“Multinational companies come and ago according to their interests; it’s very good that the state encourages these investments and competes with the other states in the region to attract foreign investment, but it should also help local entrepreneurs. They take the risk, they are inventors, they bring added value. They are more creative than the giants that have so far invested in Romania. Multinationals are opportunistic investors and leave at the first sign of uncertainty,” said Nacu at the launch of the “Business Champions,” a project designed to promote local entrepreneurship.
In his opinion, it is not necessarily the government’s fault that Nokia is leaving Romania, just like it was not the German government’s fault when the Finnish group closed a German plant to open one in Romania.
“It’s just that the authorities should help local small and medium-sized business, by refunding the VAT and eliminating red tape,” Nacu added.
Finnish mobile giant Nokia plans to close its manufacturing facility in Jucu, Cluj county by the end of 2011, in order to cut costs and bring efficiency to the business. The company said it plans to focus its phone manufacturing in its high-volume Asian factories, which provide greater scale and proximity benefits.
Nacu says that the companies in Enterprise Investors’ Romanian portfolio have a total of 4,500 employees and EUR1 billion turnover. They include Macon Deva, Smartree, Profi and Siveco. The fund’s investments in Romania amount to EUR200 million.
Irina Anghel, president and founder of the Triple Helix association, with which Enterprise Investors is running the “Business Champions” project, said Romania needs a different economic engine, possibly local entrepreneurs.
“We have moved on from thinking the state is that engine, then we realized that multinationals are not the solid anchor of economic growth. Local entrepreneurs are the economy’s renewable resource – they contribute to increasing the GDP through innovation, flexibility, adaptability. These have a social advantage, creating jobs and absorbing people put out of work through a multinational’s departure,” Anghel explained.
She also said there is an imbalance between the role of entrepreneurs and how they are perceived, according to a Gallup study.
The study found that, in the United States, 59% of the public believes that new entrepreneurs create product and services that benefit everyone, while in Romania this share is only 14%, lower than even the European Union average of 21%. Only 20% of Romanians believe entrepreneurs are job creators; the EU average is 30%, while in the USA, 60% agree with this claim.
There is also a big difference in Romania between wanting to have one’s own business and implementing this wish. The element that “paralyzes” entrepreneur potential is the lack of financial resources.
The “Business Champions” project also has the participation of business daily Ziarul Financiar and lender BCR. The project will reward the most dynamic Romanian companies, determined according to their turnover and profitability. The companies must have had turnover above 20 million lei (EUR4.627 million) in 2010, with net profit and more than ten employees.
The award criterion is the annual average rise in turnover between 2008 and 2010. In this edition of the project, 3,500 Romanian companies meet the selection requirements. They have a combined turnover of RON387 billion, gross profit of RON27.6 billion and employ around 1,000 people.
(EUR1=RON4.3222)