with its challenges, but there is a vision of change and hope that Namibians are

Being explanatory in nature this chapter aims to reveal the cultural differences between Ghana and Namibia. This chapter will give a general vision of Ghana and Namibia based on other sources and academic literature. It was wise for the researcher to select both qualitative and quantitative research methods to write up this chapter. Qualitative research techniques capture rich meaning of the respondents in their own words. Quantitative methodologies allowed the researcher to obtain information about the people of Namibia and Ghana in a fast and orderly manner. In addition quantitative methodologies will clearly illustrate why there is such a distinctive difference in terms of entrepreneurial orientation amongst these two nations, given the fact that Ghana was a prime role model for most African nations. When the researcher employs quantitative techniques the focus is on how rather than why? 'How come Ghana's entrepreneurial initiatives are much lower than that

The technique of participant observation was also employed for this research, with the methodological mandate of being technically sensitive. This technique was only employed for the Namibian participants, as the lack of research funding did not enable the researcher to conduct the study in Ghana. Participant observation is a good research technique as it enables the researcher to grasp an understanding of entrepreneurship and its social context (Bruyn, 1966; Jorgensen, 1993, and Spradley, 1997). The use of participant observation was very critical to obtain information about the Namibian respondents because, according to the African concept of "Ubuntu", the individual is part of the society and the individual's

Secondary printed sources were also reviewed to derive information for this chapter, in particular to get information on Ghana, as it was not possible for the researcher to conduct the study in Ghana. An extensive literature survey was conducted to capture information on both nations. The methodology enabled the researcher to review secondary literature and record possible and meaningful insights. Interviews were identified through snowball sampling. As explained by Muller-Wille and Hukkinen (1999), In snowball sampling of interviewees, those already interviewed identify who else they think should be interviewed'. According to Goodman (1961) interviewing only stops when the last respondents suggest only individual's names by others. Prior to conducting the interviews the interviewer tried to build a trusting relationship with the respondents ensuring that

The researcher developed a clear interview guide which constitutes open ended questions and close questions to capture a rich and meaningful understanding of what people say in their own words, about the entrepreneurial initiatives of these nations, their own experiences and the way forward envisaged for the respective nations. Interviews generally

correct and accurate information about Ghana and Namibia is obtained.

striving to achieve.

of Namibia?

**4. Research methodology** 

survival depends on that society (Mbigi, 2005).

Ghana's government has a vision of accelerated and sustained economic growth which aims at providing equal opportunities for all Ghanaians. According to Mitchell (2006b) the West African nation of Ghana is currently seen as one of the most underprivileged regions in the world. This could be viewed and judged in terms of the commonest yardstick, gross national product or by certain measures which pertains to human development. These measures include life expectancy, education, food security and adequate access to clean and safe drinking water. There are local food products or commodities which the Ghanaians trade with namely; cassava however to movement of products from one destination to another. However effective and effective service delivery is complicated by poor communication networks and great distances which make the movement of both people and products impossible.

Entrepreneurial activity in Ghana refers to the degree to which the citizens of Ghana find ways and means to produce food and local consumption of commodities for individuals within the nation to benefit the community. Like a number of other nations in West Africa, Ghana's economy is primarily based on agriculture. Cacao is the main product exported from Ghana and is the main source of external revenue. Approximately close to fifty percent (50%) of the Ghanaian gross domestic product constitute agriculture, forestry and fishing, while the manufacturing and mining industries contribute twenty percent (20%) of the GDP. Wholesale and retail trade add 12%, services constitute 14% while transport and communications contribute 4% to the GDP. Regardless of this well laid distribution of resources across the various sectors, natural and in some situations skilled human resources at its disposal the Ghanaian economy was still unable to sustain its growth. The downspin of the economy has been symptomatic of the political turmoil and social unease which pervaded in the past and continued to persist in the neighboring countries of West Africa (Pellow and Chazan, 1986: 4). When we study local communities in Ghana at a community level most of the enterprises falls within the category of micro, small and medium entrepreneurship, with an employment capacity of close to seventy (70%) of the Ghanaian labor force. Some communities engage in farming, art, craft, grow crops, carpentry, just to name a few. This form of entrepreneurial initiatives practiced by these communities is a good illustration of indigenous entrepreneurship. Entrepreneurship based on selfknowledge which is conducted by indigenous people (Dana, 2005).

#### **5.2 Entrepreneurial initiatives in Namibia**

Namibia is rich in mineral deposits namely; uranium, diamonds, silver, tin, zinc. Most of the Namibian population is employed in the agricultural sector. It is critical to highlight at this

Exploring Entrepreneurial Initiatives Among New African Nations:

in terms of entrepreneurial activity.

*Vol.6, No.3, pp.163-174.* 

Van Schaik Publishers.

*Press. Binghamton, New York.* 

**7. References** 

Reflecting Upon the Entrepreneurial Culture of Ghana and Namibia – Two Former German Colonies 143

good, but the lack of skilled people to take up these opportunities is scarce. From this chapter the researcher can also deduced factors that hinders business formation in these nations namely lack of well-established infrastructure, poor communication links or networks, overpopulation, strict regulatory measures or procedures which make it difficult for certain members of the community to contribute to their maximum potential. The findings of this chapter also reveal that higher levels of literacy are critical for any economy to flourish and in particular developing the entrepreneurial initiatives within an economy. Strong differences in terms of culture can be seen between Ghana and Namibia. Both nations' lives by the "Ubuntu" principles but challenges exist within the various cultural groups within the regions of each nation. Namibia seems to have undergone a longer period of German colonization, and that might bring about significant differences between the various nations: both in terms of culture and literacy. It is the recommendation of the author that both Western and African approach should be integrated both in Ghana and Namibia for entrepreneurial initiatives to flourish and improve the living conditions and the wellbeing of the communities. It is important to reiterate that skilled manpower is an essential ingredient for any successful economy. It is worry some that the current education systems in Africa are directed in giving a sub-average education to the masses rather than also giving superb education to the gifted few. To make matters worse, the gifted few are often nabbed by the greedy first world economies. For both the Ghanaian and Namibian economies to be a success in future, it has become high time that professionals trained abroad returned to their home nations, but African nations fail to create an enticing environment which would make those trained abroad to stay. Issues amongst many others which make the stay of the Africans trained abroad unpleasant is professional jealousy from those which have never studied abroad. Both Western and African practices should be adopted for effective and efficient change to take place. A limitation of this study is that an in depth study on Ghana could be conducted for future research, and the researcher has to extract a larger sample which could probe more information on these significant differences

April, W.I. (2010) 'Reflecting upon the entrepreneurship initiatives in new emerging African

Bruyn, S. (1966). *The Human Perspective in Sociology*: The methodology of participant

Dana, L.P. (2007). Promoting SMEs in Africa. *Journal of African Business. International Business* 

Jorgensen, D.L. (1993). *Participant Observation: A methodology for Human Studies (Applied Social* 

Lekoko, R.N. (2007). Story-telling as potent research paradigm for indigenous communities.

Nieman, G. and Nieuwenhuizen, C. (2009). Entrepreneurship : A South African Perspective.

Fick, D. (2006). *Africa: Continent of Economic Opportunity.* Johannesburg, South Africa.

*The International Journal of Indigenous People's, Vol.3, No.2, pp.82-95.*  Mbigi, L (2005). *The Spirit of African Leadership*. Knowres Publishing. South Africa.

observation, Prentice Hall, Englewood Cliffs, NJ.

*Research Methods, Vol 15)*, Sage, Thousand Oaks, CA.

nations: zooming the cultural lens on education systems in two former German colonies', *World Review of Entrepreneurship, Management and Sustainable Development,* 

point that people in the agricultural sector have a very strong sense of sharing regardless of the resources that they are producing. The lifestyle of the people is strongly embedded in the cultural concept of "Ubuntu" which is a term Former South African President Nelson Mandela describes as, *"I am, because you are".* No individual can sustain or live by him/herself, but can only achieve because of the support from others.

The mining sector contributes fifty percent (50) of the Namibian exports. In return exports accounts for forty percent (40%) of the GDP. It is important to clarify at this stage that GDP growth is volatile because of the heavy reliance on mineral exports, but nevertheless robust and Namibia has exceeded a number of its neighboring countries.

The manufacturing sector of the Namibian economy is an industry which produces or sells food. An entrepreneurial initiative in terms of the Namibian economy entails the development of local resources by Namibians, for the sustenance of their own people based on local knowledge. Similar to Ghana the small business sector in Namibia operates under an umbrella body of small and medium enterprises, and these are sometimes not formally linked to local communities. Most entrepreneurial initiatives of local communities normally operate in an informal manner (underground economy) before they are eventually integrated into the formal economy.

When we talk of Namibia, most entrepreneurial initiatives are integrated within the agricultural sector where communities focuses on raising stock livestock, due to inefficient supply of water and poor rainfall which limits effective farming. Except for the northern regions of Namibia, who are closer to the Angolan border (which is naturally greener), some of the central and most of the southern communities survive from small livestock (in terms of indigenous communities).

#### **6. Concluding remarks and recommendations for future research**

This chapter explored the entrepreneurial initiatives of two African nations namely Ghana and Namibia. The chapter in particular looked at why Ghana which has been a prime model of development for many African nations is still challenged to develop its economy, while Namibia which was the last nation to gain independence is doing relatively well. The findings from this chapter reveal that the forms of business enterprises adopted by these two nations at their independence had significant differences. The programs adopted by Ghana had a strong Western approach to business, while Namibia seems to have adopted local cultural practices in its business initiatives. Western African nations seem to be very entrepreneurial at a local community level, but the level of cooperation and coordination for communities to work together seems to be major challenge for Ghana. Issues of nepotism, corruption seems to be a major challenge for the Western nation of Ghana, which seems to hinder good initiatives for flourishing entrepreneurship. Most respondents which were interviewed for this paper felt that there is room for good entrepreneurial initiatives, but the issues of nepotism and corruption cause many Ghanaians to leave the country to seek for better opportunities elsewhere.

Namibia seems to have a good balance between Western cultural practices of conducting business with indigenous cultural practices. However flourishing entrepreneurial initiatives remains a major challenge. Opportunities for entrepreneurial initiatives in Namibia are good, but the lack of skilled people to take up these opportunities is scarce. From this chapter the researcher can also deduced factors that hinders business formation in these nations namely lack of well-established infrastructure, poor communication links or networks, overpopulation, strict regulatory measures or procedures which make it difficult for certain members of the community to contribute to their maximum potential. The findings of this chapter also reveal that higher levels of literacy are critical for any economy to flourish and in particular developing the entrepreneurial initiatives within an economy. Strong differences in terms of culture can be seen between Ghana and Namibia. Both nations' lives by the "Ubuntu" principles but challenges exist within the various cultural groups within the regions of each nation. Namibia seems to have undergone a longer period of German colonization, and that might bring about significant differences between the various nations: both in terms of culture and literacy. It is the recommendation of the author that both Western and African approach should be integrated both in Ghana and Namibia for entrepreneurial initiatives to flourish and improve the living conditions and the wellbeing of the communities. It is important to reiterate that skilled manpower is an essential ingredient for any successful economy. It is worry some that the current education systems in Africa are directed in giving a sub-average education to the masses rather than also giving superb education to the gifted few. To make matters worse, the gifted few are often nabbed by the greedy first world economies. For both the Ghanaian and Namibian economies to be a success in future, it has become high time that professionals trained abroad returned to their home nations, but African nations fail to create an enticing environment which would make those trained abroad to stay. Issues amongst many others which make the stay of the Africans trained abroad unpleasant is professional jealousy from those which have never studied abroad. Both Western and African practices should be adopted for effective and efficient change to take place. A limitation of this study is that an in depth study on Ghana could be conducted for future research, and the researcher has to extract a larger sample which could probe more information on these significant differences in terms of entrepreneurial activity.

#### **7. References**

142 Entrepreneurship - Gender, Geographies and Social Context

point that people in the agricultural sector have a very strong sense of sharing regardless of the resources that they are producing. The lifestyle of the people is strongly embedded in the cultural concept of "Ubuntu" which is a term Former South African President Nelson Mandela describes as, *"I am, because you are".* No individual can sustain or live by

The mining sector contributes fifty percent (50) of the Namibian exports. In return exports accounts for forty percent (40%) of the GDP. It is important to clarify at this stage that GDP growth is volatile because of the heavy reliance on mineral exports, but nevertheless robust

The manufacturing sector of the Namibian economy is an industry which produces or sells food. An entrepreneurial initiative in terms of the Namibian economy entails the development of local resources by Namibians, for the sustenance of their own people based on local knowledge. Similar to Ghana the small business sector in Namibia operates under an umbrella body of small and medium enterprises, and these are sometimes not formally linked to local communities. Most entrepreneurial initiatives of local communities normally operate in an informal manner (underground economy) before they are eventually

When we talk of Namibia, most entrepreneurial initiatives are integrated within the agricultural sector where communities focuses on raising stock livestock, due to inefficient supply of water and poor rainfall which limits effective farming. Except for the northern regions of Namibia, who are closer to the Angolan border (which is naturally greener), some of the central and most of the southern communities survive from small livestock (in terms

This chapter explored the entrepreneurial initiatives of two African nations namely Ghana and Namibia. The chapter in particular looked at why Ghana which has been a prime model of development for many African nations is still challenged to develop its economy, while Namibia which was the last nation to gain independence is doing relatively well. The findings from this chapter reveal that the forms of business enterprises adopted by these two nations at their independence had significant differences. The programs adopted by Ghana had a strong Western approach to business, while Namibia seems to have adopted local cultural practices in its business initiatives. Western African nations seem to be very entrepreneurial at a local community level, but the level of cooperation and coordination for communities to work together seems to be major challenge for Ghana. Issues of nepotism, corruption seems to be a major challenge for the Western nation of Ghana, which seems to hinder good initiatives for flourishing entrepreneurship. Most respondents which were interviewed for this paper felt that there is room for good entrepreneurial initiatives, but the issues of nepotism and corruption cause many Ghanaians to leave the country to seek for

Namibia seems to have a good balance between Western cultural practices of conducting business with indigenous cultural practices. However flourishing entrepreneurial initiatives remains a major challenge. Opportunities for entrepreneurial initiatives in Namibia are

**6. Concluding remarks and recommendations for future research** 

him/herself, but can only achieve because of the support from others.

and Namibia has exceeded a number of its neighboring countries.

integrated into the formal economy.

of indigenous communities).

better opportunities elsewhere.


**10** 

*China* 

*Peking University,* 

**The Talents' Impact on** 

**China's Economic Development** 

This paper focuses on the role of talents and aims to extend the framework of economic development and innovation theory. The cause of issue in this paper comes from the empirical observation as following: talents are the most vital and scarce resources in the knowledge economy. They affect the regional economics in various aspects. The capability to attract these precious talents determines the competitiveness of one region. This lesson is useful for the developing and transforming country, like China. Since 2006, China's regional economy has been ongoing a nationwide industrial shift and upgrade, in which talents are highly valued, especially in the regions that aimed to move towards advanced industry

Based on the new trends of talents development and their role in industrial upgrading, we propose a new view of talents on how to promote the China's regional economic development. That means talents should not just a supporting element, but a leading role in

The first step to analyze is defining the talents. Generally speaking, we think labors who have college education experience or specialty and can enhance the production efficiency are talents. In china' statistical approach, there is one category called Professional technical personnel. But this range is narrow than talent we defined, also no standard can be used to international comparison. In this paper, we regard talents as labors who have bachelor degree or above, or have specialty education after high school. The core of talents is entrepreneur-related management and technical staffs. This data can illustrate the trend of

This kind of data is usually used to illustrate human capital of one country in economic growth theory and almost have the same meaning with what proposed by OECD for policy analysis. Also, it is one important indicator in talent geography and creative class ideas. The common of above philosophies is regarding talents as the most vital part of labors who have technology and higher education, conduct systematical creation, issue, promotion and application of knowledge, so they are the key factor for competition. The idea of talents of

the industrial upgrading for the transforming regions.

Chinese labor structure transformation more clearly.

**1. Introduction** 

system.

\* Corresponding Author

Han Liang\*, Kaizhong Yang and Yuping Li

Pellow, D and Chazan, N. (1986). *Ghana*: Coping with Uncertainty. USA.

Spradley, J.P. (1997). *Participant Observation*, Holt Rinehart & Winston, New York.

Turner, B. (2009). *The Statement's Yearbook 2010. The Politics, Cultures and Economics of the World*, Palgrave MacMillan, New York.

## **The Talents' Impact on China's Economic Development**

 Han Liang\*, Kaizhong Yang and Yuping Li *Peking University, China* 

#### **1. Introduction**

144 Entrepreneurship - Gender, Geographies and Social Context

Turner, B. (2009). *The Statement's Yearbook 2010. The Politics, Cultures and Economics of the* 

Pellow, D and Chazan, N. (1986). *Ghana*: Coping with Uncertainty. USA.

*World*, Palgrave MacMillan, New York.

Spradley, J.P. (1997). *Participant Observation*, Holt Rinehart & Winston, New York.

This paper focuses on the role of talents and aims to extend the framework of economic development and innovation theory. The cause of issue in this paper comes from the empirical observation as following: talents are the most vital and scarce resources in the knowledge economy. They affect the regional economics in various aspects. The capability to attract these precious talents determines the competitiveness of one region. This lesson is useful for the developing and transforming country, like China. Since 2006, China's regional economy has been ongoing a nationwide industrial shift and upgrade, in which talents are highly valued, especially in the regions that aimed to move towards advanced industry system.

Based on the new trends of talents development and their role in industrial upgrading, we propose a new view of talents on how to promote the China's regional economic development. That means talents should not just a supporting element, but a leading role in the industrial upgrading for the transforming regions.

The first step to analyze is defining the talents. Generally speaking, we think labors who have college education experience or specialty and can enhance the production efficiency are talents. In china' statistical approach, there is one category called Professional technical personnel. But this range is narrow than talent we defined, also no standard can be used to international comparison. In this paper, we regard talents as labors who have bachelor degree or above, or have specialty education after high school. The core of talents is entrepreneur-related management and technical staffs. This data can illustrate the trend of Chinese labor structure transformation more clearly.

This kind of data is usually used to illustrate human capital of one country in economic growth theory and almost have the same meaning with what proposed by OECD for policy analysis. Also, it is one important indicator in talent geography and creative class ideas. The common of above philosophies is regarding talents as the most vital part of labors who have technology and higher education, conduct systematical creation, issue, promotion and application of knowledge, so they are the key factor for competition. The idea of talents of

<sup>\*</sup> Corresponding Author

The Talents' Impact on China's Economic Development 147

subsection 2.2 is concern about the spatial pattern, especially the extent of 'core-peripheral' pattern. In order to reveal the importance of the talent resource, some other economic inputs and outputs variables are introduced in the database to made comparison. Section 3 made empirical analyses on the talents' impact on China's regional economic development. We built a panel database from year 2001 to 2007 including major economic, social and innovative variables. The aim is to reveal the causation relationship of the talents and regional development, and the significant and extent of supporting and leading effects under different

This section describes both the aggregate structural features and the location distribution features of china' talents, analyzes the relationship between talents and other variables (e.g. output, capital), illustrates the differences of roles in core (developed regions) and periphery

The data in this section is the labors with education category in china' census every year. Till 2007, the total number of labors who have specialty or bachelor degree and above is 50.8134 million, and the population who have the same education background is 81.3444 million, so

**2.1.1 The talents accumulate slower after one peak; The growth rate varies in different** 

eastern region central region western region northeast

The trend in Fig. 2 shows that, from 1996, the talents in Eastern region have accumulated very rapidly, which is tripled among twelve years. The Central region and the Western

year

1996 1997 1998 1999 2000\* 2001 2002 2003 2004 2005 2006\* 2007

developing stage. A conclusion was made as the end of the Chapter in the last section.

**2. Evolution of spatial pattern** 

**2.1 The evolution of talents location distribution** 

the participate ratio of this category is 62.47%.

**regions and negative growth rate emerges** 

Fig. 2. The trend of total talents in four regions of China.

0

500

1000

Total of talents(10,000)

1500

2000

2500

(developing regions).

economic growth theory came from the human capital theory, and then further extended to creative department and scale economic effect. It explains that the labors who have more human capital and conduct knowledge creation and innovation have the crucial influence for high-tech department. Talents geography and creative class theory regard the talents as strategically resources. In the management field, talents with creation and leadership are the most important part of production factor, which influents regional competitiveness in Michael Porter' diamond framework. Peter Drucker proposed the concepts of Knowledge workers and Knowledge workers society. In additional, OECD proposed talents concept to aid government to promote the economics performance in mid-1990.

Based on the Schumpeterian endogenous growth theory and competitiveness theory, labor productivity or total factor productivity are driving force for the regional development. And, talents and knowledge innovation are the core factor for the enhancing total factor productivity. That's why governments pay much attention to talents supply.

Fig. 1. Contents analysis and conceptual framework.

The logical framework is shown in Fig. 1. The point of left part is that, the continuing increase of labor productivity is the driving force of economic development, and the main cause of labor productivity is upgrading of labor construction, which means the proportion of talents who have better education experience and better technical skills is larger than before. You can see more details on the right of the chart. On one hand, the driving force of economic development is the total factor productivity, which is supported by endogenous technology progress (the production-possibility frontier is extended and the portfolio of factors is changed) and efficiency enhancement (the output become more close to the fixed production-possibility). On the other hand, Institutions are also very important factors in some developing countries. Talents can play a crucial role in both two aspects: more talents mean higher labor quality in technology progress and efficiency enhancement, and talents are the foundation of creative system of one country or region.

After the issue of this paper in the first section, the 2rd section describes the features of the talents in China based on a database from 1996 to 2007. It includes two parts: subsection 2.1 is concern about the overall structure: evolution of aggregate talent resource, structural change based on major categories like profession, industrial sector or research units and so on; subsection 2.2 is concern about the spatial pattern, especially the extent of 'core-peripheral' pattern. In order to reveal the importance of the talent resource, some other economic inputs and outputs variables are introduced in the database to made comparison. Section 3 made empirical analyses on the talents' impact on China's regional economic development. We built a panel database from year 2001 to 2007 including major economic, social and innovative variables. The aim is to reveal the causation relationship of the talents and regional development, and the significant and extent of supporting and leading effects under different developing stage. A conclusion was made as the end of the Chapter in the last section.

#### **2. Evolution of spatial pattern**

146 Entrepreneurship - Gender, Geographies and Social Context

economic growth theory came from the human capital theory, and then further extended to creative department and scale economic effect. It explains that the labors who have more human capital and conduct knowledge creation and innovation have the crucial influence for high-tech department. Talents geography and creative class theory regard the talents as strategically resources. In the management field, talents with creation and leadership are the most important part of production factor, which influents regional competitiveness in Michael Porter' diamond framework. Peter Drucker proposed the concepts of Knowledge workers and Knowledge workers society. In additional, OECD proposed talents concept to

Based on the Schumpeterian endogenous growth theory and competitiveness theory, labor productivity or total factor productivity are driving force for the regional development. And, talents and knowledge innovation are the core factor for the enhancing total factor

> Continued growth of economy

> > Improvement of productivity

Continuing accumulation of talents such as higher education workforce

Accumulation of effective labor inputs, Increasing of total factor productivity

Model analysis

Endogenous technology progress

The logical framework is shown in Fig. 1. The point of left part is that, the continuing increase of labor productivity is the driving force of economic development, and the main cause of labor productivity is upgrading of labor construction, which means the proportion of talents who have better education experience and better technical skills is larger than before. You can see more details on the right of the chart. On one hand, the driving force of economic development is the total factor productivity, which is supported by endogenous technology progress (the production-possibility frontier is extended and the portfolio of factors is changed) and efficiency enhancement (the output become more close to the fixed production-possibility). On the other hand, Institutions are also very important factors in some developing countries. Talents can play a crucial role in both two aspects: more talents mean higher labor quality in technology progress and efficiency enhancement, and talents

After the issue of this paper in the first section, the 2rd section describes the features of the talents in China based on a database from 1996 to 2007. It includes two parts: subsection 2.1 is concern about the overall structure: evolution of aggregate talent resource, structural change based on major categories like profession, industrial sector or research units and so on;

aid government to promote the economics performance in mid-1990.

Fig. 1. Contents analysis and conceptual framework.

Correlation analysis

Improvement of labor productivity, Improvement of capitallabor ratio

> Structural change of human resources

are the foundation of creative system of one country or region.

productivity. That's why governments pay much attention to talents supply.

This section describes both the aggregate structural features and the location distribution features of china' talents, analyzes the relationship between talents and other variables (e.g. output, capital), illustrates the differences of roles in core (developed regions) and periphery (developing regions).

#### **2.1 The evolution of talents location distribution**

The data in this section is the labors with education category in china' census every year. Till 2007, the total number of labors who have specialty or bachelor degree and above is 50.8134 million, and the population who have the same education background is 81.3444 million, so the participate ratio of this category is 62.47%.

#### **2.1.1 The talents accumulate slower after one peak; The growth rate varies in different regions and negative growth rate emerges**

Fig. 2. The trend of total talents in four regions of China.

The trend in Fig. 2 shows that, from 1996, the talents in Eastern region have accumulated very rapidly, which is tripled among twelve years. The Central region and the Western

The Talents' Impact on China's Economic Development 149

Fig. 4. The trend of talents with bachelor degree and specialty in four regions from 2001.

bachelor degree's rapid growth.

China.

1.5

2.0

2.5

3.0

3.5

In china's talents, the percentage of labors that have specialty and bachelor degree is higher than 90%. With the development of china' education, these two group of labors have very outstanding growth. During the period of 2001-2007, the average growth rate of bachelor degree is 3.77%, and the specialty is 0.11%. in the same time , the growth rate of total talents is only 1.65%. So we can infer that the accumulation of china' talents almost means the

Because of this fact, the growth rate of bachelor degree is higher than that of specialty, which is still has a large proportion, but the trend of decreasing is ongoing, especially in Eastern region and north-Eastern region. Only in Central region this trend is not very significant. In general, the education experience of specialty is shorter than who get bachelor degree, so we can get the conclusion that the talents' education structure is improving.

eastern region central region western region northeast

Fig. 5. The ratio of talents with specialty to talents with bachelor degree in four regions in

2001 2002 2003 2004 2005 2006\* 2007 Year

region are similar and doubled among twelve years. But the north-Eastern region has the lowest growth rate. What is more, from the curses, we also can see the apparent fluctuations both in east, west and Central regions.

Fig. 3. The growth rate of talents in four regions of China.

We can observe the trend more clearly by dividing twelve years into three periods and calculating the compound annual growth rate (CAGR). Generally speaking, the CAGR of Eastern region is 10.62%, Central region is 9.02% and Western region 7.43%, the northwest is lowest, which is 5.15%. We can divide twelve years into three periods. The first period is 1996-2001, in which the most visible feature is Central region and Western region have the highest CAGR. The CAGR of Central region excess 20% and the Western region also excess 15%. The east, middle and Western region have the most rapid accumulation among this decade. The second period is 2001-2005, which is the tenth fiveyear development plan of china. The most significant feature of this period is the high CAGR in north-Eastern region, almost 10%, but the negative CAGR emerges in Central region. The Western region have very steady but lower CAGR than east and north-Eastern region. The third period is 2005-2007, in which the growth trend varies in different regions. Eastern region has steady CAGR for a long time, but other regions, like west and north-east, have negative CAGR.

#### **2.1.2 The changes of talents' education level is different significantly**

According to the national census' data, we can describe and analyze the education level of talents. Here we emphasize three categories of education: specialty, who mainly receives skills training after high school, the labor who have bachelor degree and who have master degree or above. The following analyses just cover the period since 2001 because of the data quality.

region are similar and doubled among twelve years. But the north-Eastern region has the lowest growth rate. What is more, from the curses, we also can see the apparent fluctuations

1996-2007 1996-2002 2002-2005 2005-2007

We can observe the trend more clearly by dividing twelve years into three periods and calculating the compound annual growth rate (CAGR). Generally speaking, the CAGR of Eastern region is 10.62%, Central region is 9.02% and Western region 7.43%, the northwest is lowest, which is 5.15%. We can divide twelve years into three periods. The first period is 1996-2001, in which the most visible feature is Central region and Western region have the highest CAGR. The CAGR of Central region excess 20% and the Western region also excess 15%. The east, middle and Western region have the most rapid accumulation among this decade. The second period is 2001-2005, which is the tenth fiveyear development plan of china. The most significant feature of this period is the high CAGR in north-Eastern region, almost 10%, but the negative CAGR emerges in Central region. The Western region have very steady but lower CAGR than east and north-Eastern region. The third period is 2005-2007, in which the growth trend varies in different regions. Eastern region has steady CAGR for a long time, but other regions, like

eastern region central region western region northeast

According to the national census' data, we can describe and analyze the education level of talents. Here we emphasize three categories of education: specialty, who mainly receives skills training after high school, the labor who have bachelor degree and who have master degree or above. The following analyses just cover the period since 2001 because of the data

both in east, west and Central regions.


0%

5%

10%

average rate of increase

15%

20%

25%

Fig. 3. The growth rate of talents in four regions of China.

west and north-east, have negative CAGR.

quality.

**2.1.2 The changes of talents' education level is different significantly** 

Fig. 4. The trend of talents with bachelor degree and specialty in four regions from 2001.

In china's talents, the percentage of labors that have specialty and bachelor degree is higher than 90%. With the development of china' education, these two group of labors have very outstanding growth. During the period of 2001-2007, the average growth rate of bachelor degree is 3.77%, and the specialty is 0.11%. in the same time , the growth rate of total talents is only 1.65%. So we can infer that the accumulation of china' talents almost means the bachelor degree's rapid growth.

Because of this fact, the growth rate of bachelor degree is higher than that of specialty, which is still has a large proportion, but the trend of decreasing is ongoing, especially in Eastern region and north-Eastern region. Only in Central region this trend is not very significant. In general, the education experience of specialty is shorter than who get bachelor degree, so we can get the conclusion that the talents' education structure is improving.

Fig. 5. The ratio of talents with specialty to talents with bachelor degree in four regions in China.

The Talents' Impact on China's Economic Development 151

Here we use the indicator of CR5, which means sum up the highest five province percentage. In 2007, the total CR5 of talents is 32.42%, and the CR5 of master degree is 61.17%, bachelor 37.74% and the specialty 30.32%. Since 1996, the total CR5 have a little increase. But when we analyze the detailed level, we can find the CR5 of bachelor is

The second indicator is polarization rate. The chart can tell us the education level is higher, the polarization rate is higher. From the trend since 1996, the total polarization rates of total talents, specialty, and bachelors are almost 2.5-4.0, which means a relative significant

> talents with post-spacialty degree talents with spacialty degree talents with bachlor degree

Fig. 8. The trend of degree of polarization of talents' spatial distribution characteristics in

between regions eastern region central region

western region northeast total

1996 1997 1998 1999 2000\* 2001 2002 2003 2004 2005 2006\* 2007

Year

Fig. 9. The changing trend of Theil and its decompose of talents' spatial distribution

1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 Year

**2.1.4 The coefficient of talents between province varies like "V"** 

significantly rising, but the CR5 of specialty is decreasing.

polarization. Judging from the curves, it varies like "W".

China.

2.0

2.5

3.0

Degree of polarization

3.5

4.0

characteristics.

(0.05) 0.00 0.05 0.10 0.15 0.20 0.25

Fig. 6. Spatial distribution characteristics of post-graduates in four regions in China.

The labors with master degree or above have a very low proportion, only 3.03% in 2007. But this group of labors has better education experience, get science and technology training more systematically, so they are more likely the key element of jobs, especially in technology innovation and knowledge creation.

From the location distribution of master degree or above, the most significant feature is that Eastern region has the highest proportion, almost 61.32%. As to the concentration rate based on the total labors, this indicator is about 1.8 in Eastern region. So Eastern region have huge scale advantage of talents.

#### **2.1.3 The distribution difference between province varies like "W"**

This part analyzes the location distribution from the unit of province. We calculate two indicators to illustrate the concentration situation and evolution of regional difference: the proportion of high education experience labors, and the polarization rate.

Fig. 7. The trend of degree of concentration of talents' spatial distribution characteristics in China.

mean value of regional human resource in talents of national presents in 2004-2007

mean value of regional concentration rate in 2004-2007

Fig. 6. Spatial distribution characteristics of post-graduates in four regions in China.

**2.1.3 The distribution difference between province varies like "W"** 

proportion of high education experience labors, and the polarization rate.

innovation and knowledge creation.

scale advantage of talents.

0.0

1.0

Concentration rate

2.0

China.

25%

30%

Degree of concentration (CR5)

35%

40%

The labors with master degree or above have a very low proportion, only 3.03% in 2007. But this group of labors has better education experience, get science and technology training more systematically, so they are more likely the key element of jobs, especially in technology

eastern region central region western region northeast

0%

30%

Percentage

60%

From the location distribution of master degree or above, the most significant feature is that Eastern region has the highest proportion, almost 61.32%. As to the concentration rate based on the total labors, this indicator is about 1.8 in Eastern region. So Eastern region have huge

This part analyzes the location distribution from the unit of province. We calculate two indicators to illustrate the concentration situation and evolution of regional difference: the

> talents with post-spacialty degree talents with spacialty degree talents with bachlor degree

Fig. 7. The trend of degree of concentration of talents' spatial distribution characteristics in

1996 1997 1998 1999 2000\* 2001 2002 2003 2004 2005 2006\* 2007

Year

Here we use the indicator of CR5, which means sum up the highest five province percentage. In 2007, the total CR5 of talents is 32.42%, and the CR5 of master degree is 61.17%, bachelor 37.74% and the specialty 30.32%. Since 1996, the total CR5 have a little increase. But when we analyze the detailed level, we can find the CR5 of bachelor is significantly rising, but the CR5 of specialty is decreasing.

The second indicator is polarization rate. The chart can tell us the education level is higher, the polarization rate is higher. From the trend since 1996, the total polarization rates of total talents, specialty, and bachelors are almost 2.5-4.0, which means a relative significant polarization. Judging from the curves, it varies like "W".

Fig. 8. The trend of degree of polarization of talents' spatial distribution characteristics in China.

#### **2.1.4 The coefficient of talents between province varies like "V"**

Fig. 9. The changing trend of Theil and its decompose of talents' spatial distribution characteristics.

The Talents' Impact on China's Economic Development 153

In addition to the correlation of region samples, we want to test the logic framework on a more detailed level. So we calculate the average value of talents density of each province and make a scatter (Figure 11). From this chart, we can see most of the provinces have relative low talents density and productivity. Three provinces differ with other samples significantly: Beijing, Shanghai and Tianjin, their density of talents and productivity is much higher that the average level. But no significant positive correlation appears from the province samples. so in our opinion, the correlation between talents density and labor

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "labor

provinces in eastern region provinces in central region

provinces in western region provinces in northeast

Fig. 11. Correlation of talent density and labor productivity under provincial average.

talents' density

This section we use the same approach to verify the correlation between talents density and capital per labor. Now the scatter chart tells us the significant positive correlation appears in Eastern region and north-Eastern region. With the accumulation of talents, the capital per labor is rising. In addition, the slope of estimated trend line of Eastern region is larger than that of north-Eastern region. But in west and Central region, there is no significant

0 50 100 150 200 250 300

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "per capita

2. The correlation based on province sample

productivity": 10,000 RMB per capita.

**2.2.2 Talents density and capital per labor** 

0

1

2

3

labour productivity

4

5

correlation between these two variables.

capital stock": 10,000 RMB per capita.

productivity is disturbed by the heterogeneity of province samples.

This part we calculate the coefficient of talents based on the total labors to analyze the difference variance. From the difference variance of total talents, the turning point occurs during 2001, when the difference between provinces began to grow larger. Before 2001, the talents in Central region and Western region have the significant accumulation, but after this time, the situation reversed. Because of the small proportion of talents in middle and Western region, the rapid accumulation before 2001 means smaller difference between regions. In addition, the coefficient illustrates that the main difference comes from the inner difference in Eastern region and have an increase trend. The difference inter-regions are not very significant. So we can infer that with the high difference inter-regions, a higher difference inner Eastern region also cannot be ignored.

#### **2.2 The correlation between talents and region development**

The paragraphs above have explained the scale and distribution feature of China' talents. As the logic framework has showed, the accumulation of talents will improve the regional labors structure and the proportion of labors with high education will increase. This will lead to extend the scale of effective labor input and promote the technology innovation. Aiming to verify this logic thinking, we calculate the correlation of variables and conduct a multivariate model in the following sections.

#### **2.2.1 Talents density and the labor productivity**

1. The correlation based on region samples

Productivity illustrates the capability of one state or region to capture wealthy. The main channel to increase the total wealth of one country is improving the quality of input (labors and capital, etc) and enhancing the efficiency, not just simply increasing the input. From this idea, we have the hypothesis that the quality of talents has positive correlation with productivity. We separate China' province into four regions: east, west, middle and northeast, and then make the scatter based on the data from 2001 to 2007. This figure supports the hypothesis partly, especially in the Eastern region. The positive correlation means with the accumulation of talents, the labor productivity is rising. But this significant correlation does not appear in three other regions.

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "labor productivity": 10,000 RMB per capita.

Fig. 10. Correlation of talent density and labor productivity under belt scales.

#### 2. The correlation based on province sample

152 Entrepreneurship - Gender, Geographies and Social Context

This part we calculate the coefficient of talents based on the total labors to analyze the difference variance. From the difference variance of total talents, the turning point occurs during 2001, when the difference between provinces began to grow larger. Before 2001, the talents in Central region and Western region have the significant accumulation, but after this time, the situation reversed. Because of the small proportion of talents in middle and Western region, the rapid accumulation before 2001 means smaller difference between regions. In addition, the coefficient illustrates that the main difference comes from the inner difference in Eastern region and have an increase trend. The difference inter-regions are not very significant. So we can infer that with the high difference inter-regions, a higher

The paragraphs above have explained the scale and distribution feature of China' talents. As the logic framework has showed, the accumulation of talents will improve the regional labors structure and the proportion of labors with high education will increase. This will lead to extend the scale of effective labor input and promote the technology innovation. Aiming to verify this logic thinking, we calculate the correlation of variables and conduct a

Productivity illustrates the capability of one state or region to capture wealthy. The main channel to increase the total wealth of one country is improving the quality of input (labors and capital, etc) and enhancing the efficiency, not just simply increasing the input. From this idea, we have the hypothesis that the quality of talents has positive correlation with productivity. We separate China' province into four regions: east, west, middle and northeast, and then make the scatter based on the data from 2001 to 2007. This figure supports the hypothesis partly, especially in the Eastern region. The positive correlation means with the accumulation of talents, the labor productivity is rising. But this significant correlation does

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "labor

eastern region central region western region northeast

40 50 60 70 80 90 100

talents' density

Fig. 10. Correlation of talent density and labor productivity under belt scales.

difference inner Eastern region also cannot be ignored.

multivariate model in the following sections.

1. The correlation based on region samples

not appear in three other regions.

labour productivity

productivity": 10,000 RMB per capita.

**2.2.1 Talents density and the labor productivity** 

**2.2 The correlation between talents and region development** 

In addition to the correlation of region samples, we want to test the logic framework on a more detailed level. So we calculate the average value of talents density of each province and make a scatter (Figure 11). From this chart, we can see most of the provinces have relative low talents density and productivity. Three provinces differ with other samples significantly: Beijing, Shanghai and Tianjin, their density of talents and productivity is much higher that the average level. But no significant positive correlation appears from the province samples. so in our opinion, the correlation between talents density and labor productivity is disturbed by the heterogeneity of province samples.

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "labor productivity": 10,000 RMB per capita.

Fig. 11. Correlation of talent density and labor productivity under provincial average.

#### **2.2.2 Talents density and capital per labor**

This section we use the same approach to verify the correlation between talents density and capital per labor. Now the scatter chart tells us the significant positive correlation appears in Eastern region and north-Eastern region. With the accumulation of talents, the capital per labor is rising. In addition, the slope of estimated trend line of Eastern region is larger than that of north-Eastern region. But in west and Central region, there is no significant correlation between these two variables.

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "per capita capital stock": 10,000 RMB per capita.

The Talents' Impact on China's Economic Development 155

The agglomeration of talents is also one important aspect. In this section, we use the talents agglomeration indicator(Wang Fen, 2006), which formula is, here is the total number of talents in region i, is the total population of region i.GDP per capita is used to illustrate the regional economic development. This part not only pays attention to the total talents, but the core of talents, scientists and engineers, who are the key factor for the innovation and high-

Fig. 14. The Trend of connections between talents concentration and total per capita output

y = 0.1803x - 16.273 R² = 0.6748

eastern region central region

western region northeast

trend line of eastern region

80 85 90 95 100 105 110

Degree of concentration

We make a figure using the agglomeration indicator and GDP per capita of four regions since 2001. A obvious positive correlation can be seen about the Eastern region. As for three other regions, the slope of curves is larger, which mean no significant agglomeration occurs there, but the GDP per capita is rising. So there is no obvious interaction between these two

**2.2.3 Talents agglomeration and regional economic development** 

tech industry.

in four regions in 2001-2007.

0

1

GDP per head

(current prices,10,000yuan per person)

2

3

4

variables.

2. The correlation based on region samples

Fig. 12. Correlation of talent density and labor capital stock under belt scales.

1. The correlation based on province samples

We also use the average value of talents density of each province to match the capital per labor. From the chart, Beijing, Shanghai and Tianjin are different from other province. Their talents density and capital per labor are higher significantly than other provinces. What is different from above scenario is that, there is relative positive correlation between talents density and capital per labor in Eastern regions. But in other regions, on obvious trend appears.

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "per capita capital stock": 10,000 RMB per capita.

Fig. 13. Correlation of talent density and labor capital stock under provincial average.

eastern region central region western region northeast

Fig. 12. Correlation of talent density and labor capital stock under belt scales.

We also use the average value of talents density of each province to match the capital per labor. From the chart, Beijing, Shanghai and Tianjin are different from other province. Their talents density and capital per labor are higher significantly than other provinces. What is different from above scenario is that, there is relative positive correlation between talents density and capital per labor in Eastern regions. But in other regions, on obvious trend

40 60 80 100

talents' density

Units of measurement: 1) "talents' density": 1 person per 1000 population, 2) "per capita

provinces in eastern region provinces in central region

provinces in western region provinces in northeast

Fig. 13. Correlation of talent density and labor capital stock under provincial average.

talents' density

0 50 100 150 200 250 300

1. The correlation based on province samples

0 0.5 1 1.5 2 2.5 3 3.5

capital stock per capita

capital stock": 10,000 RMB per capita.

capital stock per capita

appears.

#### **2.2.3 Talents agglomeration and regional economic development**

The agglomeration of talents is also one important aspect. In this section, we use the talents agglomeration indicator(Wang Fen, 2006), which formula is, here is the total number of talents in region i, is the total population of region i.GDP per capita is used to illustrate the regional economic development. This part not only pays attention to the total talents, but the core of talents, scientists and engineers, who are the key factor for the innovation and hightech industry.

2. The correlation based on region samples

Fig. 14. The Trend of connections between talents concentration and total per capita output in four regions in 2001-2007.

We make a figure using the agglomeration indicator and GDP per capita of four regions since 2001. A obvious positive correlation can be seen about the Eastern region. As for three other regions, the slope of curves is larger, which mean no significant agglomeration occurs there, but the GDP per capita is rising. So there is no obvious interaction between these two variables.

The Talents' Impact on China's Economic Development 157

This part we use the average value of each province from 2001 to 2007 as samples. The scatter chart shows that the correlation in Eastern region is very obvious, which means with the agglomeration of talents in Eastern region, its output per capita is higher and higher. But we do not notice the same feature in other regions. Especially in Central region and Western region, the elasticity between agglomeration indicator and GDP per

> eastern region central region western region northeast

Fig. 17. The connections between R&D concentration and per capita output in provinces of

Degree of concentration

10 15 20 25 30 35 40 45 50 55 60 65

y = 0.0751x - 0.4342 R² = 0.7872

trend line of eastern region

We also can use the same method to test the correlation of core talents and economic output. The result is similar: only the Eastern region has obvious correlation between core talents agglomeration and GDP per capita. No obvious interaction can be seen in other regions.

In this section, we construct the panel data of province samples from 2001 to 2007. According to the location and economic development level, we can separate the province samples into different groups and analyze the mechanism of talents' influence on competitiveness. The final conclusion is that, the influence of talents on regional competitiveness is not very significant from the empirical analysis, even in the Eastern region. The section 3.1 is a brief data description. 3.2 is the process to select the optimal model. In 3.3 sessions, we add province heterogeneity into the basic model to double check

capita is very small.

china in 2001-2007

GDP per head

 (current person)

prices,10,000yuan per

the talents' influence.

This conclusion is stated in above analysis.

0

1

2

3

4

5

**3. Impacts on regional economic development** 

Fig. 15. The Trend of connections between R&D concentration and total per capita output in four regions in 2001-2007.

Now we pay attention to the scientists and engineers of each region. From the figure 16, we can see the rapid accumulation of core talents since 2001, which is similar with the growth trend of GDP per capita. Also a visible "gradient" among regions is a very important feature, which means the very different correlations between talents agglomeration and economic development in each region.

3. The correlation based on province samples

Fig. 16. The connections between talents concentration and per capita output in provinces of china in 2001-2007.

eastern region central region western region northeast

Fig. 15. The Trend of connections between R&D concentration and total per capita output in

Degree of concentration

30 35 40 45 50 55

y = 0.0998x - 6.3323 R² = 0.7654

65 70 75 80 85 90 95 100 105 110

Degree of concentration

Now we pay attention to the scientists and engineers of each region. From the figure 16, we can see the rapid accumulation of core talents since 2001, which is similar with the growth trend of GDP per capita. Also a visible "gradient" among regions is a very important feature, which means the very different correlations between talents agglomeration and

> eastern region central region western region northeast

Fig. 16. The connections between talents concentration and per capita output in provinces of

four regions in 2001-2007.

0

1

2

GDP per head

 (current prices,10,000yuan per person)

3

4

5

china in 2001-2007.

GDP per head

 (current prices,10,000yuan per person)

economic development in each region.

0

1

2

3

4

5

3. The correlation based on province samples

trend line of eastern region

This part we use the average value of each province from 2001 to 2007 as samples. The scatter chart shows that the correlation in Eastern region is very obvious, which means with the agglomeration of talents in Eastern region, its output per capita is higher and higher. But we do not notice the same feature in other regions. Especially in Central region and Western region, the elasticity between agglomeration indicator and GDP per capita is very small.

Fig. 17. The connections between R&D concentration and per capita output in provinces of china in 2001-2007

We also can use the same method to test the correlation of core talents and economic output. The result is similar: only the Eastern region has obvious correlation between core talents agglomeration and GDP per capita. No obvious interaction can be seen in other regions. This conclusion is stated in above analysis.

#### **3. Impacts on regional economic development**

In this section, we construct the panel data of province samples from 2001 to 2007. According to the location and economic development level, we can separate the province samples into different groups and analyze the mechanism of talents' influence on competitiveness. The final conclusion is that, the influence of talents on regional competitiveness is not very significant from the empirical analysis, even in the Eastern region. The section 3.1 is a brief data description. 3.2 is the process to select the optimal model. In 3.3 sessions, we add province heterogeneity into the basic model to double check the talents' influence.

The Talents' Impact on China's Economic Development 159

Variable Unit Mean value SD1 Maximum Minimum

K 16926 0.6561 46306 2580

L 2365 0.6397 5560 253 S&E 1 person 104086 0.8477 327712 4677 R&D Hour2 57804 0.9032 199464 1262

Ind 48 0.1504 60 27 Ser 39 0.1879 72 30 S&T\_Mark 0.77 2.2202 9.44 0.02

Variable Unit Mean value SD Maximum Minimum

K 7099 0.6530 18272 1082 H 10,000 person 132 0.6674 350 10 L 2153 0.6503 5405 246 S&E person 68136 0.7317 194793 3154 R&D hour 30687 0.7970 95255 927

Ind 42 0.1669 52 20 Ser 42 0.1476 67 32 S&T\_Mark 0.73 1.3403 5.15 0.01

rGDP 1.0828 1.2160 0.9935 K 1.3844 1.5342 1.3840 H 0.2029 0.2114 1.2000 L 0.0984 0.0288 0.0249 S&E 0.5276 0.6824 0.4829 R&D 0.8836 1.0940 0.3614 R&D\_Exp 2.5552 1.9526 2.0767

Contrast Mean value Maximum Minimum

Appendix 1. Contrast of cross section library in 2001 and 2007.

current price 347802 1.1779 1711696 8457

comparable price 1236516 1.1010 5053870 26020

7490 0.8112 26299 587

159 0.6225 424 22

48.0 0.3006 88.7 28.2

3596 0.7785 11868 295

41.2 0.3926 88.5 24.0

(1) Statistical information of data base in 2007

2000 comparable price

person

%

(2) Statistical information of data base in 2001

2000 price

%

rGDP 100 million RMB,

H 100 thousand

R&D\_Exp 10,000 RMB, 2000

rGDP RMB100m,at

R&D\_Exp RMB 10,000,

Urb

Urb

(3) Contrast 2007:2001

1 SD: standard deviation 2 full-time working hour

#### **3.1 Data description**

#### **3.1.1 Indicators**

This paper constructs the panel database of 31 provinces from 2001 to 2007 (Tibet is not a sample because of its bad data quality). In the Table 1, the GDP per capita illustrates the economic development and is the criterion of different regions.


1 With the comparable prices based on year 2000.

2 We estimated the capital stock of each province from 1993 to 2007 based on Sustainable filing method. We took 1993 as base year and the data estimated by Zhang et al (2004). Then based on the "China's GDP accounting history information: 1952-2004" and "China Statistical Yearbook(1995-2008)" we collect data "Gross fixed capital formation" and "fixed-asset depreciation" of each province from year 1994, with which we calculate the "net investment flows". With the "Fixed asset price indices" and the transform ratio of year 1952, 1978 and 2000 estimated by Zhang et al (2004), we got the net flow with comparable price and accumulation each year net flow from the base year to get the results.

3 Urbanization variable use the share of urban population which is the inhabitant live in cities and towns. Industrialization rate and Service rate is the share of the second industry and tertiary industry. S&T\_Mark is the growth of regional technology market which is measured by the share of Total technology market transactions on GDP.

Table 1. Indicator system.

The regional economy develops very rapid since 2001. The real GDP of provinces have increased two times, and the capital stock increased 1.38 times. At the same time, the quality of labors has improved obviously. The growth rate of high education experience is two times than that of total labors. The budget of R&D also increases a lot and the nominal expenditure for R&D have increased 2.56 times. The growth rate of labor in technology field excess the average value three to four times. In addition, a fierce urbanization is ongoing and the urbanization rate increase 6%, but the service rate decreased 2.6%. the market of technology is developing a little slow. As to the regional difference, the difference of economic output is increasing, and the difference of capital is almost the same, but the difference of labors is decreasing, especially in some province with low proportion of talents. The labor input of technology and the difference of regional market have the largest change, which means the agglomeration in advanced region is very obvious. In the end, the difference of urbanization rate is lower.


#### (1) Statistical information of data base in 2007

158 Entrepreneurship - Gender, Geographies and Social Context

This paper constructs the panel database of 31 provinces from 2001 to 2007 (Tibet is not a sample because of its bad data quality). In the Table 1, the GDP per capita illustrates the

> Scientists and engineers (S&E), R&D labor force (Full-time equivalent: R&D), R&D **research** and **development spending**

Urbanization (Urb), Rate of non-agricultural (Including: Industrialization (Ind) and Service rate (Ser), S&T\_Mark3

economic development and is the criterion of different regions.

(R&D\_Exp)

Talent Labor force with junior college and above degree (H)

Average area GDP Permanent resident population (P), Name area GDP (nGDP)

2 We estimated the capital stock of each province from 1993 to 2007 based on Sustainable filing method. We took 1993 as base year and the data estimated by Zhang et al (2004). Then based on the "China's GDP accounting history information: 1952-2004" and "China Statistical Yearbook(1995-2008)" we collect data "Gross fixed capital formation" and "fixed-asset depreciation" of each province from year 1994, with which we calculate the "net investment flows". With the "Fixed asset price indices" and the transform ratio of year 1952, 1978 and 2000 estimated by Zhang et al (2004), we got the net flow with comparable price and accumulation each year net flow from the base year to get the results. 3 Urbanization variable use the share of urban population which is the inhabitant live in cities and towns. Industrialization rate and Service rate is the share of the second industry and tertiary industry. S&T\_Mark is the growth of regional technology market which is measured by the share of Total

The regional economy develops very rapid since 2001. The real GDP of provinces have increased two times, and the capital stock increased 1.38 times. At the same time, the quality of labors has improved obviously. The growth rate of high education experience is two times than that of total labors. The budget of R&D also increases a lot and the nominal expenditure for R&D have increased 2.56 times. The growth rate of labor in technology field excess the average value three to four times. In addition, a fierce urbanization is ongoing and the urbanization rate increase 6%, but the service rate decreased 2.6%. the market of technology is developing a little slow. As to the regional difference, the difference of economic output is increasing, and the difference of capital is almost the same, but the difference of labors is decreasing, especially in some province with low proportion of talents. The labor input of technology and the difference of regional market have the largest change, which means the agglomeration in advanced region is very obvious. In the end, the

Economic aggregate Reality area GDP (rGDP)1

Total of labor force Total of the employed (L)

Material capital Capital stock (K)2

1 With the comparable prices based on year 2000.

technology market transactions on GDP.

difference of urbanization rate is lower.

Table 1. Indicator system.

**3.1 Data description** 

Investment in science and technology

Index of regional development

Index Variable

**3.1.1 Indicators** 

(2) Statistical information of data base in 2001


(3) Contrast 2007:2001


1 SD: standard deviation

2 full-time working hour

Appendix 1. Contrast of cross section library in 2001 and 2007.

The Talents' Impact on China's Economic Development 161

portfolios of variables are better. As to model 4, the adjusted R-square decreases, and the variable is not very significant. In the end, the model 5 is the compound model, which has

Explanatory variable (totality) Goodness of fit Significance(t) Estimate parameter lnk 0.8074 86.11\*\*\* 0.7706 lnh 0.4240 3.21\*\*\* 0.2519 lnS&E 0.2089 11.65\*\*\* 0.9102 lnR&D 0.2214 19.52\*\*\* 0.8024 lnR&D\_Exp 0.3587 34.72\*\*\* 0.4437 Urb 0.8218 25.50\*\*\* 0.0731 Ind 0.1218 21.87\*\*\* 0.0620 Ser 0.1112 -11.40\*\*\* -0.0751 S&T\_Mark 0.1996 -0.69 -0.0306

Ln(y) Model 0 Model 1 Model 2 Model **3** Model 4 Model **5**  Goodness of fit 0.8074 0.7823 0.8083 0.8455 0.7921 0.8299

lnk 0.7706 0.7886 0.7671 0.7436 0.7813 0.7658657

lnh 0.0225 0.0291 0.0178 0.0214362

lnS&E 0.0847 0.0985074

lnR&D -0.0869 -0.0973451

Ind -0.0034 -0.0063655

Ser -0.0041 -0.0071026

Constant term 1.636 1.536 1.6309 1.4183 1.8045 1.650106

notes: (1) first line is 'estimate parameters', second line is 't test value': significance level 1%(\*\*\*), 5%(\*\*) and 10%(\*) (2) concern about the spillover effect, the regression introduced national average value of each production factors. (3) we tried to test regional disparity on the four-region division, but the result is much less significance than the three-region division by which Liaoning Province belong to

16.9\*\*\* 10.9\*\*\* 17.0\*\*\* 6.2\*\*\* 9.47\*\*\* 6.15\*\*\*


eastern region and other two northeast provinces belong to central region.

lnR&D\_Exp 0.0324 0.0193096

86.1\*\*\* 38.2\*\*\* 84.2\*\*\* 29.3\*\*\* 38.6\*\*\* 26.03\*\*\*

1.79\* 2.3\*\* 1.36 1.65\*

3.0\*\*\* 3.44\*\*\*

(-3)\*\*\* (-3.3)\*\*\*

1.68\* 1.98\*\*

(-1.2) (-2.22)\*\*

(-1.4) (-2.37)\*\*

not the S&T market variable, but every variable is significant.

Significance level 1%(\*\*\*),5%(\*\*)and 10%(\*).

S&T\_Mark

Table 2. Regression result of single factor panel data.

Urb -0.0021

Table 3. Exploration for optimal basic model.


(4) D-value 2007:2001

Appendix 1. Contrast of cross section library in 2001 and 2007. (Continuation)

In addition, the appendix 1 gives us the correlation matrix of these variables, and you may notice the correlation of three variables about technology is very high.

#### **3.1.2 Separating provinces into groups**

Two methods are used for separating the provinces into different groups, which criterion are regional difference and economic development. In the first method, regional difference, the most common results are three groups or four groups. The latter method, the GDP per capita is the main criterion. You can see the result of groups in appendix 2.

#### **3.2 Selecting the basic model**

The statistical model of this session comes from the macroeconomics product formula: .here is output per lobor, is capital stock per labor, is the proportion of labors with high education of total labors. Is the cob-Douglas and the A and the S is the compound indicators of technology input and social development. the formula of statistical is as following:

The variables are all Logarithm based on two causes, one is the deposition of product formula and the other is easy to understand the elasticity. In addition, because the indicators of S is ratio, its absolute change is already illustrate the same meaning with Logarithm.

Appendix 1 is already shows the correlation of variables and they are not significant except the three variable of technology. Selecting optimal basic model starts from the one variable fixed effect regression of panel data. Form 3 gives us the result. We can see the variable K is very significant, which illustrate the capital is still a very key drives in current economic development. the variable h is also significant, but the coefficient is only half of that of K. you may notice that the S&T market is not significant.

Table 3 gives the result of selecting process. Model 1 run the fixed effect regress on K and Urb, the adjusted R-square is 0.7823, and the variable Urb is not significant. So the model 0 with K is the optimal basic model. Model 2 adds the variable lnh, the adjusted R-square rises a little, and this variable is significant. So this new model can be accepted. The model 3 and model 4 adds the technology variable and regional development variable, and the model 3 have three technology indicator at the same time, but you can see the appendix 3, other

Urb 6.7700 -0.0920 0.2000 4.2000 Ind 6.4667 -0.0166 8.0000 7.0000 Ser -2.6000 0.0403 5.0000 -2.0000 S&T\_Mark 0.0351 0.8798 4.2881 0.0115

In addition, the appendix 1 gives us the correlation matrix of these variables, and you may

Two methods are used for separating the provinces into different groups, which criterion are regional difference and economic development. In the first method, regional difference, the most common results are three groups or four groups. The latter method, the GDP per

The statistical model of this session comes from the macroeconomics product formula: .here is output per lobor, is capital stock per labor, is the proportion of labors with high education of total labors. Is the cob-Douglas and the A and the S is the compound indicators of

The variables are all Logarithm based on two causes, one is the deposition of product formula and the other is easy to understand the elasticity. In addition, because the indicators of S is ratio, its absolute change is already illustrate the same meaning with Logarithm.

Appendix 1 is already shows the correlation of variables and they are not significant except the three variable of technology. Selecting optimal basic model starts from the one variable fixed effect regression of panel data. Form 3 gives us the result. We can see the variable K is very significant, which illustrate the capital is still a very key drives in current economic development. the variable h is also significant, but the coefficient is only half of that of K.

Table 3 gives the result of selecting process. Model 1 run the fixed effect regress on K and Urb, the adjusted R-square is 0.7823, and the variable Urb is not significant. So the model 0 with K is the optimal basic model. Model 2 adds the variable lnh, the adjusted R-square rises a little, and this variable is significant. So this new model can be accepted. The model 3 and model 4 adds the technology variable and regional development variable, and the model 3 have three technology indicator at the same time, but you can see the appendix 3, other

technology input and social development. the formula of statistical is as following:

Appendix 1. Contrast of cross section library in 2001 and 2007. (Continuation)

notice the correlation of three variables about technology is very high.

capita is the main criterion. You can see the result of groups in appendix 2.

**3.1.2 Separating provinces into groups** 

you may notice that the S&T market is not significant.

**3.2 Selecting the basic model** 

Contrast Mean value Variance Maximum Minimum

rGDP 0.0327 K 0.0031 H -0.0449 L -0.0106 S&E 0.1161 R&D 0.1062 R&D\_Exp -0.0768

(4) D-value 2007:2001

portfolios of variables are better. As to model 4, the adjusted R-square decreases, and the variable is not very significant. In the end, the model 5 is the compound model, which has not the S&T market variable, but every variable is significant.


Significance level 1%(\*\*\*),5%(\*\*)and 10%(\*).

Table 2. Regression result of single factor panel data.


notes: (1) first line is 'estimate parameters', second line is 't test value': significance level 1%(\*\*\*), 5%(\*\*) and 10%(\*) (2) concern about the spillover effect, the regression introduced national average value of each production factors. (3) we tried to test regional disparity on the four-region division, but the result is much less significance than the three-region division by which Liaoning Province belong to eastern region and other two northeast provinces belong to central region.

Table 3. Exploration for optimal basic model.

The Talents' Impact on China's Economic Development 163

From the regress result, we can see that the models with location groups are stronger. If we separate the provinces into four regions, the impact of Eastern region is higher 25% than other regions (see model 6(1)), but the north-Eastern region is not significant. If we separate the provinces into three regions, the difference of regions is very obvious. In model 7(2), the Eastern region's coefficient is highest, and that of Western region is higher than Central region. Because most of the rich provinces belong to Eastern regions, so we can infer that talents have stronger supporting effect in developed regions. (To refer to

On the other hand, the model with economic level groups is also shown in the result. Our purpose is to check whether the influence of talents is related to the economic development level. Generally speaking, the regress result gives us "yes" feedback, but this difference is

Talents have been concentrating absolutely in eastern region where is the most developed areas and the share increased by 8.06 percentage points from 1996 to 47.96% in 2007. The accumulation in other regions is stopped or negative, especially after 2004. The structure of education level of talents is promote robustly. From 2001 the accumulation of china' talents come from rapid growth of bachelor-degree talents and although the specialty-degree talents still has a large proportion the trend of decreasing is ongoing, especially in Eastern region and north-Eastern region. Considering the even larger concentration of postgraduates talents, the concentration of talents in eastern region and north-eastern region (the

The correlation test of talents with productive rate and factor shows in the Eastern region and north-Eastern region, the accumulation of talents correlated with the rise of labor productivity and capital per labor significantly, but the significant correlation does not appear in another two regions, and the degree related to the talents density is larger in eastern region than the north-Eastern. Considering the economic developing stage it is inferred that talents' effect is stronger in more developed regions. The interesting correlation is in the province-level, the concentration of talents and capital is positive related, and the difference is the regional disparity of scale of resources and degree of

The agglomeration of talents is also consider as an important aspect of regional development. Testing the correlation talents agglomeration degree with GDP per capita, it shows very different correlations between talents agglomeration and economic development in each region. In Eastern region, an obvious positive correlation is observed which means with the agglomeration of talents the output per capita in Eastern region is higher and higher. But the same feature can't be seen in other regions, especially in Central region and Western region, the elasticity between agglomeration indicator and GDP per

The empirical analysis based on optimal basic model method illustrates the influence of physical capital input is still dominant. And the effect of talents is significant thought is

Old Industrial Base) is not only in the quantity but even more in quality.

appendix 2)

very weak.

correlation.

capita is very small.

**4. Conclusion** 

Although model 5 is a little weak that model 3, but it has technology and regional development variable, so model 5 is the optimal basic model of this paper.

This model can illustrates that the elasticity of capital input is very high in the improving labor productivity. In addition, the variable of talents is significant, but the influence is very limit. As for the technology, it is hard to judge the net influence of talents. But one puzzle you may notice, the coefficient of Urb is negative. One possible reason is that with the rapid urbanization of china's cities, the industrialization level is not very high.

#### **3.3 The analysis of difference of regions**

In order to analyze the detailed mechanism of talents, model 7-9 adds the dummy variables that can explain the difference of regions. The following regress is random effect. The statistical formula is as following:

Here is cross variable, is dummy variable is province i, is the proportion of talents of province i.


Table 4.

From the regress result, we can see that the models with location groups are stronger. If we separate the provinces into four regions, the impact of Eastern region is higher 25% than other regions (see model 6(1)), but the north-Eastern region is not significant. If we separate the provinces into three regions, the difference of regions is very obvious. In model 7(2), the Eastern region's coefficient is highest, and that of Western region is higher than Central region. Because most of the rich provinces belong to Eastern regions, so we can infer that talents have stronger supporting effect in developed regions. (To refer to appendix 2)

On the other hand, the model with economic level groups is also shown in the result. Our purpose is to check whether the influence of talents is related to the economic development level. Generally speaking, the regress result gives us "yes" feedback, but this difference is very weak.

#### **4. Conclusion**

162 Entrepreneurship - Gender, Geographies and Social Context

Although model 5 is a little weak that model 3, but it has technology and regional

This model can illustrates that the elasticity of capital input is very high in the improving labor productivity. In addition, the variable of talents is significant, but the influence is very limit. As for the technology, it is hard to judge the net influence of talents. But one puzzle you may notice, the coefficient of Urb is negative. One possible reason is that with the rapid

In order to analyze the detailed mechanism of talents, model 7-9 adds the dummy variables that can explain the difference of regions. The following regress is random effect. The

Here is cross variable, is dummy variable is province i, is the proportion of talents of

lnk 0.7280685 lnk 0.730141 lnk 0.7313616

lnh 0.0270291 lnh lnh 0.0124749

lnS&E 0.1159404 lnS&E 0.115227 lnS&E 0.1174038

lnR&D -0.0791509 lnR&D -0.0792803 lnR&D -0.0829923

Ind -0.0037026 Ind -0.0038241 Ind -0.0033463

Ser -0.0044396 Ser -0.0045369 Ser -0.0040317

27.23\*\*\* 27.05\*\*\* 27.78\*\*\*

2.09\*\* 0.92

4.05\*\*\* 4.00\*\*\* 4.16\*\*\*

(-2.7)\*\*\* (-2.7)\*\*\* (-2.9)\*\*\*

2.24\*\* 2.2\*\* 2.22\*\*

(-1.37) (-1.4) (-1.3)

(-1.58) (-1.6) (-1.5)

2.0\*\* 2.35\*\* 3.4\*\*\*

0.029459 2.15\*\*

5.4\*\*\* 5.35\*\*\* 5.4\*\*\*

Model 7(2) Deviation

group

0.0420618 lnR&D\_Exp 0.0415296

0.0312781 Super-mean d\_h1

0.0266102 Below-mean d\_h2

2.05\*\* 3.1\*\*\*

Model 8(2)

0.0173532

0.0160936

districts

of fit 0.8805 0.8785 0.8794

D\_Exp

Middle district d\_h2

d\_h3

West district

Constant Constant 1.383922 Constant 1.38744 Constant 1.355763

0.005523 East district d\_h1

development variable, so model 5 is the optimal basic model of this paper.

urbanization of china's cities, the industrialization level is not very high.

Model 6(1) Three

lnR&D\_Exp 0.0427174 lnR&

**3.3 The analysis of difference of regions** 

statistical formula is as following:

Four regions

Eastern region d\_h1

Central region d\_h2

Western region d\_h3

Table 4.

NorthEastern region d\_h4

province i.

Goodness

Ln(y)

Talents have been concentrating absolutely in eastern region where is the most developed areas and the share increased by 8.06 percentage points from 1996 to 47.96% in 2007. The accumulation in other regions is stopped or negative, especially after 2004. The structure of education level of talents is promote robustly. From 2001 the accumulation of china' talents come from rapid growth of bachelor-degree talents and although the specialty-degree talents still has a large proportion the trend of decreasing is ongoing, especially in Eastern region and north-Eastern region. Considering the even larger concentration of postgraduates talents, the concentration of talents in eastern region and north-eastern region (the Old Industrial Base) is not only in the quantity but even more in quality.

The correlation test of talents with productive rate and factor shows in the Eastern region and north-Eastern region, the accumulation of talents correlated with the rise of labor productivity and capital per labor significantly, but the significant correlation does not appear in another two regions, and the degree related to the talents density is larger in eastern region than the north-Eastern. Considering the economic developing stage it is inferred that talents' effect is stronger in more developed regions. The interesting correlation is in the province-level, the concentration of talents and capital is positive related, and the difference is the regional disparity of scale of resources and degree of correlation.

The agglomeration of talents is also consider as an important aspect of regional development. Testing the correlation talents agglomeration degree with GDP per capita, it shows very different correlations between talents agglomeration and economic development in each region. In Eastern region, an obvious positive correlation is observed which means with the agglomeration of talents the output per capita in Eastern region is higher and higher. But the same feature can't be seen in other regions, especially in Central region and Western region, the elasticity between agglomeration indicator and GDP per capita is very small.

The empirical analysis based on optimal basic model method illustrates the influence of physical capital input is still dominant. And the effect of talents is significant thought is

The Talents' Impact on China's Economic Development 165

Three-region division

Beijing eastern region eastern part above Tianjin eastern region eastern part above Hebei eastern region eastern part below Shanxi central region central part below Neimenggu western region western part above(after 2005) Liaoning northeast eastern part above Jilin northeast central part below Heilongjiang northeast central part below(after 2003) Shanghai eastern region eastern part above Jiangsu eastern region eastern part above Zhejiang eastern region eastern part above Anhui central region central part below Fujian eastern region eastern part above Jiangxi central region central part below Shandong eastern region eastern part above Henan central region central part below Hubei central region central part below Hunan central region central part below Guangdong eastern region eastern part above Guangxi western region western part below Hainan eastern region eastern part below Chongqing western region western part below Sichuan western region western part below Guizhou western region western part below Yunnan western region western part below Shanxi western region western part below Gansu western region western part below Qinghai western region western part below Ningxia western region western part below Xinjiang western region western part below

Deviation (related to the national average)

Appendix 2. Regional division of provinces.

division

Province Four-region

much smaller relate to capital. This result is partially for the technology we used which can't extract the net influence of talents from the physical capital like the technique promotion or learning by doing. And another interesting result is the coefficient of urbanization is negative. One possible reason is relate to the rapid urbanization in China, the industrialization process is much slower recent years.

Introducing the regional disparity into the model, we can see that if we separate the provinces into four regions, the impact of Eastern region is higher 25% than other regions. If we separate the provinces into three regions, the difference of regions is very obvious. The Eastern region's coefficient is highest, and that of Western region is higher than Central region. Because most of the rich provinces belong to Eastern regions, so we can infer that talents have stronger supporting effect in developed regions. Generally the influence of talents is positive related to the economic development level.

To summary, although the input of technology increased rapidly and the market of technology is developing in china, the influence of talents for regional competitiveness is very limited. One possible reason is current develop stage of china is resource-driven, so the industry level is relatively low. And the different of talents' influence is very small among provinces, no matter we separate the provinces into policy-based location groups, or the economic development level groups.

In the end, we should pay attention to the limitation of this paper. The main point is we do not add the variable of talents' wage, which is the key difference of talents and ordinary labors. We hope to improve the analysis in the further study.

#### **5. Acknowledgement**

Corresponding author Kaizhong Yang acknowledges the financial support from the National Social Science Foundation of China (07&ZD010).

#### **6. Appendix and results**


Appendix 1. Dependence relation of major indicators.

much smaller relate to capital. This result is partially for the technology we used which can't extract the net influence of talents from the physical capital like the technique promotion or learning by doing. And another interesting result is the coefficient of urbanization is negative. One possible reason is relate to the rapid urbanization in China, the

Introducing the regional disparity into the model, we can see that if we separate the provinces into four regions, the impact of Eastern region is higher 25% than other regions. If we separate the provinces into three regions, the difference of regions is very obvious. The Eastern region's coefficient is highest, and that of Western region is higher than Central region. Because most of the rich provinces belong to Eastern regions, so we can infer that talents have stronger supporting effect in developed regions. Generally the influence of

To summary, although the input of technology increased rapidly and the market of technology is developing in china, the influence of talents for regional competitiveness is very limited. One possible reason is current develop stage of china is resource-driven, so the industry level is relatively low. And the different of talents' influence is very small among provinces, no matter we separate the provinces into policy-based location groups, or the

In the end, we should pay attention to the limitation of this paper. The main point is we do not add the variable of talents' wage, which is the key difference of talents and ordinary

Corresponding author Kaizhong Yang acknowledges the financial support from the

lny 1.00 0.90 0.65 0.46 0.47 0.60 0.91 0.35 0.33 0.45 lnk 1.00 0.69 0.17 0.20 0.36 0.82 0.24 0.36 0.47 lnh 1.00 0.17 0.19 0.27 0.73 -0.03 0.60 0.64 lnS&E 1.00 0.99 0.95 0.41 0.41 0.13 0.33 lnR&D 1.00 0.97 0.41 0.44 0.12 0.33 lnR&D\_Exp 1.00 0.52 0.44 0.16 0.37 Urb 1.00 0.14 0.59 0.62 Ind 1.00 -0.53 -0.32 Ser 1.00 0.86 S&T\_Mark 1.00

<sup>D</sup>lnR&D\_Exp Urb Ind Ser S&T\_Mark

industrialization process is much slower recent years.

talents is positive related to the economic development level.

labors. We hope to improve the analysis in the further study.

National Social Science Foundation of China (07&ZD010).

Appendix 1. Dependence relation of major indicators.

lny Lnk lnh lnS&E lnR&

economic development level groups.

**5. Acknowledgement** 

**6. Appendix and results** 


Appendix 2. Regional division of provinces.

The Talents' Impact on China's Economic Development 167

Appendix 4. Effect on regional competitiveness of talents based on three-region division.


Appendix 3. Results of optimal basic model.



Appendix 3. Results of optimal basic model.

**Part 3** 

**Social Context & Entrepreneurship** 

#### **7. References**

Becher, G. 1964. *Human capital*. New York: Columbia University Press.

