AND ENTREPRENEURSHIP IN A TRANSITION CONTEXT
4. CONCLUSIONS AND POLICY AGENDA
representative organisations of small businesses (such as the Chamber of Commerce) to express their views on draft regulations and legislation, although it is difficult to establish to what extent their comments have in- fluenced final decision making.
highly cost-effective strategy for stimulating and promoting entrepreneur- ship, particularly when government resources are limited.
Policy priorities are different incandidate countries for the next accession round and in the EU’s new member states. In this regard, one of the imme- diate policy priorities is to improve the level of detailed knowledge con- cerning the likely changes in the operating environment resulting from EU accession that face SMEs in specific sectors, combined with an effective dissemination programme. Priority must also be given to the development of effective business support networks, since the competitiveness of SMEs depends on them being able to extend and supplement their base of internal management resources and knowledge, by drawing on appropriate external inputs when they need them.
Active promotion of entrepreneurship at the regional and local levels is also required, as part of an enterprise-focused regional policy (OECD, 2000). Although the pace of development of the small business sector in core regions in many candidate countries has been impressive, there is typically a need to take steps to stimulate entrepreneurship more widely. However, to be effective, this will need to address one of the current deficiencies of current regional policy, which, in a country such as Estonia, is an institu- tional one (De Vets, Boot, & Hollanders, 2000). This refers to the need to reform the county and local government structures, neither of which have the capacity or resources to effectively engage in regional policy. There are currently 250 different local authorities in Estonia, ranging in size from Tallinn (with 400,000 inhabitants) to small islands, with a handful of people.
Local government reform can help to provide a basis for the development of effective central–local and public–private partnerships that is necessary if candidate countries are to maximise the opportunities for accessing EU structural funds in the future. In addition to reforming the structure of local/
regional government structure, priority must also be given to the develop- ment of institutional capacity to enable these countries to effectively access appropriate EU funding sources to facilitate the required development.
Other policy priorities with implications for institutional development in- clude the development of effective, market-oriented innovation systems. The development of an institutional infrastructure to support technology transfer and facilitate innovation in SMEs (e.g., innovation centres, technology parks, science parks) has been a feature of economic development in most EU member states during the last 25 years, although in new member states, such initiatives have a much shorter tradition. However, as the experience in west- ern Europe demonstrates, while supply side initiatives (such as innovation centres or science parks) may be a necessary condition for nurturing new
technology-based enterprises, they are not a sufficient condition for the de- velopment of such enterprises. Hence, another policy priority is to increase the level of involvement of higher education institutions in developing links with the business sector in order to increase the supply of technical entrepreneurs.
Finally, when considering policies to encourage and support enterprise and small business development in transition and emerging market econo- mies, it is important to keep in mind that an ongoing critical debate exists within most mature market economies about policy approaches and prior- ities and the effectiveness of government intervention with respect to small businesses (e.g.,Curran, 2000;Gibb, 2000). In this regard, some of the cur- rent policy debates in mature market economies are applicable in economies at earlier stages of market development and vice versa. For example, is a policy for entrepreneurship more appropriate than a policy for small busi- nesses and what are the implications of such an emphasis? What is the role of the state in relation to market forces and market institutions in supporting SME development? How can higher education institutions contribute more to the development of entrepreneurship? How much do policy makers really know about the support needs of the enterprises and entrepreneurs that their policies purport to address? Such questions are currently being debated in EU countries, including the UK, yet they are basic questions, which indicate the limited extent to which policy practice is based on real knowledge and robust evidence of the needs of entrepreneurs, rather than on the assump- tions of policy makers and the political agendas of their masters. These remain priority issues for policy, to varying degrees, in most countries.
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