Romanian economy is in search of an incubator

Romanian capitalism might be propelled into adulthood through the so-called business incubators for small enterprises, the first “device” of this type, privately-financed, having been inaugurated on Tuesday in southeast Romania, in Medgidia. A business incubator is in fact a building that shelters for free, for several years, a number of small companies that have access to mail services, word processing, as well as to fiscal and legislative counseling. During the first stage of their staying under “the hatching hen,” firms are completely exempt from any form of payment (rent and utilities), after six months they have to pay half of total costs. During the last year, companies are exempt only from rent-payment and afterwards they have to fly away, making room for other firms. Since 1994, about 30 such incubators have been set up in Romania, with an “incubation” capacity of about ten “fledgling firms” each. “The direct effect these incubators have over the Romanian economy is doubtless a minor one, considering that Romania has hundreds of registered companies. However, another aspect is important, namely the creation of a current of opinion which is favourable to business transactions conducted in broad daylight,” says Cristian Baleanu, a director with the International Management Foundation (FIMAN), which so far has assisted the setting up of sixteen such incubators. In Lafarge Romcim Medgidia Business Incubator, named after its founder, six “little firms” have been set up so far, of the total of nine admissible: firms activating in domains such as map drawing, and land ledger, footwear, corks, manual carpets production, inscription materials and constructions design, which will have to total by the end of the year about 35 employees. The respective companies were selected from approximately twenty applicants, based on criteria such as the number of created jobs and the viability of the business in itself. “For my company, the two or three thousand dollars per month accounting for exemptions applied following our being moved to the incubator mean a great deal,” says Mircea Costea, a co-associate with the inscription materials firm All Sign ’99 SRL, which is now several months “old.” “All over the world, heavy industry does not give birth to new jobs and the rise in production is closely linked to gains derived from productivity, so that small and middle-sized enterprises must take the lead,” says Jean-Pierre Taillardat, chairman of Lafarge-Romcim Romania, a company that has invested about 150,000 euros in the incubator based in Medgidia. “The Romanian entrepreneur is seen as a smart guy, a guy who has high connections, and businesses conducted in broad light in these incubators can eliminate this perception,” Baleanu also said. Boosting local development through these incubators is a positive aspect, economic analysts consider, but the Romanian economy is in such disarray and not yet torn away from socialism, that it would need an entire incubator only for itself, inside which to be subjected to a recovery process. But who should be the hatching hen?