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This discussion paper is concerned with entrepreneurship and the development of small and
mediumsized enterprises (SME) in Central and Eastern European (CEE) countries, where
the transition from a socialist command economy towards a marketbased system opened up
enormous possibilities for private entrepreneurs. Since the early 1990s, private entrepreneurship
gained ground, and the same applies to research on new and small enterprises [e.g., Aidis (2003,
2006), Aidis et al. (2007), Djankov et al. (2005), Dombrovsky and Uebele (2005), Lageman (1995),
McIntyre and Dallago (2003), OECD (1996), Pfirrmann and Walter (2002), Sauka and Welter (2007),
Smallbone (1997), Smallbone and Welter (2001a, 2001b, 2003, 2006a, 2006b), Welter (1996, 1997,
2005), Welter and Smallbone (2003), Welter et al. (2004, 2006)], although some authors consider
entrepreneurship research in CEE still to be a very young field [Meyer and Peng (2005)2]. In this
paper I will discuss some facets of entrepreneurship in a post Soviet (or transition) context, outline
important factors influencing entrepreneurship and small business development and review some
of the policy issues involved in fostering entrepreneurship development. The paper draws on the
results of several research projects I have undertaken in CEEs together with David Smallbone from
Kingston University in the UK and colleagues from various countries.
Table of Contents
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Facets of Entrepreneurship in a Post Soviet Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Is Entrepreneurship Unproductive? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 An Ethical Dilemma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Proprietors or Entrepreneurs? The Development Potential of Entrepreneurship . . . . . . 9
3. The Embeddedness of Entrepreneurship in a Post Soviet Context . . . . . . . . . . . . . . . . . . . 10
3.1 The Historical Context for Contemporary Entrepreneurship Development . . . . . . . . . 11
3.2 A Soviet Legacy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Challenges for Entrepreneurship and Small Business Development
in a Post Soviet Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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