The Role of Innovative Entrepreneurship in Reducing Social Inequality

Friday, 3 July 2015: 10:15 AM-11:45 AM
TW2.2.04 (Tower Two)
Revaz Gvelesiani, Presenting Author, Tbilisi, GA, Georgia
The first step taken towards entrepreneurship is to think over the idea and elaborate it, until the fully-fledged concept is produced. The next step is to find already existing professional components, which help to realize one’s idea. All these mean to see the problem from a new angle, enabling to develop entirely different approach to the question of starting business. First, we should confess that today a good concept is more important than capital; second – the principle of labor division should be applied in a more radical way in entrepreneurship; third – we should establish the company consisting of components. This model created by the famous scholar and entrepreneur and the founder of the legendary Teekampagne, Guenter Faltin, actually means “entrepreneurial Spring” for the starters.

Companies established in this way show high performance from the start, require much less capital, reduce risk and are less sensitive to typical crisis, which is likely to take place alongside with the company growth. They perform successfully their social, competitive, structural and employment functions and contribute to the reduction of social inequality.

Freedom of each market agent of making decision on independent entrepreneurship largely depends on functioning power of competition in the market. Because free market economy is often characterized by distortions (monopolies, for example), whether competition has functioning power is assessed through the criteria, which enable to sum up three hierarchically structured dimensions of competition: market structure, supplier impact and market outcome.

    Under social market economy equality in living conditions is reached by means of structural policy. Namely, sectoral structural policy should help to adjust changing demands and production conditions in separate industries.  Regional structural policy should act under balanced allocation of economic activity, while structural policy based on the size of enterprises should enhance adaptation with the changing market conditions by means of stimulating certain sizes of companies.

  For the reasons of the overall employment situation, first of all, the stabilization effect of small and medium sized enterprises is considered (job creation); to what extent small and medium sized enterprises reach job creation goal under the transformation process, or in other words, whether it has positive influence on employment policy and, accordingly, on social inequality, is first of all assessed according to the number of employees in small and medium sized enterprises.

   Nowadays, social inequality increasingly strengthens the trend from business entrepreneurship to social entrepreneurship. It can be said that business entrepreneurs, according to their interests, move towards social entrepreneurship. Effectively operating markets create mechanisms, which lead to “good” behavior. This is the most important feature of the rationally functioning society. As for the prospects of social entrepreneurship, expansion of entrepreneurship concept at the social arena may lead to such an outcome, when people who are skeptical about business, become more open towards entrepreneurship as a type of activity. This is the way which by means of increased participation in entrepreneurship promotes fair distribution of wealth. Today “entrepreneurship for all” is still a dream, although the one, which may come true.