The Concept of Entrepeneureship through Human Development Paradigm Senior Lecturer Cristina Balaceanu Lecturer Diana Apostol UCDC, Bucharest
Summary• In essence, the goal of any society is that of developing on the line of a superior capitalization of resources, of covering life necessities and of satisfying the beatitude state of spirit.• Two instruments: – Entrepreneurship as a tool for human and economic development; – Human development as a tool to increase the quality of life and to stimulate the entrepreneurship
Entrepreneurship• By the entrepreneurship: – The development of economy through increasing revenues (entrepreneurs, society in general); – Stimulates the initiative and creativity (innovation); – Increase of life quality via improving the quality of competing products; – Affect the institutions management by the direction of efficiency, requires adequate economic and fiscal policy.
Entrepreneurship• What does support / not support the entrepreneur? – The un / sustainable taxation: taxation optimum is reached where the tax rate increase does not affect the future budget revenues (Laffer); • Overcoming the Laffer optimum point affects the investment and increases the underground economy: – In 2011, the tax rate in Romania was 44.4% of income (World Bank, 2012), the lowest level since 2006; – The tax rate correlated with the large number of taxes (113) discourages entrepreneurial initiative
Entrepreneurship Fig.1: Total tax rate Fig.2: Tax payments(% of profit) in Romania (number) in Romania
EntrepreneurshipFig.3: New businesses registered (number) in Romania
Entrepreneurship– Commercial protectionism and promoting the products with high technological / innovative contribution, energy efficient, recyclable, etc.;– Financial and banking policies favorable to investment: no more state funding, but economy is crucial.
Fig.4: Firms using banks to financeinvestment (% of firms) in Romania
Human Development• As a complementary process to the growth, and directly dependent on the economic and social policies: – Emphasizing the human dimension of public policy; – Providing sufficient income to meet the basic needs (reducing the disparities); – Emphasizing the capabilities, competencies and skills development in the socio-economic sphere; – Emphasizing on the decision decentralization and the in / direct participation of the individual; – Emphasizing on the democratic institutions in order to realize socio-economic stability.
Human Development• The Pyramid of L.C. Thurow- the combined strategy for the growth of wealth : Wellness Resources Tools Abilities Knowledge developing Undertaking initiative Social organization
Human Development• L.C. Thurow: – The economic factors, the psychosocial factors and the governance factors and / or organization: - Required for the development process in primary form; - Necessary for the wealth generation via generation / accumulation of knowledge; - Needed to organize and manage the society to ensure stability and safety
Human Development• The state can support the human development through a system of levers: – Supporting a banking system of preferential credit; – Providing technical assistance and business expertise to young entrepreneurs; – Supporting the entrepreneurship development through subsidies, selective tax policies etc.;
Human Development– Redirecting the private initiative on those sectors of the economy where there are resources but they are underutilized;– Encouraging the public-private partnerships where the profitability rate is low but the society benefit is guaranteed;– Professionalizing the education system: adapting the education to market demands.
Conclusion Entrepreneurship and Human Development• Two tools for superior capitalization of resources, for basic needs coverage and for satisfying the state of bliss: – Entrepreneurship as a tool for economic and human development: the entrepreneur who contributes to increasing wealth; – Human development as a tool to increase quality of life and to stimulate entrepreneurship: public policies that contribute to increased wealth via human development and / or entrepreneurship.