Book Review
The Cutting Edge – Innovation and entrepreneurship in new Europe
Ruta Aidis and Friederike Welter (Eds)
ISBN: 978-1-84542-974-4 2008 178 pages Edward Elgar
Alex Velkov
BeDo Innovation, London, United Kingdom
Innovation by a Thousand Cuts
The Cutting Edge - Innovation and Entrepreneurship in New Europe explores innovation and entrepreneurship in ex-Soviet Bloc economies. The book consists of eight case studies, spanning eight countries in a variety of industries and company types to offer some insight into the opportunities that this region presents to entrepreneurs. The countries covered include the Czech Republic, Bulgaria, Estonia, Hungary, Lithuania, Latvia, Poland and Slovenia.
These case studies are focused on specific, successful firms, aiming to explore firm/entrepreneur level actions rather than the effects of the wider environment on entrepreneurship.
Unfortunately, the chosen case studies fail to live up the expectation that a title such as The Cutting Edge creates. While each of the organisations examined in the book can be considered innovative in some way, the metrics of success are not consistent and neither are the notions of what is considered to be innovative. Moreover, the firms studied vary widely from a small internet portal, to an international luxury goods manufacturer and which of them can be considered as ‘cutting edge' is open to debate.
It is perhaps due to the difference between the cases that the book contains limited general commentary regarding common themes, leaving readers to draw their own conclusions. With no explicitly stated common theme, this approach delivers a breadth of information, and eight specific points of reference, however delivers little added value over and above reading the cases on their own.
One aspect that these case studies do highlight, is how success in this region can be based on unique approaches such as exploiting market vacuums or temporary regional opportunities as well as more established approaches like a well devised business strategy, investment in human capital (through education centres), marketing and flexible new product development processes. While some of the studied companies developed through unique approaches, based on local opportunities, others grew as a result of exploiting established business models within a new, hostile environment.
Another aspect worth mentioning is that while the 'New Europe' countries have all shared vaguely similar history due to central planning, the case studies highlight just how different the soviet occupation was in each country, and how different the resulting business environments are. As an example Poland, Hungary and Slovenia allowed some forms of private enterprise even during central planning, while such activities were heavily restricted in Bulgaria, Czechoslovakia and the Baltic States. Another example was the ability to travel, with Slovenian nationals being comparatively free. Both of these issues culminated in vastly different attitudes towards entrepreneurs and small business owners which, even in 2008, still differ significantly from country to country.
The final interesting observation that emerged from the book was that of the eight enterprises studied, seven were started as new ventures, once this was allowed in their respective countries. The case studies noted that benefits of this approach include:
- Freedom from bureaucratic legacy management systems based on centrally planned enterprises;
- Little attention from 'rent-seeking' officials who have paid more attention to traditionally important and valuable industries and organisations; and
- Freedom to invest in new, modern equipment without the need to justify upgrading from old machinery.
The general discussion of this observation disappointingly focused only on the entrepreneurship side, suggesting reasons why these companies were formed as new ventures. Another approach, and one which would have done justice to the word ‘innovation' in the book's title, would have been to examine the competitive advantage that firms can gain by exploiting these benefits.
This point is perhaps most indicative of the downfall of this book. While it is a fine attempt at compiling some studies of the issues and opportunities present in economies throughout the ‘New Europe', it barely scratches the surface with respect to those issues which would add value beyond reading the case studies on their own. To the academic reader, it provides a good source of inspiration for further research. Where it fails however, is to expose the ‘innovative potential that these environments provide', as promised in the opening paragraphs of the introduction.
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