engleski

Start-Up Entrepreneurs in Croatia : Some Determinants of Entry within the Context of Croatian Economy

1. INTRODUCTION There are numerous approaches to the policy of entrepreneurship development in postsocialist countries (Brezinski, Fritsch, 1996 ; OECD, 1998 ; Bartlett, Franičević, 1999). However, we did not found in recent literature so decisive theories about the factors which determine the establishing of small and medium enterprises in post-socialist environment. Using the results of GTZ/Pilar research from 2002 about the participants of seminars for start-up entrepreneurs (N = 130), as well as the results of only Croatian research on the crucial success factors of start-up entrepreneurs from the year 2000 performed for Croateh, Zagreb (also on a small sample of individuals: N = 78 from 14 Croatian counties) (Čengić, 2002b), in this paper we will try to identify some socially-induced and latent factors which influence the individuals' choices regarding entrepreneurship in Croatian conditions. We proceed from the general hypothesis that among the start-up entrepreneurs the most frequent motive is self-employment, and then the other reasons (such as personal choice, family tradition, available capital etc.) Since these persons were not taught specifically how to run their own business, as a part of their regular education and previous employment (if they were employed) it was expected that seminars for start-up entrepreneurs - in the form of information on entrepreneurship and new management skills that they acquired - would have a positive impact on them. 2. PERCEPTION OF SEMINARS WITH REGARD TO OBSERVED BENEFITS The participants of the seminars for start-up entrepreneurs have, as expected, a positive attitude to entrepreneurship as a possible development policy. Their perception of the seminars depends largely on thematic content offered, on their real expectations ('awards'), previous entrepreneurial (in) experience (whether they came with concrete or simply fluid business projects), as well as on other contextual variables. First of all, the participants' general impression of the seminars is very positive. The most important benefits of the seminars according to the participants are as follows: 1) acquiring key information necessary for starting up own businesses (33, 1%) and 2) developing a positive attitude to entrepreneurship as a possible economic development (26, 9%). According to the evaluations of the participants for 19, 2% of 130 persons, seminars had some or even crucial impact on their decision about starting up their own business (table 3). Although for 80% of the interviewed persons seminars were not crucial for their decision to 'enter' the entrepreneurship, the impact of seminars on a fifth of seminar participants is still significant! 3. PROBLEMS OF 'ENTRY' - SOME CONSTRAINTS OF START - UP ENTREPRENEURS The difficulties in the functioning of small businesses and companies can roughly be divided into two types: a) the difficulties of becoming established - directly during and after starting a company (6-12 months), and b) the difficulties of a stabilized business- after a company has already survived the first attacks of different commitments towards spenders, vendors, state and local governments (cities, municipalities). Start-up entrepreneurs name the following problems in the initial phase of their business: 1) the impossibility of obtaining stimulating funds/loans (26, 2%), and then (with lower percentage): 2) administrative difficulties in obtaining work permits from the state (16, 7%) and 3) unreliable/incomplete market data, as well as high costs of small business/company registration (11, 9%). Among the difficulties of a stabilized business the main problems are: 1) big taxes and payments to the state (21, 4%) ; 2) impossibility of obtaining cheap loans (19, 0%), and 3) non-payment for delivered goods/services (16, 7%). Start-up entrepreneurs from Croateh survey from the year 2000 had had somewhat different problems compared to GTZ seminar participants. They had problems with insufficient current assets (42, 3%), non-payment of products (37, 2%), big taxes (35, 9%), inaccessibility of cheap(er) loans (32, 1%) and the lack of relief for new investments (30, 8%). 4. WOULD-BE ENTREPRENEURS AND PERCEPCTION OF ENTRY BARRIERS Available data suggest that among numerous reasons of non-entrepreneur status are three dominating variables: 1) impossibility of financing initial business costs (46, 6%), 2) insufficient family support (18, 2%) and 3) non-realization of business ideas due to high production costs (15, 9%). Our data suggest the conclusion: entrepreneurial projects are not followed by sufficient funds for investing in initial business costs. At the same time, these data show that a part of the participants came to the seminar with very vague entrepreneurial ideas, and that there is a problem in choosing participants for that kind of seminar. In any case, the advantage of the seminar is that it has helped a part of the participants to raise the awareness of hidden difficulties in business idea realization – the problems may have the ground in their surroundings or in private individual flaws (but still relevant for business). At the same time, the data warn us that without the support of a family (be it moral or financial, or in the form of available work force) it is very difficult to start an entrepreneurship. Those problems are especially stressed in economically static surroundings, such as Slavonia and a part of Croatian coast (Dubrovnik and Zadar hinterland). 4. DISCUSSION AND SOME CONCLUSIONS Several general conclusions can be drawn from our data. Firstly, educational seminars have a certain and positive impact on the start-up of new businesses. This is why one of the state's measures in this area could be focused on a functional increase in the quality of educational seminars and their adjustment to the different needs of operating actual start-up entrepreneurs and real 'would-be' entrepreneurs. Secondly, it is good to know that entrepreneurial education on its own will not bring about optimal development results unless there is a structural adjustment of the national administration to the entrepreneurial needs. In this regard it is necessary to complete the education of those with whom the start-up entrepreneurs meet regularly while trying to realize an entrepreneurial concept - primarily management and professional personnel in state administration and self-government (ministries, counties, towns). In parallel with this activity, a check, supplementation and reinforcement of knowledge and skills of lecturers should also be organized. Thirdly, it seems necessary to reconsider the business mission of the local entrepreneurial centers. In the short-term run their activities should be completely oriented towards entrepreneurial development, i.e. provision of different kinds of services covering information, education and consulting. Fourthly, we find that data from both cited research materials confirm the hypothesis that start-up entrepreneurs in Croatia develop significantly due to self-employment, mostly from professional skilled workers connected with production, and less to state administration. We thus conclude that the technical competence factor, founded primarily on technical-technological know-how from the socialist industrial structure, is one of the most important factors influencing decisions of individuals on starting their own businesses in Croatia. Part of our data suggests that achievement motives could be also the widespread motives for entering entrepreneurship in Croatia (Dubini's self-actualizers) but this thesis should be checked in some future research. According to the data from the both consulted researches, there is no clear evidence which could detect some impact of family tradition on start-up entrepreneurs here. Fifthly, regarding the problem of available capital for all small entrepreneurs, we again here must talk about how to ease access to financial sources. A market-oriented strategy that improves an access of small entrepreneurs to financial sources should be focused on risk and transaction costs' reduction strengthening at the same time the capacity of financial institutions and the competition on financial market. Finally, Croatian Agency for Small Business (HAMAG) should be also responsible for the implementation of SME policy within the whole country. HAMAG and local entrepreneurship centres should play a crucial role in creating entrepreneurial climate for SME development. Within their mission special attention shoud be paid to start-ups since they need both financial and consulting assistance. The role of the SME Ministry and its relation to the entrepreneurship centres should be considered in this context as well.

Start-Up Entrepreneurs; Croatia; Determinants of Entry; Croatian Economy

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