Entrepreneurship, Innovation and Small Firms: A Case for Technology Centres and Science Parks in the Transition Process?

Eastern reform countries formerly under the influence of the Soviet Union apparently now have all concluded the first phase of the transition process and have entered a second stage (Stern 1998; EBRD 1998). In the first phase priority was laid on macroeconomic stabilisation and on privatisation of state enterprises. Depending on initial conditions as well as design and persistence of the chosen transition policy, there are large differences between countries with regard to success. Generally, the further East one looks, the slower the transition process and the larger the transition problems. Especially, the Czech Republic, Hungary and Poland seem to be quite advanced, while Russia and other countries of the CIS still show poor performance. It is now becoming clear that further progress, even in the macroeconomic field, needs support from more microeconomic measures. All countries, although to a different degree, lack appropriate institutional environments to provide proper incentives for market-oriented economic activity. In particular, there is now widespread disillusionment concerning the results of privatisation, which left serious problems of enterprises restructuring unsolved and created some fairly new problems too. Emphasis on privatisation of existing state-owned enterprises has often diverted attention away from establishing of new firms, which is at least as important.