Competitiveness and Economic Development in Europe

Prospects and Challenges

Sławomir I. Bukowski, Alina Hyz, Marzanna B. Lament, Sławomir I. Bukowski, Alina Hyz, Marzanna B. Lament

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000373288
• Edition: 1
• Topic: Economics
• Subtopic: Macroeconomics
• Index: Economics

The success of an economy to adapt quickly, flexibly, and effectively to the demands of the changing international economic environment can only be investigated using the achievements of other national economies or regions as a benchmark. This book analyzes the fundamental factors of competitiveness, which will, in turn, facilitate economic development and growth, in the new post-crisis environment. In the economic, social, legal, and technological environment that has emerged in recent years, as well as in the period after the recent financial crisis, it is critical to define, assess, and implement new pathways to competitiveness and economic development.

The book covers all aspects of competitiveness and economic growth, from financial intermediaries to tourism and the digital economy, and from regulation and corporate governance to exchange rate dynamics and monetary policy issues. It uses empirical findings from a variety of different countries with divergent economic structures and policies. It examines the new system of production, and the technological, commercial, financial and institutional environment, with the aim of recommending a proportional division of benefits and costs of economic growth. It offers a fresh, holistic, and flexible concept to underscore the new relationship between competitiveness and economic growth. Such an approach is needed, whereby competitiveness is no longer a zero-sum game between countries, but is achievable for all countries.

The book recommends future directions and offers policy solutions, and as such, will appeal to students, researchers, and policymakers, as well as those interested in the role of competitiveness in the operation of markets, productivity, and economic development, and how it might foster innovation and growth.

Part I

Determinants of competitiveness, economic growth, and development

1
The linkage between entrepreneurship, competitiveness, innovativeness, and economic growth – theoretical approach

Sławomir I. Bukowski and Alina Hyz

Introduction

During the last decade (XX century), governments all over the world have promoted entrepreneurship and enterprise culture as a means of improving and stimulating competitiveness and economic growth. This is particularly evident after the rise of supply-side economics, according to which a better climate for businesses results in job creation, demand increase, and a further boost of the economy. When entrepreneurship is seen as the engine of growth, the emphasis shifts toward the creation of an environment within which opportunities for entrepreneurial activities are created. As a result, governments tend to, directly and indirectly, subsidise entrepreneurial activity using tax reduction, soft loans, creating appropriate infrastructure, and other means. However, the question remains whether the effects of this policy outweigh its costs. Entrepreneurship is usually considered from a microeconomic point of view, as it focuses on products or enterprises. However, it is rarely examined from a macroeconomic point of view. Is this macroeconomic perspective important? Could it be assumed a priori that entrepreneurship is a source of economic growth? Lack of analysis of the impact of entrepreneurship on economic growth makes it impossible to rationalise economic policy. The aim of this chapter is to indicate the connections between entrepreneurship, competitiveness, innovativeness, and economic growth from a theoretical point of view. Another important matter is the determinants of entrepreneurship, competitiveness, and innovativeness development.

Conceptualisation of entrepreneurship

When investigating entrepreneurship, an important question is what we understand by “entrepreneurship.” The analysis of the complex social and economic phenomena of entrepreneurship with its interdisciplinary nature is not an easy task. Because of its variety of forms, it is not possible to analyse it sufficiently and satisfactorily using only one approach/method. The diversity and multidimensionality of the concept of entrepreneurship, the variety of definitions, the differences in scope and scale between the scholars’ work have led to a noticeable difference in the reported results of research, which are often contradictory in a fundamental way (Venkataraman 1997; Shane and Venkataraman 2000; Bruyat and Julien 2001; Busenitz et al. 2003). There are three main approaches to entrepreneurship in economic theories. Probably the most widely known approach is the one proposed by Schumpeter, who represents the so-called German school. Schumpeter (1934) defines entrepreneurship from the economics perspective and tries to explain the progress in the capitalistic system by using innovator entrepreneur’s destructive creation. He defined development as “a spontaneous and discontinuous change in the channels of flow, disturbance o...