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EXECUTIVE SUMMARY

No similar study has been conducted

so far regarding the Romanian

entrepreneurial ecosystem and the

momentum is given by the growing

interest for supporting social and

economic entrepreneurship at European

and national levels for the period 2014-2020

(International Expert Workshop Joint

Research Center-IPTS, July 2014). This studyinvestigates the degree to which Romania

oers an environment conducive to

entrepreneurship.

We address here the dening conditions

of entrepreneurship in Romania and

gather evidence and knowledge in order

to inform policy-makers on how to better

support the entrepreneurship

development. Specically, these kind of

inquiries are referred to, world wide, as

entrepreneurship ecosystem analysis,

because it emphasizes the relationships

between various factors which help or hold

back the economic development, likeleadership, human capital, or culture which

inuence entrepreneurship to the same

extent nance and markets do. Economic

macro-research ndings show that a solid

entrepreneurship ecosystem employs

trusted leadership, nancial and

non-nancial support to entrepreneurship,

prospective international markets,

capitalization of human resources and a

strong culture of entrepreneurship.

The interplays between all these domains

determine people to take risk of becoming

entrepreneurs and make regions and

countries competitive on the global markets.

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Selected Research Findings of the Relevant Country Level Data

Strengths: Weaknesses:

Human capital

Science, Technology, Engineeringand Mathematics (STEM) graduates

High school and college graduates rates.

Business community dissatisfaction withthe quality of education.Low capacity to attract and retain talentLow quality of management andentrepreneurial education

Finance

A large variety of institutions andorganizations oering access to nancialcapital: like banks, microcredit institutions,VC funds, business angels, private equity,crowdfunding, European funds.

Barriers to access nance capital like high

costs of debt nancing andcollateral guarantees. Small amount ofmoney invested by PE and VC. Unequaldistribution of funds across countryregions with the highest density inBucharest.

Support

High speed connectivity4G Mobile networks.

Low satisfaction towards utility servicesand transport servicesLow diversity in expertise outside theprivate sector, like NGO.

Culture

High social status associated withentrepreneurs. Large percentage of adultsintending to start a business (entrepreneurialintentions) Media attention given toentrepreneurship.

Tendency towards employment ratherthan self- employment (entrepreneurship)due to lack of opportunities to nance abusiness. Low proclivity for risk.

Small number of opportunity-drivenentrepreneurs.

Policy

New instruments to support SMEs, accordingto the principles included in the EuropeanSmall Business Act.

Low level of trust in public institutions.

Markets

Proportion of total sales that are exporteddirectly or indirectly.Foreign and domestic market size.

Data missing for diaspora networks andearly customers.

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The Romanian Entrepreneurial Ecosystem Index

Is the environment conducive to

entrepreneurship? Do entrepreneurs feel

inspired, tend to access consultancy,

mentor others and further invest or do they

rather grow isolated from the environment?

To answer these questions we rst created

an index based on ve pillars, and then we

conducted a survey among entrepreneurs.

The structure of our index was adapted

from a study performed by Endeavour, anon-prot organization with extensive

experience in promoting entrepreneurship

as a source of long-term growth, around

the world.

Endeavour methodology alllows us to grasp

the maturity of the ecosystem by assessing

to what extend the entrepreneurs are

inspired, nancially and non-nancially

supported, mentored by others and also to

what extend they trust and nd incentives

to invest in other businesses.

P1.Inspiration - source (if any) of

inspiration for starting own business

P2.Consultancy - source (if any) of

consultancy / advice for starting own

business

P3.Working Experience - years of work

experience before starting own business

P4.Mentorship - mentorship provided to

other potential entrepreneurs

P5.Investment - investment in newbusinesses.

The value of the Romanian Entrepreneurial

Ecosystem Index is 4.5 on a scale from 0 to

10, and has its maximum at 8. It suggests

that the Romanian Entrepreneurial

Ecosystem is very weakly developed.

The networks established among

entrepreneurs are not strong enough to

lead to a self-sustaining environment.

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Policy Recommendations

Targeted policies to encourage people with

more than 5 years of work experience to

enter entrepreneurship.

Our research ndings show that people

with more than 5 years of working

experience are more likely to have a long

term, growth-focused vision for their

business and the right scale-up mindset

(Isenberg, 2013), and to strengthen the

entrepreneurial ecosystem by investments.

Targeted policies to encourage well

educated people (holding a Masters degree

or higher) who have at least 5 years

working experience to engage in

entrepreneurship.

Through their presence, the ecosystem

would be infused with potential high

impact entrepreneurs, who have the ability

to activate and set in motion the

ecosystem to become self-sustaining.

Targeted policies to encourage more

women to enter earlier the ettntrepreneur-

ial ecosystem. Our research ndings show

that women tend to start a business in their

40s and 50s and that they highly impact the

entrepreneurship ecosystem. Comparative

to men, women entrepreneurs tend more

to encourage others to become

entrepreneurs and to invest in new

businesses.

Targeted policies for education in

entrepreneurship in academic

environments. Our research ndings show

that there is a tendency towards a

decreasing impact of the entrepreneurs

with academic working years experience

on the entrepreneurship ecosystem.

A clear distinction between economic and

social entrepreneurship is needed to be

made in the policy measures.Policy support for economic

entrepreneurship should focus on the

entrepreneurs needs for creating value,

voiced by the entrepreneurs themselves

and to not manifest excessive bureaucracy

which is inconsistent with entrepreneurship

spirit and its development.

Targeted policy for the development of

social entrepreneurshipshould start with

clarifying the legal framework and state aid,

like MINIMIS aid which targets social

entrepreneurship.

Targeted support for the development of

high quality education in management and

entrepreneurship programmes.

Low-performance of national educational

programmes in economy and management

is shown, when compared to international

ones.