ppt crebus 2012 balaceanu apostol

The Concept of The Concept of Entrepeneureship through Entrepeneureship through

Human Development Human Development ParadigmParadigm

Senior Lecturer Cristina BalaceanuSenior Lecturer Cristina BalaceanuLecturer Diana ApostolLecturer Diana Apostol

UCDC, BucharestUCDC, Bucharest

SummarySummary • In essence, the goal of any society is In essence, the goal of any society is

that of developing on the line of a that of developing on the line of a superior capitalization of resources, of superior capitalization of resources, of covering life necessities and of covering life necessities and of satisfying the beatitude state of spirit.satisfying the beatitude state of spirit.

• Two instruments:Two instruments:– Entrepreneurship as a tool for human and Entrepreneurship as a tool for human and

economic development;economic development;– Human development as a tool to increase Human development as a tool to increase

the quality of life and to stimulate the the quality of life and to stimulate the entrepreneurshipentrepreneurship

EntrepreneurshipEntrepreneurship • By the entrepreneurship:By the entrepreneurship:

– The development of economy through The development of economy through increasing revenues (entrepreneurs, increasing revenues (entrepreneurs, society in general);society in general);

– Stimulates the initiative and creativity Stimulates the initiative and creativity (innovation);(innovation);

– Increase of life quality via improving the Increase of life quality via improving the quality of competing products;quality of competing products;

– Affect the institutions management by Affect the institutions management by the direction of efficiency, requires the direction of efficiency, requires adequateadequate economic and fiscal policy.economic and fiscal policy.

EntrepreneurshipEntrepreneurship• What does support / not support the What does support / not support the

entrepreneur?entrepreneur?– The un / sustainable taxationThe un / sustainable taxation: taxation : taxation

optimum is reached where the tax rate increase optimum is reached where the tax rate increase does not affect the future budget revenues does not affect the future budget revenues (Laffer);(Laffer);• Overcoming the Laffer optimum point affects the Overcoming the Laffer optimum point affects the

investment and increases the underground economy:investment and increases the underground economy:– In 2011, the tax rate in Romania was 44.4% of In 2011, the tax rate in Romania was 44.4% of

income (World Bank, 2012), the lowest level since income (World Bank, 2012), the lowest level since 2006;2006;

– The tax rate correlated with the large number of The tax rate correlated with the large number of taxes (113) discourages entrepreneurial initiativetaxes (113) discourages entrepreneurial initiative

EntrepreneurshipEntrepreneurship

Fig.1: Total tax rate Fig.2: Fig.1: Total tax rate Fig.2: Tax payments Tax payments

(% of profit) in Romania (% of profit) in Romania (number) in Romania(number) in Romania


Fig.3: New businesses registered (number) in Fig.3: New businesses registered (number) in RomaniaRomania


– Commercial protectionism and Commercial protectionism and promoting the products with high promoting the products with high technological / innovative technological / innovative contribution, energy efficient, contribution, energy efficient, recyclable, etc.;recyclable, etc.;

– Financial and banking policies Financial and banking policies favorable to investment: no more favorable to investment: no more state funding, but economy is state funding, but economy is crucial.crucial.

Fig.4: Firms using banks to finance investment (% of firms) in Romania

Human DevelopmentHuman Development • As a complementary process to the As a complementary process to the

growth, and directly dependent on the growth, and directly dependent on the economic and social policies:economic and social policies:– Emphasizing the human dimension of public Emphasizing the human dimension of public

policy;policy;– Providing sufficient income to meet the basic Providing sufficient income to meet the basic

needs (reducing the disparities);needs (reducing the disparities);– Emphasizing the capabilities, competencies and Emphasizing the capabilities, competencies and

skills development in the socio-economic sphere;skills development in the socio-economic sphere;– Emphasizing on the decision decentralization Emphasizing on the decision decentralization

and the in / direct participation of the individual;and the in / direct participation of the individual; – Emphasizing on the democratic institutions in Emphasizing on the democratic institutions in

order to realize socio-economic stability.order to realize socio-economic stability.

Human DevelopmentHuman Development• The Pyramid of L.C. Thurow- The Pyramid of L.C. Thurow- the the

combined strategy for the growth of combined strategy for the growth of wealthwealth ::

Social organization

Undertaking initiative

Knowledge developing

Abilities

Resources

Tools

Wellness

Human DevelopmentHuman Development

• L.C. Thurow: L.C. Thurow: – The economic factors, the psychosocial The economic factors, the psychosocial

factors and the governance factors and factors and the governance factors and / or organization:/ or organization:- Required for the development process in - Required for the development process in primary form;primary form;

- Necessary for the wealth generation via - Necessary for the wealth generation via generation / accumulation of knowledge;generation / accumulation of knowledge;- Needed to organize and manage the - Needed to organize and manage the society to ensure stability and safetysociety to ensure stability and safety


•The state can support the human The state can support the human development through a system of development through a system of levers:levers:– Supporting a banking system of preferential Supporting a banking system of preferential

credit;credit;– Providing technical assistance and business Providing technical assistance and business

expertise to young entrepreneurs;expertise to young entrepreneurs;– Supporting the entrepreneurship Supporting the entrepreneurship

development through subsidies, selective development through subsidies, selective tax policies etc.; tax policies etc.;


– Redirecting the private initiative on those Redirecting the private initiative on those sectors of the economy where there are sectors of the economy where there are resources but they are underutilized;resources but they are underutilized;

– Encouraging the public-private Encouraging the public-private partnerships where the profitability rate partnerships where the profitability rate is low but the society benefit is is low but the society benefit is guaranteed;guaranteed;

– Professionalizing the education system: Professionalizing the education system: adapting the education to market adapting the education to market demandsdemands..

ConclusionConclusionEntrepreneurship and Human Entrepreneurship and Human

DevelopmentDevelopment • Two tools for superior capitalization of Two tools for superior capitalization of

resources, for basic needs coverage and resources, for basic needs coverage and for satisfying the state of bliss: for satisfying the state of bliss: – Entrepreneurship as a tool for economic and Entrepreneurship as a tool for economic and

human development: the entrepreneur who human development: the entrepreneur who contributes to increasing wealth;contributes to increasing wealth;

– Human development as a tool to increase Human development as a tool to increase quality of life and to stimulate quality of life and to stimulate entrepreneurship: public policies that entrepreneurship: public policies that contribute to increased wealth via human contribute to increased wealth via human development and / or entrepreneurshipdevelopment and / or entrepreneurship..