In the context of the integration into the European Union, the issue of the increase of firmsâ€(tm) competitiveness has become essential for Romaniaâ€(tm)s economy also, which requires as a mandatory condition the elaboration and application of certain clear strategies, both at the level of firms, and of the Government's, with specific goals and actions. Although it has made certain progress, Romania has significant competitiveness delays compared to the EU member states. In this context, development of entrepreneurial activities is a premise of the increase of economic competitiveness. Entrepreneurship is first of all a state of mind referring to the motivation and capacity of an individual to identify opportunity and follow it with the purpose of producing value or economic success.entrepreneurship, competitiveness, development

Tanase Adrian

Tanase Diana

English

Research Papers in Economics

335 
 
DEVELOPMENT OF ENTREPRENEURIAL ACTIVITIES – PREMISE OF THE 
INCREASE OF ECONOMIC COMPETITIVENESS  
T￿nase Diana 
University “Eftimie Murgu” of Re￿i￿a 
Faculty of Economics and Administrative Sciences  
T￿nase Adrian 
University “Eftimie Murgu” of Re￿i￿a 
Faculty of Economics and Administrative Sciences  
 
In the context of the integration into the European Union, the issue of the increase of firms’ 
competitiveness  has  become  essential  for  Romania’s  economy  also,  which  requires  as  a 
mandatory condition the elaboration and application of certain clear strategies, both at the level 
of firms, and of the Government's, with specific goals and actions. 
Although  it  has  made  certain  progress,  Romania  has  significant  competitiveness  delays 
compared to the EU member states. 
In this context, development of entrepreneurial activities is a premise of the increase of economic 
competitiveness. 
Entrepreneurship is first of all a state of mind referring to the motivation and capacity of an 
individual to identify opportunity and follow it with the purpose of producing value or economic 
success.  
 
Keywords: entrepreneurship, competitiveness, development 
 
JEL classification: L26, O10, R11 
 
1. Entrepreneurship and competitiveness– overall perspective 
After several years of rapid and almost unhindered growth, the global economic landscape has 
changed. The raise of energy and food prices, the international financial crisis and the slow-down 
caused by it confronts the managerial policies of the present economy with new challenges.  
The present context has underlined the importance of competitiveness that can help national 
economies survive these types of shocks, with the purpose of assuring economic performance in 
the future. 
Competitiveness is a complex concept, largely debated at present by economists and politicians 
throughout the world. 
Representing the highest degree in which, under the conditions of a free market, a nation is 
capable to produce goods and services that can be successfully launched on the international 
market, contributing thus to the increase of the living standard of its citizens, competitiveness is a 
challenge, which applies not only in the case of nations, but also at the level of each of the actors 
of the national economy. 
Competitiveness suggests security, efficiency, quality, high productiveness, adaptability, success, 
modern management, superior products, and low costs. 
Creativity or innovation are needed in order to access and become competitive on a market, to 
change it or even to create a new market. Moreover, in order to turn a business idea into success 
one needs the ability to combine creativity or innovation with solid management principles.  
In relation with the remarkable importance of innovation, P. Druker
193 underlined the following: 
“innovation is the specific instrument of entrepreneurs, the means with which they exploit change 
as an opportunity for various businesses or services; it can be also represented as a subject and 
                                                       
193 Drucker P., Innovation and the entrepreneurial system, Encyclopaedic Publishing House, Bucharest, 1993, p. 19. 336 
 
thus it can be learned and practised. Entrepreneurs must seek with precise purpose the sources of 
innovation, its changes and symptoms, which indicates for them favourable opportunities for 
successful innovations. They need to know and apply the principles of successful innovation.” 
Furthermore,  entrepreneurship  contributes  more  and  more  to  the  creation  of  new  jobs.  One 
remarked at the global level that small firms and not large firms created most jobs. Studies have 
shown that entrepreneurship can significantly contribute to the stimulation of economic activity, 
to the integration of the unemployed and social disadvantaged groups, contributing thus to the 
economic growth of a country.  
 
2. Stimulating factors of entrepreneurship in our country 
The new entrepreneurial initiative, the start of a business or the reorientation of an exiting one 
(after the transfer of a business to a new owner), the support for productiveness -  all these raise 
the pressure of competitiveness, forcing other firms to react by enhancing efficiency. 
The increase of efficiency and innovation within the firm, in products, services or markets, raise 
the force of the competitiveness of an economy as a whole. This process brings thus benefits to 
all participants in economic life, and thus not only to entrepreneurs, but also to consumers, who 
have the possibility to choose the best existing offers. 
Although  slight  progress  has  been  registered  in  our  country  lately,  there  is  not  yet  an 
entrepreneurial culture and consequently the State institutions, the academic institutions and the 
SMEs  recognise  the  necessity  to  act  in  this  direction.  The  limited  number  of  studies  on 
entrepreneurship  in  Romania  made  entrepreneurship  itself  remain  in  a  continuous  state  of 
inferiority  (because  of  the  absence  of  resources  put  at  the  disposal  of  universities  and 
governmental agencies). 
In spite of the improvement efforts under progress, entrepreneurs identify bureaucracy as being a 
major obstacle in the way of business operations, especially for those who desire to operate and 
develop within the European market. The legislation is not generally differentiated in accordance 
with the size of the firm and thus it disproportionally affects smaller companies. The local public 
authorities  must  be  encouraged  to  think  at  the  micro  level  at  the  beginning  and  keep  the 
legislation as simple and appropriate as possible. 
Adequate  fiscal  measures  can  contribute  to  the  development,  growth  and  longevity  of 
companies. The structure of the fiscal system, including income tax, corporate tax, labour tax and 
VAT influence the capacity of firms to expand. The complexity of the fiscal systems is in itself 
an administrative burden for entrepreneurs. 
As the rates of marginal tax raise, the entrepreneurs tend to expand their own business more 
slowly, to invest less and to employ less personnel. The level of the labour taxation can also be a 
decisive factor in the decision of the firms in our country to employ staff. The fiscal reform in the 
past year have not contributed to the creation of a clearer trend as regards the creation of small 
and medium enterprises, as the labour taxation is still high. 
On  the  other  hand,  the  strangulations  on  the  labour  market  create  barriers  in  the  way  of 
development and one must intensify the qualification efforts for workers. 
Although unemployment still constitutes a major challenge for Romania, the recent years have 
exhibited higher difficulties in recruiting labour force in certain regions and counties. The firms 
already respond to the qualification voids, for instance, by providing formal or informal training 
for their own staff.  
Consequently, we are currently witnessing the need to make sure that most qualifications of the 
local, regional and national labour force correspond to the economic and technological evolution. 
The permanent enhanced training represents an effective means of getting a qualification. 
Moreover, the access to financing is indispensable for development, but most SMEs encounter 
difficulties such as: the risk capital market is underdeveloped and banks avoid more and more 
risky loans. 337 
 
Furthermore, in order to deal with the challenge of a harsh competition, entrepreneurs must be 
encouraged to innovate and to tend towards the internationalisation of the business. For this 
reason, they must have access to knowledge, relevant contacts, specialisation and support for a 
first-rate business. 
SMEs  consider  that  the  Single  Market  has  led  to  a  higher  competition,  but  also  to  new 
opportunities of expansion. The competitive pressure makes firms continually exploit knowledge 
and  innovation.  Firms  can  modernise  themselves  in  different  ways,  including  by  means  of 
technologic  development,  quality  management,  new  modalities  of  work  organisation  or 
distribution channels. The human capital is important for creating innovating ideas.  
A stimulating factor for encouraging entrepreneurship is also the business incubators, a facility 
putting at the disposal of small entrepreneurs, besides working premises, centralised services of 
secretarial activities, guarding and cleaning, a package of consulting and business services.  In 
the period of incubation, ranging from 1 to 3 years, the newly-established firms, those in their 
first years of operation or in their first years of crisis are assisted by the consulting team of the 
incubator to develop managerial and operation capacities in order to become viable partners of 
the local business community.  
A study performed by GEM (Global Entrepreneurship Monitor) and forwarded in Romania’s 
country  report  2007  –  Global  monitoring  of  entrepreneurship  –  highlights  the  features  of 
entrepreneurship in Romania in an international comparison: 
-  absence of entrepreneurial tradition, activity and  education before the ‘90s during 
the socialist period; 
-  unfavourable entrepreneurial environment in the transition period of the ‘90s;  
-  in the period of economic growth, after 2000: acceptance by the population of jobs 
offered by the large companies, as they are perceived as having a lower risk. 
The explanation for the rather low level of entrepreneurship development in Romania can be 
found in the restrictions faced by small companies as regards resources and their vulnerability 
related to the environmental changes and uncertainty, the enhanced comprehension of factors and 
mechanisms explaining the development of firms
194.  
 
3. Conclusion 
In the present context of economic crisis, both new SMEs and the existing ones are confronted 
with financial problems and especially with the absence of resources, limited access to loans and 
absence of customers, increase of the number of customers with due payments.  
As for demand, entrepreneurs consider that their problems depend on the constraints of their 
competition on the sales markets and the lack of economic resources of their potential customers.  
Thus, in the context of the economic and social changes exhibited at the national level as a result 
of the global financial crisis, we find that the labour market is undergoing a continual chance. 
The high rate of BIM unemployment or the absence of prospects of economic investments able to 
stimulate the development of local communities are factors generating stagnation or social crisis. 
This  reality  highlights  the  need  for  the  intervention  of  public  institutions  or  other  non-
governmental  organisations  for  the  support  of  entrepreneurship  development.  The  need  for 
information, counselling, professional training or creating a support network for entrepreneurs or 
for those who desire to become entrepreneurs can be palliated by certain legislative regulations, 
efficient programmes and projects able to respond to the specific needs of this category.  
Under these circumstances, entrepreneurship can contribute to the economic and social growth in 
the area whose development is delayed as it is, by stimulating economic activity and creating new 
                                                       
194 Lafuente Esteban, Rabetino Rodrigo, Human capital as a determinant of small firms growth in Romania a quantile 
approach, CEBR, Working Paper Series 03 – 2007, p. 10. 
 338 
 
jobs, all the above contributing to the regional development and implicitly to the increase of 
economic competitiveness. 
Entrepreneurship is crucial for competitiveness, as the raise of efficiency and the introduction of 
innovation in companies, either related to management, processes, products, services or markets 
increase competitiveness among competitors, and leads to the obtaining of new products and to 
the reduction of prices. 
Entrepreneurship offers the possibility of exploting the creative potential of the person, as owning 
a business is not only a way to earn money, but also a modality to earn independence, to deal 
with a variety of challenges an thus to reach a higher level of satisfaction. 
 
Bibliography 
1.  Cojanu  Valentin,  Bîrsan  Maria,  Unguru  Manuela,  Competitiveness  of  the  Romanian 
economy: adjustments necessary to reach the goals of the Lisbon Agenda, European Institute 
of Romania, Bucharest, 2007. 
2.  Cojanu Valentin (co-ordinator), Integration and competitiveness, ASE Editions, Bucharest, 
2007. 
3.  Dinu Marin, Romania’s economy. Small and medium enterprises. What do we get integrated 
with?, Economic Publishing House, Bucharest, 2002. 
4.  Drucker P., Innovation and the entrepreneurial system, Encyclopaedic Publishing House, 
Bucharest, 1993. 
5.  Lafuente Esteban, Rabetino Rodrigo, Human capital as a determinant of small firms growth 
in Romania a quantile approach, CEBR, Working Paper Series 03 – 2007. 
6.  Voiculescu Dan, Mereu￿￿ Cezar, Competitiveness analysis of Romanian economy, Publishing 
House of the Romanian Academy, Bucharest, 1998. 
7.  Voiculescu Dan, Competitiveness – lectures notes, Economic Publishing House, Bucharest, 
2000. 
8.  *** - Key figures on European business with a special feature on the factors of business 
success, EUROSTAT, European Commission, 2008 Edition. 
 
 
 
   

DEVELOPMENT OF ENTREPRENEURIAL ACTIVITIES â€" PREMISE OF THE INCREASE OF ECONOMIC COMPETITIVENESS

http://anale.steconomiceuoradea.ro/volume/2010/n2/050.pdf

DEVELOPMENT OF ENTREPRENEURIAL ACTIVITIES â€" PREMISE OF THE INCREASE OF ECONOMIC COMPETITIVENESS

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics