ENTREPRENEURSHIP IN ARMENIA

What are the factors, problems and prospects of developing entrepreneurship studies in Armenia?

What are the factors, problems and prospects of developing entrepreneurship studies in Armenia?

Introduction

When Armenia was a part of Soviet Union its economy was based on industry and outside resources. There was a sharp decline in early 1900s in Armenia's economy, which was successfully recovered by economic reforms, cut down on inflation and development so small and medium-sized enterprises (American Review 2008). This attracted entrepreneurs to invest in new business opportunities. In 1991, Armenia became independent from the former Soviet Union. This affected their economy and around 800,000 Armenians left the country. These emigrants infuse large amounts of money into Armenia which helps to improve job demand and national infrastructure. These remittances had amounted to 17.4% of total Armenian income in 2001 (national Statstical Service).

To grow the newly establish country, reallocation of resources needs to come to play, where firms have to play a main role (Olson 1992). The firms that already exist are less excited for structural change, because of an already established planning system. The three pillars of stabilization, liberalization and privatization have been emphasized by the main stream economists (Woodruff 2002). The transition period of any country has numerous opportunities for low level entrepreneurs (Kirzner 1983). Insufficient management incentives and over centralization of institutions have hampered growth and innovation.

Since then the country is conferring its efforts to develop its economic and political system. The country has the ability to develop entrepreneurship systems to raise its economy. However, like all developing nations, limited financial resources, incumbent tax policies and unjust business practices had hampered the situation to move forward. Although, there is development in the higher education system, there is a need to change the overall practices in the country and establish institutions that lead the country ahead. As business opportunities are high in rising economies, many Armenians immigrate to places where they can innovate and reap results. It is not surprising to denote that countries with developed entrepreneurial infrastructure, little resource constraints are the ideal places where market opportunities can be grasped. Conversely, in Armenia, many start entrepreneur ventures out of necessity as they have less number of employment choices. It is interesting to note here, this level of entrepreneurial activity is higher in middle and low income nations (Bosma & Harding, 2006). People are driven to overcome obstacles they face despite the conditions they face. Although, high income countries have advanced infrastructures and business creation opportunities, middle income country like Armenia still lacks opportunity.

There is a theory that suggests that attitudes have an antecedent to behaviors (Azjen, 1991). To elaborate this, attitudes are made of behavior intentions that act in a particular way towards a focus. Research proves that the right intentions play a significant role in understanding the entrepreneurial process (Shapero, et.al. 1994). The intentions link to the desirability to perform entrepreneurial activities. Kreuger (1993) found that their exposure to entrepreneurship activities led to desirability to start a new ...