Identification of the factors that affect entrepreneurship in the former communist countries of Central and Eastern Europe

The former communist countries of Central and Eastern Europe have the developed world’s lowest number of entrepreneurs. Since small and medium businesses are the economic drivers for long term economic growth, this issue creates an economic weakness for the Czech Republic and greater region. In the literature there is a lot of general knowledge about entrepreneurship, but very little is focused on entrepreneurship in the East compared to the literature available regarding Western nations. This study’s research is focused on the factors that affect entrepreneurship in the former communist countries of Central and Eastern Europe in terms of culture, norms, and the impact of communism on today’s entrepreneurial environment. The aim of this study is to broaden our understanding of how entrepreneurship currently works in this unique region, because understanding the factors, characteristics, and barriers to entry for new entrepreneurial economic activity will help business development, and raise economic growth in the region. In order to identify, understand, and compare the characteristics of entrepreneurs, the research is focused on three areas: how entrepreneurship has evolved from West to East, an investigation of the factors that that influence entrepreneurship in developing countries with transitional economies, and finally, an analysis of the factors that impact entrepreneurship in the former communist countries of Central and Eastern Europe. A mixed methods approach was used for the design of the primary research: Qualitative methodology was used to collect data through semi structured interviews, while Quantitative methodology was used to collect information through an electronic questionnaire. The secondary research was then compared with the primary research using triangulation to identify the critical themes of entrepreneurship in Central and Eastern Europe. The characteristics identified in the region were: control and corruption, critical thinking, risk taking, access to capital and mentoring, and education. Overall, the communist machinery that kept markets closed still exists today, with the former communist politicians still in charge, and the power structures organized in such a way as to keep wealth within the hands of a few. The psychological effects of communism have left a measurable impact upon individual appetite for risk, standing out, or thinking differently. Finally, there is a lack of infrastructure available to train and mentor new entrepreneurs. The original contribution of this work has been the identification of these factors, which expands the knowledge base of global entrepreneurship in terms of the unique social, cultural, and business environment for the former communist countries of Central and Eastern Europe