Scoring High Marks After Marx

The Conference Board Review^® Article

Ex-Communist nations are the new hot zones for start-ups.

By Larry Farrell

I had just finished my usual rah-rah speech on the wonders of the entrepreneurial spirit to 125 young students and their professors in Sofia, Bulgaria, at the former Karl Marx Higher Institute of Economics. It's now called the University of National and World Economy, but I like the ring of the former name, especially since you can still make out its shadow on the walls of the buildings. Call me arrogant, but I get unusual pleasure out of beating the drum of capitalism to crowds of converts in former Communist countries. The thing I most appreciate about them is that they don't take their new economic freedoms for granted, as many of us do in the West. Eastern Europeans are the most enthusiastic entrepreneur wannabes I've come across yet.

Kiril Todorov, the director of the university's Institute for Entrepreneurship Development, is no exception. His interest in entrepreneurship began before the fall of communism. "I attended a conference on entrepreneurship in 1987 in Austria," he explains. "Up to then, about all we had ever taught students about capitalism was that it was an economic system designed to make a few people rich and keep the masses poor." After that conference, he became very interested in the power of entrepreneurship as an economic tool, and by the time of the changeover, he was ready to share his new outlook. "We held the first seminar on entrepreneurship at the university in 1990, at a time when our political and economic future was still unclear. In any event, we forged ahead."

In 1995, Todorov established the entrepreneurship institute as an autonomous center within the university's school of economics. He calls entrepreneurship the number-one interest of business and economics students in the former Communist world, especially in his native Bulgaria, as well as Poland, Slovenia, Hungary, Estonia, and Romania. Milena Stoycheva, the CEO of Junior Achievement Bulgaria, confirms that entrepreneurship is the hot subject for JA students across Russia and the former Soviet-bloc countries. (Colorado Springs-based Junior Achievement Worldwide, which educates young people on how to economically succeed, is a client of mine.)

I was also able to get a corporate view of the state of free enterprise in Bulgaria from Sasha Bezuhanova, who founded Hewlett-Packard Bulgaria in 1994 and has been its general manager ever since. She started the business with a staff of seven and has grown HP Bulgaria into the country's top computer company, with 1,100 employees. "When the big political changes started in 1989, my generation believed that in two or three years Bulgaria would be equal to the rest of Europe and the United States," she says. "We were working 24/7 to make that happen. We were a bit naïve, of course, but it was a huge opportunity for all of us." She and other young Bulgarians made fast progress as entrepreneurs and managers of international companies. Bezuhanova took a job with a German software company, leaving eventually to start HP's new computer business in Bulgaria.

With start-up experience thrust upon her, Bezuhanova's views on Bulgarian entrepreneurship are upbeat. "Young Bulgarians, most of all, want to be international entrepreneurs," she explains. "I believe this entrepreneurial enthusiasm is what Bulgaria and the other Eastern European countries can contribute to Old Europe, which we see as a bit tired and complacent. Actually, we want to be more aligned with U.S. ideas on business. The United States is the world leader in both democracy and the entrepreneurial spirit, which we very much want to be a part of here in Bulgaria."

I next visited Romania, the European Union's seventh-largest country and, along with Bulgaria, its newest member. It's also a nation bursting with new, young entrepreneurs, more than 150 of whom I met at my presentation on global entrepreneurship in Bucharest. One of the most interesting was a thirtysomething woman named Rada Sonea, who founded a booming "mystery-shopper" consultancy that sends undercover shoppers into retail outlets — a business idea unheard of in Eastern Europe five years ago. Her company, Phantom Shopping, has contracts with major national and international firms, bringing to Romania a Western customer-service technique that must be making Marx and Lenin spin in their graves. "Anyone who ever visited a Communist country in the old days, when service was completely unheard of, will understand why my business has been so successful in Romania," says Sonea.

I say bravo to this — I recall shopping at the monstrous GUM mall in Moscow years ago, trying to buy a raincoat during a rainstorm, eventually giving up and trudging out because I couldn't find a single salesperson to pay.

Another indicator of the country's appetite for free enterprise, according to Junior Achievement Romania CEO Stefania Popp, are the 320,000 schoolchildren taking JA courses on business and free enterprise. In other words, after only fifteen years in operation, JA Romania enjoys a market penetration rate equal to the one it has in the United States — where JA has been working since 1919!

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