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Entrepreneurship and Growth in Local, Regional and National Economies

Entrepreneurship and Growth in Local, Regional and National Economies

Frontiers in European Entrepreneurship Research

Edited by David Smallbone, Hans Landström and Dylan Jones-Evans

This state-of-the-art book provides a window on contemporary European entrepreneurship and small business research. The papers selected demonstrate the applied nature of entrepreneurship research as well as the various contributions that entrepreneurship can make to local, regional and national development.

Chapter 15: The Emergence of Entrepreneurial Potential in Transition Environments: A Challenge for Entrepreneurship Theory or a Developmental Perspective?

Friederike Welter and David Smallbone

Subjects: business and management, entrepreneurship


Friederike Welter and David Smallbone INTRODUCTION The importance of analysing entrepreneurship in its social context has recently been emphasized in the mainstream entrepreneurship literature (Davidsson, 2003). Under transition conditions, entrepreneurship has distinctive characteristics and behaviours, reflecting the specific external conditions pertaining and the wider social context. This includes forms of self-employment and part-time businesses (Arzeni, 1996); where selfemployment can provide a means of ‘self-help’ support for those who have lost their jobs through restructuring, or who have been unable to find employment. Other forms of entrepreneurship range from nomenclature businesses where well-connected party officials and directors of former state enterprises used their privileges to gain from privatizing businesses or setting up new ventures, to a variety of types of formal and informal microenterprise and small enterprise activity, often involving different members of a household on a paid and unpaid basis (Smallbone and Welter, 2001). In such a context, researchers often discuss the contribution of ‘simple’ entrepreneurial activities, sometimes categorizing such activities as necessity-driven entrepreneurship, or proprietorship rather than entrepreneurship, or in the case of petty trading as arbitrage, rather than entrepreneurship, with little development potential. However, it can be argued that reality is more complex, making such a dichotomy overly simplistic in practice, particularly in a rapidly changing and hostile environment, and one where there is evidence of entrepreneurs having considerable human capital (e.g. Smallbone and Welter, 2001; Wasilczuk, 2000), which is likely 339 340 Entrepreneurship and growth to increase their adaptive capacity. Research has shown that in the context...

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