Entrepreneurship as driver of competitiveness: The case of Macedonian fruit and vegetable processing industry

Conclusions and recommendations

Today, after more than 20 years of researching the national competitiveness and in a time when competitiveness is among the main goals that countries are interested to achieve, the concept is still not clear enough. Although, there are many definitions about what national competitiveness is, none of them is generally accepted. Some authors consider competitiveness as productivity and growth, others, as dominance on international markets, third as improved living standards and development. Many times researchers equate competitiveness with its determinants, and by trying to measure the determinants, they create measures for competitiveness.

One of the most popular measures for competitiveness is The Global Competitive Index. According to the value of the index, countries are ranked, and the lower the rank, the greater is the competitiveness of the country. In the case of The Republic of Macedonia the rank is decreasing continually since 2008, and in 2013-2014 the country was on the 73 place, which is a relatively good position. Compared with Western Balkans, The Republic of Macedonia is in a better position of all Western Balkans, except Montenegro. Compared with the EU countries, The Republic of Macedonia is more competitive than four European economies which is a good indicator. However, further improvements are needed especially in the industry/ manufacturing competitiveness.

Industrial competitiveness is important for the overall prosperity of a country. Manufacturing is the process of converting inputs into final goods and creates the real base upon which services then develop. In order to have a strong economy and structural competitiveness manufacturing matters a lot. In The Republic of Macedonia, compared with other Western Balkans and EU, manufacturing is not as developed. Measured with the CIP index, the economy shows worse results than other countries in “manufacturing value added”, and also in “manufacturing exports”. Moreover, its greatest weakness is the technological advancement.

In order to improve the current situation, it is not enough to state the need to improve, but rather to analyze where the improvements can be made. I investigated each of the main industries by using quantitative indicators such as value added, employment and exports by sector, but also by applying qualitative approach – The Porter Diamond. The results from the quantitative research clearly show that Wearing apparel sector, Production of iron and steel, Tobacco products and processed fish, meat, fruit and vegetable are the key sectors. The qualitative research stresses the positive and negative sides of each of these industries and contributes to locate the sectors from main interest for achieving faster development and country’ national competitiveness.

The results from the research indicate that the industries Processed fruit and vegetable and Wearing apparel have potential to be competitive on domestic and international markets. They contribute into the value added, employment and exports. However, their contribution in the value added should be increased, and that will improve also the international competitiveness. In the domestic economy, it will contribute in supporting the employment and wages in the concrete industries. Furthermore, once the spiral is started, the development of the industries and supporting industries as well will accelerate as well.

In order to achieve the effect and initiate the process of development of industries measures should be taken on macro, but also on micro level. Macro level measures may concern the climate for doing business, the legal environment, monetary and fiscal policies. These areas have already been widely investigated and strategies, plans and programs have been developed by policymakers to advance them. However, only by themselves, macroeconomic improvements cannot be effective in achieving the main goal. They need to be supported by the micro level measures.

The micro level measures depend of the businesses and their manager’s capacities to notice opportunities, organize the process of work, to innovate, and to have more market oriented approach. Those capacities depend from the level of the entrepreneurial spirit. Entrepreneurial spirit in The Republic of Macedonia is relatively high. The GEM Report, which represents the largest research in entrepreneurship in the World shows that the degree of the total entrepreneurial activity in The Republic of Macedonia is good. However, this research includes entrepreneurship motivated by opportunity and entrepreneurship motivated by necessity.

Entrepreneurship motivated by opportunity is recognizing opportunities and creating a business upon them. The process of recognizing opportunities is influenced by external factors economic, demographic, technological and political forces, and by internal factors which determine the degree to which entrepreneurs are capable to discover the opportunity. Among them are the knowledge, the alertness, creativity and social contacts of the person. Entrepreneurs with these characteristics are more likely to identify business chances.

After identifying opportunities follows their implementation which includes taking risks, combining recombining and substituting different kinds of resources in order to use them in the most appropriate and most effective way. If resources are combined in a new way, or the final result is something new, or there is new way for distribution of the value to customers, then, there is an innovation.

Innovation is crucial element of entrepreneurship. It is not just having a new idea, but, also it is important the new solution to be recognized as valuable on the market, and to be implemented and exploited. Therefore, the other important element of entrepreneurship is the market orientation.

Market orientation is creating relationships with customers, continuously trying to satisfy their needs, to attract them and keep them as loyal customers. Considering that different customers have different whishes and needs, and even the same customers can have different needs in two different periods, entrepreneurs should be able to analyze them and recognize their needs. This can be done by close relationships with customers, researching the trends on a continuous base and acting as the customer is “the king”. Even though it may sound as a cliché, this statement, it is pure reality in today’s society. Namely, the fast life of the 21 century and the ever changing environment has created a world where customers loyalty gained through entrepreneurial approach are the best competitive advantages a firm can have.

Competitive advantages as ability to recognize opportunities where others see nothing, to take risks in order to exploit that opportunities, to recombine given resources in a new way or introduce new ones, to implement innovations and bare the risk of their acceptation and demand on the market for a long period, are really rare among firms. So, the firms who have them, the ones who are managed by individuals with special characteristics, the entrepreneurial ones, are those which will gain the higher profits, the fastest growth, the higher productivity levels and the higher levels of exports. In one word, entrepreneurial firms are the ones which are most competitive, and which can improve competitiveness of sectors where they operate.

Supporting more firms to be entrepreneurial will result with greater competitiveness. The results from this study show the entrepreneurship in The Fruit and Vegetable industry in Republic of Macedonia has an important influence over the competitiveness of the industry. Namely, the entrepreneurial oriented firms have greater chances to be competitive than their competitors. The relation between entrepreneurship and competitiveness is relatively strong and 70% of the competitiveness in companies in Fruit and vegetable processing industry depends from the presence of entrepreneurship in the way companies are managed, and only 30% of the competitiveness depends from other factors.

The results obtained for the Fruit and vegetable processing industry in Macedonia may be applied on other industries as well. Therefore, by fostering entrepreneurship in Macedonian firms and industries, the entire national competitiveness of The Republic of Macedonia can be improved. By reaching that goal we will be more competitive on European markets, and consequently the standard of living will be improved.