Vitalija Venckuviene

Changes of Economic Globalization Impacts on the Baltic States Business Environments

Abstract In numerous sources of scientific literature it is clearly proved that the process of globalization in regions, countries, industries and even smallest economic subjects is inevitable. However, it is not only inevitable, but also rapidly changing in its forms and impacts. In 2012 the authors of this paper carried out a thorough analysis of economic globalization impact factors on Baltic countries business environments, which revealed high levels of impacts in the fields of: the liberalization of trade; integration of previously non-connected markets and overall productivity growth; the global value chains influence; the increased significance of outsourcing and services sector; the influence of FDI. The research carried out has revealed that the power and scope of globalization impacts in Baltic countries business environments (with the few exceptions) is gradually diminishing. The findings in general correspond with the trends in global markets that the process of globalization is gradually turning into functional regionalization. However, it is important to emphasize, that this new regionalization phenomenon is very different in forms, scope and origins than that of the sixties and seventies. The core conclusion of the research carried out is the following: the economic impacts of globalization process are progressively diminishing, however there are new unforeseen impacts evolving and there will be even more challenges for economic subjects to face in the future trying to stay competitive in volatile business environments.

Venture Capital a Catalyst for Start-Ups to Overcome the “Valley of Death”: Lithuanian Case☆

Abstract Research so far have indicated that start-ups in early stage of development encounter with the financial gap which limits companies’ ability both to innovate and to commercialise its products (valley of death) ( Hudson & Khazragui, 2013 ). Moreover limited human capital, high uncertainty in terms of product and market, volatile development process, weak partnership ties are the utmost impediments for successful start-ups development (Fielden, Davidson and Makin, 2000). It has been finalised that venture capitalists are valuable contributors in both filling the financial gap (1), and providing value added services (2) like financial, technological, managerial support, and contacts (Hellmann, Puri 2002; Dubocage, Rivaud-Danset & Redi, 2012; Caselli et al., 2009 , Bertoni and Tykvova, 2012 ). Still the research on venture capital role on the start-ups performance is fragmented the impact on the companies’ performance indicators is revealed in some extent ( Peneder, 2010 ). Having all mentioned the scientific problem emerges: what is the role of venture capital in start-ups development specifically on the performance indicators (turnover, number of employees). Purpose of study is to explore the role of venture capital funds as a catalyst for start-ups to overcome the “valley of death” especially focusing on the value added provision in terms of financial and innovation perspectives. Research is carried out by combining qualitative and quantitative research techniques including analysis and synthesis of the scientific literature, case studies and statistical data as well. The literature research has identified the characteristics of venture capital financing, specifically there are evidences that venture capital funds trigger the growth of company, product development, inspire entrepreneurship and thus enhancing the competitiveness of start-ups. Regarding the analysis of venture capital backed companies’ cases in Lithuania it has been revealed that investments were made not only in start-ups, but for mature companies as well and covered various sectors, not solely high-tech, but also including energy, food, and textile sectors.

THE OBSTACLES FOR START-UPS AND THE CRITICAL FACTORS FOR THEIR SUCCESSFUL DEVELOPMENT

The analysis of the scientific literature has revealed that low technology sector has wantonly been left aside in terms of technology adaptation and generated potential for innovation (Santamaria et al., 2009; Hirsch-Kreinsen, Hahn and Jacobson, 2008). Recent studies emphasise that there is a need to unify the standards of industry classification since the classification provided by the Organization for Economic Co-operation and Development (OECD) seems to be working improperly (Yin, 2011; Hirsch-Kreinsen, 2006). This discourse in the scientific level is a pretext to analyse the phenomenon of innovation in low-tech sector from the qualitative approach focusing on the challenges that this sector faces while implementing innovations. Considering the broad concept of innovation, many qualitative and quantitative aspects should be disclosed including the most cited innovation dimensions such as process innovation, product innovation, marketing innovation and organisational innovation. The paper aims to explore the peculiarities of innovative activities in low technology sector focusing on the challenges that the companies face during the process of innovation implementation. Low-tech sector in this paper refers to the industrial companies that prefer the usage of traditional technology in the following three branches of manufacturing industry: wood, wood products and paper production; furniture production; textile and the wearing apparel production. The results of the research suggest that the ability to solve the issues of innovation adaptation, to follow a new attitude towards production, to satisfy the dynamic demand and to reach higher productivity level may lead low-tech sector companies to a more innovative performance, and this way could enable them to gain competitive advantage over their rivals.