Baltic Rim Economies - Baltic Port List

Expert article 915 Baltic Rim Economies, 21.12.2011 Quarterly Review 5�2011
Intellectual entrepreneurship as a way to innovation economy
By Irina Sennikova
In May 2011 Latvia celebrated the 20th anniversary of its
independence. Twenty years have passed since Latvia
began its transition from a command to market economy.
Within a relatively short time the foundations for a market
economy have been laid and macroeconomic preconditions
for economic growth created. Reforms conducted to
transform the economy resulted in the fact that for several
years Latvia was considered to be one of the fastest
growing economies in Europe with an average 7% of
annual growth. Accession to EU in May 2004 came as
recognition of the achievements of the national economy
and proved that the chosen way of development was right
for the development of the country. Although Latvia, as
many other countries, was badly hit by global economic
crisis and is now suffering the consequences of global
economic slowdown, the transition process which the
country went through cannot be overestimated as it allowed
the country to obtain its due place in European economic
landscape. Currently Latvia is planning its development
strategy in line with EU priorities set in Europe 2020
strategy, which expressed economic growth in three key
words: smart, sustainable, and inclusive. Smart growth
envisages developing the economy based on knowledge
and innovation. By 2030 Latvia has to develop into a
country with innovative and ecoefficient economy where
intellectual and creative potential transforms into economic
benefit. Strategic document Latvia 2030 says that in order
to change intellectual and creative potential of a person
into growth of innovative, energy efficient and competitive
economy, the economic model must change. It is stressed
that initiative and environment supporting entrepreneurship,
support for the creation and commercialisation of new
ideas, knowledge transfer and user-directed research come
into the centre of attention. Here comes the question what
new models can be offered in order to bring the country to
a new level of development. Intellectual entrepreneurship
can be one of the possible solutions, which I define as of
capitalisation of knowledge in innovative environment. The
underlying thought under the definition is that knowledge
generation and creation of new intellectual capital are only
possible when constant innovation is taking place, when,
as soon as knowledge turns into information, new
knowledge needs to be generated and commercialised so
that the company stays competitive.
Looking back at the transition process in Latvia it can
be said that the change from a socialist to a capitalist
economy has been a traumatic experience in Latvia, where
managers in the large state enterprises have found it
difficult to adapt to the new competitive environment. They
were unable to use effectively either their existing
productive resources or their established economic
relationships. As a result many established companies
went into liquidation whereas some others were saved only
by state intervention.
At the same time, although state enterprises have
struggled, other sources of economic activity have
emerged. Individual entrepreneurs who have been able to
adapt to the new era have formed companies, generally
with low levels of capital investment. This has occurred in
various industry sectors, including manufacturing, retail,
education, information technologies, etc. Many of the
individuals are professionally or scientifically qualified, but
79
do not necessarily have any formal management education
or experience. They have created companies not as a
result of restructuring processes, but based on their
intellectual abilities, previous experience, and intuitive
understanding of economics and entrepreneurship. This
gave rise to a research conducted by RISEBA (Riga
International School of Economics and Business
Administration), which tried to understand the reasons of
success of these people. The research showed that there
are many things that bring together two seemingly distant
worlds - the one of intellectualism and the one of
entrepreneurialism. True entrepreneurs, the same as
intellectuals have a wide range of interests, which leads to
a specific thinking process, develops creativity, innovation
and heightened intuition. Both intellectuals and
entrepreneurs can think critically of what they are doing
and are never satisfied with the achieved, they are always
in a development phase. Being driven by the result they
wish to accomplish, they search for optimum solutions and
are capable of making decisions in non-standard situations.
Surprisingly, intellectuals feel themselves quite comfortably
in entrepreneurial arena. With their thinking and analytic
abilities it is easier to understand business logic. Diverse
knowledge and communicability gives possibility to
communicate with wider constituencies and be interesting
for different people. It also provides a common language
with professionals, which helps build trust and
understanding within organisations. While being in
business they see many intellectual challenges, which
make their minds constantly work and does not allow to
give up. They are able to innovate in non-innovative
industries and search for non-standard decisions in
standard spheres of entrepreneurship which requires lots of
creativity. In a modern world intellectuals are perceived as
a business engine and creators of new knowledge.
Therefore, it can be concluded that entrepreneurship
provides not less, if not more, intellectual challenges and
does not tend to become boring for relentless intellectual
minds. Therefore, intellectuals should go to business, as
they bring such things as harmony, inspiration, creativity
and image thinking to it, thus making it better and more
beautiful (if you can say so about business). Besides,
intellectuals contribute to the core of business as well, as
they bring business as such, make more competent
decisions and foster higher quality of management.
Irina Sennikova
Dr.oec., Asoc. Prof.
Rector
RISEBA (Riga International
School of Economics and
Business Administration)
Latvia
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