The economic and social role of Entrepreneurship Flashcards
SME’s definitions:
Micro-Enterprise:
Nr. of Employees < 10
Turnover ≤ 2 mil. Euro
or Balance Sheet Total ≤ 2 mil. Euro
Small Enterprise:
Nr. of Employees < 50
Turnover ≤ 10 mil. Euro
or Balance Sheet Total ≤ 10mil. Euro
Medium Enterprise:
Nr. of Employees < 250
Turnover ≤ 50 mil. Euro
or Balance Sheet Total ≤ 43 mil. Euro
Types of SME:
Autonomous/ Independent Enterprise (owns<25%)
Partnering Enterprise [owns 25-50%]
Linked Enterprise (owns>50%)
Legal forms a business can take in Romania:
Authorized Physical Person PFA (1pers)/
Individual Enterprise II (1pers) /
Family Enterprise IF (min. 2 pers.)/ OUG 44/2008
II. Trading Companies/ L 31/1990
Limited Liability Firm / SRL/ max.50pers./ SC=200L
Joint Stock Company/ Incorporated Company / SA / min.2p/ SC=90mii Lei
General Partnership Company with Unlimited Liability of the Partners/ SNC / min.2p/ SC=?
Limited partnership Company / SCS/ min.2p/ SC=?
Limited by shares partnership company/ SCA/ min.2p/ SC=90miiL
III. Economic Interest Group – GIE/ asoc.min 2pers,/det. per.; European Economic Interest Group – GEIE/ [2-20p.] from min.2 dif. states/ L 161/2003;
IV. Cooperative Companies: nr. Members> 5; L 161/2003
V. Agricultural Companies/ nr. of associates= unlimited & variable;
SC = variable.
Unicorn company:
“Unicorn” is the private company valued at over 1 billion dollars! The term was chosen especially to signal the rarity of such companies.
Small business act (SBA):
It has served as the framework for guiding SME policy-making, based on a set of voluntary policy recommendations centered on 10 principles!
SBA’s principles:
SBA’s 10 principles:
Entrepreneurship;
‘Second chance’;
‘Think small first’;
‘Responsive administration’;
State aid & public procurement;
Access to finance;
Single Market;
Skills & Innovation;
Environment; and
Internationalization.
Intrapreneur:
The original word “intrapreneur” was coined by G. Pinchot III (1978). It was later popularized by Steve Jobs (1985).
Corporate entrepreneurship:
Rapid growth in the nr of new and sophisticated competitors;
Sense of distrust in the traditional methods of corporate management;
An exodus of some of the best and brightest people from corporations to become small business entrepreneurs;
International competition;
Downsizing of major corporations;
An overall desire to improve efficiency and productivity
SMEs are:
Contributing to a competitive environment;
Generating new jobs and lowering the fluctuations in the labor market;
Proving a greater sensitivity to market needs, thus better matching of supply to demand;
Are creating opportunities for the appropriate technologies’ development and adaptation;
Harnessing market niches that are not profitable for large companies, often accompanied by a more effective combination of the production factors;
Providing a better use of secondary resources, that would otherwise remain unused; providing a more efficient use of local resources;
Acting as a specialized supplier of spare parts, assemblies, and services for large enterprises (generally through subcontracting), usually at lower prices, thus positively influencing the profitability of large firms;
Encouraging investments having as main source the household savings (family, relatives, friends), or other funds that would otherwise be unproductive;
Contributing to a better distribution of the power in society, in general, and economic power (in particular) with positive long term effects on the social and political stability.
Entrepreneurship & SMEs Sector: the Statistics’ “Language”
National Level Statistics:
The National Trade Register Office/ Oficiul National al Registrul Comertului (ONRC)/ ;
The National Institute of Statistics/ Institutul National de Statistica (INS)/ ;
Ministry of Public Finance/ Ministerul Finantelor Publice (MFP)/
List of Romanian Companies: www.listafirme.ro
Ministry of the Business Environment, Trade and Entrepreneurship (Ilan Laufer)/ Start Up Nation (nonrefundable funds up to 200.000 lei/ SME)
E.U. Level Statistics:
- Eurostat http://epp.eurostat.ec.europa.eu/; Structural Business Statistics/ SBS);
International Level Analyses:
The Organization for Economic Cooperation and Development (OECD) (www.oecd.org ).
World Bank (www.worldbank.org / Doing Business Index);
Doing business:
Overall score 55/ (1-190)
Starting a business (rank) 91,
Dealing with construction permits (rank) 147,
Getting electricity (rank) 157,
Registering property (rank) 46,
Getting credit (rank) 25,
Protecting minority investors (rank) 61,
Paying taxes (rank) 32,
Trading across borders (rank) 1,
Enforcing contracts (rank) 19,
Resolving insolvency (rank) 56.
Global Entrepreneurship Monitor (G.E.M.):
Founded in 1997 by Babson College (Massachusetts, USA) & London Business School.
GEM develops, annually, the most extensive and complex longitudinal study on entrepreneurial activity worldwide!
The 2022/2023 GEM Report – “Adapting to a New Normal”:
Is the result of data processing from 51 countries;
It is based on a representative sample, (data gathered by national teams of experts).
The analysis is based on the 3 groups of countries:
Economies (A) with a Gross Domestic Product (GDP) per capita of > 40,000$;
Economies (B) with a GDP per capita between 20,000 to 40,000 $ (/ including Romania);
Economies (C) with a GDP per capita of < 20,000$.
The Pandemic hit hardest those who could least afford it!
Promoting entrepreneurship (E) and entrepreneurial education (EE):
The E & EE promotion has become a strategic objective of the public policies for growth and employment in Europe;
EE) is a determining factor in this process, having a positive impact on:
the young generation entrepreneurial spirit’s enhancement,
the attitude and willingness to promote private initiatives and, finally,
the role played in the economy and society;
E can transform ideas into action, involving creativity, innovation, risk taking, project management potential and goals achievement;
European Commission (EC) adopted a series of measures to empower entrepreneurial culture, entrepreneurial skills, especially among young people.
Effects and impact of entrepreneurship programmes in higher education:
The study was conducted among graduates of European higher education institutions; the fundamental conclusion was that:
“Entrepreneurship Education (EE) - has a positive impact on young people’s mental setting, on their entrepreneurial intentions, their chances of employment and finally their role in society and the economy”!
Entrepreneurship (E) refers to an individual’s ability to transform ideas into practical actions!
EE must achieve the following objectives:
- Improving the entrepreneurship mental setting of youth, in order to enable them to become more creative and self-confident, whether they will decide to decide to be self-employed, employers or employees.
- Encouraging innovative start-ups;
- Increasing the role of youth in the society and the economy.
The Key Entrepreneurial components are:
Entrepreneurial attitude (Initiative, Risk acceptance, Efficacy, Need for self-realization, structured behavior);
Entrepreneurial skills (Creativity; Analytic Skills; Motivation; Interrelatedness network / networking, Adaptability);
Knowledge (Understanding the role of entrepreneurs, Entrepreneurial knowledge / on setting up a new business and manage it).
