ERENET PROFILE ISSUE No.2 Vol. I April 2006 ERENET PROFILE __________________________ PUBLISHER Dr. Péter Szirmai– Editor Dr Antal Szabó – Scientific Director Attila Petheő – Web site Editor INTERNATIONAL BOARD Dr. Sanja Pfeifer – University of Osiek Dr. Dimitri Matis – University of Cluj-Napoca Dr. Szabo Zsuzsanna – University of Tirgu Mures Dr. Eric Dejan – University of Belgrade Dr. Miroslav Glas – University of Ljubljana Dr. Toni Brunello Studiocentroveneto Dr. Renata Vokorokosova, University of Kosice Dr. Dilek Cetindamar – Sabanci University Dr. Natalya Kubiny – Uzhgorod National University Dr. Gyula Fülöp – University of Miskolc Dr. László Szerb – University of Pécs Dr. Márton Vilmányi – University of Szeged Dr. Gábor Nahlik – University of Veszprém Published by: ERENET NETWORK Small Business Development Centre, Corvinus University of Budapest info@erenet.org www.erenet.org © ERENET PROFIL, 2006 CONTENT EASTER MESSAGE PAPERS Dr. Gilbert Fayl – Ulric Fayl von Hentaller Innovation and Civil Society in the 21st Century Dejan Eri , PhD Access to Financing for SMEs Miklós Kókai – László Böszörményi TRATOKI – Transnational Toolkit for Micro Enterprises Antal Szabó Best Practice in Business Incubation in Emerging Market Economies and Countries in Transition Due-Gundersen Gunnar, Morten Muus Falck The ENTRANSE Business Incubator Concept Gábor Kerékgyártó and others Possible program for the Entrepreneurship Development and Education System in Hungary Gyula Fülöp – Krisztina Szegedi Ethics of Small Enterprises in the Era of Globalization – Part 2 Csapó Krisztián - Attila Pethe - Péter Szirmai Spin-off Companies in Hungary CONFERENCE PAPERS st The European Way of the 21 Century The Budapest Declaration in 2005 New EU SME Policy: Implementing the Community Lisbon Programme - Modern SME Policy for Growth and Employment INSITUTIONAL PROFILE Business College “VERN” University of Pécs ESBC SME Union CALLS – EVENTS – NEWS • • • • • Conference on the European Charter on SMEs The 51st ICSM World Conference ICEB + eBRF 2006 Budapest Round Table ICELM-2 International Conference on Economics, Law and Management EASTERN MESSAGE OF THE SCIENTIFIC DIRECTOR 2 Dear Readers, Distinguished Friends, It is my great honour to forward you the second issue of our joint new Internet periodical ERENET PROFIL. It is already March, “the season of buds, getting in love and revolutions” written by the Hungarian poet and translator and sensitive impressionist and artists of the language Árpád Tóth, born in Arad in 1886. It was a long winter and people in all CEECs suffered much. However, the spring brings new hopes, and Europe is badly needs the new wings of prospects. It is my privilege to inform you that our ERENET Network becomes strong. At the time being we already have 36 Members from 16 countries representing 29 institutions. In addition to the core-CEECs we are proud to have Members from SEE, CIS and advances EU and non-EU countries. International organizations and initiatives have been discovered ERENET. We agreed to cooperate with the Central and Southeast European Innovation Area (CEIA) and we are in the discussions concerning mutual recognition with Research, Innovation and Business network (RIBN) for Central- and South-Eastern Europe. What is favourable for us, that we could launch our first joint project on “Benchmarking of Business Incubators in Selected Transition Economies” with the financial assistance of SINTEF - The Foundation for Scientific and Industrial Research at the Norwegian Institute of Technology. The honeymoon of the newcomers is over and these countries are facing the reality of the asymmetric EU enlargement. Due to the full-fledge liberalization the discount changes unpresedented and agressive investment strategy have been launched. The cheapest milk in the multinational retails shops in the Hungarian Auchan is made in Germany, where the subsidy of the peasant is much higher as their new neighbours, and the onion delivered from Austrian costs HUF 10 less than one in the land of the famous Makó onion, and the Tesco offered polluted eggs of Polish origin. During the last decade the CEECs’ Governments attracted with many provisions and allowances the multinationals (like tax holliday, support for creation of job, infrastructural development, business parks and industrial zones, etc.). Today in average a multicational company pay less coporate taxes the indigenous newborn SMEs. However, the speculative capital in the whole CEECs, the capital is moving further toward a highest profit leaving behind chaos and dumping ground of backrupt domestic SMEs, increasing the level of unemployment and poverty. In March I attended the World Deauville Conference dedicated to a Asian-Europe dialogue. The Conference aimed at developing a new concept „World Economy For All” and how it may create a new value for organisations, shareholders and all your stakeholders in a well balanced economy. Understanding ideas, behaviours and patterns in two major world regions as a source of new value in a well balanced development. Asia is one of the most dynamic regions of the world economy, in which Europe has a prominent cultural and economic role. Drawing of their civilisation accomplishments, an interregional dialogue should involve business, cultural and academic leaders to lay foundations for a new global economy based on mutual understanding and respect. It is pitty, that out ot the 300 participants half a dozen people came from our region. On 16 and 17 March the 4th edition of the European Business Summit (EBS) took place in Brussels. One week before the EU Spring Summit, the business community intended learn about the reforms which the 25 member states and the EU will carry through in order to move to a more competitive Europe. The around 1,500 participants will comment on the various National Reform Programmes to create more growth and jobs. The EBS will provide these programmes with a corporate reality-check and will present the official Business Message for the Spring Summit to the Austrian EU-Presidency and the European Commission. The Annual Meeting of the ERENET is coming soon and we shall take stock of our modest achievements during the first year and we shall set ourselves the task to growth and shoot up. Dr. Szabó Antal Scientific Director of ERENET 3 Dr. Gilbert Fayl Secretary of External Affairs, European Academy of Sciences and Arts Ulric Fayl von Hentaller Adviser to the President, Novitech Plc. gilbert.fayl@european-academy.at ST INNOVATION AND CIVIL SOCIETY IN THE 21 CENTURY Strategic Vision for Regional Development and Integration in Central- and Southeast Europe • In the 21st century, more than ever before, informed members of civil society – individuals and interest groups – have opportunities to contribute to innovation. These opportunities should be fully realised. • Regional-level innovation often results from measures initiated locally. In this way targeted trans-border co-operation also becomes a reinforcing element to strategies of regions in Central- and Southeast European countries. • Supported by civil society initiatives, regions should address in joint projects, their “own” issues identified locally and regionally. This will mobilise and combine dispersed efforts, and realise synergies of expertise and resources that might otherwise not be achieved. In the 21st century, more than ever before, informed members of civil society – individuals and interest groups – have opportunities to contribute to innovation. These opportunities should be fully realised. • Regional-level innovation often results from measures initiated locally. In this way targeted trans-border co-operation also becomes a reinforcing element to strategies of regions in Central- and Southeast European countries. • Such co-operation will enhance the involved regions’ innovation potential. It will: (i) lead to more and better job opportunities; (ii) help the new EU Member States and countries with accession status to efficiently contribute to the successful implementation of the Lisbon Agenda; and (iii) assist the future EU enlargement by facilitating the accession countries’ participation in regional and European innovation projects and activities. • The non-political initiative presented in this article, contributes to the establishment of a “Central- and Southeast European Innovation Area”. The initiative will actively support the involved countries’ catch-up process to become strong partners in the European Union. • The initiative is: (i) inclusive – open to all relevant individuals / organisations; (ii) responsive – being able to provide advice / direction in a timely manner; and (iii) forward looking - sounding board for new / innovative ideas. It is already being implemented. Civil Society – driving innovation 1. The European Union’s (EU) economic dynamism and growth is weak. The Union needs to enhance its competitiveness vis-à-vis its rivals. Public authorities, industry, agriculture and service providers in the EU must be more determined to introduce innovative measures. Without innovation, economic progress slows down and stagnation results. Society-driven demand for innovative products and services enhances the drive for innovation. Thus, society-driven demand is essential for progress. 2. Innovation is not a straightforward linear process (J.-P. Contzen). It often appears in a somewhat chaotic way. Strong entrepreneurial spirit, high-quality education and research are all vital for innovation. In a complex manner, national and international regulations, and rules of free market all play vital roles. 4 As customers of high-quality products and services, the behaviour of public authorities and members of civil society directly influence the extent and direction of innovation. In an indirect way, civil society can exercise pressure upon innovation as it demands high-quality public services. 3. Innovation is too important for a nation’s wealth creation, economic growth and progress to be left in the hands of any Government or Government officials – alone. st In the 21 century, more than ever before, informed members of civil society, individuals and interest-groups, have the opportunity to take initiatives that have potential to positively influence the innovation capacity of their local communities. This, in turn, has the potential to spill over to regional level-innovation – maybe also to the level of a country or the EU. 1 4. This article presents an example of a non-political, civil society initiative . It aims to enhance the innovation potential of regions in Central- and Southeast Europe. Thus, to help establish an “innovation area” that includes the new EU Member States and applicant countries in this part of Europe. Central- and Southeast Europe – driving an economically strong EU 5. A strong and economically competitive Central- and Southeast Europe is important for the EU as a whole (P. Jungen): • The sooner the new Member States improve their economic performance, the faster the EU can reduce the transfer of funds to these countries and focus on other pressing global issues (e.g. support of ”third world”). In turn, the growth and increased spending power of the new Member States should ensure additional market acces and jobs for the old ones. • A globally competitive EU is only possible if its Member States and their regions compete and co-operate effectively with each other. Decentralised decision-making and the gradual transfer of resources to regional and local authorities would contribute to a more effective implementation of Lisbon strategy. This would enable regional and local authorities to develop and adapt their own strategies through competition, for instance in deregulation and public services. The role of civil society in this process is obvious. • Several of the new Member States seem to have developed a strong entrepeneurial spirit, most likely because of their still relatively small and more developing economies. 6. More specifically, there are several crucial economic reasons for the development of a Central- and Southeast European Innovation Area: • The region’s economies need more market-access if they are to perform optimally. • The existing EU markets are already relatively saturated. The goods and services from the new Member States have to compete head-on with existing goods and services already established on the EU market and fulfilling EU norms. • The amount of disposable income from consumers inside the EU (private, industrial and institutional) is finite. Any inroads by new products and services into the existing EU markets would have to result from spending substitution. The consumers’ measurement criteria will include price, perceived quality, perceived knowledge content and perceived after-sales service. • The main potential for market development in Europe for the foreseeable future will be in Central- as well as Southeast Europe. The old EU Member States are well aware of this fact. The enlargement is not solely due to EU’s sense of “solidarity”, as can be witnessed by their marketing efforts in Central- and Southeast Europe. EU – and overseas – companies are already aggressively targeting these markets. • Countries in Central- and Southeast Europe must pay due attention to the potential contained in the development of their home-market. These countries’ economic actors would do well to establish a firmer foothold here in order not to be left behind by EU and overseas players. 1 The article’s authors established the basic principles of the initiative a few years ago. The European Academy of Sciences and Arts supported the proposal from the beginning. Subsequently, colleagues – Prof. G. Pethes, Prof. I. Hronszky and Dr. I. Bilik – provided useful advice. Early 2003 G. Fayl invited a group of individuals – representing organisations of various types and sizes – to participate in the CEIA concept realisation, see Point 17. 5 7. A Central- and Southeast European Innovation Area will lead to more dynamic progress towards a knowledge-based economy and society. In addition, the possibility to produce high knowledge-content goods and services, rather than cheep labour cost, will raise confidence in the region and attract further foreign and domestic investments. 8. Equally, if not even more, important is that the process of establishing a Central- and Southeast European Innovation Area will: • promote direct and non-political dialogue in the region. Together with rising living standards, this would promote regional stabilisation and full integration into the EU. • mobilise and combine dispersed efforts, and realise synergies of expertise and resources that might otherwise not be achieved. Innovation – driving regional development and European integration 9. The conclusion of the Lisbon Summit (March 2000) is currently one of the EU’s main policy-drivers. It laid out the objective of Europe becoming "the most competitive and dynamic knowledge-based economy in the world by 2010". However, without pioneering thinking and significantly increased domestic innovation potential, the EU will be unable to reach the challenging objective laid out in the Lisbon Agenda. 10. Innovation is a dominant factor for market success. It leads to enhanced productivity, higher quality, and more and better competitive goods and services. Thus, innovation is key for improving the competitive position of individuals, firms, regions and nations. 11. Sustained innovation often results in more and better job opportunities. It has the prospect to improve living and working conditions and ensure the economic basis for high-quality public services. All these are significant contributing factors to political stability. 12. The current trend of globalisation necessitates new forms of co-operations – even between previously competing groups – in order to gain and/or maintain competitive advantages at a global level. The enlargement of the EU is a real opportunity for increasing Europe's position in the process of globalisation. 13. Direct co-operation between regions is a novel possibility for more active and better competitive participation in the globalisation process. Even co-operation beyond national (including “Schengen”) borders. Regions with high potential for knowledge creation offer particularly attractive prospects for such initiatives. These regions should house high quality universities and/or public and private research centres. These need to jointly possess appropriate complementarities in human resources and research infrastructures. 14. Optimal conditions should be created for cooperation at regional level that would occur 2 on a voluntary basis . To be most efficient, co-operation should be handled directly among universities, research centres and (in most cases micro- and small size) enterprises, including incubator plants, regardless of national borders. Whenever possible, the participants should take full advantage of the support mechanisms offered through the EU framework for co-operations between regions across national borders. These measures include relevant parts of the RTD Framework Programme, in addition to the Structural Funds (the main instrument to promote social and spatial cohesion within the EU). 15. With adequate public and private economic underwriting, and sustained political endorsement, enhanced co-operation could evolve between regions that fulfil the criteria 2 Political wisdom would dictate the following pro-active approaches by public authorities: at EU level: promoting the establishment and further development of regional research infrastructures (including electronic networks, comprehensive databases and large installations) and their integration into the European research main streams. at national level: encouraging the development of innovation potential in targeted fields (biotechnologies, information technologies…). This would ensure an efficient combination of the advantages offered by higher education, basic research, and technology development, transfer and application. The latter would require the presence of relevant industries or close links to them. in less-developed regions: supporting the development of physical infrastructures (high-ways, railroads, telecommunication). High-quality infrastructures are key contributors to mushrooming business activity, networking and generating new development poles. 6 highlighted in Point 13. Illustrative examples in Central Europe could be (i) Kosice/Krakow/Miskolc; (ii) Cluj/ Debrecen/Oradea; (iii) Arad/Beograd/Novi Sad/Szeged/Timisoara; (iv) Koper/Ljubljana/Maribor /Pécs/Zagreb; (v) Bratislava/Brno/Gy r/Komarno/ Sopron/Vienna. 16. Transfer of expertise from neighbouring regions in current Member States (notably Austria, Germany, Greece and Italy) is necessary. Whenever appropriate and possible, joint projects will include regions from other parts of Southeast Europe (Albania, Bosnia and Herzegovina, Macedonia and Serbia and Montenegro), and centres of excellence in Belarus, Moldavia, Russia and Ukraine. Thus, our initiative helps to establish a Central- and Southeast European Innovation Area. The CEIA Initiative – driving targeted regional trans-border co-operation 17. In early 2003 an informal dialogue was initiated to agree on the operational principles (see footnote 1). It was based upon the aforementioned analysis and experts were invited to develop an initiative with wide ranging potential. A year later the initiative entered the implementation phase, to promote joint projects with high relevance for local and regional development. The overall structure for co-operation has been agreed, and organisational matters and project preparation are progressing. 18. The initiative’s relation to the most important EU activities, and its flexible organisational set-up is illustrated in the figure Central- and Southeast European Innovation Area (CEIA) initiative. The organisational set-up consists of two main elements: • The main thrust: formulating policy- and strategic advice The CEIA Consortium ensures this function. The consortium assembles those who share the vision for a Central- and Southeast European Innovation Area. The Consortium is an open, non-legal framework for dialogue and voluntary co-operation and networking. Its main aims are to: (i) keep focus on CEIA and create continued interest for it; (ii) promote networking between regional offices, research institutes, innovation centres, higher education establishments, and industry (micro-, small- and medium size enterprises) including incubator plants; and (iii) provide input to EU- and national RTD- and regional development policies. The Consortium-agreement with the first participants (11 organisations) was signed in March 2004 (EASA Press Release). Currently the Consortium includes 17 organisations of various sizes. The Consortium remains open to all relevant individuals and organisations from the regions and beyond. • Putting into practice: implementing cross-border regional-level projects “CEIA Associations” – appropriate independent legal entities – constitute the frameworks for structured co-operation around the individual projects. Respecting the broad policy- and strategy orientation formulated by the CEIA Consortium, the CEIA Associations adhere to a fully unbureaucratic, decentralised and bottom-up approach. The first CEIA Association was registered in September 2004 in Hungary. 19. The CEIA Associations will, in particular: • monitor public calls (EU, national, other) closely and inform members about opportunities that could provide financial support for joint trans-regional projects; • suggest joint projects in targeted fields with high innovation- and/or job creation potential. • act as a ”match-maker” for joint project application. Focus is on the new Member States and applicant countries. Whenever appropriate and possible, relevant regions of the old Member States and Southeast Europe is invited to participate, as well as centres of excellence in Eastern Europe; • organise international meetings about regional innovation initiatives, strategies and policies. Senior EU- and national policymakers will be invited; • promote exchange of best-practices (EU, national, other) with relevance to joint regional projects; and • keep a record of joint initiatives and use of their results. Help maximise the overall beneficial effect of the joint initiative. 7 20. Practical implementation of the CEIA initiative is in progress. An important criterion is that projects implemented under the initiative must have clear value-added. Unnecessary duplication of projects carried out under other schemes is avoided. 3 The following are examples of CEIA work: (i) in the context of open consultations the CEIA Consortium provided input to EU policies; (ii) responding to an IST related call by the European 4 5 Commission, the CEIA Association participates in two EU projects ; (iii) an international workshop was organised together with the Information Society Directorate-General of the European Commission. The CEIA concept has been presented at several international conferences and in various publications (e.g. G. Fayl; G. Horváth; T. Kallai). 21. It is also worth mentioning that several organisations have extended their moral support to our initiative. These include the “Hungarian Commission for the UNESCO” (www.unesco.hu), the “Association of the Local Democracy Agencies” (www.aldaintranet.org), and the “EuropaBio” www.europabio.org. Innovation and Civil Society – the way forward 22. Governments, politicians and most economic actors are falling over each other to embrace the concept of globalisation. Antiglobalists and other demonstrators are kept firmly away and outside the respective security perimeters. 23. Governments, countries and regions will have to start thinking and acting like economic players. As such, they are no longer deciding on whether they can afford to engage in certain activities. Rather, they have to assess the risk of not doing something: “Can we afford not to do this”. They now face the same questions that are facing companies in the globalised environment how far they can and will allow the competition to pull ahead. Informed members of the civil society should follow the above development and provide voluntary support to it. Foresight studies could offer useful guidance. To be constructive, foresight studies should focus on neighbouring regions as indicated in Points 15 and 16. 24. In the context of the current wave of EU enlargement, it is interesting to observe that applicant countries instinctively understood the importance of not being left outside the EU. Although it is far from certain that EU membership will bring the expected economic benefits in the short term. However, the potential cost of remaining on the “outside” and not moving with the “insiders” was and is readily recognised by all. 25. The authors of this article express their hope that the advantages offered in the medium to longer term by the Central- and Southeast European Innovation Area initiative will become apparent for economic actors in the new EU Member States. 26. The authors equally express their hope that informed members of civil society will be inspired by the present initiative to embark on pioneering ways to support regional innovation strategies. Our main message is that: CIVIL SOCIETY NEEDS TO BECOME A KEY DRIVER OF INNOVATION IN THE 21 CENTURY - THEREIN LIES THE CHALLENGE 3 (i) New Innovation Action Plan of the European Commission ; input submitted in May 2004 (http://europa.eu.int/comm/enterprise/innovation/consultation/index.htm); (ii) High Level Group reviewing the Lisbon Strategy ; input submitted in July 2004 (http://europa.eu.int/comm/lisbon_strategy/group/index_en.html); (iii) Future of the European Union Research Policy; input submitted in Oct. 2004 (http://europa.eu.int/comm/research/future/index_en.html). 4 The participants are from old and new EU Member States and Applicant Countries. The proposals were handed over to the European Commission in September 2004. From the CEIA Association, Ms. T. Kállai is in charge 5 of the co-operation . Ambient Intelligence at Work and New Member States, Budapest, 13-15 May 2004. From the CEIA Consortium, Dr. I. Bilik and Dr. É. Nagy were in charge of the co-ordination. ST 8 Central- and Southeast European Innovation Area (CEIA) initiative – schematic illustration. EUROPEAN RESEARCH, EDUCATION and INNOVATION AREA EUROPEAN REGIONAL POLICY CEIA CONSORTIUM (1) open framework for voluntary co-operation and networking : - keep focus on CEIA and create interest for CEIA; - provide input to EU and national policies. Multiannual EU RTD FPs + STRUCTURAL FUNDS CEIA ASSOCIATIONS (2) framework for structured co-operation and networking : - joint project in connection with EU RTD FRs. - joint project financed through other means Individuals & Organisations sharing the vision for / usefulness of creating an Innovation Area in Central- and Southeast Europe Individuals & Organisations recognising the practical advantages of joint RTD projects in Central- and Southeast Europe Trans-border Projects : International Conferences : promote Regions' innovation potential in targeted fields, e.g. biotechnologies, information technologies - PR for CEIA; - match-making for potential project participants; - exchange of best-practices. Key participants : - Universities; - Academia; - Industry, Chambers. Main focus : common issues, e.g. how to maximise the competetive advantages of EU enlargement in Southeast Europe Remarks: (1) The CEIA Consortium is: (i) inclusive - open to all relevant individuals / organisations; (ii) responsive - being able to provide advice / direction in a timely manner; and (iii) forward looking - sounding board for new / innovative ideas. (2) The CEIA Associations (legal entities) should be able to: (i) operate in the CEIA interest - helping to maintain the regional focus; (ii) co-ordinate projects in the CEIA spirit - putting the concept into practice; and (iii) demonstrate financial viability / attractive track record - underpinning the credibility of the CEIA initiative. References: • • • • • • • • • J.-P. Contzen, “Which Strategy for Governing Innovation”, 1st International Conference on Innovation – Innovation Management in a Global Environment, Moscow, 22-24 September 2004. EASA Press Release, “Strategic Vision for Regional Development and European Integration - A contribution by the European Academy of Sciences and Arts”, 20 May 2004. G. Fayl et al., “Strategic Vision for Regional Development and European Integration: An Innovation Area in Central- and Southeast Europe”, The IPTS Report (84) May 2004. G. Fayl, “The Central and Southeast European Innovation Area (CEIA) Initiative”, 1st International Conference on Innovation – Innovation Management in a Global Environment, Moscow, 22-24 September 2004. G. Fayl, “Initiative for targeted regional trans-border co-operation in Central- and Southeast Europe”, Europe 2002, September 2004, (http://www.euroinfo.hu/e2002/05szept.html). G. Fayl, “Strategic Vision for Regional Development and European Integration: An Innovation Area in Central- and Southeast Europe”, International Conference: Europe and Croatia: Strategies and Policies for the Development of Entrepreneurship, Zagreb, 5 - 6 October 2004. G. Horváth, “Opinion on the new EU Action Plan: Innovate for a competitive Europe”, 31 May 2004. IST Programme Call 3, OJ C158, 15 June 2004. T. Kallai, “CEIA – and a Collaborative Working Environment in AMI@WORK”, 2nd International Conference on Management, Enterprise and Benchmarking, Budapest, 25-26 June 2004. 9 • • • T. Kallai, ”CEIA – and a Collaborative Working Environment in AMI@WORK”, Budapest Tech International Jubilee Conference, Science in Engineering, Economics and Education, Budapest, 4 September 2004. P. Jungen, “Entrepreneurs and SMEs are vital to enlarged EU”, European Voice, 23-29 September 2004. Website of Central- and Southeast European Innovation Area initiative - www.ceia.hu. Dejan Eri , PhD Vice-Dean Belgrade Banking Academy eric@ptt.yu ACCESS TO FINANCING FOR SMEs – Some Problems and Challenges in Transitional Economies Abstract The main aim of this article is to highlight some of the major problems and challenges regarding the access to financing of small and medium enterprises (SMEs). Among numerous problems this type of commercial organization faces, the financial ones prevail. They reflect in the existence of a financial gap that represents the difference between demand for financial resources of the SMEs sector and their demand. This article will point to a number of options for closing the mentioned gap and confront the widespread but erroneous concept that credit sources are the only alternative in financing the SMEs’ sector. 1. Some Common Problems with the SMEs Small and medium enterprises (SMEs) represent a rather heterogeneous group that includes various forms of business entities. There are different opinions among countries as to what types of companies can be included in this group of commercial subjects. SMEs considerably differ with regards to their nature of business, goals and strategies, type of ownership, organizational cultures and else. However, they also share a number of similarities and at least one common denominator. SMEs represent a very vital and important sector that plays an enormous role in many world economies today. It is well known that SMEs greatly contribute to overall economic development and total macroeconomic performance of a country. It is believed that around 20 million SMEs in the European Union (EU) create 65% of workplaces (A. Szabo, 2005.). In certain regions that are not in the EU, e.g. the Black Sea Region, SMEs represent 98% of the total number of registered commercial subjects (A. Imre, 2005.). With regards to the place and role of SMEs in economic structure, it should be noted that their alternative are large-scale companies. In light of internationalization and globalization of modern business the size factor becomes rather relative. Something regarded as a large commercial subject could be of a much smaller, sometimes minor importance, if looked within the wider regional context. Therefore, the concept of size is considered only on a national level here. Large-scale companies no doubt have a special role, since they carry the economic development, employ a great number of people and have a major social responsibility. However, the size, especially in smaller transitory economies, can be a consequence of specific economic development, an inherited structure from socialist times or a result of monopolistic position, mainly in certain areas such as telecommunications, traffic, energetics and hydraulicity. Consequently, the direct result is a low efficacity, irracionalities, inflexibility and inability to innovate and change. SMEs can bring a number of benefits, all the more if it is the transitory economy in question. They form the backbone of market economy (A. Imre, 2005.). SMEs can offer new jobs, produce new kinds of products or offer new services, facilitate technological innovation, represent an evident structural shift from the large state-owned to privately-owned entities, develop entrepreneurial and managerial spirit as well as new kinds of values and organizational culture… in one word - a new sort of “mental revolution” (F. W. Taylor, 1912) so much needed in conditions of great shifts implied in transition. 10 Despite their nature of business or country of origin, a lot of SMEs have a number of binding similarities, especially looked from a wider, regional viewpoint. Some of the typical examples are regions of South-East Europe (SEE) or Black See (BS): they include many countries that had various forms of socialist systems for a number of years and that went through transitory processes in a slower or faster way. Besides, they share considerable cultural, traditional, sociological and other similarities. An evident analogy with regards to functioning of the SMEs is a number of common problems found throughout the regions in question. Some of those include: • Technology – there is a noticeable technological gap as a result of slower economic development and things inherited from the past. It is reflected in chronic inefficiency and unfavorable expenditure structure that in turn disable the realization of important competitive advantages. • Human resources and capital – knowledge of people, their skills and expertise are under question. Educational systems in the majority of countries in the mentioned regions are considerably late in modifications, compared to the other segments of the society. Accepting new values, work discipline, responsibilities, loyalty, dedication, high professional and ethical standards are some of the open questions that need to be addressed. Two more are those about productivity and efficiency. It may look paradoxical that some countries of the region have a high unemployment rate (e.g. Serbia and Montenegro, or Bosnia and Herzegovina) on one side and a marked gap for good-quality human resources on the other. • Marketing – many companies in the mentioned regions have been taken aback by market and competition demands. Views that investing in marketing is an expenditure rather than an investment have gradually started to change. However, for many SMEs the question of how to realize marketing goals and provide an adequate level of resources into marketing budget and, at the same time, to assure survival on the market, still remains. • Research and Development (R&D) – an area closely connected with the previous one, especially in the financing sector. Underdevelopment of the R&D has much greater consequences – low level of innovations, high costs and inability to realize distinctive competencies, based on which considerable competitive advantages are formed. • Financing – the last on this list, but the first in importance. The majority of the listed problems faced by the SMEs have a common denominator: the lack of financial resources! It is a universal problem, no matter how large the company, what is its nature of business or the country of origin. It is characteristic for all life phases of the SMEs, including startup, growth, expansion, transformation, reorganization and modernization. This problem cannot be avoided or surpassed in any of the phases of development. 2. Open Problems in the Area of Finances Situation in which SMEs are faced with inadequate financial resources is often referred to as the financial gap; it simply represents shortage on supply of capital to meet demand. The economic science states that the resources are always limited and that their scarcity stipulates the process of making business decisions. The financial gap often represents an impediment to formation, survival, faster growth or development of the SMEs. Since the SMEs are a rather sensitive group of commercial subjects, there are rarely alone in trying to solve the financial gap problem. The majority of countries attempt to create different system mechanisms that back up solving of this problem and thus instigate the development of the SMEs sector. One of the first questions that faces each entrepreneur or owner of a small or medium-size business is whether there are certain financial resources for the pre-start-up phase when micro firms emerge. Here lies the first group of challenges related to the development of institutional mechanisms. Some countries have very advanced forms of instigating the development of the SMEs and others lag behind considerably. At the international level, within the EU framework, there have been various programs, e.g. Multi Annual Programs or, in newer times, Competitiveness and Innovation Framework Program (CIP). They are based on at least three forms for instigating the micro businesses: credit/loan guarantees, micro credit and equity guarantee schemes. 11 A large group of problems in financing is connected with questions of risk, uncertainty and asymmetric information. Many SMEs have great staff, ideas and programs, but due to the lack of accurate information and underdevelopment of financial systems, especially in domain of financial markets, their access to many financial sources is impeded. Closely connected is a problem of market inefficiency, that is mirrored not so much in operational, but in alocative and especially in information efficiency (E. Fama, 1970). Lack of information further undermines the low level of price efficiency. There are at least two more important things - on one hand, the owners of SMEs, due to the lack of information, have difficulties obtaining the necessary financial resources. On the other, the investors ready to take the risk have problems coming to reliable information for making decision about investing into the SMEs. If, after all, they succeed to recognize the real potential and choose to invest into the SMEs, due to the low level of information efficiency and high level of risk taken, there is a great probability they will achieve a high required return rate. Another large group of problems is connected with the lack of knowledge and skills, especially in the domain of finances and financial management. Majority of the countries in the SEE region until 15 years ago had various forms of socialist economies in which existed the relatively undeveloped financial system and stagnant financial markets. Generations were educated based on tenets of Marxism and communism, and not on market-based earnings, entrepreneurship and management. Thus there is an evident gap in them being familiar with the world of modern finances and the ways to provide and manage capital quickly and efficiently. In less developed countries, especially those formed after the break of ex-Socialist Federal Republic of Yugoslavia, in war and isolation for a long time (Bosnia and Herzegovina, Serbia and Montenegro, Macedonia) the existence of undeveloped institutions of market economy and many legal loopholes is clearly evident. These additional factors negatively influence the rise of the risk level and increase the cost of financial resources. Low level of economic and social development further influence great restrictions in financial, especially banking system, in supplying the resources. On the other hand, underdevelopment and relatively low level of trust in financial institutions do not offer ample chances for quick development of investment banking and affirmation of financial mechanisms through the process of issuing securities. Financing of the SMEs sector is specific for many reasons. First of all, as previously mentioned, it is a very heterogeneous group of commercial organizations that differ, among other things in size, type of business, number of employed, business philosophy and managerial decisions. SMEs also go through different phases in their life cycles, one of the most common cycles having 4 stages (OECD, 2004.) as follows: • Pre start-up phase (pre-seed, seed phase) • Start-up • Emerging phase (Expansion) • Development It can be concluded that there is a financing lifecycle for SMEs. Different development phases imply different problems and demand specific approach in their solving. In the early stages – pre start-up (seed) and start-up – when the companies are created and start their business, a big challenge is to provide the so-called seed money. Here we talk about micro companies whose main goal is to survive, since in that phase the “company death rate” is very high. The owners usually engage their own capital, family and friend assets, private loans – all of which is not enough to close the financial gap. In later stages of development, when the survival is guaranteed and SMEs cross break even point of profitability some new problems arise – closing the financial gap for purchasing new technologies, R&D, marketing research and marketing. At the same time, the possibilities for financing grow; they include options such as venture capital or private equity funds. With further expansion of business and increase in size, the number of possibilities increase as well, mainly through activation of investment bankers and access to organized financial markets. 3. Overview of Alternative Forms for Financing the SMEs • The following forms of alternative financing for SMEs will be reviewed: Government programs 12 • • • Venture capital (VC) or Business Angel Networks (BANs) Access to loans Access to equity market. 3.1. Government Programs Governments of many countries in the SEE and BS regions, the ones that completed the process of transition and joined the EU, as well as the ones that are still in transition, make great efforts to develop the SMEs sector. There are considerable differences among them; however, all countries support the affirmation of the SMEs, either declaratively or concretely through creating relevant laws and institutions. The efforts are generally two-fold: the first is aimed at restructuring and privatizing large systems, inherited from the past economy structures and ways of thinking. The second promotes the development of the SMEs sector (A. Imre, 2005.). Governments are capable of achieving remarkable results in realizing priorities of economic policies and implementing national development strategies. They can encourage creation of target economic structure through selective SMEs development in certain regions, sectors or branches of the economy. Moreover, they can solve open economic or social questions, e.g. unemployment, uneven regional development or technological delay. Govermental efforts in solving the most pressing question in SMEs development – financing – can be rougly systematized into three groups: a) Activities of cooperation and support to international financial institutions – an active policy in SMEs development has to entail finding ways to involve national SMEs into various financing programes on an international level. There is a vast number of such programs, e.g. the aforementioned EU programs, those by the European Investment Bank (EIB), European Investment Fund (EIF), European Bank for Reconstruction and Development (EBRD), European Agency for Reconstruction (EAR), and so forth. This group of financial resources includes various bilateral agreements between countries, in which certain developed EU members offer favorable financial arrangements to commercial subject from other areas, interesting for them. General characteristic of all these resources is that they offer a relative advantage in terms of expenses, but often demand a lot of administrative effort and time for approval and obtaining the funds. Regardless of limitations, they represent one of the first and foremost options in finding ways to bridge the financial gap. b) Programs of direct financial support – they represent efforts of each country to create additional stimulating mechanisms through which to encourage formation, transactions, growth and development of the SMEs. There is a number of such schemes, e.g. direct loan programs, loan guarantee schemes or guaranteed coverage, micro credit, programs of employment, equity guarantees, schemes to pool risk, export credit schemes, and so forth. The aim of these schemes is to provide the SMEs sector with necessary financial resources with less expense or to enable transfer of credit risk from financial institutions to state schemes in order to create more favorable conditions for financial resources. Number of schemes is not limited and depends on the interest of participants from at least three groups – SMEs, financial institutions and government itself. Besides, governments can create specialized institutions, such as development funds, funds for entrepreneurship and innovation development, entrepreneur centers, business incubators, all of which contribute to affirmation and strengthening of the SMEs sector. c) Measures of economic policy aimed at fomenting and affirmation of the SMEs – this is a very complex and heterogeneous group of measures that are available to governments. They represent a combination of measures from the domain of tax or credit and monetary policies on one side, and those that can be described as wider measures of development policy. Some of the typical activities are: • Various forms of tax stimulations and measures - they have different formats, duration and range. • Consolidation of financial system – through implementing the mechanisms of “hard budget constrains”, passing a number of financial laws with respect to European directives, responsible conducting of the monetary policy, creating strong and credible financial institutions, and so forth. 13 • Creation of efficient financial market and institutions – through bank development, especially by stimulating domain of investment banking, brokerage firms, insurance companies, leasing companies, stock exchange and self-regulating organisations (SRO). • Financial regulations and regulatory and self-regulatory bodies – they contribute to diminishing the negative influence of informational asymmetry and level of systematic risk. Therefore, strong institutions such as the Central Bank or Securities Commission positively affect the macroeconomic environment and activities of other financial institutions. 3.2. Venture Capital (VC) and Business Angel Networks (BANs) At times there is a specific problem related to financing of the SMEs in some countries in transition. On one side, there is a large number of SMEs facing the financial gap, and on the other, a significant level of domestic savings that lack attractive investment possibilities. Due to the relatively undeveloped infrastructure of the financial system, especially mechanisms of indirect financing (Miskin & Eakins, 2001.) that are a result of insufficient development of, above all, financial institutions and instruments, there is no optimal alocative efficiency of financial markets in terms of transferring the financial resources from the subjects with resource surplus towards the SMEs. As one of the missing links, there are types of institutions such as the Venture Capital firms and Business Angels Networks. VC is basically a financial partner motivated to invest into new, very perspective and high risk SMEs in order to achieve high return. They are usually not interested in operating the company, therefore allowing founders or original owners to continue with the business expansion. VC financing of the SMEs usually takes form of equity (shares, rights, warrants, convertibles). Investment time period varies, and it is usually from 3 to 7 years. Companies that are invested in are expected to reach the annual target rate of return between 30-40%. The internal rate of return (IRR) is most commonly used as a parameter, although other rates if return can be used as well. When deciding whether to invest into small or medium enterprises, VC pays attention to the exit possibilities. There are usually 2 main exits: initial public offer (IPO) and trade sale. IPO means that target firms issue shares to the public and become public, which means they can be openly traded with at the stock exchange. The VC investors earning is in the difference between the company value from the moment of investing until the moment of sale. The second exit mechanism is a direct trade sale, which implies that a firm is sold to a larger company. In this mechanism there is no issuing of shares and later trade at the stock exchange: the deal is realized in direct transaction between a VC investor and a buyer who becomes a new owner. Although Business Angels (BA) date back to the 1920s (C. Munck & C. Saublens, 2005.), in recent years BANs have become a major source of financing the SMEs in some countries. BA networks are trying to bring together private investors who look for good investment opportunities and entrepreneurs who search ways to increase their capital. Apart from financial resources, very often BA are ready to offer help in terms of entrepreneurship and management to the SMEs sector. The number of BANs is rising in the EU: in 1999 there were 64, and just 3 years later, in 2002, 157, with tendency to rise further (eban). It is a new form of financing that has not yet found its true place in the SEE or BS regions (except Turkey), but it is expected to gain in importance. When VC and BANs are mentioned as possible options in bridging the financial gap, it should be noted that certain investors of this type have special preferences in terms of investing into certain industries only, e.g. high-tech, biotechnology or telecommunications. In less developed countries and economies in transition VC financing of the SMEs still remains in the early stages of development. For instance, in Ukraine in 2004 there were 14 companies operated as venture funds (O. Stepaniuk, 2005.). There are two main reasons – lack of exit mechanisms and undeveloped institutional investors, such as pension funds, insurance companies or investment funds. 3.3. Access to Loans and Equity Finance Credit sources represent one of the main resources for financing the SMEs. They can take plural forms: direct credits, various credit schemes, leasing, factoring, issuing of bond and other 14 debt instruments. One aim of this work is to show that credits are not the only source of financing the SMEs, as it is sometimes mistakenly implied, but only one of the many options at hand. The more developed financial system and higher level of competitiveness between banks and other financial institutions favorably influence the credit offer to the SMEs sector. However, the problems related to debt as a source of financing still remain. Namely, general characteristics of debt are that borrowed resources have to be returned by the scheduled term with interest, the existence of an optimal borrowing limit, restrictive regulations that limit certain activities of the debtor and specific tax treatment. For debtor, credit means an increase in the level of debt, which in turn increases the risk that liability will not be accepted. Risk and fear of not being able to pay off the taken credits are often the biggest obstacles in using the credit sources. Looking from the creditor’s point of view (apart from banks, other depositary financial institutions can be involved, e.g. credit unions, savings and loan association, etc, or the other investors like foundations, investment funds, innovation funds) credit approval always implies the existence of a certain level of credit risk (default risk). In general, banks follow the logic of the capital, where financial analysts assess the solvency, credit capability and risk level of the credit applicant. The higher the risk level, the higher the interest rates. For the majority of financial institutions investing into the SMEs means a combination of high risk – high return. In case of debt financing, investors’ return is very limited, but exposure to risk is relatively high. The problem is that the high interest rates that need to bring about high earnings to the investors represent a very high cost for the SMEs. That makes credit sources somewhat unattractive. Moreover, especially with smaller SMEs, there are some additional problems that cause a much more difficult loan procurement. For instance, there are no tangible assets to secure the loan. Also, problems may exist in making good-quality business plans, in sizeable administrative obstacles, in evaluation of financial statements (that are not the most representative for many SMEs), in procedures and in costs that restrict taking the credit sources. Access to capital markets in form of equity financing is possible, but for somewhat bigger entities in the SMEs group. Issuing of shares is a very attractive source of financing since the base of potential investors gets larger. However, for many SMEs this source is not accessible, since they have to fulfill certain requirements. One of those is to register the company in the form of corporation (joint-stock company), which is one of the key decisions that founders and current owners have to make. There are 2 types of corporations – closed held and open held. Conditions for founding the closed held ones are less restrictive, the procedure is simpler, there is no registration of share emission with the relevant authorities (Securities Commission) and there is no need to publicize the financial results. On the other hand, it is not possible to trade the closed held corporations’ shares on the stock exchange (SE), making them less attractive for investors. Nevertheless, the majority of VC and BANs investors opt for this type of investment. Public offer of shares done by the open held corporations is the highest level among the options in financing the SMEs. Those are the companies that have had outstanding business results for a couple of years. They have the possibility to publicly sold their shares and thus collect the capital from a wide range of investors. Those shares can be traded with at the stock exchange, after prospectus publishing, following disclosure standards and SE listing requirements. SMEs growth into open held corporations brings about a new group of challenges, connected with respecting the standards of corporate governance and public disclosure of all relevant information. Moreover, these companies can easier become targets in mergers and acquisitions and loose their business independence. Nevertheless, their big advantage is a relatively easy access to the capital market, which in turn eases bridging of the financial gap. 4. Concluding Remarks One of the greatest challenges facing a large number of the SMEs around the world, especially in the SEE and BS regions, is the existence of a financial gap. The lack of adequate financial resources to satisfy the needs of the SMEs has a strong influence on solving a number of other problems, related to technology, R&D, human resources, and marketing. It is believed very often that credit sources offered through financial and banking system represent a sole option for closing the financial gap. This work tried to show that the number of options is much larger. The leading role in the process must be taken by the governments that can realize many macroeconomic and developmental aims through the support of the SMEs sector. Governments 15 can establish relations with international institutions, form their own programs and, through various measures, create environment in which financial resources are quicker and easier to find. In that way, the goals in the development of the SMEs sector could be easier to reach. In conclusion, it has to be stressed that a number of institutions and individuals, both on national and international level, have addressed the development of the SMEs sector and problems in their financing. For example, in June 2000, the first Conference of Ministers responsible for SMEs, was held in Bologna. The representatives from over 50 countries participated and adopted the “Bologna Charter for SME Policies”. Shortly after, a dialogue and monitoring known as “OECD Bologna Process” started. Minister stressed the importance of access to financing the SMEs as one of essential ingredients in facilitating the innovation process. • Some of the key recommendations for policy creation were (OECD, 2004., pp. 6): • Concentrate policies for promoting availability of risk capital to innovative SMEs, mainly in the early stages of company financing. • Recognize the need for proximity between fund suppliers and those who require capital. • Increase the managerial and technical expertise of intermediaries whose role is to evaluate and monitor companies. • Facilitate international transfer of institutional infrastructure and expertise. • Encourage accounting bodies to recognize, measure and report intangible assets of small business. Having in mind the situation in certain countries of the SEE region that are still undergoing the transition, apart from the above-mentioned, the following recommendations can be also given: • Ensure political and economic stability. • Ensure stable and competitive financial system, especially in banking industry. Effectively manage public sector loan guarantee and equity guarantee schemes. • Increase public awareness and understanding of micro finance and micro credit as vital parts of the development process. • Support and encourage VC and BANs to the greatest extent. • Improve level of financial reporting and disclosure of financial data and statements. • Transparency and principles of Corporate Governance. • Increase access to global capital market. • Improve education and training in the area of business economy, especially in finance, management and entrepreneurship. • Provide soft advisory services for entrepreneurs. • Create information networks among the SMEs in regions like the SEE or BS. References: - Imre A. N. (2005.) “The Role of Regional IFIs tin the Provision of Financing to SMEs: The Case of the BSTDB”, A presentation to the “Financing of SMEs Workshop”, Belgrade, 13-16. October 2005. - Fama E. F. (1970.) “Efficient Captial Markets: A Review of Theory and Empirical Evidence”, Journal of Finance, May, pp. 383-417 th - Miskin F.S. and Eakins S. G. (2001.) “Financial Markets and Institutions” 4 edition, Addison-Wesley, New York - Munck C. and Saublens C. (2005.) “Introduction to Business Angels and Business Angels Network Activities in Europe”, European Business Angel Network - OECD (2004.) “Promoting Enterpreneurship and Innovative SMEs in Global Economy – Toward nd a More Responsible and Inclusive Globalization”, 2 OECD Conference of Ministers Responsible for SMES, 3-5 June, Istabnbul – Turkey, www.oecd.org/dataoecd/6/11/31919231.pdf - Stepaniuk O. (2005.) “Financing of SMEs – Case of Ukraine”, A presentation to the “Financing of SMEs Workshop”, Belgrade, 13-16. October 2005. - Szabo A. (2005.) “Microfinance and Credit Guarantee Schemes – Experiences in the EU and in Economies in Transition”, A presentation to the “Financing of SMEs Workshop”, Belgrade, 13-16. October 2005. - Taylor, F. W. (1912.) “Taylor’s Testinomy Before the Special House Commitee”, A Perpint of the Public Document, US Senate, 1912. 16 - www.eban.org Miklós Kókai Credit Manager László Böszörményi Managing Director Zala County Foundation for Enterprise Promotion info_zmva@zalaszam.hu TRATOKI - TRANSNATIONAL TOOLKIT FOR MICRO ENTERPRISES In 2004, the Zala County Foundation for Enterprise Promotion (Hungary) has been launched a Sub-Project on ”Microcredit – an innovative instrument for fostering regional and local development” within the framework of the Project on ”Transnational Toolkit for Micro Enterprise„ (TRATOKI) of the INTERREG IIIC Phare program. Dr. Márton Braun, Antal Szabó and László Böszörményi (from left to right) at the Opening Session of the International Conference on Micro-Credit Beside Zala County Foundation for Enterprise Promotion (ZMVA) the following project partners work together in the framework of the interregional cooperation: Investitionsbank Berlin (Germany), WAFF Vienna Employees Promotion Fund (Austria), SIPRO – County Board for Local Development (Italy), BIC Spišská Nová Ves s.r.o. (Slovakia), CPEM (France), Molapolska School of Public Administration/County Council of Krakow (Poland), as well as Bidasoa Activa (Spain). The starting idea of the project was the fact that it is an elementary demand of the Hungarian small entrepreneurs to know the legislation operating in the European Union, the operational rules of the single internal market, the tender system of the EU, the number of substances of knowledge, which are necessary for the operation of the enterprises, that finally improves the equal opportunities of the enterprises by improving their competitiveness. Following Hungary’s EU-accession it is absolutely necessary to strengthen the small- and medium-sized entrepreneurs’ sector, that plays a considerable role in the employment. One of the most important aims of the economic policy is giving the investments momentum, making possible the development of the already operating enterprises and promoting the establishment of new ones. The determinant elements of the serving means system are: promoting the willingness to invest by founding the conditions of the favourable granting of credit (credit program, capital program). In each countries of the world there is a part of the small- and medium enterprises, which can not get external financial resources on the money market. The rate of the enterprises, which are kept not financiable by the banks, is an important index both in the aspect of the entrepreneurs and the financial sector. This rate is typically less than 10% in the well developed market economies, while it is more than 90% in most part of the developing countries. In Hungary nearly 90% of the enterprises have not used bank-credits during their operation up till now, that is practically the same circle, which does not have a chance to get credit on the money market now. In Hungary the Micro-Credit Program, which is operated by the network of the local enterprise agencies (LEA), means such a multi-element supporting system, which provides a complex financial and professional assistance for the small- and medium enterprises. The program is a integrated part of the economic development program of the Hungarian Government. The Hungarian Foundation for Enterprise Promotion assures the nation-wide availability of the MicroCredit Program in cooperation with the LEAs organized on a county-level and other collaborators, local branches. 17 In Hungary practically there are not any other credit possibilities for those starting and micro enterprises, which have no business experiences, suitable capital and guarantee, which can be approved by the banks, than the Micro-Credit. ZMVA grants the credit on the basic rate, complemented with a complex advising, training system. It is a considerable assistance for the SMEs, that not the strict bank requirements are considered during the judgement of the credit and the procedure is simpler, too. Thus this program is a really favourable opportunity for the SMEs and the starting enterprises having no business experiences. In the framework of this project the West-Transdanubian region of Hungary intends to captivate the target groups of the project in the course of the interregional cooperation, by taking over the EU experiences, surveying the regional finance programs promoting the SMEs. On the one hand we can inspire the economic policy makers (regional development councils, municipalities), the enterprise promotion organizations, the ones being entitled to use public funds, the business federations (chambers of commerce and industry, craft-unions, business associations, small-regional associations, local and regional development agencies), the resource holders, which we intend to involve, to know the Western experiences and use them for the sake of the economic development of the region. As part of the project we have organized an International Conference on “MicroCredit in Hungary and in the European Union” in Zalaegerszeg (Hungary) on 17 October 2005, where Hungarian and foreign experts presented their experiences for the participating banks, enterprise promotion organizations, business federations, regional and local decisionmakers. The timeliness of the event was increased also by the fact that the United Nations declared 2005 the year of micro-crediting. The first presentation of the conference has been held by Dr. Márton Braun, that has introduced the development, results of the micro-credit program, which had been started in Hungary in 1992. He told that original credit sum was HUF 300.000 in Hungary, but it increased to HUF 6 million in the course of time. During the passed nearly 15 years the interest rate – that is tied to the base rate of the Hungarian National Bank – changed from the 28% in 1995 to the current 6%, which means the lowest HUF interest rate now in Hungary. Up till now 30 billion HUF has been paid out for 20 thousand entrepreneurs. In the framework of the second presentation Dr. Annamária Horváth, program manager of VÁTI, told about the Interreg programs, the advantages of taking part in the programs. The main purpose of the Interreg programs is the improvement of the efficiency of the regional development policies and means by the exchange of the tested practices, experiences. Priorities of the programs: • Exchange of experiences in connection with the cross-border and international cooperations, as well as the exchange of the best practices among the member-states and with third countries. • Cooperation initiatives in the fields of research, technology-development, enterprising, information society, tourism, culture and environment protection among others. The lecturer has mentioned also some figures concerning the participation of Hungary in Participants of the International the Interreg programs: Conference Hungarian partners being entitled to an ERDF support: held on 17 October 2005 in Zalaegerszeg - 69 applications with Hungarian participants – the lead partner is Hungarian in 3 cases 96 Hungarian partners take part in 69 applications A support of approx. EUR 11.8 million (EUR 7.7 million from ERDF + EUR 4.1 million co-financed by the Hungarian Governmental). The lecturer introduced the INTERREG IIIA, B (CADSES), C programs. rd Concerning the future of the INTERREG programs she told that the 3 Objective of the EU regional development policy will come into prominence in the next planning period => European 18 Territorial Cooperation, a considerable resource increase is expected and she mentioned the prominent fields of development: - innovative developments, - SMEs, - environment protection, town development, - modernization of public services. (information: www.vati.hu) As the third lecturer Dr. Antal Szabó, retired Regional Adviser of the UN Economic Commission for Europe, shared his experiences with the audience on financing the small enterprises. The participants could get an overview on the history of the first micro-credit programs, the micro-credit practices in the world, its good and useful elements, but naturally on the incurred mistakes, too. The lecturer mentioned that the exemption of policy, the decentralized financial infrastructure, the management and the controlling mechanism are the basic preconditions of the successful micro-crediting. The following things are necessary for establishing the suitable micro-credit system: - political alignment – both from the side of the governing and the opposition parties- establishment of an efficient not traditional and decentralized financial infrastructure - establishment of a suitable controlling mechanism - establishment of a professional correct management operating in the closeness of the borrowers and having a transparent order of procedures – eg. having an accredited and quality manual – - establishing finally the self-supporting ability. He told, that micro-crediting can be the alternative of handling the unemployment, if it is accompanied by an adequate education, because it contributes to the establishment of the selfemployment, the economic independence and the generation of a taxable income. Following the international overview by Dr. Ditha Brickwell, the German lead partner of TRATOKI project, from Investitions Bank Berlin, introduced the TRATOKI project operating on EU-level. The project is a joint program for exchanging, handing over and joint development of the experiences concerning the financial instruments and measures supporting the beginners and the micro enterprises, promoting the job creation and becoming an entrepreneur in the 9 participating regions and over them, too. The partnership has been developed around the assumption that each region have some efficient good practices, which can be offered, while all of them look for new solutions and complementing instruments. The partnership stimulates the establishment of closer relations between the old and new EU member-states in a way that it helps the small enterprises to take advantage of the new opportunities offered by the enlargement. The final product of the project is a toolkit for the decision-makers and other regional actors (e.g. program designers). As a first step they collect the existing good practices from the regions, they present and compare them. The selection of the good practices represents the handing over function in the partnership, a kind of project market, where the deliverers offer their experiences. The receivers are those partners, which test the good practices, if they work also in other regions. The testing happens partly in theory by discussing the new systems and views with the local actors, partly in practice by setting up local demonstration projects. TRATOKI project is based on three thematic components: a.) the comprehensive system of the enterprise promotion measures for the micro- and starting businesses, b.) making the micro enterprises international and partner searching for them in the field of cross-border cooperations, c.) accessing financial resources through revolving (micro-credit) funds and financing systems. The lecturer introduced also the activities of the different working groups of the project in details. (information: www.tratoki.org) As the fifth presentation by Mr. Peter Claydon, representative of Yorkshire Enterprise Limited (YFM) introduced the crediting schemes established in Yorkshire. Their company has been established by the local municipality for the purpose of enterprise promotion, but the company has been privatized by a management buy-out in 2003, however they have been continuing their business advising and crediting, capital investment programs since that time. (The firm has been declared the most active investment company by an independent research company in 2004-2005.) 19 In his presentation he introduced the antecedents of establishing their Partnership Investment Program (PIF), the difficulties which they had to get over. This program has been worked out with the assistance of the regional governmental organs and a local bank, but the program gets a considerable support by the EU’s ERDF and ESF. The program, the starting and collecting a financial fund was a challenging task for YFM enterprise, because they had to harmonize the regional ideas and the requirements of a profit-oriented bank, but they also had to fulfil the requirements of ERDF and ESF. He mentioned that of course they also needed a strong governmental support to solve the incurred problems. The fund started with a sum of EUR 53 million, that was divided into four part-funds: - risk capital, - so called credit capital program, - midi-credit program, - micro-credit fund. The required results are the following concerning them: as for the risk capital a strong profit, as for the credit capital a moderate profit requirement, as for the midi-credit a small loss, as for the micro-credit a considerable loss. As an experience he summarized the followings for the participants: − - setting up public sector backed funds can take a long time − if private investors are to be involved then it is necessary to have a clear focus on financial returns − having a short time period in which to invest and having to reconcile competing financial and social agendas leads to poor investment decision-making − public sector report requirements can be very onerous More information see at the following website: http://www.yfmgroup.co.uk/ In the framework of the last presentation by Mr. Lajos Spilák, representative of Hungarian Development Bank, introduced the preferential credit schemes, which are available for the enterprises in Hungary. The entrepreneurs can get these credit schemes through the commercial banks, and in spite of the fact that currency credits are behind these credits, the Hungarian state has taken charge of the currency exchange risk. The credits have been worked out for different target groups, such as: promoting the micro-enterprises, the export-oriented enterprises, the cross-border businesses. He noted that the deminimis rule is also in force in most of these credit programs, the entrepreneurs have to think over their participation in later EU tenders. More information is available on the Hungarian Development Bank on the following website: www.mfb.hu. 20 Antal Szabó UN retired Regional Adviser and UNECE Consultant Scientific Director of the ERENET antal.szabo@gmail.com BEST PRACTICE IN BUSINESS INCUBATION IN EMERGING MARKET ECONOMIES AND COUNTRIES IN TRANSITION 1. CENTRAL AND EASTERN EUROPEAN COUTRIES Promoting favourable business environment became a paramount importance for the new EU Countries and now they collected quite sufficient experiences to talk about best practices, especially in the V4 countries plus Estonia and Slovenia. It is time to benchmark these countries against the Member States. The total number of business incubators in these six countries amount to 144 (see the Table 1 below). In the following chapter emphasis will be given to technology transfer oriented business incubations. Table 1. BUSINESS INCUBATORS IN SELECTED CEECs Country Type of BI Business Incubators BICs Science and Technoparcs Other type of BIC TOTAL CZ EE HU PL 16 2 17 53 4 4 3 1 8 4 3 SK 9 5 6 6 24 6 34 SL 3 1 56 11 13 Source: CUOA Database, UNECE, Geneva, 2003 Attached please find a summary of the most relevant business incubators in the new EU Member States as well as in economies in transition. It is obvious, that the list is not complete. Several countries just starting to develop national business incubators programmes like the Republic of Montenegro, Serbia and Montenegro, etc. are even not mentioned. CZECH REPUBLIC The science and technology park is an institution oriented into fields of research, technology and innovation entrepreneurship. It utilises its know-how for establishing prerequisites for dynamic development of innovation companies, for transfer of technologies and education for innovation entrepreneurship. The Czech science and technology parks are characterized by two most important functions: • innovation - development of new products, not only consulting; and incubation - help in start-up of small and medium sized innovation firms, in their market establishment and assistance in risk reduction. There are many different types of incubators registered in Science and Technology Parks Association (STPA) directory. Innovation companies are usually rather small or medium sized firms with the main intention to develop and marker new products (proprietary manufactured product, technology, service). Common feature of such activities is a high-risk level and usually high initial capital investment needed. Since 1990, following types of STPs have been registered in the Czech Republic: • science park (centre); • technology park (centre); 21 • business and innovation centre. The STPA (http://www.svtp.cz) belongs to the founding organisations of the Association of Innovation Entrepreneurship of the Czech Republic. The Association started its activities on July 27, 1990 and since that time it actively takes part in establishment preparatory work and assists in the activities of a number of Czech science and technology parks. STPA is a union of natural persons and legal entities that support an efficient course of the innovation process from the outcome of science and research as far as to the practice, participate in successful establishment of small and medium sized innovation firms, transfer of technology, hi-tech, and among others provide supporting services utilising infrastructure available. An important base for establishing the science and technology parks is the scientific and technical potential of the research and development institutions. Their human resources, material and technical equipment, informatics, complex expertise in methodology and management may represent very powerful initial assets for STP formation and build-up. In majority of cases the parks emerge from the transformation process of former research an development institutes, sometimes they are products of private initiative of individuals or of creative groups such as research departments or project teams that spin off from a larger organizations (state owned enterprises or research institutes). They continue in their activities as independent non-profit or commercially aimed companies, sometimes provided with useful buildings, offices, production space, laboratories, instruments and equipment by the parent institutions. In the Czech Republic there is a new initiative by the Ministry of Industry and Trade launched in 1997, which contains instruments to overcome barriers to innovation and to promote technology transfer are the Technos and Park programmes. While "Park" was designed especially to support the establishment of technology parks, "Technos" is targeted on the research and development of new materials, products, technologies and information technologies. Its target is to search and develop new technologies and products and to exploit this information about new technologies and know-how in SMEs, in order to help them in their further development. The programme focuses on environmentally friendly projects, energy savings and non-traditional energy sources. The Technos – Phare programme is determined to support solution and implementation of applied research of SME (up to 250 employees) on the area of the Czech Republic through the advantaged loan to co-financing maximum 50% of projects` costs. Innovations represent series of scientific, technical, organizing, financial and business activities, whose aim is to develop a new or marked improved product effectively located into market. The Association of Innovative Entrepreneurship (http://www.aicpr.cz) since 23 June 2001 is a non-governmental organization in the filed of innovative entrepreneurship. For a number of years, the Association of Innovative Enterprise has been active in the Czech Republic, forming a network of universities, industrial companies and science and technology parks. It publishes a magazine, organises seminars, conferences and exhibitions and presents an award for the best innovation of the year. The association has an Information Centre for Innovation and the Transfer of Technology, and it runs a Research and Education Centre. In the bulletin of the association there is a separate section for technology transfer, in which selected offers of and demands for technology transfer are being published along with a range of current news items concerning this area. ESTONIA The Estonian R&D strategy - "Knowledge-based Estonia" - was endorsed by the Government on 29 May 2001. The strategy defines for the years 2001-2006 the broad policy framework, objectives, priority areas and describes the main measures to be taken by the government to stimulate R&D and innovation in Estonia. The Estonian Parliament has given a boost to innovation by adopting an ambitious research and development strategy for 2002-2006. At the end of 2001, the Estonian Economic Development Strategy was completed. In order to ensure continued economic growth, the Government’s aim is to create a business environment, which can adequately support new up-and-coming technologies and business ideas. Information society technologies, biomedicine and material technologies will all be areas into which research funding will be channelled, and efforts will also be made to strengthen links between industry and science and promote an international outlook. The Ministry of Economic Affairs pays extensive attention to develop 22 the national programme listed in the Estonian R&D strategy document “Knowledge based Estonia” for 1 the years 2001-2006 adopted by the Riigikogu on 6 December 2001. The 1999 figures show that current R&D expenditure in Estonia is in the region of only 0.76% of GDP. The long-term goal of the "Knowledge-based Estonia" strategy is to increase gross expenditure on research and development to 1.5% GDP by 2006. A strong R&D and innovation policy will be an essential factor in ensuring the country's socio-economic cohesion with the EU. Enterprise Estonia (http://www.eas.ee) is one of the largest institutions within the national support system for entrepreneurship in Estonia, providing financing products, advice, partnership opportunities and training for entrepreneurs, research and development institutions and the public and third sectors. Enterprise Estonia actively operates in the following areas: the enhancement of the competitiveness of Estonian enterprises in foreign markets, the inclusion of foreign direct investments, the development of tourism exports and indigenous tourism, the elaboration of technological and innovative products and services, the development of Estonian enterprises and the entrepreneurial environment and the enhancement of general entrepreneurial awareness. Enterprise Estonia is one of the institutions responsible for the implementation of EU structural funds in Estonia, as well as being the primary provider of support and development programmes targeted towards entrepreneurs. Enterprise Estonia was founded in 2000 by the Ministry of Economic Affairs with the aim of promoting the competitiveness of the Estonian entrepreneurial environment and Estonian businesses, thereby increasing prosperity. The main instrument of the Ministry of Economic Affairs in implementing the innovation and technology policy is the Estonian Technology Agency (ESTAG) established in 2001. Several innovation support structures have been created in Estonia during recent years. The aim is to strengthen linkages between science and enterprises and to support the development of new knowledge-based enterprises. For example: Tartu Science Park (http://www.park.tartu.ee) (TSP) was founded in 1992 and was the first organization in Estonia set up with clearly stated intention to support innovation. TSP is linked to the Estonian biggest university – University of Tartu. The latter produces more than a half of the Estonian R&D. Hence, the main goal of TSP is to provide variety of services needed in the process of R&D commercialization. Currently, there are 26 companies residing on approx 3000 2 m of office, laboratory and production space. The TSP technology incubator offers a variety of services to start-up companies from fully developed infrastructure and office services to business and management consultancy. At this point, there are 8 incubation companies located in TSP's premises, acting in the national key fields of material technology, biotechnology and ICT. The incubator will face a vast expansion in 2005 2 when an additional 3000 m of renovated and constructed workspace will be given to the purpose of incubation services. Tartu Science Park's ICT Centre organises seminars, courses and contests for students and mediates several national and international ICT activities. The consultants of the Centre have also helped both starting and relocating ICT companies with personnel management through their networks in the region. Tallinn Technical University Innovation Centre (TUIC) was established in order to stimulate the connections between the R&D base of Tallinn Technical University and the technology needs of industrial enterprises. The main functions of TUIC include active marketing of R&D projects with market potential, assistance and advice in co-operation with industry; management of the spin-off programme and the development of incubation services for knowledge-based start-up companies. In the further development of the Innovation Centre the establishment of Tallinn Technology Park as a part of Tallinn Technical University Campus area is foreseen. 2 Ida-Virumaa Innovation Centre (IVIC) in Jõhvi was established within the framework of a Phare project, in order to improve the utilisation of the industrial potential existing in the IdaViru County, and to facilitate the transfer of new technologies to the region where R&D resources are limited. IVIC has carried out numerous support actions such as conferences, seminars, infodays, workshops, training courses, and consultations. It has also provided the assistance on 1 2 http://www.eib.ee/files/15%20industrial%20policy1.pdf http://www.ida-virumaa.ee/innovatsioon/est/indexes.html 23 R&D planning, project preparation for EU and Estonian funding, IPR, co-ordination of regional joint projects, analysis, and presentation of Ida-Virumaa innovative projects/companies at meetings and brokerage events to the potential investors. IVIC has undertaken initiation of joint research projects with the Estonian main R&D centres - Tallinn and Tartu. 3 The mission of Ida-Virumaa Innovation Centre (IVIC) is to develop the innovative thinking and activities in Ida-Virumaa, to support the competitive and sustainable development of enterprises and to create new jobs of high qualification. The Centre was opened as a IVD subsidiary unit in Jõhvi in November 1999, the team (4 persons) is fulfilling its mission mainly via studying the needs of and opportunities for innovation and technology transfer in the region, developing the network of universities and R&D institutions interested in Ida-Virumaa, spreading of related information of and know-how among the enterprises and public sector, mediating contacts and co-operation links between the R&D institutions, public authorities and businesses, both on regional/national and international level. During the Pilot Project, IVIC has carried out numerous actions that can be grouped as follows: • Conferences, seminars, infodays, workshops, training courses on: relevant EU and Estonian programmes and funding (9), general aspects of innovation and technology development (6), higher education and science in Ida-Virumaa (5), municipality-university-business relations (4), applications and management of IT-projects (4), accreditation of engineers (2), quality management, integrated product development, high-tech information, trends in telecommunication technologies, food biochemistry, marketing in Internet, intellectual property rights, vocational schools in the changing world, increase of human resource competitiveness. The target groups have been: entrepereneurs (mostly SMEs), representatives of municipalities and other public (development) administrators, teachers/students of TTU Virumaa College and vocational schools. • About 250 consultations and practical help by IVIC staff on: innovation, development planning, regional joint projects, patent and utility model applications, submission to EU and Estonian funding sources, bilateral international co-operation Target groups: entrepreneurs, local administrators. • Practical arrangement of B2B contacts of Ida-Virumaa enterprises with those from Tallinn and Tartu. • Preparation, analysis and presentation of Ida-Virumaa innovative projects/companies at meetings and brokerage events with potential investors. Search and assistance to the applicants for financing has resulted in 20 applications, 10 of which received funding (ca 600,000 EUR overall): 3 from the EIF, 4 from the Start-Up Fund of the Pilot Project, 3 from other sources. • 500 contacts and interviews with entrepreneurs have resulted in comprehensive database on ca 100 innovation-oriented Ida-Virumaa enterprises. • A concept of innovation co-operation network (incl. possible industrial and technology park models) of CG, municipalities, education institutions and innovation support structures in Ida-Virumaa developed via regular round-table brainstorming throughout the Pilot Project. HUNGARY The first business incubators were established in Hungary in 1991. The PHARE programme has provided funds (supplemented by national funds) for the establishment and/or improvement of 16 business incubators managed by the network of Local Enterprise Agencies. The number of incubators is currently 24. Most of them are members of the Association of 2 2 Business Incubators. Their size varies between less than 300 m and above 5,000 m and they are spread all over the country. Enterprises renting business space in an incubator house are mainly start-ups (up to three-five years of age) and belong to the smallest category (employing less than 10 people, only a small number has more than 10 employees). A new trend in the development of incubators is sector-specialisation, and technology orientation (enterprises involved in specialised software applications, IT, e-commerce, new media, biomedical technology, engineering services, 3 http://park.tartu.ee/greenpaper/eng/3_2.html 24 advanced telecommunication etc. form the target group of a technology-oriented incubator house). The Association of the Business Incubators (http://www.visz.hu) about 34 members including incubator house, entrepreneurship development centres, innovation centers, technological parks and entrepreneurial foundations. Among this, the Bács-Kiskun Megyei AngolMagyar Kisvállalkozási Alapítvány (British-Hungarian Small Business Development Foundation of the Bács-Kiskun County) with headquarter in Kecskemét is a good example of successful cooperation and twinning within the framework of the EU and associated countries. The new Government Development policy recognise the need to strengthen R&D capabilities within SMEs. The growth of SMEs is however still hindered by the difficulty in accessing capital and the capital intensity of R&D. To reduce this barrier, the R&D division of the Ministry of Education has provided support through calls for proposals to almost 2,000 SMEs to a total of about 8.56 million during the past 4 years. The National Research and Development Programme also supports research activity by SMEs. The new tax regulations in force from January 2001 contain measures to increase R&D spending. 200 % of the costs for research and development can be deducted, both for in-house R&D activity and for purchased know-how. This incentive is accessible to both SMEs and large enterprises. Apart from the measures under the Enterprise Development Programme and the National R&D Programme, the Széchenyi plan also contains a Regional Economy Development Programme, which aims to broaden the regional base of economic growth. The programme covers a set of measures regarding the development of regional innovation systems, the establishment of regional clusters, the development of regional electronic market places, support to the development of programmes for the economic development of micro-regions and measures to support the development of uniquely Hungarian products and the promotion of their access to the market. Business networks, especially final assembler – supplier networks play a crucial role in the Hungarian economy in terms of technological and organisation innovations, employment and exports. The main government initiative to support inter-firm co-operation is the Integrator programme whose major aim is to improve Hungarian SMEs innovative capabilities and competitiveness, promote their networking activities, especially those aimed at conducing technological development projects. The programme was first launched in August 1999, and then repeated quarterly. Fifty-nine applications have been submitted since then, 26 of them have been awarded altogether 2 million. The main objective of the regional innovation sub-programme is to accelerate the development of an institutional system of innovation organised on a regional basis. It will operate through the development of innovation-oriented industrial parks. The Industrial Park Programme of the Hungarian Government aims to set up altogether 250 industrial parks within ten years. As a result of improving quality, "second generation" parks are being developed and organised into a network. The aims of the innovation sub-programme will in part be achieved through the transformation of some of the existing 133 industrial parks (total number of firms hosted are 1,500, with 100,000 employees in total) developed since the early 1990s, into innovation-oriented industrial parks that will provide advanced services to companies and institutions located within the park. The sub-programme also aims to support the creation of innovation centres around major R&D centres across the country, in co-operation with the corporate sector. There are several industrial parks that have technology park or innovation park characteristics. The most ambitious undertaking exists in Budapest, where a technology park will be set up around two universities (Budapest Technical and Economic University and Eötvös Loránd Science University). The park focuses on information technologies, hence the name Infopark (http://www.infopark-budapest.com/hungarian/warp.php) POLAND Between 1990 and 1999, over 300 initiatives/institutions have been to build various centers for SME promotion, including 56 business and innovation incubators. the first business and innovation centers were focused on technology transfer and promoting innovative firms. They emphasised problems of innovations and technology progress and aimed at building technology innovation centers as well as technology parks. The new Business Incubators, Small Business Assistance Centers and Entrepreneurship Development Funds aim at solving unemployment 25 problems and promoting entrepreneurship, which results ever greater acuteness of that problem and easier possibility to acquire support for training and business start up. The Business and Innovation Centers aim at solving local economic and social problems by training entrepreneurs on how to start business activity and develop the enterprise for free market economic environment; searching for and evaluating of new business opportunities and projects; providing technical, economics, financial, legal and other forms of consultancy; helping in business planning; assisting in technology transfer; and using idle production facilities providing floor for new initiatives and businesses. In Poland various types of centers operate for (i) providing all above-mentioned services in Business Incubators; Business and Innovation Centers; Science and Technology Parks: and (ii) providing the above-mentioned services excluding providing premises for new businesses Business Support Centers; Small Business Development Centers; Small Business Institutes and Clubs. In 1992, the Polish Business and Innovation Centers Associations (PBICA) (http://www.sooipp.org.pl/) was established. PBICA is a non-governmental organization (NGO). It functions within the framework of the National Services System of the Polish Agency for Entrepreneurship Development, and is an accredited centre for training and information consulting services. Its 150 members include individuals, innovation and entrepreneurship centres, and other institutions dealing with the promotion of entrepreneurship and local development. The Association hires consultants on per project contracts. Their basic place of employment is outside PBICA, where they are experts in their respective fields, and provide consulting and training services. Some 35 consultants are working with PBICA in providing support to small and medium-sized enterprises (SMEs) and to regional and local development authorities. Their main areas of specialization are: formulation of business plans, marketing, finance, credits, as well as the organization and management of business incubators, innovation and technology centres, science and technology parks, entrepreneurship development centres and various types of capital funds to help finance entrepreneurship initiatives. The Polish Business and Innovation Centres Association's mission is to promote the business incubation process by meeting the needs of those who provide support and advice to entrepreneurs to start up a business and help their enterprises to grow and prosper in a competitive market environment. PBICA’s statrategic objectives are the following: 1. Improve professional skills of business and innovation centres' managers and staff. 2. Disseminate information about theoretical and practical best practices in the field of business and innovation centres' organization and functioning. 3. Support technology transfer and innovation, particularly to SMEs. 4. Promote initiatives aimed at utilizing idle plant capacity. 5. Help SMEs to adapt to a free market economy and Poland's imminent accession to the European Union. 6. Create model solutions to promote entrepreneurship and combat unemployment. 7. Support the development of a business and innovation centres network. 8. Promote the creation of new business and innovation centres. 9. Advocate a better legal, regulatory and financial environment for the development of 4 entrepreneurship and innovation, particularly in SMEs. 4 http://www.sooipp.org.pl/index_en.html 26 Since 1997, innovative products and technologies can try to obtain the Polish Product of 5 the Future Award. This competition, organised by the Technology Agency, is aimed at promoting new and innovative technical solutions that can be put into use in a short time (up to 3 years), especially in SMEs. The competition is held in two categories - product of the future and technology of the future. The competition is under the patronage of the Prime Minister of the Republic of Poland. In addition to this, numerous other awards are granted by local and regional authorities, trade fairs and business organisations. The Technology Transfer Centre at the Warsaw Technical University organises courses for engineers from the fields of industry and services associated with implementation of quality control standards in accordance with ISO standards and implementation of European directives in the field of "new technology and environmental protection". The Centre has also organised a number of industrial-academic seminars dedicated to the transfer of University patents and research results to industry as well as a series of symposiums and conferences during the "8th 6 International Trade Fair on Business Use of IT Technologies". SLOVAKIA Slovakia new programme "Promotion of Innovation and encouragement of SME Participation" gives SMEs the opportunity to be involved in the development and implementation of progressive innovation technologies. SMEs can get information via the National Contact Point (NCP) within the Business Innovation Centre (BIC) in Bratislava. The Innovation Relay Centre is also hosted by BIC Bratislava. The National Agency for Small and Medium-sized Enterprises (http://www.nadsme.sk/) among others implements the Technology Transfer Scheme, which is intended to support restructuring of the Slovak production base through implementation of progressive technologies in SMEs. The scheme started in 1998. The scheme includes development and updating of an information system pooling the bids and offers of research units and requirements of SMEs for progressive and innovative technologies. Currently there are 6 Technology Centres for industrial sectors in Slovakia. These focus on the following sectors: • Centre for energy development (workplace of VÚJE Trnava, a.s. Trnava) ( http://www.vuje.sk) • Centre for development of chemical and pharmaceutical industry (VÚSAPL, a.s. Nitra) (http://www.zchfp.sk/vusapl.html) • Centre for development of electro-technology and information technology (EVPÚ a.s. Nová Dubnica) (http://www.evpu.sk) • Centre for development of processing industry (VIPO, a.s., Patrizánske) (http://www.vipo.sk) • Centre for development of wood, forestry and pulp and paper industry (VÚPC, a.s. Bratislava) (Internet: www.vupc.sk); • Centre for development of mechanical engineering (VÝVOJ Martin, a.s. Martin) (http://www.zspsr.sk/vyvojmartin.html) There are 5 Business Innovation Centres (BICs) in Slovakia (Bratislava, Košice, Prievidza, Spišská Nová Ves, Banská Bystrica). They provide enterprises with comprehensive advisory and information services in areas related to business and innovation. BICs are a regional support structure for innovative SMEs and entrepreneurs. Their objective is to turn innovative entrepreneurial projects into successful businesses, adding long term value to regional economies. They provide a regional focal point for innovators and entrepreneurs, co-operating with other organisations to ensure a full range of assistance to new and existing SMEs: from detection and assessment of innovative business ideas, through business planning guidance, launch advice and business accommodation to post start up support. The BICs in Prievidza, Košice and Spišská Nová Ves also host business incubators. 5 6 See at http://www.att.gov.pl/atit/konkurs.html. See at http://www.ctt.pw.edu.pl. 27 SLOVENIA Over a five-year period, technology parks gained experience in the formulation of solutions and data on the inclusion of companies and the favourable effects of parks, as well as the dissemination of technologically-oriented developmental guidelines for small businesses. Currently there are three parks in Slovenia, which are organised rather differently: • Ljubljana Technological Park is a mixed private-public company. (http://www.tp-lj.si) In fulfilling its mission Ljubljana Technology Park provides support to technology companies by incorporating them into a favourable environment and assisting them in the development of new technologies, products and services and in accessing the marketplace. The working methods formulated ensure less risk and greater effect, subsidisation of operations and the optimal use of invested funds. In addition the mission comprises: generating motivation and a climate for the development of businesses based on in-house skills, promoting self-employment as a modern trend within society, creating a positive image of the entrepreneur, providing in-depth information to businesspersons, creating new jobs in the region, assisting the conversion of regional potential into commercial enterprise, giving the region's hi-tech enterprise a profile on the global marketplace through foreign partners and international networks of links. • Styrian Technology Park is a public agency owned company with its own premises. (http://www.stp.si) The Styrian Technology Park (STP) was created following a national strategy to promote technology development in the North-Eastern region of Slovenia. Its main objective is to serve as a link between business entrepreneurs and capital on one side and know-how from university and research institutes on the other side. Through its own activities and especially the activities of its members, the Park operates both in Slovenia and abroad (especially in cooperation with the Austrian Styrian Region). It serves as a catalyst for faster development of innovative Slovene companies and their access to international sources of knowledge, goods and service with its infrastructure, the Styrian Technology Park provides the ideal environment for selected start-ups and innovative or technological Small and Medium-sized Enterprises (SMEs). In its creative environment you have the opportunity of exchanging experiences and knowledge with other Park members, while at the same time having access to modern communication technologies, which will allow you to keep in contact with the world in a fast and interactive manner. 2 2 Styrian Technology Park occupies a plot land of around 36.000 m , of which 2000 m are office space used by resident companies. The Park has 14 resident companies, whose activities are very diverse. Some of the most important sectors of activity are: (i) Environmental technologies, (ii) Information technologies, (iii) Mechanical engineering, (iv) Pharmaceutical – Chemical technologies and (v) Marketing, distribution and service firms for technology companies. • Primorski Technology Park is a newly set up mixed public-private owned company with network tendency. The Small Business Innovation Network (SBIN) is a new initiative that will link together all the Regional Development Agencies, Regional and Local Business Centres. It will enhance the creation of regional innovation centres in the whole country. Each of these centres train specialists for efficient and quality advice and other services on the field of innovation activities and 28 intellectual property. Special attention will be paid to involving young people in innovation7 related activities. 2. COMMOWEALTH OF INDEPENDENT STATES RUSSIAN FEDERATION 8 According to official data provided by GOSKOMSTAT, the number of small businesses 9 (further as SB) and the end of 2003 amounts less than 900,000. The level of the development of the small business sector is still weak and cannot ensure the fulfilment of the tasks facing by the private sector of Russian economy during the transition to a market economy. Analysing the problems of development of entrepreneurship and the Russian Federation and studying the development of business incubators in advanced market economies demonstrated that business incubation is a useful tool and mechanism, which should be implemented during the transition process too. Due to the flexibility and their multifunctional approach business incubators can be adopted and used for solving the problems of various Russian cities and regions. The Russian definition of a business incubator – this is an organization, which creates the most favourable condition for a start up entrepreneur to develop her/his small businesses by providing a complex of services and resources including offering subsidized premises, communication and office automation services, the required equipment, training of the personal, consulting and others. Complex services, including secretarial, accounting, legal, educational, consulting ones, are one of the main conditions for startups. Business incubator in some cases assist in access to lease of technological equipment or in getting credit for the development of the business and to exit of the tenant to the market. As a result of all the above-mentioned the startup could concentrate on her/his business only, that means to start with the production or providing services for the market, while in all other problems, which are also part of the business, she/he will get assistance from the management, administration, experts and consultants of the business incubators. The key success factor of a good business incubation process is, that the management of the business incubator fully committed to its tenants’ goals to develop and form its “own face”, to develop its image in a bumpy road of the market economy, which is still beginning to take shape in Russia. The experiences of the business incubators in Russian and abroad highlight that business incubators accelerate the growth of small businesses 7-22 times and decrease failure-rate up to 20%. Today the importance of the small businesses is slightly shifted from the federal level to regional and also to municipal ones. Since the share of tax revenue in municipal budget from small enterprises already amounts for 15-25%, this fact significantly changed the judgement of the authorities toward small businesses. It is estimated, that in near future we can expect a breakthrough development and growth of small businesses from their support from the municipalities. The economic efficiency of business incubators can be demonstrated at the practice of the Business Incubator in Zelenograd. It was established in 1996 with a financial investment of US$ 100,000 only for repairing of unutilized enterprise and buying office and IT equipment. In one year 18 small businesses were settled here, Official tax revenue from them transferred to local and republican budget excelled the amount spend fro the creation of this business incubator. In the meantime 400 jobs were created and the local market was filled up with new quality products and services, while the employees of the incubated businesses earned in average more that the other in the same region. In 1996, a National Commonwealth of Business Incubators (NCBI) was established in the Russian Federation. Today NCBI deals with the following activities: 7 http://www.nadsme.sk/e-adr2.htm Base on the study on “Development of Business Incubators in Russia” by Mr. V.Sh.Kaganov, President of the Coordinating Committee of the National Commonwealth of Business Incubators, and Ms. E.A. Shoshnikova, Director of the National Commonwealth of Business Incubators, Moscow, March, 2002. 9 The term of medium-sized enterprise does not exists in the Russian Federation. 8 29 providing consulting, marketing, projecting, sociological, analytic and research oriented tasks; assisting in organization of training and retraining people, increasing their knowledge and managerial skills of all staff of the business incubators; providing scientific and methodical assistance to development of business incubators; creating exchange of information among its members, providing assistance in solving problems of regional business incubators, creating a technology market for small businesses, collecting and disseminating of experiences of business incubators; protecting the rights and representing the interest of the Members of the NCBI against the Government and also in public relations; and providing publication services. The Representative of the NCBI believe, that the most attractive characteristics of the small business incubators is not only that they could contribute to the development of the entrepreneurship in a regions, but they also could be used as a useful instrument for development of regional, productive, intellectual and other resources, which up to now did not find their role and place in the process of creation of market economic environment. Business Incubators might be used as an instrument of conversion of large and outdated enterprises and their production capacities into an efficient sector of the economy. If the business incubators are well designed and managed, they could be not only self-sustained, but also commercially profitable entertaining in consequence of selling their resources and utilising the existing intellectual resources in a given region. Model business incubation can effectively used in solving such kind of tasks as development of entrepreneurship and competitiveness, creation of new jobs, decreasing social treats, streamlining of large enterprises, creation of groups of small enterprises capable to be suppliers and subcontractors of large ones, development of economic sectors through small entrepreneurship, development of real estates and other resources. At the beginning of 2003, NCBI had 65 business incubators and organizations supporting the development of small entrepreneurship in the Russian Federation. NCBI organizes regional seminars and trainings on how to create and manage business incubators, prepares exhibitions, compile methodical documents and provide informational support concerning small entrepreneurship within the framework of business incubation. NCBI’s aim is to increase the number of current business incubators in Russia and create an enabling condition for the growth of small entrepreneurship via incubators. REPUBLIC OF BELARUS Business incubators in Belarus were established in order to create new jobs and foster the economic activity in the region. Legal basis for the Program activities is provided by the Decree of the Belarusian Council of Ministers on business incubators. Since 1997 the Program consultants have been actively involved in: 1) studying the relevant foreign experience, 2) developing recommendations for creation and effective running business incubators, 3) providing technical assistance to emerging business incubators. The strategy for creation of the national business incubation network was elaborated at the initial stage of the Program implementation. It implied creation of business incubators in Minsk (located at the large manufacturing company "Center") and other regions of the republic. To identify proper organizations that could start working as business incubators in the nearest future, the Program consultants initiated and conducted the national contest. Among twelve applicants the following organizations were recognized as the best: Mozyr Entrepreneurship Support Center "Business Center", Molodechno Business Incubator, Lida Entrepre-neurship Support Center and Gomel Technical University with the project to create a Business Innovation Center. The Program consultants have developed a special procedure, which is currently used by the Ministry of Entrepreneurship and Investments to evaluate business incubator performance. The Program supports five business incubators. The personnel of these incubators have been trained at a series of workshops on effective business incubation. A training course has been organized for the incubators managers at the Volkhov Business Incubator, the best in Russia. The 30 officials of the Regional Entrepreneurship Support Committees who are in charge of assisting incubators locally got acquainted with business incubation experience of Poland during the study tour organized by the Program. KAZAKHSTAN The first supporting organizations for entrepreneurship development go back to late 1890s. However, we can consider for the birthday of the business incubators only 1999 and 2000, when the first Almaty City Business Incubator was established. The Government Resolution RK No.312 as of 28 February 2000 on “Major measures for increasing the creation of job for the population” requested to analyse the experience and achievement of the Almaty City Business Incubator and disseminate it through the country. The organizational and legal aspects of creation of business support infrastructure are different. The majority of business incubators, technology parks and innovation centres are so called communal state enterprises (CSEs), which have been established by local and regional authorities called “Akim”, like the Almaty City Business Incubator, Eastern-Kazakh Regional Centre for Support of Entrepreneurship (VKOCPP), CSE Business Incubator in Karaganda, CSE Regional Technology Park in Petropavlovsk, CSE Kokshetechnopark in Kokshetau, Al’-Farabi Science and Technology Park KazGU in Almaty, etc. The other types of business incubator are nongovernmental organizations, like the Association of League of Entrepreneurs of Kazakhstan in Almaty, the Business Incubator SodBI in Shymkent, OF Business Centre in Aktobe, OF Business Incubator in village Solnechnij in Pavlodarsk Region, etc. The third type of ownership form is private entities, like the TOO Incubator of Small Businesses in Taldykorgan, TOO InvestmentConsulting-Koshetau and shareholding companies, like the OAO Astana Technopark. The structure and services provided by the business development centers are also different depending on the local political and economic environments. In the rural areas incubators without walls become most popular, which provide set of services, like office, consulting, financing, real estate oriented services, etc., but they do not provide production facilities and premises, like farms. In large cities with more empty premises, where the business is highly concentrated, the industrial zones got priorities. According to the Agency of the Republic of Kazakhstan for Regulation of Monopolies, Protection of Concurrency and Development of Small Entrepreneurship, there are 44 organizations within the framework of development of entrepreneurship in Kazakhstan. However, the Kazakhstan’s Association of Business Incubators and Innovation Centres (KABIIC) (http://www.kabic.kz/) confirms the standard and quality of only 14 incubators. The two leading Business Incubators sponsored by Soros Foundation Kazakhstan are: • Almaty City Business Incubator; and • Business Incubators SodBI in Shymkent. Both have space over 3.500 m2 and offer on site: office and production space, shared services, training, consulting, networking, information, access to finance, etc. On May 31st, 1999 the state institution named Almaty city business incubator has been established by a group of people representing the most prominent entrepreneurs (Initiative group) using the existing favorable conditions and in conjunction with the Department of Small Business of the Almaty city. Establishment of the Almaty city business incubator has been preceded with a lot of research work on experience of the economically advanced countries and countries of Eastern Europe regarding organization and activities of specific institutes engaged with the small business support (business incubators, techno parks, innovation centers and other subjects of the small entrepreneurship development infrastructure). Successfully tested models of the industrial zones established in Turkey and business incubators operating in Poland have been put into the 10 basis for the Almaty city model. There are two leading Technology Parks, including • Technoparks in Astana (one building and potentially available territory) and • Petropavlovsk (one building of 12.000 m2). They are tending towards full scale technoparks. Both are city administration initiatives. 10 See http://www.kabic.kz/AMBI.htm 31 The Eurasia Foundation financed the establishment of three business incubators. • Two of them, Ust Kamengorsk and Uralsk oiffer on site space and business Services, and • The Agribusiness Incubator Without Walls in Kokshetau. In consequence of the Because of Governmental and President's decision, most of the regions started business incubator projects. However their knowledge about the business incubation concept is poor. UKRAINE Ukrainian Business Incubators and Innovation Centres Association (UBICA) (http://www.novekolo.info/ru/about/index.html) consists of 71 legal entities and 112 individuals including 8 foreign members. Theses provide entrepreneurship development assistance in all regions of Ukraine. UBICA applies more than 60 experienced trainers including 23 with international accreditation. The Association elaborated 35 training programmes in the field of entrepreneurship, SME-development and activities of NGOs. The Association has developed and introduced the model of network cooperation among the Association’s members as well as of 11 monitoring the activity of business incubators and centres for entrepreneurship support. Over the period of the Association activity there have been realized projects to the amount exceeding USD 820,000 with financial support of International Foundation for Social Adaptation, International Renaissance Foundation, within the programs of Open Society Institute, International Fund "Eurasia". At time being the Association implements a project on “Forming of interregional information and communication environment for effective business incubation development in Ukraine” with the financial assistance of the World Bank amounted at US$250,000. The project is timed for two years (from July 1, 2003 to July 1, 2005) and is registered in the Ministry for Economy and European Integration of Ukraine as the program of international technical assistance. The project is implemented in partnership with Ukraine State Committee for Regulatory Policy and Entrepreneurship. The project goals are the following: (i) assistance in social and economic development of the population by giving support to SMEs with use of information and communication technologies (ICT) in business incubation; (ii) wide implementation of ICT in SMEs with the aim of increasing effectiveness of their development; (iii) acceleration of building the network of business incubators and other innovation type structures with the use of modern ICTs; and (iv) assistance in creation of favourable environment for more effective social partnership among governmental, public and business sector. Project comprises three directions: Knowledge Management that provides for monitoring of the effectiveness of entrepreneurship support structures activity and research of problems and ways of innovation entrepreneurship development, creating and maintaining web-portal and information interregional network. Capacity Building and Training is aimed at increasing professionalism of entrepreneurship support institutions managers, improving skills of modern information technologies usage in practical activity of SME, which are clients of business incubators and entrepreneurship support centers. Support of information and analytic centers by organizing and carrying out mini-grant project tender for effectively operating business incubators and entrepreneurship support centers in the regions of Ukraine. Project activities • building the network of information and analytic centers; • conferences and round tables; • capacity building and training for BI clients and personnel in the fields of ITC in business; 11 http://www.novekolo.info/ru/about/index.html 32 • monitoring and evaluation of current condition of resources of UBICA, partners and executives; • PR campaign. UBICA has a comprehensive web-site in Ukrainian, Russian and English variation and ready to assist other countries in development of business incubation process. Those for example it carries out an education training programme for directors of entrepreneurship support entities from Tajikistan in Ukraine with the financial assistance of the Tajik Branch Office Open Society Institute. UZBEKISTAN From 1996 in Uzbekistan acts a network of business-incubators. The total investment and operating cost of the three pilots over the last five years is estimated at about US$ one million, excluding the provision of vacant building spaces. This has resulted in the creation of over 200 new jobs, that is, under US$ 5,000 per job, a number, which is declining as these incubators reach maturity. To 2000 year has ripened an idea of association all business-incubators of Uzbekistan and in same year on the initiative of all business-incubators of Uzbekistan was created the Association of Business Incubators and Technoparks (ABIT) (http://fursat.freenet.uz/bis.php). At present ABIT unites 36 business incubators and one Technopark "Beruni", created under Tashkent State Technical University in 1992. On ABIT is entrusted function of association of efforts of its members for co-ordinations of their activity, reinforcements to cooperation, protection and presentations their legal interests and rights in relations with state organs an authorities and management. Also on ABIT is entrusted function on the interaction and determination of new relationships with international and donor organizations, adjusting the partner relations with related associations and organizations. At present ABIT with “Goskomimushestvo” and UNDP realizes a project on creation in rural regions new 13 business 12 incubators. The Technology Business Incubator was established in 1995 in Tashkent under the Tashkent State Technical University as a joint project of UNIDO and the Government of the Republic of Uzbekistan "Pilot Business Incubators Programme and development of private enterprise" for the support and practical assistance to small and middle size entrepreneurs. Technology Business Incubator is organized as a private shareholding, closed type are: • Tashkent State Technical University. • Union of Uzbekistan Entrepreneurs. The Committee of State Property (Goskomimushestvo) of the Republic of Uzbekistan sponsored the incubator with an allocation of 1 million of sums. Technological Business Incubator has 25 offices rented to private firms, equipment room, conference hall and a comfortable cafeteria. The Business-Incubator “Fursat Maskani” was created in 1997 as an organization, assisting development of small and medium enterprises. Business-incubator renders assistance to small and medium enterprises in the searching and introduction new technicians and technology in the production, efficient methods of management by means of creation necessary economic conditions, educating and consulting. This incubator falls into the association of machine-building enterprises of Uzbekistan "Uzmashsanoat". This association unites 25 large machine-building enterprises. On these enterprises is released varied machine-building products, like air compressors; lifting taps; machines for cleaning cotton; instruments for cutting metal; equipment for handling and transportation of finished products; refrigerators; spinning machines; hydro distributors for hydro systems; excavators; diesel motorpumps; welding electrodes; different nonstandard equipment. During the time of existence of BI "Fursat Maskani" through incubation process passed over 25 small businesses (SB), under the direct support of BI created over 20 SB, including two joint-ventures, 3 SB realized investment projects on the account of credit facilities, 3 SB received grants from international organizations, on scholastic courses got education over 400 persons on the business disciplines and English language. At present under BI acts 30 SB in different scopes of business. For accommodation and creation of BI tenants BI has necessary conditions such as building by the area over 1000 sq. 33 The Business Incubator “INTELLEKT” with headquarters in the city of Karshi in Surkhandaya region provide training in farm management on the principles of the market economy. “It is a matter of great importance”, says Mr. A. Altiev, director of Surkhandarya Business Incubator "Intellect", “as we have, today, more than 2500 farms in the Surkhandarya region.” Training of management and specialists of farms is carried out according to the programme "Principles of market economy and market relations in agriculture", that was approved by the Committee for State Property of the Republic of Uzbekistan in association with Tashkent State University of Economy. In the training programme, which is intended to last ten hours, the main attention was devoted to such subjects as marketing, business planning, legal regulation of farms activity, management, taxes and tax assessment, insurance, accounting in farms, stock market and securities, banks and banks activity, technologies and mini equipments for farms. The schedule of training for management and specialists of farms has been worked out in association with the Khokimiyat of Surkhandarya region, the so called district khokimiyats, the regional management of the Committee for State Property of Uzbekistan, the Union of Farms and Private Subsidiary Holdings, the Chamber of Goods Producers and Entrepreneurs and the Management of Water and Agriculture of the region According to the programme, it is planned to train 150 farmers up to the end of the current year. The significant characteristics of the programme is that, it can render consulting assistance to the specialists of farms in the selection of modern technology and mini equipment, credit institutions and explain the rules of credit allocation, international grants and for obtaining equipment by leasing. References: [1] Best Practice in Business Incubation, ECE/TRADE/253, UNECE, New York & Geneva, 2001. [2] Best Practices in Business Incubation, ECE/TRADE/265, UNECE, New York & Geneva, 2002. [3] Promoting and Sustaining Business Incubators for the Development of SMEs, UNECE Coordinating Unit for Operational Activities, OPA/AC.9/4, 25 May 1999, Geneva. [4] Antal Szabó: Best Practice in Business Incubation in Countries in Transition, European Forum on Business Incubation: ACCELERATION, CONNECTION, ENABLING, 21-22 March 2002, Paris. Due-Gundersen Gunnar, Morten Muus Falck The ENTRANSE Business Incubator Concept Gunnar.Due-Gundersen@sintef.no THE ENTRANSE BUSINESS INCUBATOR CONCEPT Abstract ENTRANSE concept represents the synergy of experiences gained. Materials developed and implemented in the Republic of Serbia as well as lessons learnt and know-how will be used in other counties in transition and via versa. During the Programme implementation the cooperation with other countries in transition will be developed and established Furthermore, ENTRANSE Projects applies a participatory approach to secure the local participation, programme sustainability and ownership of the programmes’ results. The specific country environment and the conditions are taken into consideration for developing ENTRANSE Programme. The experiences gained is summarized and conceptualized under the joint ENTRANSE Concept 34 1. INTRODUCTION The purpose of this Document is to introduce the readers to the ENTRANSE incubator concept. The concept is the base for ENTRANSE incubators establishment and has been gradually developed by practical experience. As development of incubators continues, so will the total concept. For this purpose the concept will not be attempted defined, but be described by the following areas: o Obligations and conditions for incubator entrepreneurs / tenants o Funding and financing related to the entrepreneurs / tenants o Leadership and monitoring of the incubator / tenants o Sustainability for the incubator / tenants o Development & training The article does not attempt to theoretically analyse a business incubator, but to highlight the practical and operative substance of the incubator concept. The content of the article is by large referring to internal ENTRANSE documentation. For further reading related to the subject: "Business Incubators as Elements of Business Service Institutions", published in ERENET PROFILE No1 by Antal Szabo, Science Director of the ENERET. 2. ABOUT INCUBATORS ENTRANSE is using the following business incubator description: “an economic development tool designed to accelerate growth and success of entrepreneurial companies through an array of business support resources and services. A business incubators main goal is to produce successful firms that will leave the program financially viable and freestanding. ENTRANSE: ENtrepreneurial TRaining ANd SErvices is aimed at developing entrepreneurs and business ideas To make a theoretical wide range of incubator types manageable and practical ENTRANSE operates with two types of incubators: o High Tech incubators; University and R/D related o Production; General and sector specific The presence of an incubator is said to be beneficial for its housing region by a variety of ways such as potential for growth, regional attention by investors and new business, commercial publicity and future international trade. The tenants and entrepreneurial environment may gain from financial support, competence development, access to new concepts and methods, technology transfer and business through networking. 3. ABOUT ENTRANSE INCUBATOR CONCEPT ENTRANSE incubator concept consists of all the various areas which are important for running the incubator. Being a business the incubator will have to be measured accordingly, however an incubator will often have certain incubator specific areas, these are of interest to examine further – they in fact describe the incubators concept. These areas are included below under “Obligations and Conditions of the tenants”, “Financing and Funding”, “Leadership and Monitoring of the incubator”, “Sustainability for the incubator / tenants” and “Development & training”. It is the concept comprising the above sections which specifically is design to allow the incubator to become a “business producing businesses”. It is designed to develop entrepreneurs and business ideas. It gives guidelines for the direction of development for the incubator as a business unit. ENTRANSE incubator concept consists of all the various areas which are important for running the incubator. Being a business the incubator will have to be measured accordingly, however an incubator will often have certain incubator specific areas, these are of interest to examine further: 3.1 Obligations and Conditions 35 When entering the incubator the individual tenant will gain access to considerable opportunities to progress as a part of a total scheme designed for personal development, business development, practical support and financial funding. On the other hand, each individual tenant will have to act and perform in accordance with predefined rules and regulations. A general contract is defining the framework of cooperation. The incubator will support strategically and operationally tenants placed in incubator i.e. to provide consulting services in the field of accounting, finance, law and taxation policy, perform constant supervision of the accomplishment of business plans and programmes. On the other side, tenants will conduct business with due diligence and in accordance with good commercial practice, constantly apply in its business activities skills and knowledge acquired on seminars and training organized by the incubator; follow Rules of Conduct of the incubator etc. In addition to obligations and practical conditions finaning is important parts of an ENTRANSE package. The following illustrates ENTRANSE´s policy related to funding and financing of tenants 3.2 Funding and financing In broad sense the funding provided by the incubator to the tenants will cover the following items: o Grants to entrepreneurs production equipment o Building / premises adaptation o Infrastructure and equipment in incubator o Promotion o Running cost of incubator, fixed and variable o Miscellaneous costs o Networking / technology transfer o Training Expenses for business premises have been regulated by the following increasing scale: o The first year of Tenant’s residence in incubator premises is free of charge. o The second year of residence in the business premises is charged 50 % of the market price for rental of business premises. o The third year of residence in the business premises is charged 75 % of the market price for rental of business premises. The sliding scale arrangement bare defined to prepare the tenants for real life expenses after leaving the incubator. As an example of regular expenses; on a monthly basis the tenants are obliged to take care of costs such as: o heating expenses by the price established by m2. o electricity based on own usage o heating, spent water and other utilities o telephone costs, use of Internet and other means of communication Summary: legal and practical conditions for incubator tenants: The objective of the general contract established between the incubator and the individual tenant is to outline the general framework for the cooperation that will lead the Tenants to grow and succeed by developing and enabling it to conduct its own independent and self-supporting business after leaving the incubator. Some major point in the cooperation between the incubator and the tenants are shown above. 3.3 Leadership and monitoring of the incubator 1 Contractual obligations Although the incubator is locally owned and operated, ENTRANSE has extensive possibilities to affect strategies, direction of operation and practical actions at Management Board Level or through the acting Managing Director. From a practical and operational point of view the incubator management will: 36 o prepare yearly Action plan of its activities and proposal of financial means - yearly budget, necessary for providing the conditions of its operations and successful realization o prepare yearly business plan in order to achieve objectives o prepare reports on its activities and the activities of the Tenant Companies on a regular basis. 2 Planning and follow up Regular monthly meeting are arranged with participation from incubator management and ENTRANSE. Matters in focus include: o Results on monthly basis for the incubator o Actions - tenants - monthly performance o Training, development – tenants o Promotions Results and progress for each tenant will be reviewed on a three monthly basis. At this early point of time in the life of the incubator one has a good overview of how the incubator is to be managed and monitored. Some of the monitoring systems are in place, some are still being developed. It is accepted by management and by ENTRANSE that although planning and systems are essential ingredients of progress, practical experience, lessons learned, and learning by doing, may prove to be equally important. 3.4 Sustainability An incubator concept must also be said to include one of the most important factors of the incubator; the way it handling sustainability. Sustainability is often related to the incubators initial objectives with sustainability goals specified in the business plan for the incubator and achievability and performance goals described in development plans. Sustainability gives a measure of how successful the incubator is in producing successful businesses of initial start ups as| well as its own stability. Sustainability can be considered at two levels: The tenants, through throughput and growth The incubator through performance and stability The primary level, tenants will be affected by the incubator operation. Both tenant- and incubator levels will be affected by capable management, infrastructure, funding and policies. Sustainability of tenants will to a large extent be affected by the following factors: o Professional recruitment of entrepreneurs o Pre-incubator, incubator and post-incubator modelling o Incubator concept o Training plan and individual development process for Tenants o Direct assistance within defined and relevant business areas o Planned step by step decrease in financial support towards exit o Measuring and goal setting system for Tenants o Tools and system for planning, monitoring and developing the Tenants o Concrete exit platform o External promotion, marketing and network assistance In considering the incubator company the following factors are important: o Establish income / revenue generation by letting out training facilities, canteen o operation, excess space, etc o Income from services supplied to tenants o Introduction of new revenue products or services o Introduce alternative or additional sources of finance,- donor replacement program o Conduct business activities of according to the law and the Establishing act o Act in accordance with over all incubator governing framework, concept, o strategies, policies, standards and procedures o Act in accordance with local development strategies and policies o Operate in accordance with yearly Business and Action plan of strategic o development and activities 37 o 3.5 Establish and implement long term sustainability and long / short term training plan for Tenants Development and training concept An incubators development and training concept is often regarded as the incubators business idea or the core. It should be based upon the fact that an incubator should be producing businesses; it is the basis for developing entrepreneurs. It should give the direction for incubator development and operation, as well as give guidelines for incubator management. It has been stated that a substantial concept is necessary to run a successful incubator. ENTRANSE concept is based upon developing entrepreneurs and business ideas. . The Entrepreneur The Business Figure 1 ENTRANSE concept The figure attempts to illustrate that an entrepreneur who wants to achieve his / hers goal, or hit the target have two development routes to follow. the development of the entrepreneur as a person, with competence and experience the development of the business idea The reasoning behind this is that one may have a good business idea, without having the knowledge or experience to back the idea – or one may have good experience without a sufficiently good business idea. ENTRANSE concept will cater for both eventualities. ENTRANSE concept covers a new approach for private sector development by means of entrepreneurial training & development and structured business incubation. This is achieved by combining training & development of each entrepreneur with the development stage is / her company is at. One is securing the correct development by viewing the entrepreneur, the business idea and the development stage of the enterprise. The incubator is time wise split in three different phases. o The pre-incubation phase, where start ups and entrepreneurs go through their early development o The incubation phase, where start ups are turned into growing companies through support and development o The pre incubation phase, where successful companies have left the incubator, and are joint in a special purpose network The three different phases are illustrated in figure 2. o o o At each level the entrepreneur will need different types of support and personal training and development. At each level the market will demand different response from the enterprises. ENTRANSE concept will combine the two above requirements, the entrepreneurial and the ones of the enterprise thus take care of the demands from the individual and from the market. 38 POST- INCUBATION independent companies INCUBATION SME’s and Entrepreneurs PRE- INCUBATION Individual Entrepreneurs Figure 2 Incubator phases ENTRANSE is operating with what is called core values in its training of entrepreneurs and business development of enterprises. These “Core Values” are: o Timing: Timing, to secure development and development of the enterprise in accordance with plans and in spite of challenges. Your timing for launching a new product must as example be right. Your timing for delivery to customers must be kept. Timing in terms of payment has to be kept. o Relations: Relations, to develop the relations needed for the enterprise to succeed. You need good relations to customers, suppliers, sources of finance and other stakeholders o Perspective: Perspective, to develop a realistic and strategic perspective for the possibilities and pitfalls surrounding the enterprise. Your strategy needs to be developing, long term, bur realistic and practical. o Loyalty: Loyalty, to build loyalty to the enterprise and its external and internal environment. Your business must be trustworthy and reliable. You should be loyal to yourself and your business idea. o Action: Action to create and secure movements and results. The actions to run the business need to be realistic, understandable, target oriented and planed. They need to give results. It is said these Core Values are important factors to take care of any enterprise. They are regarded as CORE elements in the operation of the business development. They are of VALUE for the individual entrepreneur: CORE VALUES. All the 5 core value categories contain a number of training packages. By defining which combination of core values the individual entrepreneur needs measured against required development, one is defining the specific and required training content. Different ways of defining training needs could be used, Core Values is one alternative to secure individual development. The training concept is based on that one at all stages will provide the entrepreneur practical and relevant training, training which is based on well known and accepted methods and theory. The training will be directed towards the individual entrepreneur through coaching and consulting. 39 The sum of all activities and support schemes offered in the incubation period is in ENTRANSE terminology called “Embedded training” Training Consulting & support Pre Incubator Analyses and preliminary training Information and basic consultation related to possibilities Incubator Incubator training •Compulsory •Voluntary / tailor made Coaching and Consulting from specialists in accordance with demand Specially designed development programs Consulting / individual Post Incubator . The sum of all elements supporting the entrepreneur is described as Embedded training Phase Figure 3 Total model for ENTRANSE Training Concept All elements in the process are built on the 5 Core Values, which are: 1 Timing, to secure development and development of the enterprise in accordance with plans and in spite of challenges 2 Relations, to develop the relations needed for the enterprise to succeed 3 Perspective, to develop a realistic and strategic perspective for the possibilities and pitfalls surrounding the enterprise 4 Loyalty, to build loyalty to the enterprise and its external and internal environment 5 To create actions to secure movements and results 4. ABOUT ENTRANSE PROJECT IN REPUBLIC OF SERBIA The Government of Serbia has set ambitious goals to develop sustainable, internationally competitive and export-oriented SME sector as the basis for a modern knowledge based economy. In order to obtain these goals and to further develop the society it is of vital importance that considerable resources are made available. Strengthening Serbian economy and improving living conditions for the population are expected results of “Strategy for the Development of Small and Medium–sized Enterprises and Entrepreneurship”. ENTRANSE Program is funded by the Norwegian Government. The project owner and national lead partner is Ministry of Economy. The project is implemented by the Republic Agency for Development of Small and Medium-size Enterprises and Entrepreneurship (national implementing partner) and Sintef (international partner). “European Charter for Small Enterprises”, “Strategy for the Development of Small and Medium-sized Enterprises and Entrepreneurship” and “Action plan for support of Small and Medium-sized Enterprises and Entrepreneurship” of the Government of Serbia creates the foundation of ENTRANSE programme. 40 One of ENTRANSE´s components is the design, establishment, stabilisation of - and operational participation in the Pilot Business Incubator Center in Nis. Apart from sustainability the Business Incubator Programme has definite goals such as: o Design a step-by-step guide to set ting up business incubators o Design a manual/curricula for a entrepreneurial training programme o Provide practical skills to new entrepreneurs o Training future incubator managers and domestic trainers o Support the development of Regional SME Agency in Nis o Cooperate with business and academic institutions/associations 5 ABOUT SELECTION CRITERIA OF INCUBATOR LOCATIONS In selecting a region or location for a new incubator there are some important considerations which may prove important to examine: o Local Marked, what is the size, growth potential and its possibilities? o Republic & Regional development strategies, are relevant strategies supportive to the establishment of incubators? o Political attitude, is the necessary support there? o Level of SME, innovation, entrepreneurship, is the substance of entrepreneurship of climate of innovation present? o Ownership, is it obvious which ownership structure is to be chosen, is this a possible solution? o Local network, whish supporting network is available? o Local sources of competence, expertise, the incubator will require a minimum level of available competence, to which degree is this available? o Sources of finance, is the financial support defined and acceptable? o Local drivers, establishers, the establishment of the incubator require a team of enthusiasts and experts willing to carry through the lengthy and often complicated process of establishing the incubator, is this team defined? o Site possibilities, is the specific location defined? o Commitment, who is really committed to the task in question, where is this commitment, how wide is| the range of support? As far as the ENTRANSE incubator in Nis was concerned the final decision on the regions/city for the pilot business incubator was made in close cooperation with the Ministry of Economy, Norwegian Ministry of Foreign Affaires and European Agency for Reconstruction as well as based on the proposed criteria. Nis city has a great location: it is on the Corridor X, 3 hours by car from the capital, with its airport and University Centre. Nis business environment was also determined by ex-gigant Mechanical Industry Nis (MIN Holding) around which significant economic development of Nis region was based on. As an illustrative example, table below is presenting the structure of the registered small enterprises in Nis region in the sector “industry and mining”. Table:: Number of small enterprises in the industry and mining sector Area Number of small enterprises Total number of small enterprises in industry and mining 548 sector Petroleum derivatives production 4 Ferrous metallurgy 4 Non-ferrous metals refinement 5 Non-metals refinement 1 Metal works 89 Machine building industry 40 Vehicle production 1 Electric machines and devices production 103 Chemicals production 5 41 Chemicals refinement Stone and sand production Building materials production Cut materials and plates production Production of final wood products Paper production and refinement Yarn and textile production Production of finished textile products Leather and fur production Leather shoes and leather goods production Gum refinement Food production Beverage production Fodder production Printing Raw materials recycling Production of various products 39 6 3 5 37 26 1 49 3 8 1 57 8 2 35 11 5 Source: Strategy for SMEs Development in Nis Municipality, Regional Agency for SME Development Nis 2003, Table number 8 (page 32) Metal works, machine building industry, electric machines and devices production are dominating the market. This, in addition to other factors, gave base for determining location and the type of incubator to be established. 6. ABOUT ENTRANSE PILOT BUSINESS INCUBATOR CENTER NIS ENTRANSE concept is developed and is being developed during the establishment of the incubator in Nis. To better understand this development process a short description of the Nis incubator may prove to be useful. ENTRANSE Business Incubator Centre Nis (BIC Nis) is primarily targeted at business start-ups with a growth potential in the Nis region. It is available to companies in an early stage of their establishment which are in production or production related services businesses. These businesses need to show the growth potential and prospects for new employment in near future. BIC Nis offers space facility, office services, production equipment and soft services, i.e. Training programme, business idea |analysis, market assistance and financial resources. In the first year, BIC Nis is supporting tenants free of charge. As of second year the services are provided with subsidized rates. BIC Nis was opened in September 2005. The owners are the City of Nis (51%) and the Regional Agency for SME´s in Nis (49%). It is located in the premises of Mechanical Industry Nis. The business incubator was established with support of the Norwegian Government, with the mission of economic development and increase of employment rate in the region. The goal of the Business Incubator Center Nis is to support small and medium sized enterprises development by providing them with office space and production facilities and other business related services in the most critical phases. In terms of facts and figures it is worth mentioned that the incubator can house 14 companies, it has a total of 2.700 m2 with 2.100 m2 production space and is staffed with 5 permanent employees, who’s responsibility is to run the incubator and to support the tenants. 42 Gábor Kerékgyártó Small Business Development Centre (SBDC) gabor.kerekgyarto@uni-corvinus.hu PROPOSAL FOR THE DEVELOPMENT OF THE HUNGARIAN ENTERPRISE-EDUCATION SYSTEM CORVINUS UNIVERSITY OF BUDAPEST (CUB) The base situation At present many institutes, including universities, colleges, foundations, non-profit organisations etc, are dealing with entrepreneur training in Hungary. However, there is not an elaborate, consistent syllabus and an enterprise-educating network in existence, which would be able to prepare practice-oriented and adapting to the small businesses’ opportunities the will-be and practising entrepreneurs to set up and run their companies successfully. Moreover, there is not a developed institution system to utilise the market innovations coming from below. These deficiencies can be divided into two functional areas: enterprise-education and enterprisedevelopment. In order to develop this fragmented system, the CUB SBDC has started a strategy program to make a national joint enterprise-education system. The first step was a short survey of the going situation. The second was the conception of the theoretical system which is optimal for the country and is fit for reality. This document summarises the results of the second step. Development of enterprise-education In order to create a successful enterprise-education the enterprise-educating organisations have to be arranged in a horizontal system, and a central organisation has to be established. This central organisation would work out the consistent enterprise-education materials (notes, books, lecture materials, seminar materials, case studies, study-aids) similar to a franchiser, as well as the educating methodology, which would be used by the educating organisations similar to the franchisee. The central organisation would function as an instructors’ instructor by means of the most experienced, and most successful instructors. Through this method it would be possible to build up a wide-ranging, high-quality enterpriseeducation in Hungary within a short time as the instructors teaching other subjects could be retrained rapidly (due to the central organisation’s function as instructors’ instructor) and there would be at the instructors’ disposal the ready-made syllabus and study-aid. Thus the high-quality, practise-oriented enterprise-education would be available at any university, college, secondary school and enterprise-developing organisation that joined the system. The franchise-like using right and the syllable would get in possession of the recipient in return for an agreed sum of money as well as for notes on educational experience which are to be forwarded to the central organisation. The consistent syllable would develop continuously due to the collected educational experience and new knowledge. The quality of the education would be controlled by the central organisation on a regular basis (this would be the quality-control function of the central organisation), while the recipients should have to renew the using right from time to time (this would also ensure the high quality). It would be possible to make use of state sources both for the working out of the consistent syllable and the instructors’ instruction function. It is apparent that this system means the most efficient usage of state money by means of eliminating redundancies and creating a consistent high educational standard. The consistent-method educational material would be worked out on more levels: 1. according to the higher education bachelor (BSc) education (six semesters) level six subjects/educational moduls 43 2. on a secondary school level within three years, one subject per year, altoghether three subjects (one subject would be the contraction of two moduls, one modul one semester) 3. education of gipsy people according to special conditions 4. practising entrepreneurs postgraduate education, absoluately concise and practiseoriented The educational material would be based on the entrepreneur success formula: Entrepreneur performance= human factor* financial factor* marketing factor* state factor* (*luck) In more details this means 1. these factors determine the entrepreneur’s performance 2. there is multiplicative connection between them, which means they are equally important, if any of them is a zero the result is a zero too The six educational moduls would be the following: 1. Setting up and running small businesses Introductory modul, which gives an overall picture of small businesses and of the necessary knowledge about small businesses. 2. The role of human factor in small businesses This modul teaches the management of one of the enterprise success factors. Content: introducing the role of human factor, human recourses management, education of leading, organising, corporal behaviour, building up relation capital knowledge, which can be used in small businesses. 3. Finance of small businesses This modul teaches the management of one of the enterprise success factors. Content: introducing the role of financial factor in small businesses, liquidation management, investment management, capital acquisition, application studies, financial planning, bank relations. 4. The role of state factor in small businesses This modul teaches the management of one of the enterprise success factors. Content: introducing the role of state factor in small businesses, taxation, licensing, legal studies on a level that can be applied in small businesses. 5. Marketing of small businesses This modul teaches the management of one of the enterprise success factors. Content: introducing the role of marketing factor in small businesses, market research, marketing communication, positioning, pricing, product development, innovation management, sales and e-business studies on the level of small businesses. 6. Business planning of small businesses and case studies This modul synthetises the acquired knowledge, during this modul the students have the opportunity to deal with case studies. Within the scope of the training the students themselves write a case study until the end of the first term analysing an operating small business, proposing solution to its problems, challenges, and acquiring direct experience through this. The examination which closes the modul is a complex final examination at the same time. During this examination the students are to prepare the business plan of their own enterprise idea (using the knowledge acquired during the other moduls), and they are to present it during a Powerpoint presentation to the examiners playing the role of the potential investors. 44 Expansion of enterprise-development system The establishment both of a country-wide enterprise-education system and its central organisation gives opportunity to enhance the efficiency of the Hungarian enterprise development system: the central organisation has the capacity to build up a database of the students completing the training (these students would get a consistent, but multi-level degree). The central organisation would keep in touch with the students after graduation as a consultant, supporter and coach. At the same time it would collect and keep in contact with the Hungarian enterprise-development organisations, venture capital funds, business angels, banks and would act as a mediator between them and the operating/potential entrepreneurs, with whom the central organisation would keep in touch after the education. Further steps for the implementation of the system After having prepared the discussion material recently, the SBDC started to make it wellknown. The goal is to acquire the support of the government, the economic universities and the other stakeholder institutions. During this third step details of the conception could be changed by the discussions, but the base will be stable: in Hungary someone will have to create an elaborate and consistent syllabus and an enterprise-educating network, which is practice-oriented and adapted to the small businesses’ opportunities the will-be and practising entrepreneurs to set up and run their companies successfully. Gyula Fülöp Associate Professor Krisztina Szegedi Associate professor University of Miskolc (Hungary) vgtbogi@gold.uni-miskolc.hu ETHICS OF SMALL ENTERPRISES IN THE ERA OF GLOBALIZATION PART II Abstract The small enterprises are decisive players in business life; consequently the area of research of corporate ethics also has to be extended to cover this facet of enterprises. In the future the honest and responsible attitude may increasingly appear as a competitive edge and in many cases even as the minimum criterion of staying on the global market. In the age of globalization in the course of the decision making of small enterprises ethical questions arise mainly in connection with the social responsibility of the enterprise, with the consideration of those affected in the enterprise and with the management of the enterprise. The stressing of these sets of themes is justified by the peculiar situation of the small enterprises. In the second part of this study the best solution of the practical problems of ethics and of globalization is illustrated by the examples of a Dutch, a Hungarian and a German small enterprise. The article ends with a practical part. To explore in more depth the essence of honest and responsible attitude of enterprises, we studied three enterprises in different countries. We discuss each of these in terms of workplace, community support, environmental protection, the benefit of the enterprice, and the benefit for society. First the practice of assumption of social responsibility of the Dutch firm Peeze Caffe is presented as a case that is to be emulated. The second case 45 description study it is shown how the Hungarian Telvill Kft. has achieved successes in a backward area with ethical enterprise management. Finally, the case study of the German Alpine Bau provides an example how the proportion of customary kickbacks in construction industry can be reduced by the application of ethical institutions. BEST PRACTICE IN THE ASSUMPTION OF SOCIAL RESPONSIBILITY – PEEZE CAFFE, NETHERLANDS: BLACK COFFEE NEAT For the Peeze firm sustainability is of primary importance. It has introduced an integrated management system that encompasses the quality, workplace and environmental protection areas. We have summed up in the following part what the integration of these elements and ensuring sustainability means for it. Business behavior The Peeze is the supplier of quality conscious service units and enterprises; it was the first coffee roaster enterprise that received the Max Havelaar –Fair-Trade label. This label ensures that the small enterprises in the developing countries receive a fair price for their products and they work in appropriate conditions. In the case of the Max Havelaar label the whole value chain extending from the producer to the consumer is checked by the FLO, the Fair Trade Organisation on the basis of predetermined criteria. The „Mex-Eco” of Peeze is an ecological Max Havelaar-coffee that has been apparently successful in recent times on the market. They do not use feed solution or chemicals and they plant the coffee plants among trees to prevent erosion thereby they ensure the long-term sustainability of small farms. The manager-owner of Peeze further developed the production process of the company by means of innovation and he made available to the market the result of the innovation free of charge. The workplace Computer-controlled machines have fully taken over the simple manual work from the packaging to the storage of boxes in the roasting workshop. As the owner-manager of the enterprise states: „Why should the burden weigh down on the shoulders of men when a robot costing 50000 euros could also perform the same work?” As the compatibility of work and private life is important for the company, overtime is permitted only in exceptional cases. In addition Peeze has its own gym that is available for the employees and their family members. Equal opportunity is a self-evident thing and women occupy several management positions. The management style is open and informal; the owner-manager spends a great deal of time in the workshop in order to have daily contact with the co-workers and also to be effective in development. Thus the employees easily get to the enterprise management and they have influence on decision-making. The amount spent on training makes up 1,6% of the entire cost of wages, which is double the average of Dutch small enterprises. The employees fill out a questionnaire twice a year whose goal is further improvement of the present situation. Community support Although Peeze does not have an initiative that would be expressly engaged in the issue of public good, it makes efforts also to pass social measures and often it freely makes available coffee or a coffee machine. In 2002 it organized an informal meeting with the local community and assured it that the activities of the enterprise do not have a negative impact on the immediate 46 environment. They use modern, smoke-free coffee roasting devices, furthermore they have purchased machines that do not cause noise and they ensure adequate parking space for the customers. The management of the company has the view that the emphasis has to be put on the workers and the production process if they wish to strive for sustainability. Once they have utilized all opportunities for improvement in this area, it is only then that they would like to turn to community affairs. Environmental protection The Peeze puts most of the emphasis on environmentally friendly production process. The corporate strategy aims at the reduction of the burden on the environment. It buys exclusively top quality coffee beans that are derived from an environmentally friendly production process and do not harm the rain forest. The plant is mainly cooled by vaporized rainwater. The excess heat arising during coffee roasting is reused. The introduction of an innovative coffee roasting process has reduced the use of water by 99%. Natural waste, as for instance the shell of the coffee bean is composted. The large quantity of the packaging material of coffee machines is environmentally friendly and it is returned for recycling. The energy wasting aluminum has been removed from the coffee packaging and the fresh coffee aroma is preserved with a special locking mechanism. The electric power used is produced by an environmentally friendly method and planting trees counterbalances the effect of CO2 production. The benefit of the enterprise - Good reputation - Satisfied employees - Better environment The benefit for society/those affected - Training - The enhancement of the ethical consciousness of those affected - Better environment Awards - The “Environmental success” prize of the Dutch Ministry of Environmental Protection, 1995 - The environmental prize of the city of Arnheim, 1996 - The environmental prize of the province of Gelderland, 1997 - Innovation award of the branch, 2002 Further information The annual report can be viewed at the web address r.smit@peeze.nl THE MAIN DATA OF THE ENTERPRISE The name of the enterprise: Peeze Coffee Basic capacity: Peeze Coffee is a family enterprise that has specialized on the production of first class coffee for 125 years. The coffee produced by the enterprise is not sold in supermarkets, but exclusively at the enterprise, restaurants as well as in cafes City/Country: Arnheim, the Netherlands The year of foundation: 1869 The number of employees in 2002: 39 persons Annual turnover in 2002: 9-10 million euros 47 BEST PRACTICE IN ETHICAL COMPANY MANAGEMENT – TELVILL KFT., MISKOLC: LEADER IN A BACKWARD REGION The factors of ethical management: employees – working conditions – standard of living, jobs – local communities, natural environment. How does the management of Telvill Kft. take this into consideration in the course of its decisions? László Ágoston, the managing director of the firm said the following about the practice of ethical corporate management: The establishment of equitable relationship with the employees, the improvement of working conditions and the raising of the standard of living of the workers „I believe that the relationship with the employees has to be based on the respect for human dignity and on the unqualified adherence to the personal rights. One’s ties to family and relatives belong to the intimate sphere by all means. It is not proper to ask the employee in connection with this. The employment policy of the company may not use racial, sex, religious, nationality, age or health (not related to the job) discrimination. We continue to put major emphasis on the improvement of working conditions and the development of a cultured workplace. In the case of our investments and developments we always take into account that the result should be the reduction a physical labor and the creation of healthier working conditions. To achieve this at present we are engaged in the renovation of our headquarters. In addition to this I consider it important that our workers should also be given the appropriate material recognition in exchange for their good work. By further improving the material position of our co-workers in the first nine months of 2003 the amount of monetary and other in kind disbursements in addition to wages have increased by 20% in comparison to the year 2002. The effective management of the business made possible a 15% rise in average wages. In 2004 an average rise of the basic wages was carried out. On the basis of a semi-annual evaluation on the average a bonus corresponding to the monthly wages is given to th the workers and the institution of 13 month salary also exists in our company. During the year we try to get to know the opinions of the employees by means of questionnaires addressing workers and we make the necessary measure by evaluating these. The suggestion box directed at workers also functions effectively.” Ensuring sustainable opportunities for work and the support of local communities „When we are expanding our scope of activities as well as during our development activities we always take into account the retention of the present workforce and we endeavor to create as many jobs as possible which is not an easy task knowing the situation of our region. The special attachment of employees to their work and job is also indispensable for a successful undertaking. This can be enhanced to a great extent if the organizational culture, the reconciliation of interests and participation is appropriate. This attachment is strengthened by the decision of the owners of the firm about the introduction of a loyalty benefit. Those co-workers receive the bonus every year who have been working with good performance for 5 and 10 years, respectively, at the firm. 48 The first regular team members have been honored this year by our co-workers in a family setting on a festive weekend at Lake Csorba in Miskolc, of course as the guest of our company. Telvill by the support it lends helps among other things the Berekalja Hungary’s Conquest Memorial Park, that has set as its goal for the local population the establishment of healthy lifestyle and environment as well as the „park of statutes” of game park of Miskolc that commemorates those local animal species that have become extinct as a result of human activity. As one of the major patrons of instruction and training of specialists it has undertaken the renovation and maintenance of the informatics systems of the local elementary school, it has provided effective professional assistance for the informatics training program of the institution and it provides material support for two vocational secondary schools as well as the Borsod Aeroclub year after year. In addition to these for the sake of nurturing a good relationship maintained with the local patriots of Miskolc and the city leadership it regularly takes part in the forums organized by the chamber of commerce of the city.” The creation of a uniform environment and the protection of the natural environment „Telvill wishes to be a responsible enterprise also in the future, and for this one of its goals is to set a good example with its continuous development projects and market successes – that it achieves by its responsible behavior with respect to the environment and society. This is the reason why it devotes a great deal of resources for the creation and protection of a healthy environment. The management and collective of the firm espouses as it own the thought of the world-renowned philosopher professor Ervin László: „Think globally, live responsibly”. It is time for humanity to wake up to the fact that if it continues to use and exploit the reserves of resources and carrying capacity of the globe, it will jeopardize its future.” The managing director summed up the essence of ethical management in the following way: „The responsibility towards human beings has to be manifested not only in the fact that appropriate working conditions are created within the firm. We have to set an example also with our other deeds.” Advantage/benefit for the enterprise Ágoston László: „The benefit of ethical management for the firm is nothing else than the fact that the confidence of the employees towards the firm has increased, the reputation of Telvill has increased in the eyes of its partners and customers, and this has brought about more customer loyalty and satisfaction. We have developed good relationship with the local communities. Our participation in the activities of local groups means that we contribute to the development of the region that we also belong to.” Advantage/benefit for those affected The most important task of ethical management is that it does not conceal the work, initiatives and attained results of the enterprise, company already managed ethically, but makes it accessible for everybody thereby also giving incentive to the market players for a more ethical business policy and company management. TELVILLE-SUPPORTED PROJECTS National Incubator Foundation Game park of Miskolc Ferenc Móra Elementary School Conquest of Hungary Park For the increase of the chances of survival of premature infants The creation and development of a park of statues commemorating the animals that have become extinct because of human irresponsibility The development and free maintenance of the informatics system and assistance to the instruction of computer technology Park landscaping work for the establishment of a healthy lifestyle and environment 49 Invancsó-hamlet goat farm Biofarm for promoting a healthy lifestyle and nutritional habits Kálmán Kandó Secondary Vocational School The development of the computerized technology of the electronics laboratory of measurements Aero Club of Borsod For popularizing sports, good air and physical activity Special Search and Rescue Team Public Foundation of Miskolc Foundation for the Development of the Environs of the Castle of Diósgyőr Heavy machinery for the earth-work of the training course The holiday illumination of the Mikulás-train of Lillafüred AWARDS TO THE TELVILLE KFT 2000 MicroCad Trade Exhibition, topnotch quality prize Borsod Industrial Exhibition, the special prize of the Chamber of Commerce and Industry of the County of Borsod-Abaúj-Zemplén Outstanding Business Management Organization, the special prize of the Chamber of Commerce and 2002 Trade of the County of Borsod-Abaúj-Zemplén Regional Quality Prize of Northern Hungary (in accordance with the system of requirements of the 2003 National Quality Prize) It can make public in the European Union the best practice of the assumption of social responsibility in 2005 Hungary (upon the initiative of the European Commission) 2001 Further pieces of information - The firm operates a controlling system with a focus on quality and the environment in accordance with ISO 9001 and 14001 - Contact: www.telvill.hu 50 THE MAIN DATA OF THE ENTERPRISE The name of the enterprise: TELVILL KFT. The branches of the enterprise Telecommunications branch: building of sub-structures of plastic piping, assembly of optical and copper cables - Electric network construction unit: cable networks of low and medium voltage as well as the construction of spatial lighting systems Informatics branch: the planning and realization of integrated sound, data and video signal transmission communication infrastructure The essential capability of the enterprise: Telvill Kft. started its activities 15 years ago as a typical firm „starting from zero” by planning and carrying out telecommunications networks. However, by now it has developed to become a medium-sized enterprise whose specialist engineers are at the disposal of their customers in all three branches of business with complex network solutions. The enterprise has constructed a quality control system for the development of quality conscious attitude and for the real reduction of environmental burdens it has introduced an environmental guidance system. The headquarters of the company: Miskolc, Hungary The year of the foundation of the enterprise: 1990 The number of people employed by the company: 70 persons The annual turnover of the enterprise (2004): more than 2 million euros BEST PRACTICE IN THE AREA OF APPLICATION OF ETHICAL INSTITUTIONS – ALPINE BAU, GERMANY: BRIBES IN THE CONSTRUCTION INDUSTRY The construction industry worldwide has been under numerous attacks in recent years because of the use of dishonest deals and bribes. In the Bavarian Construction Industry Alliance the opinion has been formed that the enterprises in the construction industry simply no longer have to be the target of criticism, but they themselves have to influence things. Corruption may not become a decisive competitive factor. The toughening of legal rules is not enough and often it is not effective. A change must start at the root of the problem. The establishment of an ethical system of institutions serves as the tool of voluntary assumption of commitment. The primary goal of its introduction is not the prevention of erroneous behavior, but rather it has to do with such a continuous learning process in the course of which the ethical requirements appear in the operation of the enterprise. On May 2, 1996 the Construction Industry Ethical Management Alliance was created. The alliance already had 36 members in 2004 in which the process was introduced and audited. The foundations of the system - The basis of the program is mutual fair behavior: „They way our partners behave toward us, that is how we would also like to behave toward them.” 51 - - Description of enterprise-specific behavioral rules, i.e., the formulation what the enterprise acknowledges as a mode of behavior to be emulated. For example integrity and correctness towards the customers placing orders, correctness, abiding with the laws, the rejection of illegal business practice and the involvement of employees into the decision-making. Where the ethical program is the matter of the management, credibility comes into being. The value program becomes alive if everybody becomes conscious of this: it gets into the work contracts and constitutes the basis of the enterprise strategy. It should not have an alibi function; internal instruction and external auditing should prove its seriousness. The elements of the ethical program The program on the one hand contains such elements that are valid within the enterprise; on the other hand they are associated with those affected in the company. The main corporate elements are the following: - Honesty: – „We do not promise anything that we are unable to keep.” - The avoidance of possible conflicts of interests. - The separation of private life and official life. The basis of the contracts should not be cronyism. - „We do not accept bribes.“ - In the case of situations of ethical conflicts the legal rules and their own ethical behavioral rules are applied exclusively. - No side activity between own employees and the employees of the sub-contractor is allowed if both managements have no knowledge about it. Statement from the suppliers and sub-contractors, in which they commit themselves that: - They recognize the behavioral modes recorded here as also mandatory for themselves. - They will also inform their workers about this. They will confirm this with their signature. The following things are expected from the customers: - The acceptance of these basic principles. - Appropriate information for the facilitation of the fulfillment of these. - Openness in the area of information flow, which also makes possible the external examination of these basic principles. The management documents the attitude of the customer. - In the offer phase the contact is exclusively made with the competitors with the purpose of making a joint offer if there is a chance for this. Price fixing and the procurement of assignments may not take place at the expense of the contract giver. Since all contacts taking place by telephone are recorded externally, this can be checked. - With respect to human relations all employees are treated equally irrespective of their sex, citizenship and religion. The same is also expected from their partners. - It is expected from their partners that in the long run they should also document the ethical foundations in their own area in the form of a value program in order to ensure fair contracts and cooperation by this. The consequences of the violation of ethical rules In addition to given rules of the penal code the following measures are taken against those violating he rules: - Labor law measures, in certain cases dismissal - The withdrawal of the right to sign - The withdrawal of the right to make a decision 52 - The connection of a complementary, mandatory control level If the partners of Alpine Bau do not abide by the rules of ethical behavior, then the consequences are following: - Suppliers: a note in the supplier data that is taken into consideration during the selection of suppliers. - Subcontractor: a note. Demotion with respect to qualification as subcontractor. On the basis of discussion with the construction management and business management ordering a ban on contracting for one year. - Other partner: - Informing the appropriate construction manager - The increase of the number of written agreements - More control - The increase of the need for mandatory provision of proof - All consequences have to be put down in writing The advantages of the value program - The predictability and the increasing reliability improve the position of the company in the eyes of the business partners and employers - Towards to external environment this program is also a certain kind of quality assurance - A certain skill develops for avoiding erroneous behavior in the companies introducing the value program THE MAIN DATA OF THE INSTITUTE The name of the ethical institute: Bavarian Construction Industry Ethical Alliance Year of founding: 1996 Province/country: Bavaria, Germany Contact: http://www.alpine-bau.de Number of member enterprises (2004): 36 References: Bounols, A. – Lamb, J. 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NOL, 2001. szeptember 26. Csapó Krisztián Assistant Lecturer Attila Pethe Assistant Lecturer Péter Szirmai Assistant Professor, SBDC Director Small Business Development Centre, Corvinus University of Budapest krisztian.csapo@uni-corvinus.hu SPIN-OFF COMPANIES IN HUNGARY “Spin-off” – we gave this title to our paper. Let’s admit still only few people know what it exactly means if we translate this to one of the Eastern-European languages. But it is time to start getting used to this word in a broader context, because it refers to an important phenomenon of 54 the economy which will play an extremely important role in the coming years. It refers to that case when researchers at theoretical search labs (at academic research institutes, universities, colleges) set up a company for utilizing their ideas and inventions with the help of their institution. The support of the institution they belong to can take multifarious forms, while it also often differs to which degree the new company owns the knowledge, production method and know-how. Several decades ago, during the centrally-planned economy period those who wanted to have their invention or scientific result assessed on the market had to “spin-out” from (leave) the country. There are many inventions on which the owner began to work, to lay down its theoretical base in Hungary, but the development was carried out in the United States of America or in Western-Europe. This means that the profit and the outcome which was seeded in Hungary were harvested overseas. This situation has changed a lot up to now, leastwise there are some positive signs, so the Hungarian National Office for Research and Technology could organize its first conference entitled “Knowledge and enterprise – utilizing research achievements on the market” on this topic presenting successful Hungarian examples. The Hungarian model After a short, striking theoretical introductory section the participants could gain experience from real enterprises and entrepreneurs, whose presentations were organized into 3 groups concerning the development stage their firms achieved (starters, early expanding and expanding phase). In the example of the starters it was illustrated that the firms in many cases not only spin out from universities (for example for the purpose of simplifying its administrative tasks), but this process is played to some degree in reverse too: companies endeavour to develop a bilaterally beneficial co-operation with the universities. A good example of this was the case of a small firm earlier spin-out from the University of Szeged, which signed a contract with the university. Under this agreement the firm gets some office space and free labour at the university, shares the new equipment purchase cost with the university, and the rental fees must be spent on the development of the department from which the firm originates. This is beneficial for both sides, because in our country everybody knows how underfinanced Hungarian higher-education is, to what extent universities have no money for the development of their buildings, sometimes even for their upkeep and then we did not mention the procurement and replacement cost of the equipment needed to have a research activity of high standard. From this example we can see that spin-off companies do not always want to be separated from their mother institutes forever. They are in most cases interested in maintaining the daily connection because of their market/profit interests; they want to build upon the intellectual base which can be found at universities. And universities realize that companies moving out, spinning out this way do not only take some knowledge with them, but if this process can be controlled and managed consciously, they will bring something in exchange for it for the institution. During the conference it could be learnt that the Hungarian leading universities try to lay emphasize on this question. Especially impressive the movement with which the Semmelweis University set-off on this way during the last semester. The regulation on utilizing intellectual property rights was completed; they support the establishment of spin-off firms at university level. The university helps in the setting up of companies and finances the registration of patents – for their help they ask for a 20% stake in the new firm. This can be considered a fair price, as without university help the start-up would take more time and might cost more, if the researchers have to deal with this kind of administration work in parallel with their daily research activity. Lack of capital, fullness of capital During this conference, mainly companies originated in Hungary presented the success they achieved during their lives, demonstrating this with the fact they are able to become dominant players in the international market in the field of biotechnology, nanotechnology, developing medical instruments and software. These companies became world leaders in their field with their own products and developments involving external capital. It is public opinion that Hungarian firms are hindered by lack of capital in contrast with their luckier counterparts, while in America investors are hunting for these kinds of spin-off firms. 55 Mr. György Martin-Hajdú, adjunct professor at the Corvinus University of Budapest drew attention to the fact that venture capital is internationalized these days; therefore there is enough external capital available in Hungary to carry viable ideas through to the market. Mr. Gábor Bojár, founder of Graphisoft Plc, which was the first Hungarian privately-owned company to be quoted on the Frankfurt Stock Exchange, drew attention to the fact that state subsidies for this kind of company are more harmful than useful, as it diverts their managers attention from real tasks like how to appear with their product on the market to dealing with looking for activities for which they can get state support. The neighbours’ garden It was especially interesting to hear the experience of a colleague who started a spin-off firm in the United States. He explained his relation to the university and talked about the process of becoming a spin-off. Most of the audience were surprised to hear that in the US the situation of a spin-off company is also very difficult. They have to fight for financial resources, and this is not an easy task. Most American universities have technology-transfer centres, and it is out of question that the knowledge and patent made by the researchers are owned by the universities, while the research and innovation is part of their paid work. If a researcher starts a spin-off firm without compensating the university it is not considered a spin-off firm; it is regarded as stealing. In his example, in order to get the licence for the utilization of his patent, the founders of the firm required the giving of 50% of the total revenue gained from this patent to the university. This kind of agreement in Hungary is inconceivable at the moment. The audience was also amused to hear the following opinion: he emphasized that it should in Hungary be acceptable that when the company becomes “stock-market ready” the ownership of the original inventors will sink below 5%. According to US practice, inventors must be grateful that somebody helped them with capital to reach the market. The Hungarian experience is just the opposite; in most cases there would be no product because the inventors believe that they are entitled to have majority ownership. With these conditions, no business angels or even risk (venture?) capitalists will invest in these companies because as they are accepting a high level of risk they want to get a higher return for it. The companies we are talking about are usually working in the high-tech sector (which is a very knowledge-intensive field) and their sector is very capital intensive. If we think about biotechnology or modern nuclear physics or other modern sciences we always have to accommodate the high cost of instruments, laboratory, real-estate and other required equipment. A start-up never can afford to buy most of them; however start-ups usually do not always need to own them, as they often need them for a shorter time only, for a short phase of the research. This kind of demand from knowledge-intensive companies makes business incubation schemes very useful. At the conference many pieces of research put forward the opinion – and our experience gained abroad strengthens this - that during the start-up period it is useful for a fledgling company to be in an incubator house, where it can access the needed infrastructure and also receive other business services so the firm can concentrate its energy on science and research activity. It is sure that this incubation model can not be followed in Hungary en masse because of a lack of financial resources, but the initiatives which have been started in Szeged, in Budapest and in many other cities carry the hope that sooner or later all ideas will find their institutions which help them to become utilized spin-off firms. Domestic market and external market Many examples of Hungarian success stories were introduced in the conference. However it is common in these cases that founders had to think internationally from the beginning, because there is not enough domestic demand for their product. It is easy to imagine the difference between the two situations in the case of a product which can proove (or disprove) paternity from a drop of blood in two seconds when we consider the differences between the small Hungarian market and the many times larger Chinese market. The international focus of the Hungarian firms appears already in their names - as all of them have anglicized names: Analogic Computers, Solvo, Pharmahungary 2000, 3DHistech, ComGenex, Thales Nanotechnology. 56 We can also witness that, after the dotcom balloon, free capital flow turned towards biotechnology. Today, biotechnology shares are soaring as investors are looking for such firms. This is despite the fact that it can not be seen whether they will become profitable, and before the “promising” entry to the stock market several years might elapse and some more millions of investment be needed. According to the Annual report on Hungarian SMEs published by the Hungarian Ministry of Economy and Transport, 58.1% of R&D was financed by Government, and only 30.6% by enterprises in 2004. However, 75% of the entrepreneurial R&D was put up by foreign owned enterprises. The significance of SMEs is lacking in this field (according to the Hungarian Innovation Association there are only 2000 innovation-ready SMEs in Hungary), despite the fact that innovations are essential for expansion and appearance on international markets. One of the main conclusions is that talented researchers do not have to go abroad to become successful, because there are more and more possibilities for them in Hungary. The inventors must be aware that they have to fight for the realization of their inventions; they should be prepared to manage even the completion of the prototype. Péter Nagy (advisor of National Office for Research and Technology) emphasized that the main problem with spin-off companies arises when researchers enter the market, as they go to a field in which they have no experience (as many presenters mentioned), they have a lack of management skills and knowledge and they do not have an entrepreneurial mindset – all of this may preclude failure at the market development stage. We heard many of these challenges at that conference. It is important to make a remark it that there is no general remedy for all these problems, because there are different needs at different phases of development. To solve these problems the most important is trust, and for trust we need to get to know each other and ourselves completely. This is the reason why such conferences are needed, to make the first step towards each other. 57 CONFERENCE PAPERS ST THE EUROPEAN WAY IN THE 21 CENTURY – Our Message to the Future – Dedicated to Professor Ferenc Mádl, President of Hungary Protector of the European Academy of Sciences and Arts. Formulated at the “Budapest Round Table”, 31 May 2005, Budapest. 1. TAKE RESPONSIBILITY We are, individually and collectively, responsible for the future of our societies. Collective responsibility does not replace individual responsibility. Leaders, who are democratically elected, must take responsibility for their actions and be accountable. Elected leaders shall not transfer responsibility to the public by subjecting difficult or unpopular decisions to referenda when these are not constitutionally required. 2. RESPECT THE PAST Change should not take place simply for the sake of change. They are needed in response to new developments and challenges. Young generations need to understand their roles in the context of future challenges in an ever-changing world. Young generations have to draw lessons from history in order to avoid past failures. Young generations must realise that peoples can coexist and prosper only through mutual tolerance. Tolerance is inextricably linked to human rights, and is the prerequisite to solving humanity's problems. This means not only accepting one another's differences, but also recognizing them as enrichment to mankind. Solidarity across generations and mutual understanding are as important as tolerance. 3. SHAPE THE FUTURE Young generations must choose the type of society they wish to live in. Young generations should make use of all possible avenues to shape an ecologically and socially sustainable future. It has to include the pursuit of more and better education and participating in civil society initiatives with high social values. Successful examples of such societal participation of the youth should be supported and promoted. The involvement of young generations in shaping the future is a unique asset. Political leaders have the responsibility to ensure that appropriate conditions exist for younger generations to nurture their own vision of the future and bring it into the political decisionmaking process. Parliaments should actively engage in direct dialogue with young generations. Europe has the duty to support gifted young individuals. These also require tolerance as they differ from the mainstream. 58 THE YOUNG MUST PARTICIPATE The multitude of deep traditions is a unique strength of Europe. The respect for the different traditions of the past continues in the tolerance of the differences in the present. As societies become increasingly open and complex, uncertainties often increase. Young generations want to understand the world and the reasons behind the political decisions. Young generations more easily recognise, accept and adapt to pressures a societal system receives from outside, as a result of such openness. Recent events in Europe have shown that political leaders are reluctant to provide responsible leadership and fulfil democratic mandates. Politicians are becoming increasingly risk-averse as they strive to ensure re-election. They often prefer to send decisions on issues that are neither required nor foreseen for a referendum back to the public. This avoids political leadership and responsibility; referenda become instruments of non-governance. Policy-makers have a difficult task to decide when and what degree of guidance and precaution is required. Turning towards various parts of society (younger generations, older generations, experts) might lead to diverging conclusions. As a consequence, societal uncertainties “hang in the air” and often remain unresolved for some time. The apparent lack of moral and political leadership brings about ever-increasing reservations about- and distrust in the political establishment. This distrust appears to be more pronounced among younger generations, where individuals often seek guidance and inspiration for their future. Knowledge and trust by the public are determining attributes for the acceptance of political leadership. In turn, public trust and knowledge exist when the leadership is objective, issue oriented, transparent, engages in dialogue with the public and is able to show vision for the future. If at all possible, the latter should be optimistic and within the reach of the population. It should, in any case, take account of younger generations. When political leadership becomes so cautious and structured that it can only see individual pieces of a larger puzzle and lacks the synthetic ability required to provide vision, the younger generation and its interests are marginalized in, if not barred from, the political processes. The main moral duty entrusted to modern democratic societies is the task of open, equitable education. It entails education that does not target the "production" of disciples (i.e. people like us) but targets the elimination of the fear of "others". Education, continued education and vocational training should produce citizens that are able to think independently – rather than being indoctrinated by "sound bites". PARTICIPANTS AT THE BUDAPEST ROUND TABLE THE YOUNG GENERATION Mr. Szilárd Kui, Secretary, Network of Youth Excellence; student, Eötvös Loránd University, Budapest 59 Mr. Dániel Rátai, winner of six INTEL awards; student, John von Neumann High School, Budapest Ms. Brigitta Sip cz, Pro Scientia Junior Awarded student, Eötvös Loránd University, Budapest Ms. Katalin Sulyok, President, Hungarian Research Student Association; student, Miklós Radnóti High School, Szeged Ms. Ágnes Tóth, student, Eötvös Loránd University, Budapest Ms. Eszter Végh, student, Semmelweis University, Budapest INTERNATIONAL EXPERTS Prof. Tibor Asbóth, Deputy Vice-President, Hungarian Section of European Academy of Sciences and Arts (EASA) Dr. István Bilik, Secretary General, Hungarian Rectors’ Conference Prof. Péter Csermely, President of the Board of Trustees of the Hungarian Research Student Foundation Dr. Gilbert Fayl, Secretary of External Affairs, EASA Prof. László J. Kiss, Andrássy University Mag. Christian F. Lettmayr, Deputy Director, European Centre for the Development of Vocational Training - CEDEFOP, Thessaloniki Prof. Péter Paczolay, Deputy Head of the Office of the President of Hungary, EASA member Prof. György Pethes, Deputy Vice-President, Hungarian Section of EASA Prof. Karen Siune, Director, The Danish Centre for Studies in Research and Research Policy, Århus Prof. Felix Unger, President, EASA OVERALL CO-ORDINATION Mr. László Fazekas, Manager, Hungarian Research Student Foundation INTERNATIONAL ADVISERS Mr. Ulric Fayl von Hentaller, MBA, Adviser to the President, Novitech Dr. Isidoros Karatzas, Senior Administrator, European Commission * The Budapest Round Table was organised by the Hungarian Delegation of the European Academy of Sciences and Arts, in collaboration with the Hungarian Student Research Foundation, the Hungarian National Commission for UNESCO, and Andrássy University, Budapest. Comments and recommendations presented in “Our Message to the Future” are solely of those who participated in the round-table discussion. They do not represent the opinions of the participants’ organisations. The organisers kindly thank the Hungarian National Commission for UNESCO for its financial support and Novitech (Slovak Republic) for its generous financial and technological support. 60 New EU SME policy: "IMPLEMENTING THE COMMUNITY LISBON PROGRAMME – MODERN SME POLICY FOR GROWTH AND EMPLOYMENT" (COM (2005)551 final of 10.11.2005) On 10 November 2005: The European Commission adopted a new approach, which provides a single coherent policy framework for EU actions in favour of SMEs. A Communication adopted to-day puts particular focus on a more systematic consultation and cooperation with SME stakeholders to involve them in the policy-making process at an early stage, and thus benefit from their experience and increase their commitment in and ownership of the process. The Commission proposes to integrate the “Think Small First Principle” into all policies both at the national and EU level to make them truly SME friendly. Better regulation is another key area for SMEs. The Commission is committed to simplifying regulations and to ensuring that the forthcoming legislation does not inhibit SMEs’ growth and innovation potential. To reduce the information gap between the European institutions and businesses, the Communication calls for a more regular and structured dialogue with SME stakeholders. According to the EC Press Release Reference: IP/05/1404 Commission Vice-President Günter Verheugen said: “Small and medium-sized enterprises play a key role in delivering more growth and jobs in the European Union. We must help them by creating the right conditions to thrive and by promoting a culture so that more people start up their own companies.” European SMEs are key to deliver stronger growth and more and better jobs – the two main objectives of the Lisbon partnership for Growth and Jobs. They make up a large part of Europe’s economy: there are some 23 million SMEs in the EU, providing around 75 million jobs and accounting for 99% of all enterprises. They are also a key part of European industry, as they contribute up to 80% of employment in some industrial sectors, such as textiles, construction or furniture. The Commission proposes specific actions in five areas: • Promoting entrepreneurship and skills • Improving SMEs’ access to markets • Cutting red tape • Improving SMEs’ growth potential • Strengthening dialogue and consultation with SME stakeholders The Commission proposes specific actions in five areas: 1. Promoting entrepreneurship and skills, including actions to ensure successful transfer of businesses, to facilitate adaptation of SME workforce to labour market needs and to promote entrepreneurial skills. To narrow the skills gap, all partners, and particularly enterprises, should be involved in the development and definition of training courses and methodologies. The Commission invites Member States to review their educational and training policies to make them more responsive to current and anticipated changes in the labour market. 2. Improving SMEs’ access to markets, including actions to improve SMEs’ access to public procurement and standardisation. The Commission intends to propose new initiatives to encourage SME participation in business cooperation and matchmaking events, especially in border regions. 61 3. Cutting red tape, including the integration of ‘Think Small First’ principle in all EU policies and the simplification of rules and legislation, for example related to State aids or SMEs’ participation in EU programmes. The Commission will examine the SME dimension when assessing the impact of EU legislation and ensure that SMEs’ needs are properly and systematically taken into account. This will include longer transition periods, reduced fees, simplified reporting requirements or even exemptions from EU rules. 4. Improving SMEs’ growth potential, including actions to strengthen the innovation and research capacity of SMEs and increasing the existing financial support to SMEs. The Commission will undertake further measures to encourage and facilitate SME participation in th the 7 Framework Programme for Research and to deliver specific support to SMEs in the field of intellectual property rights (IPR), through the EU business support networks. 5. Strengthening dialogue and consultation with SME stakeholders, including actions to create SME panels to get views from SMEs in specific areas of policy making and to launch a “European Enterprise Awards” to promote entrepreneurship and to facilitate the exchange of best practices at regional level. The Commission plans to create a quick and easy-to-use consultation mechanism (“SME panel”) via the Euro Info Centre network to get views from SMEs in specific areas of policy making. More information http://europa.eu.int/comm/enterprise/entrepreneurship/financing/surveys.htm The full text of the new SME policy is available at: http://europa.eu.int/comm/enterprise/entrepreneurship/index_en.htm 62 INSTITUTIONAL PROFILE INSTITUTION OF HIGHER EDUCATION – BUSINESS COLLEGE “VERN” File: www.vern.hr Business College VERN' is the college of entrepreneurship established in 2000 on the principles set by the Bologna Declaration . It is the only college in Croatia that has been, from its very beginning, structured to fit the future academic system which will be equal in all parts of EU. Educational mission of Business College VERN is to affirm and develop entrepreneurial ways of thinking and acting. Therefore, the curricula at Business College VERN' are shaped and adapted to fit intrapreneurial discourse, which is reflected in every single study programme we offer. THERE ARE THREE BASIC PRINCIPLES DEFINING STUDYING AT VERN' 1. Technical training applicable in professional work 2. Motivating and interactive methods of studying- TEAMWORK 3. The most modern equipment The purpose of our existence The mission of the Entrepreneurship Business College VERN' is to produce highly educated professionals who will meet the challenges of the modern business world and consequently to upgrade the quality of the Croatian higher entrepreneurship education. The Entrepreneurship Business College in future Our vision is to become a prestigious higher school with a recognizable image of a market oriented organization offering a high quality service. Our ways of getting better and better In order to accomplish our vision, mission and short and long term goals the Entrepreneurship Business College has chosen a strategy of the following, clearly defined guidelines: • creation and improvement of programmes that will, by their content and methods, meet the requirements of the labour market looking for modern, educated business professionals, • establishing of higher levels of studying (graduate studies), • opening of branches in the region, • constant education and training of the already employed, • continuous modernization of the work organization and work equipment, • synchronization of the spatial capacity with the identified needs of the labour market and a planned number of students, • constant improvement of other work conditions. UNIVERSITY OF PÉCS http://english.pte.hu/htmls/index.php The modern University of Pécs, founded on January 1, 2000 through the merger of Janus Pannonius University, the Medical University of Pécs and the Illyés Gyula Teacher Training College of Szekszárd, is committed to endorsing and popularizing the idea of lifelong education. The primary goal is to ensure high-level teaching and research, but ample emphasis is also given to programs unique in Hungarian higher education (such as The Dancing University or The Open University) that provide an opportunity to our teachers, staff, present and former students to 63 develop their knowledge and education extensively as well as strengthen their ties to the university. With its nine faculties – Faculty of Law, Medical School, Faculty of Humanities, Faculty of Health Sciences, Illyés Gyula Faculty of Education, Faculty of Business and Economics, Pollack Mihály Faculty of Engineering, Faculty of Sciences, Faculty of Music and Visual Arts – the university offers a broad range of training and degree programs that are aimed at training well-qualified experts with a wide intellectual horizon, ranging from higher educational professional training programs – with special regard to a high-level training of physicians – to undergraduate, postgraduate and doctoral degree programs. University of Pécs Faculty of Business and Economics The training of students of economics began in 1970, when the Pécs Branch of Karl Marx University of Economics in Budapest was established. Since 1975, the Faculty of Business and Economics has been a part of the University of Pécs. The Pécs Branch was founded with the view of creating a regional centre for the training of economists, offering courses developed specifically to meet the requirements of the region. The founders did a really good job: in the three decades that have elapsed since the foundation – which is quite a short time in the life of a university – the Faculty became an acknowledged centre for the training of economists. From the very beginning, the Faculty focused on various aspects of micro-economics (business administration, management, marketing, finances, accountancy, corporate strategy) both in the training and scientific research. By the 1980s the regional character had gradually disappeared and the Faculty developed into the second most important training centre for businessmen and economists. The Faculty of Business and Economics at Pécs University is not only an educational institution, it is also a fruitful community created by the interrelationships among students, lecturers (both Hungarian and foreign), researchers, corporate specialists and also former students of the Faculty who have either taken a job or are self-employed in the region. It is at the same time a gatheringplace for practitioners of the economic sciences and a regional knowledge centre. The Faculty offers a wide range of programmes ranging from basic education via supplementary, specialised further education to doctoral programmes, giving students the capacity to use the knowledge acquired with us to answer today’s challenges in the best possible way. We are offering the following education programmes in English • • • BA (Hons) in Business Administration As a result of the cooperation between the University of Pécs, Faculty of Business and Economics and the Middlesex University Business School, the Business Degree Programmes in English started in 1996. Thank to the long, fruitful educational and scientific collaboration the programmes were validated by both institution. This collaboration is recognisable in our special educational system which matches with the requirements of both the Hungarian and British higher education systems. Master of Science in Applied Management (MSc) Programme has been designed to help you develop skills and competencies to meet requirements for business administration and management into the new Millennium. Completing the programme successfully will help to attain those skills and competencies. The aim of the Programme is to prepare participants for the challenges of business management in a global, competitive and everchanging business environment. The International Ph.D. Program is designed for professionals in business or public administration with several years of experience in their field, but not necessarily in 64 research or education. Developed on the basis of the Hungarian Ph.D. program of the Doctoral School of Business Administration, it is as such nationally accredited. We pride ourselves on the fact that the International Ph.D. Program combines the advantages of contact-based and distance-based education drawing on the contribution of recognized national and international experts. The Faculty of Business and Economics has built up strong international relations with foreign partner institutions all around the world. A significant number of the Faculty's teaching and administrative staff has had the opportunity to conduct research and upgrade their knowledge at renowned universities abroad. These opportunities have been made possible by Phare, KnowHow Fund, Fulbright Fund and ERASMUS projects. Exchange Programmes, such as Erasmus, allow all students interested to spend a term or an academic year at a foreign institution, learn the language of the country and gain experience in a new environment. These exchange programmes bring in students from various European countries (France, Germany, Spain, Italy, Sweden, Norway, Poland, Holland, Greece, Finland - to name but a few). Dr. László Szerb Associate Professor EUROPEAN COUNCIL OF SMALL FOR SMALL BUSINESS AND ENTREPRENEURSHIP The European Council for Small Business and Entrepreneurship (ECSB) is a non-profit organization whose main objective is to advance the understanding of entrepreneurship and to improve the competitiveness of SMEs in Europe. The ECSB is an affiliation to the ICSB (International Council for Small Business). ECSB facilitates the creation and distribution of new knowledge through research, education and the open exchange of ideas between professions and across national and cultural boarders. ECSB organises for its members high-quality conferences, such as the RENT conference in cooperation with EIASM (The European Institute for Advanced Studies in Management), in order to facilitate and enhance the exchange of knowledge within the ECSB membership. The exchange and creation of knowledge is also possible at the internet platform (www.ecsb.org). The network of ECSB´s members covers nearly the whole Europe geographically; it has over 500 members from over 30 countries. Through its affiliation to the International Council for Small Business since 1989, the European network is also connected to the global academic and professional small business community. ECSB - European Council for Small Business and Entrepreneurship SECRETARIAT Executive secretary Kaisu Paasio Small Business Institute Turku School of Economics and Business Administration Rehtorinpellonkatu 3 FIN-20500 TURKU, FINLAND Tel. +358 2 4814 511, Fax.+358 2 4814 393 e-mail: info@ecsb.org internet: www.ecsb.org 65 SME UNION http://www.sme-union.org/subject/index.php?LAN=en&ID=1 SME UNION (Small and Medium Enterpreneurs Union) of the EPP (European People´s Party) is the network of pro-business Christian-Democrat, Conservative and Liberal politicians and political organizations. Its main objective is to help in shaping EU policy in a more SME friendly way. The importance of the work of the SME UNION can be seen in the fact that SMEs are considered as the key for sustainable jobs, growth and prosperity. The work of the SME UNION is based on the principle that it is standing for the democratic state based on the rule of a free economic and social order. In 1996 the SME UNION was set up as economic and independent business association by delegates of the business associations linked to the member parties of the EPP. Its top priority is to reform the legal framework for SMEs all over Europe and to promote and support the interests of small and medium-sized enterprises which - due to their willingness to take risks and responsibility - are the engine of the European economy thereby contributing to eradicating unemployment and promoting economic growth in Europe. The SME UNION believes in the principles of the EPP - freedom and responsibility - and in fostering the environment and social conditions in Europe by market mechanisms. It stands for the promotion of free enterprise, the implementation of the principle of subsidiarity, the limitation of bureaucratic obstacles to economic development and the protection of free competition based on efficiency. As mission the SME UNION supports and promotes the interests of Small and Medium sized businesses in their dealings with the policy institutions of the European Union. On the basis of clear analysis of the situation, the challenges and the problems of SMEs, the SME UNION presents proposals for solutions that can improve the business environment for SMEs. The SME circle ensures the cooperation between the group of the EPP/ED in the European Parliament and the SME UNION of the EPP and advises the EPP/ED group on relevant matters of economic policy. SME Central: SME Central is a working group that aims to strengthen European small and medium-sized enterprises helping to create a more competitive environment in Central Europe. SME Central consists of the Central European SME Union member organizations and it aims to strengthen European small and medium-sized enterprises helping to create a more competitive environment in Central Europe. The objectives of the SME Central are • • • to strengthen the competitive position in the European Union of smalland medium sized enterprises to help creating a more competitive environment in Central Europe to convey our own experiences to the new candidate states joining the European Union György BISZTRAY, President of the SME Central CALLS – EVENTS – NEWS CONFERENCE ON THE EUROPEAN CHARTER FOR SMALL ENTERPRISES 13-14 June 2006, Vienna (Austria) In the course of implementing the “European Charter for Small Enterprises” which came into force in 2000, the European Commission has been holding annual implementation conferences. On 13 and 14 June 2006, in the context of the Austrian Presidency, the Conference on the European Charter for Small Enterprises - financed and organised jointly by the European Commission - will be held in the Hofburg in Vienna. Around 350 participants are expected to attend. 66 The aim of the conference is to exchange ideas concerning established practices for promoting the competitiveness of European small enterprises. For this reason, the conference will include six workshops for the presentation of best practices in the following areas: better utilisation of the internal market, in particular regarding better access to information on laws and regulations; first-class support, especially in relation to the establishment and transfer of enterprises; the Euro-Mediterranean experiences; successful models for e-commerce, particularly concerning support for SMEs; one-man enterprises, particularly concerning possibilities for developing business potential; other lines of action of the European Charter for Small Enterprises. As a prelude to the event, participants will be given an opportunity to engage in informal exchanges of experiences in the Kursalon Hübner on the evening of 12 June 2006. A Gala dinner in the Albertina is planned for 13 June 2006. Contact: Maria Christine Grubmann Tel: (+43 1) 71100-5823 Maria.Grubmann@bmwa.gv.at http://europa.eu.int/comm/enterprise/enterprise_policy/charter/conf2006/index_en.htm THE 51st ICSB WORLD CONFERENCE Melbourne, Australia, 18-21 June 2006 The International Council for Small Business (ICSB) was established to encourage and support people and organisations around the globe to seek, develop and share new and innovative small and medium enterprise ideas, research outcomes and teaching/facilitation methodologies in changing and volatile times. ICSB2006 will make this the emphasis with a particular focus on creativity. The Small Enterprise Association of Australia and New Zealand (SEAANZ) is the Australasian affiliate of the ICSB and host of the ICSB2006 conference. SEAANZ is an association of researchers and educators working in the small and medium enterprise (SME) academic environment, SME policy-makers and enterprise facilitators and advisers. The association has been active for over 15 years in the Australasian SME sector and provides a unique service to the Australian and New Zealand business community. Conference themes: The following topics and themes have been established as a framework for encouraging potential conference attendees to begin the process of devising papers and symposiums/workshops. It will also enable the conference planners to ensure that there is a balanced and interesting program for all attendees. Research and Policy: • Entrepreneurial finance • Indigenous, ethnic and minority entrepreneurship • Growth, exit &/or development strategies • E-commerce and technology • Family business • Franchising • Globalisation & trade • Public policy issues related to entrepreneurship and/or small business • Research methodologies and techniques • Rural and regional entrepreneurship 67 • • • • • • Small business and/or entrepreneurship in economic development (including micro credit, community and social entrepreneurship) Social entrepreneurship Venture capital and angel investment Women in entrepreneurship Youth entrepreneurship Corporate entrepreneurship Entrepreneurship educators and practitioners: • Business incubators – new directions, strategies and networks • Consulting and advising SMEs • Developing entrepreneurial behaviours in industry sectors • Case studies: Entrepreneurship and small business in action • Entrepreneurship education in schools • Entrepreneurship in undergraduate programs • Ethics in entrepreneurship • Innovative entrepreneurial education • Using technology in teaching entrepreneurship See further at http://www.icsb2006.org/index.htm GLOBAL CONFERENCE ON EMERGENT BUSINESS PHENOMENA IN THE DIGITAL ECONOMY ICEB + eBRF 2006 28 November 28 – 2 December 2006 Tampere Hall - Tampere, Finland In 2006 two conferences will come together to create a diverse platform for business researchers all over the worlds. International Conference on Electronic Business is an Asian based conference, which has been organized in Hong Kong (twice), Taipei, Singapore and Beijing. Behind the ICEB conference is an organization called The International Consortium for Electronic Business (ICEB), which was founded in 2001. eBRF is a border-crossing, innovative research conference that has been organized in Tampere, Finland since 2001. The conference has brought together researchers, practitioners, and policy makers that share a common interest on business in the knowledge society. Yearly eBRF has gathered over 200 participants to Tampere and established itself as a leading business conference in Finland. Further information see at http://www.ebrf.fi/ BUDAPEST ROUND TABLE 2006 Corvinus University Budapest 3 or 10 November 2006 HOW TO BECOME SUCCESSFUL AND SOCIALLY RESPONSIBLE ENTREPRENEUR? "LEARN FROM EXPERIENCE." BACKGROUND: The economies of Central- and Eastern European countries (CEECs) have heavily suffered for more that 40 years of operating under tight state control within the framework of a centrallyplanned economy. Today, many of these countries are members of the European Union, others will become in a foreseeable future, or on the way to develop close economic links to it. SME friendly policies become more important in the enlarged Europe to unlocking the EU’s potential. Under the new economic circumstances, the CEECs need dynamic entrepreneurs, in particular young ones at the beginning of their carriers. There is a need to promote greater 68 awareness of a carrier as an entrepreneur and foster entrepreneurial mindsets including the promotion of responsible entrepreneurial practice. ORGANISERS: Hungarian Section of European Academy of Sciences and Arts, Hungarian National Commission for UNESCO, Corvinus University Budapest, ERENET Network, Budapest Infopark... PARTICIPANTS: max. 20 persons: - 10 high school/university students: 3 Hungarians + 7 non-Hungarians - 10 successful entrepreneurs: 3 Hungarians + 7 non-Hungarians MAIN POINTS OF DISCUSSION: 1. TO BE A SUCCESSFUL ENTREPRENEUR: What kind of personal qualities do you consider as important being a successful entrepreneur? How do you unitize emerging opportunities? What are the critical success factors (e.g. “think global/act local”, “doing the right thing”, business planning, utilization of quality and environment management standards, networking, co-operation, etc). As a busy entrepreneurs how to ensure the long-term competitiveness and continuity of your business? 2. RESPONSIBLE ENTREPRENEURSHIP To be a socially responsible entrepreneur you have to ensure the economic success of your business by the inclusion of social and environmental considerations - like energy efficiency and pollution prevention, waste minimanisation and recycling -, into your enterprise’s operation. In other worlds, you have to satisfy for customer’s demands, while also managing the expectation of other peoples, such as employees, suppliers, the public authorities, the community around you. And this can bring direct benefit to your business and secure your long-term sustainability. How do you do this? 3. YOUNG, CREATIVE, INNOVATIVE ENTREPRENEUR Innovation as a substantive appearance of entrepreneurship, creativity and innovation in the enterprises, different types of innovation (product innovation, organizational innovation, social innovation etc.) Par excellence innovative areas (informatics, communication engineering, biotechnology etc.). Spin off enterprises as special links between innovative entrepreneurs and educational institutes, creativity developer and creativity restricting educational didactical methods, enterprise development as innovative education developer method in higher education. 4. LESSONS TO LEARN FROM SUCCESSFUL YOUNG AND SOCIALLY RESPONSIBLE ENTREPRENEURS: - Success stories on what is the message for future, entrepreneurs; - What is the message for future entrepreneurs? - How could be creative an entrepreneur and an enterprise? 69 ICELM-2 INTERNATIONAL CONFERENCE ON ECONOMICS, LAW AND MANAGEMENT Hotel Continental ∗∗∗ Motel Europa ∗∗∗∗ Hotel Week-end ∗∗ Hotel Tineretului ∗∗ Diakonia House Options 45 € 45€ 15 € 28 € 20 € 38 €- - 22 € - Double room 33 € Single room - 33 € - 60 € 96 € Apartment Requests for reservation should be included in the submission form. ACCOMMODATION Mureş, Cod fiscal 4322831, marking ICELM – 2. the main author). 60 € one participant – one paper 65 € one participant – two papers 20 € - accompanying person Details about the payment for the registration and hotel accommodation can be obtained at contact address. ! Papers submitted after the deadline cannot be published ! The fees must be paid in the “Petru Maior” University of Tîrgu-Mureş account, RO33TREZ476504601X000426, Trezoreria Tîrgu- PARTICIPATION FEE (includes the conference proceedings, welcome cocktail, dinner and banquet for March, 27, 2006 submission form and the abstract of the paper/papers (about 700 words) should be sent to the contact address by e-mail April, 3, 2006 confirmation of registration April, 30, 2006 the payment for the registration and accommodation full paper / papers submission DEADLINES Web: http://icelm2.upm.ro The languages of the conference are English and French. Each participant can present no more than 2 papers, as main or co-author which will be published in the volume of ICELM-2 Proceeding. Research papers should be original, unpublished elsewhere and no longer than 5000 words in length. Detailed information on format and regarding electronic submission will be available on the conference Web site. Instructions for Authors The paper will be written in Microsoft WORD. Page Format: Paper size A4, margins left, right, top and bottom - 20 mm, (Justified), default font TNR 14 pt, line spacing 1,5; Paper Title: on 50 mm, upper case, TNR 16 pt, bold, align center; List of Authors: Second line under title, TNR 14 pt, bold (including name, scientific title and institution); Abstract: include a 200 word abstract, second line under authors, TNR, 14 pt, italics; Drawings and charts: will be numbered and inserted in the text; Bibliography: The references, ordered alphabetically, should be at the end of the paper. Papers shall be e-mailed to your track chair’s e-mail address. Also bring an electronic copy with you. ICELM-2 is organized in partnership with: • Faculty of Law and Political Sciences, Versailles Saint-Quentin en Yvelines University, France; topic: “International Partnership and Teritorial Development” • Metropolitan State College of Denver, USA, „Information and Decision Systems in a Rapidly Evolving World” GENERAL INFORMATION Honorary President SCIENTIFIC COMMITTEE ROMANIA Tîrgu – Mureş May 31st - June 3rd, 2006 Call for Abstracts First announcement INTERNATIONAL CONFERENCE ON ECONOMICS, LAW AND MANAGEMENT FACULTY OF ECONOMICS, LAW AND ADMINISTRATIVE SCIENCES CONFERENCE TOPICS, TRACK CHAIRS and CONTACT INFORMATION Ioan ABRUDAN (Cluj-Napoca-Romania) Bernardo Diniz de AYALA (Lisabona - Portugal) BAKACSI Gyula (Budapesta-Hungary) Georges BALAYE (Paris-France) Ringolds BALODIS (Riga - Latvia) Christophe BREDILLET (Lille-France) Gabriela BODEA (Cluj-Napoca- Romania) Paul BRAN (Bucureşti- Romania) Silviu CERNA (Timişoara-Romania) Lazăr CISTELECAN (Tîrgu-Mureş - Romania) Ludmila COBZARI (Chişinău-Moldavia) Alexandre FAYAD (Beirut-Lebanon) Nicolae GHIŞOIU (Cluj-Napoca-Romania) Anthony GORDON (Belfast-Ireland) GÖRÖG Mihály (Budapesta- Hungary) JENEI György (Budapesta- Hungary) Viorel LEFTER (Bucureşti – Romania) Thierry LETERRE (Versailles-St Quentin- France) Ernest LUPAN (Cluj-Napoca-Romania) Stéphane MANSON (Versailles-St Quentin- France) Liviu MASALAR (Liege-Belgium) Dumitru MATIŞ (Cluj-Napoca-Romania) Ioan MĂRGINEAN (Bucureşti-Romania) Gheorghe MIHAI (Timişoara-Romania) Ioan MIHUŢ (Cluj-Napoca-Romania) Mircea Ştefan MINEA (Cluj-Napoca - Romania) Radu MOTICA (Timişoara-Romania) Ioan NISTOR (Cluj-Napoca-Romania) José ESTEVE PARDO (Barcelona-Spain) Viorel PAŞCA (Timişoara-Romania) Rodica Narcisa PETRESCU (Cluj-Napoca – Romania) POÓK Laszló (Denver-USA) Corneliu POPEŢI (Timişoara-Romania) Raminta PUCETAITE (Vilnius- Lituania) RAPCSÁK Tamás (Budapesta- Hungary) Ion Gh. ROŞCA (Bucureşti-Romania) Traian ROTARIU (Cluj-Napoca-Romania) Costache RUSU (Iaşi-Romania) Silviu SBURLAN (Constanţa-Romania) SZABÓ Antal (Budapesta- Hungary) Ilie ŞIMON (Bucureşti-Romania) Neculai TABĂRĂ (Iaşi-Romania) Daniel THIEL (Nantes-France) Ioan VIDA (Bucureşti - Romania) Spyridon VLACHOPOULOS (Atena – Greece) ZOLTAYNÉ Paprika Zita (Budapesta- Hungary) Tudor DRĂGANU Honorary Member of the Romanian Academy President Liviu MARIAN Rector of „Petru Maior” University photographic exhibition of artist Mirela Pribac, Bachelor of Fine Art, Cornell University, USA ∗ Thursday, June 1, 2006, 1830 - Opening reception of SATURDAY, JUNE 3, 2006 Post Conference Tours. FRIDAY, JUNE 2, 2006 1000-1300 Scientific Sessions 1300-1500 Lunch break 1500-1600 Cloture Ceremony 1900-2200 Banquet, The Mirror Hall of the Palace of Culture 900 Opening Ceremony 1030-1300 Scientific Sessions 1330-1500 Lunch break 1500-1830 Scientific Sessions 2000-2200 Galla Dinner 1, 2006 THURSDAY, JUNE 1900- 2200 Cocktail Continental Hotel WEDNESDAY, MAY 31, 2006 Registration: „Continental” Hotel CONFERENCE PROGRAMME 4. SOCIAL and POLITICAL SCIENCES Maria Georgescu d4icelm2@orizont.net +40-745-818555 5. INFORMATION and DECISION SYSTEMS; MATHEMATICAL MODELLING and STATISTICS Călin Comes d5icelm2@orizont.net +40-745-399337 3. MANAGEMENT and MARKETING Flavia Ardelean d3icelm2@orizont.net +40-745-540507 2.ECONOMICS (Economics, Accounting, Finance, Banking) Emilia Herman, Irina Păşcan d2icelm2@orizont.net +40-745-258529; +40-744-363857 1.LAW and PUBLIC ADMINISTRATION Daniela Valea, Brînduşa Marian d1icelm2@orizont.net +40-742-993395; +40-727-842222 Universitatea „Petru Maior” Facultatea de Ştiinţe Economice, Administrative ICELM - 2 str. Livezeni, nr. 69, Tîrgu-Mureş 540560 ROMANIA Telephone/Fax +40-265-255554 Juridice Andrei MĂRGINEAN Brînduşa MARIAN Nicoleta MEDREA Ramona NEAG Irina PĂŞCAN Adrian PETELEAN Ioan SABĂU-POP Olimpiu SABĂU-POP Daniel ŞTEFAN Daniela VALEA Alexandra VIŢELAR Correspondence Address Flavia ARDELEAN Rodica CISTELECAN Dragoş CHILEA Liviu CIUCAN RUSU Călin COMES Lia Codrina CONŢIU Corina DÂMBEAN Lucreţia DOGARU Maria-Ana GEORGESCU Emilia HERMAN Raul Felix HODOŞ Members Jean-Luc PENOT (France) POÓK Laszló (USA) Secretary Daniela ŞTEFĂNESCU Co-presidents Zsuzsanna SZABÓ Lucian CHIRIAC ORGANIZING COMMITTEE şi 71