Doing Business in Europe

As the European Union (EU) has been shaken by various challenges such as the economic and immigration crises, Euroscepticism, Brexit, the raise of extremist parties, we consider timely a short overview on the political, social, and economic contexts that lead to the creation of the EU, and on its predecessors. The present chapter provides insights into the enlargements of the EU and it lays the foundations that lead to the current situation in the EU by shading light on the multi-layered causes and consequences of UK leaving the EU. Reflections are made on the clash of national and supranational entities and on political regimes and parties that dominate the EU stage as of the 2014 elections.

It is not easy to establish the precise moment when the concept of economic integration emerged in the sense that it was given after the start of the European integration process. Pelkmans define economic integration as a process of “elimination of economic frontiers between two or more economies” considering that “the fundamental significance of economic integration is the increase of actual or potential competition”. This chapter contains a few answers to some important questions such as: what is the substance of integration and what are the criteria underlying the decision of states to launch an integration process? What are the symptoms based on which one can decide whether the integration process functions properly or if it still is a desideratum? This chapter analyses the single internal market as an essential stage of the European integration process stressing the four freedoms of goods, services, capitals and human resources.

The process of economic integration at the European level began with the integration of the market of goods. Therefore, the EU’s trade policy was the first genuine common policy. Even if it is still the most important global trading actor, the EU cannot ignore the transformations taking place within the multilateral trading system. The current context is marked by tensions between multilateralism and regionalism. This raises numerous challenges to the resilience of the global trading system. The present investigation is based on the hypothesis that the trade policy is still a major tool used to address these challenges. This chapter provides an examination of EU’s trade policy emphasizing the actors involved, the challenges that the EU has to face, the tools that can be used and the specific responsibilities of the European integrationist group.

The European Cohesion Policy is the largest and most complex policy of the European Union. As it is a policy focused on reducing the intra-EU gaps in development, the Cohesion Policy is particularly relevant for less developed economies and regions, where it has a key contribution to stimulating economic competitiveness and accelerating growth, boosting and spreading the positive effects of the internal market. In this chapter we aim to introduce a theoretical foundation for public interventions on cohesion in the process of European integration, as well as to explain the system of Cohesion Policy coordination, regulation and implementation, to present critically its impact on the European economy and explain the way in which Structural and Investments Funds contribute to and may be used for business sector development in the European Union.

Competition is an essential element in the efficient functioning of markets. It brings important benefits to the consumer by encouraging companies to innovate, in order to provide consumers the best goods and services at the best possible price. In the European Union, this process should contribute to the national competitiveness and EU global competitiveness. Competition policy provides instruments to encourage and improve the competitive process, and to ensure consumers to enjoy the benefits of that process. These aims are achieved in practice through competition law and enforced by competition authorities. Companies should be stimulated to innovate but innovation could stimulate to exceed the limits of competition law. Appropriate information and prevention instruments at the national level could increase the corporate responsibility and promote competition culture inside the company.

The fiat money production and European Union’s monetary integration is considered to be a big leap in the integration process. The introduction of Euro and the centralization of fiat-money production by European Central Bank was considered to generate many benefits for Single Market, European citizens or business sector. Monetary integration and accession to Euro was linked to specific nominal convergence criteria and became compulsory for any new member. The history of Euro creation and adoption by majority of EU countries was not an easy one. The evolution of the Euro Zone after the introduction of a single currency was not merely positive. The introduction of the Euro was followed later by a significant enlargement, including Eastern European Countries (EEC), thus creating a European Union with “different speeds”. The current bailouts of various banks exposed to the Greek or the Cyprus crisis and the constant quantitative easing that significantly expanded the existing broad money (denominated in Euro) emphasize the fiat money features of this currency and the tragedy of commons surrounding this important project for European Union.

The economic and fiscal crisis which started in 2007–2008 triggered a significant change in the economic governance at the European Union level, particularly at the fiscal policy level. The paper analyses the evolution of the EU economic governance regulation, starting with the Maastricht Treaty from 1992, focusing on the more recent regulations outlined in the Treaty on Stability, Coordination and Governance (TSCG), particularly on the Fiscal Compact. The paper assesses the impact of the Fiscal Compact in Romania, pointing out the major consequences it has on the conduct of the fiscal policy and on the capacity to stabilize the business cycle. The study concludes that the space for maneuver of the fiscal policy in Romania will be much lower than in the past. Possible solutions to this constraint include the acceleration of the absorption of EU funds and the increase in public spending efficiency.

The European Energy Union represents a desiderate that is analysed in this chapter. The chapter starts with the evolution of the energy sector and the transition to a society, where the renewable energy sources will play a significant role for the future sustainability strategies on a global scale. This is a response to the objective of the long-term decarbonisation of the European energy system and to the new EU strategies 2020, 2030 and 2050. The chapter further introduces the role of energy security, energy efficiency and competitiveness within the concept of European Energy Union. Furthermore, the main statistical indicators are presented in the energy sector for the case of the European Union with explanation of certain correlations and their meaning for the evolution towards a sustainable development for EU member states.

This chapter focuses on the main steps towards a digital society at the level of the European Union’s countries. The first subchapter entitled “EU Digital Single Market Regulatory Frame” provides information about the Digital Single Market Strategy for Europe. The subchapter entitled “ICT Sector Influence on EU-28 Economic Growth” underlines the main influences of ICT sector (ICT demand and ICT supply, national corruption and lifelong learning as moderating variables) on GDP. The subchapter “EU-28 Digital Divide” focuses on the main elements that create digital gap between the countries of the European Union. Reading the full chapter, the students will understand the progress of EU-28 countries towards a digital society and economy, together with the effort of the European Commission to create proper regulatory frame. This study is a necessary tool for the students, focusing on the main elements that need to evolve in order to reach a single digital market.

Social entrepreneurship has become an indispensable part of the economy and it is now regarded as the driving engine of social economy. The present chapter presents a short introduction into social entrepreneurship (key definitions, concepts and theory) in order to create the setting for detailing the emergence and development of social entrepreneurship in various countries within the European Union. The next sections provide insights into the scale and legislative, social and economic framework regarding social entrepreneurship at the level of the European Union and across some of its member states in an attempt to establish whether social entrepreneurship is harmonised both from the standpoint of regulatory bodies and practitioners. Moving on, we get the readership familiarised with different initiatives of social entrepreneurship at academic level but also at the level of practitioners and regulatory bodies. The closing section presents one case study from a European country in order to improve the understanding of the idea and the implementation of social entrepreneurship in the European Union and to underline the potential challenges that might arise within this context.

The social enterprise model of business is gaining more and more in popularity since it provides opportunities to combine societal goals with commercial objectives for the benefit of both community and environment. The chapter presents the role played by European Union social enterprises in creating innovation, driving growth and reducing unemployment and poverty. It starts with refining the meanings of social enterprise to have a consistent definition which can be broadly used across all European countries. It further introduces the forms of organization of social enterprises and common fields where they operate together with associated target groups. Furthermore, a financial model for the social enterprise is introduced. The next part of the chapter discusses the ways in which social enterprises can contribute to the economy and what networks and mutual support mechanisms there are for social enterprises at European level. The chapter also brings into the discussion real case examples of social enterprises and their key success factors.

Family entrepreneurship as a form of economic activity plays a significant role in enlargement processes, integration and competitiveness improvement policies of the European Union. Family entities in their business strategies must take into account coping with the rules and practices of the European common market and internationalization as well as solve their specific problems related with family relationships and business and multi-generational perspective of functioning. The specific nature of family entrepreneurship requires an understanding of its nature and criteria for distinguishing these entities from other companies. In EU countries, family businesses have dominated the sector of small and medium-sized enterprises but also they play a significant role among large businesses. Family businesses create most jobs and nearly half of GDP, they are also a source of competition and the development of the market mechanism.

Tourism is one of the sectors that have been favoured by the creation of the EU and each new country that acceded helped the Union increase its competitiveness in tourism. According to official statistics, the number of international inbound tourists in the New Member States of the EU increased, on average, three times and in many cases this is partly a consequence of the European Union accession and market oriented policies. However, most of the tourists travelling in Europe choose Western destinations, as they are not aware of the New Member States’ tourism potential or have a wrong perception about these countries. Moreover, considerable research has been devoted to tourism in Western Europe, while rather less attention has been paid the New Member States. With these in mind, this chapter provides an examination of tourism in the New Member States of the European Union in the context of European integration.

Small-to-medium-sized enterprises (SMEs) are the backbone of national economies, in particular, for transition and emerging nations. SMEs contribute significantly to employment generation and innovation in countries that are in transition. However, SMEs face several social and technical challenges as they focus on technological innovation. SMEs face several barriers in technological innovation because of their limited financial, human, and technological resources. The purpose of this study was to investigate the key sociotechnical challenges that the SMEs of a transition economy face during EU integration and then to highlight any critical success factors for overcoming those challenges. Albania was the case study because they recently achieved candidate country status and are progressing toward EU integration. The central research question which drove the study was: What are the key social and technical challenges that SMEs in transition countries, such as Albania, face in the process of EU integration? We extended existing quantitative research by using qualitative data collection. We used in-depth interviews with 20 managers working in 10 medium-sized enterprises in Albania. After analyzing the data we identified five critical success factors for these EU transition-country SMEs. The first factor was the degree of investment made by the SME to introduce information and communication technology and software into the work processes. The second factor was the degree of investment made by the SME to acquire adequate resources to train their employees to use technology. The third factor was the perceived usefulness of the new technology by employees. The fourth characteristic was the level of employee self-efficacy (confidence) in using new technology. The final attribute was the openness attitude of employees towards using new technology. These results should generalize to other SMEs in Albania and to future EU transition countries. This study should be of interest to SMEs executives and organizational researchers in transition or developing countries, as well as to socio-economic practitioners in any industry or discipline.

The entrepreneurial activity has been recognized as a major source of jobs and economic development. Most people who start and grow their own businesses around the world are opportunity motivated. Others are motivated by the necessity to earn their living, when leaders of downsizing corporations replace them with technology and lay them off, in their attempt to increase efficiency. On the other hand, the entrepreneurial competence is crucial for corporate competitive advantage. Intrapreneurship is a key factor of innovation. The entrepreneurial society represents the hope of moving economy from stagnation to prosperity. This chapter aims to explain what such a society is, why it is so important to mankind, and how it can be created.

The past decades have witnessed the emergence and development of creative economies all over the world. As an impressive transformative force and one of the most rapidly growing economic sectors in today’s globalized economy, the creative economy promotes human development, social inclusion, and cultural diversity, stimulates entrepreneurship, attracts a high-quality workforce, and constitutes a pathway to economic success in terms of income generation, job creation and export earnings. The aims of our chapter are to define the concept of creative economy and to analyse the evolution of the Romanian creative economy in the period 2001–2014. In this respect, the methodology is based on the use of the geographic information system software and of the grey level co-occurrence matrix and fractal analysis. The creative economies have proved to be a veritable development vector, showing superior capacity for adapting to structural crises, and contributed to the economic integration of Romania in the EU.

The contemporary higher education environment is dominated by uncertainty. Institutions do not disappear overnight in this industry, but study programmes decline even dramatically. Presently, ranking methodologies and indicators contribute to different and dynamic positioning of institutions at national or international level, based on a particular approach or a field-based one. Building a proper development strategy is a complex task for academic leadership. The chapter reveals the need of integrating the information provided by rankings into the decisions and actions in higher education institutions to achieve sustainable development. The main objectives of the chapter are to understand the dynamism of the contemporary competitive environment in higher education sector, to clarify the differentiation strategy as a solution for being stable on the educational market, to identify the role of rankings in defining an effective strategy. The topic is relevant for the students, contributing to their knowledge of differentiation strategy in general, but also on its applications in higher education, in particular; they will not only become more aware of the large possibilities of differentiation strategy implementation, but also better decision-makers about educational providers.

This chapter contributes a critical perspective on EU policy and the challenges it imposes on SMEs in general and alternative businesses in particular. The recent financial and Euro crises have undermined public trust in the business world and the political system. Reorientation and/or innovation towards more viable business practice could come from—and inspires—many SMEs, particularly alternative ventures. However, lobbyists of the large corporation scenery exercise substantial influence undermining meaningful policy shifts at EU level. We illustrate resulting dilemmas in the areas of banking and agriculture.

The research, development and innovation programmes of the European Union play an important role for the development and competitiveness of the “old continent”. The aim of this paper is to briefly describe the policy that drives these programmes and give some insights on how they are assessed in order to measure the impact of public investment. In this work, we discuss the impacts on Gross Domestic Product and employment estimated by the European Commission for Framework Programme 7 with the results of a sample of 60 FP7 projects in three ICT domains. The exercise allows to raise some questions about the assumptions made by the EC experts and provides suggestions in order to implement a more effective system for monitoring the R&D investment.