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NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 Vsebina / Contents Melita Moretti, Mirko Markič Training on Sustainable Use of Water in the Processing Industry 3 Simona Sternad Zabukovšek, Irena Šišovska, Monika Mravljak, Samo Bobek E-business in Micro Companies: Lessons learned 15 Klara Glazer Advantages and Disadvantages of the Single European Patent 24 Irena Kedmenec, Urban Šebjan, Polona Tominc Effect of Rurality and Human Capital Resources in the Entrepreneurial Opportunity Identification Process 35 1 Training on Sustainable Use of Water ORIGINAL SCIENTIFIC PAPER in the Processing Industry RECEIVED: SEPTEMBER 2014 Melita Moretti REVISED: FEBRUARY 2015 PhD student at the Faculty of Management Koper, University of Primorska, Slovenia ACCEPTED: FEBRUARY 2015 melita.moretti@amis.net Mirko Markič DOI: 10.1515/ngoe-2015-0005 Faculty of Management Koper, University of Primorska, Slovenia mirko.markic@fm-kp.si UDK: 338.45:502.131.1 JEL: O120, I250, D830 Abstract The aim of this article is to present research results on the influence of factors of sustainable water use training (management support of training, co-worker support of training, incentives for using skills acquired during training) and the influence of this training on technical efficiency and employee efficiency. The article is based on an empirical study of 328 medium and large companies in the Slovene processing industry. The findings show that the training factors have a statistically significant and positive effect on sustainable water use training and that training has a positive effect on technical efficiency. They also offer new theoretical knowledge as well as practical guidelines for anyone working in the sustainable development management of natural resources. Keywords: Management, water, processing industry, research, sustainable development, training. 1 Introduction The current approach to managing natural resources, including drinking water, does not meet even the most fundamental needs of the world’s population (Elliott, 2013). One of the biggest consumers of drinking water is the industrial sector (European Commission, 2012a; European Commission, 2012b). The industries that consume the most water are the paper, food, textile, and chemical processing industries (European Commission, 2012a; European Commission, 2012b). Industrial water is used for cooling, technological, sanitary, and other purposes (e.g., washing and cleaning). To increase competitiveness, industrial organizations are modernizing and increasing their production capacities (Krivograd–Klemenčič, Drev, Kompare, Jami, & Weissbacher, 2011). Consequently, global water demand is expected to rise by 50% by 2025 (European Commission, 2012a). The increased consumption of drinking water will also result in increased wastewater production. Reforms in water resource management are, therefore, necessary according to the OECD and will require governments to take decisive measures (OECD Environmental Outlook NAŠE GOSPODARSTVO OUR ECONOMY to 2050, 2013). The OECD suggests implementing two economic incentives that would improve water efficiency: increasing water prices and increasing penalties for water pollution (OECD Environmental Outlook to 2050, 2013). Although different Vol. 61 No. 2 2015 strategies for stimulating development and economic competitiveness have been adopted on the EU and national levels, governments and institutions cannot take pp. 3–14 action in the place of business organizations and their management teams. 3 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 The recession caused by the 2008 financial crisis brought Garg, & Deshmukh, 2008), as it is only in this way that or- to life weaknesses and unsustainable economic conditions ganizations will develop, create, and maintain their current in individual EU countries and led to the implementation of competitive advantage (Armstrong, 2009; Evans, 2013; measures designed to stimulate the economy (Svet EU, 2011). Forslund, 2009; Jeston & Nelis, 2008; Jones, 2004; Robbins In 2010, EU member states adopted the Europe 2020 strategy & Coulter, 2012; Robbins & Judge, 2013; Schermerhorn, with the goal of building a smart, sustainable, and inclusive 2012; Schermerhorn & Wright, 2014). The importance given 21st-century European social market economy (European to training on the sustainable use of water in industry, as well Commission, 2010, p. 10). EU member states further adopted as support given to it by management and co-workers, has “A Blueprint to Safeguard Europe’s Water Resources” in led us to examine the current state of this field. 2012 (European Commission, 2012c, p. 3), which states: This article consists of six parts. Following the introduc- The EU needs to focus on green growth and become tion, we briefly describe the theoretical background and more resource efficient (including water) to achieve a put forward our hypotheses. Then, the empirical data and sustainable recovery from the current economic and research methodology are presented and the survey findings environmental crisis, adapt to climate change and build introduced. The final part consists of a discussion of the resilience to disasters. Tackling these challenges holds findings, the conclusion, and final remarks. significant potential to boost the competitiveness and growth of the European water sector. There is also poten- tial for green growth in other water-related sectors (wa- ter-using industries, water technology development, etc.) 2 Theoretical Background and Hypotheses where innovation can increase operational efficiency. 2.1 Theory More recently, in 2013, the EU signed into law the 7th Envi- ronment Action Programme “Living well, within the limits Sustainable development is becoming an increasingly im- of our planet.” One of the priority objectives of the program, portant factor in achieving and maintaining organizational which will guide EU environmental policy until 2020, is im- success. Business costs can be reduced by encouraging the proving resource efficiency in the water sector, with a view development and use of new technologies that reduce the to maintaining, achieving, and enhancing good water status need for raw materials, natural resources, and energy and in accordance with the Water Framework Directive (Uradni by reducing the strain on the environment and increasing list EU 2013). the recycling of raw materials (Elliott, 2013; Pearce & Barbier, 2009; Soyka, 2012). Sustainable development Slovenia took similar steps in 2005 with Slovenia’s Devel- policies can also lead to greater corporate social respon- opment Strategy (UMAR, 2005), where sustainable devel- sibility and increased market share as consumers demand opment and competitive and faster economic growth were eco-friendly products and services (Elliott, 2013; Pearce & set as development priorities for the 2005–2013 period. Barbier, 2009). Senior management plays a central role in In 2006, the strategy was followed by the Programme of introducing sustainable development policies and training Measures for Promoting Entrepreneurship and Compet- into organizations (Blewitt, 2014; Dodds, Laguna-Celis, & itiveness 2007–2013, which recommended measures for Thompson, 2014; Elliott, 2013; Kralj, 2005). “strengthening human resources for needs of the economy by stimulating the share of highly educated people in the The general consensus is that applying skills learned in economy” (Ministrstvo za gospodarstvo, 2006, p. 5). The training requires the cooperation and support of manage- processing industry was listed as a sector employing very ment (Rampersad, 2004; Schermerhorn & Wright, 2014; few highly educated people (p. 21). The same year also saw Spitzer, 2005). Research (Devos, Dumay, Bonami, Bates, & the adoption of the Operative Programme for Drinking Water Holton, 2007; Wieland Handy, 2008) has also demonstrated Supply (Ministrstvo za okolje in prostor, 2006), which spec- that the success of training programs depends on support ified the funding of the drinking water supply. The Decree given by management. Our study focused on the following on Drinking Water Supply followed in 2012 (Vlada Repub- forms of management support: encouraging employees to like Slovenije, 2012), establishing priorities and conditions undergo training, showing interest in what employees learn for the country’s drinking water supply. there, meeting employees to discuss their new skills, and giving employees goals that motivate them to apply their Therefore, the functioning of an organization should be new knowledge. based on constant innovation, the maintenance of customer relations, the internationalization of business processes and Another important factor that contributes to successful training (Evans, 2013; Schermerhorn & Wright, 2014; Singh, training, according to research (Evans, 2013; Holton, 4 Melita Moretti, Mirko Markič: Training on Sustainable Use of Water in the Processing Industry Hsin-Chih, & Naquin, 2003; Schermerhorn & Wright, 2014; the level of understanding of key organizational problems, Wieland Handy, 2008), is co-worker support. Devos et al. work motivation, work quality, and average productivity. (2007, p. 183) defined it as support given to other employees that encourages them to use new knowledge in the work- place. In our study, we defined it as the degree to which em- 2.2 Hypotheses ployees value sustainable water use training and encourage their co-workers to take advantage of the training opportuni- The aim of our study is to explore the factors of sustain- ties offered in the workplace as well as the degree to which able water use training (management support of training, they support co-workers in using their newly acquired skills. co-worker support of training, incentives for using skills acquired during training) and the influence of this training Feedback (helpful information given by co-workers, managers, on technical efficiency and employee efficiency of people and other employees) is required to transfer acquired knowl- working in the Slovene processing industry. A study of this edge into the workplace (Evans, 2013; Holton et al., 2003; kind has never been carried out in Slovenia. Schermerhorn & Wright, 2014; Wieland Handy, 2008). If management combines training with incentives such as oppor- After reviewing the existing literature, we proposed certain tunities for pay rises or awards, the means they require for the relationships between the three factors of sustainable water use of new skills, as well as other forms of reward and promo- use training and training as well as between training and tion opportunities, the probability for a successful transfer of factors of technical efficiency and employee efficiency. knowledge in the workplace can become very high. We then formulated hypotheses based on the relationships between the variables. The research framework generated in Researchers have not arrived at any completely convincing this study is illustrated in Figure 1. conclusions about the effectiveness of any type of training, in- cluding sustainable water use training, on company efficien- cy (employee efficiency, technical efficiency, etc.). However, some empirical studies have tried to determine the effects Figure 1: Research framework and hypotheses of training on employees and companies (Barron, Black, & Loewenstein, 1989; Bartel, 1994; Blandy, Dockery, Hawke, SUPPORT_MG TECHNICAL EFFICIENCY & Webster, 2000; Campbell, 2006; Duncan & Hoffman, 1979). For example, training has been shown to affect em- H2a ployees’ personal incomes: A 10% increase in training over 3 H1 years can lead to a 1.5% rise in wages (Duncan & Hoffman, SUPPORT_CW TRAINING 1979; Mincer, 1994). Barron et al. (1989) and Blandy et al. (2000) tried to determine the relationship between training H2b and productivity, concluding that a 10% increase in training EMPLOYEE leads to a 1% to 3% increase in productivity. In addition, INCENTIVES EFFICIENCY Bartel (1994) and Campbell (2006) demonstrated that a 5% increase in training attendance in manufacturing companies led to a 4% increase in productivity. Huselid’s (1995) work Notes: Management support of training (SUPPORT_MG), Co-worker support of training (SUPPORT_CW), Incentives for showed that conducting training courses on quality within using skills acquired during training (INCENTIVES). the company led to increased product quality. A direct link between sustainable water use training and technical effi- ciency and employee efficiency was not detected. However, We put forward the following hypotheses: because training in general enables individuals to acquire the knowledge needed to do their work, the same is true for • Hypothesis 1: Management support of training, co-worker sustainable water use training (such as the implementation support of training, and incentives for using skills acquired of new cost-effective technologies, tools, and methods for during training affect sustainable water use training. sustainable supply, use, and disposal of water in industry). • Hypothesis 2: Sustainable water use training affects Following Škerlavaj, Indihar, Škrinjar, and Dimovski technical and employee efficiency. (2007), we defined technical efficiency as the improvement of work and process quality and of the technology of work H2a: Training on the sustainable use of water affects processes as well as the implementation of improvements technical efficiency. in work processes that lead to reductions in drinking water H2b: Training on the sustainable use of water affects consumption. Similarly, employee efficiency was defined as employee efficiency. 5 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 3 Data in Methodology Table 1 shows the demographic profile of the respondents. In terms of gender, 68% of respondents in the sample were men, 3.1 Sample description while female respondents accounted for 32%. The youngest respondent was 26 years old, the oldest was 63, and the The biggest consumers of water in Slovenia in 2010–2012 average age of respondents was 43. Furthermore, 15.9% of were processing industry companies (holding type C: respondents were employed in high management, 26.5% in standard classification – SKD 2008) (SURS, 2013a). When middle management, and 27.7% in operations management, this fact was compared to the 2013 statistical data (SURS, while 29.9% worked in other positions. In terms of length of 2013b) on processing companies in Slovenia, which shows employment, 19.8% of respondents had worked at their com- that the number of medium and large food processing com- panies for up to 5 years, 47.6% between 5 and 15 years, and panies decreased by 5.75% between 2010 and 2012, we 32.6% for more than 15 years. In addition, 5.5% of respond- arrived at the conclusion that water consumption from the ents had up to 5 years of work experience, 30.5% had between public water supply (the consumption of drinking water) 5 and 15 years, and 64.0% had more than 15 years of work has not decreased significantly. Thus, we included 20% of experience. Finally, 1.5% of respondents had completed only the 608 medium and large (SURS, 2013b) processing com- secondary education, 10.1% had completed higher vocational panies (SKD 2008 Category C) in a random sample. The education, 61.3% had completed higher education/under- electronic questionnaire was sent by e-mail to a contact graduate degree/specialization, 25.3% had earned master’s person in 122 companies in the processing industry, together degrees, and 1.8% had earned doctoral degrees. with a note informing them of the goal and intention of our research. The contact person then sent the questionnaire on to all employees. All employees with company e-mail 3.2 Methodology addresses were included in the survey. We received 386 questionnaires, 328 of which were complete and used for The instrument of the research was a closed-ended online analysis. The incomplete questionnaires were excluded. questionnaire. The questionnaire statements about training Table 1: Demographic Profile of Respondents Characteristics Descriptor Distribution (percent) Male 68.0 Gender Female 32.0 Min 26 years Age Max 63 years Average age 43 years High management 15.9 Middle management 26.5 Position Operations management 27.7 Other 29.9 Up to 5 years 19.8 Duration of employment in the organizations 5–15 years 47.6 More than 15 years 32.6 Up to 5 years 5.5 Work experience 5–15 years 30.5 More than 15 years 64.0 Secondary education 1.5 Higher vocational education 10.1 Education level Higher education, undergraduate degree, specialization 61.3 Master’s degree 25.3 Doctoral degree 1.8 Sample size = 328 6 Melita Moretti, Mirko Markič: Training on Sustainable Use of Water in the Processing Industry (non-formal education) on sustainable water use in the or- were checked and analyzed using SPSS 19.0’s descriptive data ganization were based on the work of Dimovski, Škerlavaj, analysis functions: univariate analysis (frequency, arithmetic Kimman, and Hernaus (2006), Garvin, Edmondson, and mean, and standard deviation) and multivariate statistical Gino (2008), Holton et al. (2003), Škerlavaj et al. (2007), and analyses (principal component analysis [PCA], correlation, Wieland Handy (2008). Statements regarding technical effi- and regression analysis). ciency and employee efficiency were adapted from Škerlavaj et al. (2007). The questionnaire was tested on seven randomly selected employees from one of the analyzed companies. No comprehension problems were reported, so the questionnaire 4 Descriptive Statistics was not changed. 4.1 Training on sustainable use of water The questionnaire was divided into two parts. The first part consisted of six demographic questions (gender, age, position, Participants were asked to rate to what degree statements on duration of employment in the organization, work experience, sustainable water use were true for them. Table 2 shows that education level). The second part consisted of 23 questions participants gave the statements “Our organization offers suf- on sustainable water use training (informal education) and ficient opportunities for training on sustainable water use” and non-financial success (technical efficiency and work efficiency “All employees receive occasional training on sustainable water of employees). A 7-point Likert scale was used in the second use” the highest mean score (M = 4.40). The statement “The part of questions, with 1 being “strongly disagree” and 7 being organization offers sustainable water use training” received the “strongly agree” for questions on sustainable water use training lowest mean score (M = 4.01). By looking at the mean scores, and 1 being “much worse” and 7 being “much better” for ques- we see that no significantly high or low scores occurred. tions on technical and work efficiency of employees. Cron- bach’s alpha (Cronbach’s alpha1 = 0.909) was calculated as an estimate of the scales’ internal consistency (Garson, 2013). 4.2 Management support of training The data were collected in June 2013 through the Centre of Participants were then asked to rate statements about man- Social Informatics at the Faculty of Social Sciences of the agement support of training. Table 3 shows that participants University of Ljubljana. The responses for every questionnaire rated the statement “Management values sustainable water use training” highest (M = 4.48). The statement “Manage- 1 α ≥ 0.9 : Excellent consistency. ment meets with employees to discuss how to use skills Table 2: Training on Sustainable Use of Water in Industry (TRAINING) Variables Mean Standard score deviation Our organization offers sufficient opportunities for training on sustainable water use. 4.40 1.88 The organization offers sustainable water use training. 4.01 1.94 Offered training programs on sustainable water use are of very high quality. 4.29 1.92 Training programs on sustainable water use are regularly reviewed and updated to keep up with changes in the environment. 4.27 1.90 All employees receive occasional training on sustainable water use. 4.40 1.87 All new employees receive suitable training on sustainable water use. 4.28 2.08 Table 3: Management Support of Training (SUPPORT_MG) Variables Mean Standard score deviation Management shows interest in what employees learn in sustainable water use training. 4.24 1.77 Management meets with employees to discuss how to use skills learned during training. 4.20 1.75 Management encourages employees to attend programs and workshops on sustainable water use. 4.34 1.84 Management values sustainable water use training. 4.48 1.82 Management gives employees goals that encourage the use of skills acquired during training in the workplace. 4.47 1.78 7 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 learned during training” received the lowest mean score 5 shows that the statement “After training, the means that (M = 4.20). No significantly high or low scores occurred. employees need to use the acquired skills are available” received the highest mean score (M = 3.42). The state- ment “When employees make use of skills acquired during 4.3 Co-worker support of training training, they receive some form of pay raise or award” received the lowest mean score (M = 2.63). All statements Next, participants were asked to rate statements about received somewhat low scores. co-worker support of training. Table 4 shows that the statement “Employees value training on sustainable water use” received the highest mean score (M = 4.54). The statement “Employees 4.5 Technical efficiency and employee efficiency encourage co-workers to attend programs and workshops on sustainable water use” received the lowest mean score (M = Finally, the participants were asked to rate statements about 4.05). No significantly high or low scores emerged. technical efficiency and work efficiency. Table 6 shows that the statement “Product and service quality” received the highest mean score (M = 5.77) whereas the statement “Work 4.4 Incentives for using skills acquired during training quality” received the lowest mean score (M = 5.30). No sig- nificantly high or low scores were evident. Next, the participants were asked to rate statements about incentives for using skills acquired during training. Table 2 Table 4: Co-worker Support of Training (SUPPORT_CW) Variables Mean Standard score deviation Employees value training on sustainable water use. 4.54 1.67 Employees encourage co-workers to attend programs and workshops on sustainable water use. 4.05 1.72 Employees value co-workers who use skills acquired during training and encourage their use. 4.46 1.71 Table 5: Incentives2 for Using Skills Acquired During Training (INCENTIVES) Variables Mean Standard score deviation When employees make use of skills acquired during training, they receive some form of pay raise or award. 2.63 1.46 After training, employees receive feedback on their use of acquired skills. 3.32 1.76 After training, the means that employees need to use the acquired skills are available. 3.42 1.91 Table 6: Technical Efficiency and Work Efficiency Variables Mean Standard score deviation Product and service quality. 5.77 0.96 Technology of work processes. 5.75 0.86 Implementation of improvements in work processes to reduce drinking water consumption. 5.76 0.88 Work quality. 5.30 0.99 Employees’ understanding of key organizational problems and work motivation. 5.33 1.02 Average productivity of employees. 5.39 1.01 2 The statements represent opportunities and possibilities for employees for improved efficiency and greater personal satisfaction in the future. This is why we also asked about what happens after training. 8 Melita Moretti, Mirko Markič: Training on Sustainable Use of Water in the Processing Industry 5 Multivariate Data Analysis support of training, incentives for using skills acquired during training), as well as the constructs of technical In order to extract the relationships presented in Figure 1, a efficiency and employee efficiency. The suitability of the multivariate data analysis was performed in two stages: data for PCA was assessed for each construct by using Bartlett’s Test of Sphericity and the Kaiser-Meyer-Olkin • Stage 1—factor structures: To extract the factor struc- (KMO) Measure of Sampling Adequacy. The KMO index ture, we used PCA with varimax rotation. ranged between 0.708 and 0.910, with 0.500 considered • Stage 2: We analyzed the relationship between the suitable for analysis (Bartholomew, Knott, & Moustaki, factors using correlation analysis and regression analysis 2011). Factors with eigenvalues (the amount of variance (ENTER regression method). accounted for by a factor) larger than 1 were carried for further analysis (Bartholomew et al., 2011; Mulaik, 2010). PCA on the training on sustainable use of water produced 5.1 Stage 1—Factor structures one factor that explained 76.88% of the observed variance for training on the sustainable use of water, as shown in PCA3 was used to reduce each of the constructs (training Table 7. on sustainable use of water, management and co-worker The PCA on management support of training produced one factor that explained 69.36% of the observed 3 PCA reduces the data down to the fundamental components, variance for management’s support of training, as shown stripping away any unnecessary parts. in Table 8. Table 7: PCA of Training on Sustainable Use of Water Cum. % Factor Factor Eigen- loads value variance explained Factor 1: Training on sustainable use of water (TRAINING) 4.613 76.877 Offered training programs on sustainable water use are of very high quality. 0.924 The organization offers sustainable water use training. 0.903 Training programs on sustainable water use are regularly reviewed and updated to keep up with changes in the environment. 0.869 All new employees receive suitable training on sustainable water use. 0.869 Our organization offers sufficient opportunities for training on sustainable water use. 0.849 All employees receive occasional training on sustainable water use. 0.844 KMO measure of sampling adequacy = 0.910; Bartlett test of sphericity = 1681.138; p < 0.001. Table 8: PCA of Management Support of Training Cum. % Factor Factor Eigen- loads value variance explained Factor 2: Management support of training (SUPPORT_MG) 3.468 69.358 Management values sustainable water use training. 0.924 Management shows interest in what employees learn in sustainable water use training. 0.867 Management encourages employees to attend programs and workshops on sustainable water use. 0.828 Management meets with employees to discuss how to use skills learned during training. 0.790 Management gives employees goals that encourage the use of skills acquired during training in the workplace. 0.743 KMO measure of sampling adequacy = 0.854; Bartlett test of sphericity = 959.614; p < 0.001. 9 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 The PCA on co-worker support of training produced one The Cronbach α for the underlying factors ranged from factor that explained 72.91% of the observed variance for 0.85 to 0.76, again indicating a reliability of factors (see co-worker support of training (see Table 9). Table 11). The PCA on incentives for using skills acquired during training produced one factor that explained 77.23% of the 5.2 Stage 2—Relationship analysis observed variance for incentives for using skills acquired during training (see Table 10). The correlation analysis showed significant relationships among almost all variables and factors. The correlations The PCA on technical efficiency and employee efficiency were positive. Three pairs had a weak association (Pearson produced two factors that explained 72.82% of the observed correlation > 0.260 and < 0.510) while seven pairs had a variance for technical efficiency and employee efficiency. good association (Pearson correlation > 0.510 and < 0.760). Table 9: PCA of Co-worker Support of Training Cum. % Factor Factor Eigen- loads value variance explained Factor 3: Co-worker support of training (SUPPORT_CW) 2.187 72.909 Employees encourage co-workers to attend programs and workshops on sustainable water use. 0.877 Employees value co-workers who use skills acquired during training and encourage their use. 0.854 Employees value training on sustainable water use. 0.830 KMO measure of sampling adequacy = 0.708; Bartlett test of sphericity = 333.474; p < 0.001. Table 10: PCA of Incentives for Using Skills Acquired During Training Cum. % Factor Factor Eigen- loads value variance explained Factor 4: Incentives for using skills acquired during training (INCENTIVES) 2.317 77.230 After training, employees receive feedback on their use of acquired skills. 0.894 After training, the means that employees need to use the acquired skills are available. 0.875 When employees make use of skills acquired during training, they receive some form of pay raise or award. 0.867 KMO measure of sampling adequacy = 0.729; Bartlett test of sphericity = 429.286; p < 0.001. Table 11: PCA of Firm Technical Efficiency and Employee Efficiency Cum. % Factor Factor Eigen- loads value variance explained Factor 5: Technical efficiency 2.376 39.608 Implementation of improvements in work processes to reduce drinking water consumption. 0.959 Technology of work processes. 0.956 Product and service quality 0.655 Factor 6: Employee efficiency 1.993 72.820 Employees’ understanding of key organizational problems and work motivation. 0.803 Work quality 0.759 Average productivity of employees. 0.678 KMO measure of sampling adequacy = 0.718; Bartlett test of sphericity = 1336.089; p < 0.001. 10 Melita Moretti, Mirko Markič: Training on Sustainable Use of Water in the Processing Industry Table 12: Descriptive Statistics and Correlation Analysis Mean S.D. TRAINING SUPPORT_MG SUPPORT_EM INCENTIVES TECHNICAL EF. EMPLOYEE EF. TRAINING 4.27 1.69 1 0.776** 0.639** 0.614** 0.186** 0.045 SUPPORT_MG 4.35 1.49 1 0.688** 0.688** 0.206** 0.030 SUPPORT_CW 4.35 1.45 1 0.612** 0.136* 0.026 INCENTIVES 3.12 1.51 1 0.341** 0.263** TECHNICAL EF. 5.76 0.81 1 0.526** EMPLOYEE EF. 5.34 0.79 1 ** Correlation is significant at the 0.01 level (2-tailed); * Correlation is significant at the 0.05 level (2-tailed) Table 13: Results of Regression Analyses Unstandardized Standar- H Regression Coefficients dized analyses Coeffici- t p (Sig) R R2 F Result B Std. Error ents Beta H1 (Constant) 0.139 0.193 0.720 0.000 0.795 0.628 18.915 Supported SUPPORT_MG 0.658 0.059 0.579 11.240 0.000 SUPPORT_CW 0.190 0.057 0.163 3.354 0.001 INCENTIVES 0.144 0.053 0.128 2.707 0.007 TRAINING = 0.139 + 0.658 * SUPPORT_MG + 0.190 * SUPPORT_CW + 0.144 * INCENTIVES H2 Supported a (Constant) 5.378 0.120 44.771 0.000 0.186 0.131 11.623 TRAINING 0.089 0.026 0.186 3.409 0.001 TECHNICAL EFFICIENCY = 5.378 + 0.089 * TRAINING b (Constant) 5.430 0.118 46.026 0.000 0.045 0.002 0.653 Not supported TRAINING -0.021 0.026 -0.045 -0.808 0.419 ≠ No pair had a very good association (Pearson correlation Figure 2: Results concerning the hypotheses > 0.760), as shown in Table 12. We can deduce that higher levels of training, management and co-worker support, and SUPPORT_MG TECHNICAL incentives are associated with higher levels of technical ef- EFFICIENCY ficiency whereas only higher incentives are associated with H2a higher levels of employee efficiency. H1 SUPPORT_CW TRAINING The research framework generated in this study is illus- trated in Figure 1 (a theoretical scheme), which was also H2b our research model. Figure 2 depicts the main findings of EMPLOYEE the three regression analyses conducted using SPSS 19.0, INCENTIVES EFFICIENCY which were analyzed according to regression diagnostics: all variance inflation factors4 < 2 (ranged between 1.495 Supported Not supported and 1.654); Durbin–Watson tests5 were close to 2 (ranged between 1.986 and 1.998); and the normal distribution of Notes: Management support of training (SUPPORT_MG), residuals (Newbold, Carlson, & Thorne, 2013). Co-worker support of training (SUPPORT_CW), Incentives for using skills acquired during training (INCENTIVES). 4 The variance inflation factor (VIF) is used as an indicator of multicollinearity. Table 13 shows the result of the regression analyses. The 5 The Durbin–Watson test is a test for first-order serial correlation arrows in Figure 2 (with the exception of H2b ( p = 0.419)), in the residuals of a time series regression. which symbolize the supported associations, were statistically 11 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 significant ( p < 0.05). The findings show that management and of improvements in work processes in order to reduce in- co-worker support of training as well as incentives for using dustrial consumption of drinking water. We believe that skills acquired during training positively influences sustaina- these improvements would also lead to greater financial and ble water use training (Hypothesis 1). The multiple correlation non-financial success of companies. coefficient (R), whose value was 0.795, showed a very strong relationship between sustainable water use training and the Our study shows that management support of training plays three independent variables: management support of training, a fundamental role in training for the sustainable use of co-worker support of training, and incentives for using skills water as it has the greatest regression coefficient. By giving acquired during training. The value of the coefficient of deter- support to sustainable water use training, management mination of R2 = 0.628 indicates that 63% of the variance in shows interest in what their subordinates have learned. By sustainable water use training is explained by the independent working with employees on learning objectives and solving variables. The F-test (F = 18.915) and the significance level any potential problems, management strengthens the im- ( p = 0.000) also indicate the existence of a relationship. Fur- pression that training is important and necessary. thermore, a weak relationship was found between technical efficiency and sustainable water use training ( p = 0.001; R = Despite having the smallest regression factor, the use of 0.186; R2 = 0.131; F = 11.623; Hypothesis 2a). However, no skills acquired during training has a positive and signifi- relationship was found between employee efficiency and sus- cant association with sustainable water use training. With tainable water use training ( p = 0.419; R = 0.045; R2 = 0.002; their attitudes toward training and the attention devoted to F = 0.653; Hypothesis 2b). employees after training, management can encourage other important stakeholders in the company to make it possible for employees to apply skills learned during training to the workplace. New skills have the potential to lead to improve- 6 Discussion and Conclusion ments in the technology of work processes, the quality of products and services, and work processes, which can in This article reported on a study of sustainable water use turn lead to a reduced consumption of drinking water. training in the Slovene processing industry, drawing on a sample of 328 firms. A theoretical framework was empirically Our findings give support to the idea that sustainable water tested to determine the relationship between training factors use training ought to become an integral part of business (sustainable water use training, manager and co-worker strategy. Managers should recognize and manage training as support, incentives for using skills acquired during training) well as incorporate it into their action plans. Two limitations and factors of technical efficiency and employee efficiency of the study need to be acknowledged: This research was (product and service quality, improving technology of work only carried out among medium and large companies in the processes, implementation of improvements in work pro- processing industries, and only fully answered question- cesses to reduce drinking water consumption) in companies. naires were used for analysis. Nevertheless, we believe that In addition, various good associations emerged among four our research offers a significant contribution to the subject factors on the sustainable use of water. Thus, hypothesis H1 of sustainable water use training. For a fuller understanding, was supported. The results of the analysis also demonstrated we recommend that similar research be conducted in all that hypothesis H2a—namely, training on the sustainable use companies in the processing industry. of water affects technical efficiency—was accepted. However, the relationship between sustainable water use training and employee efficiency (H2b), was not found to be significant. Acknowledgments These findings substantiate our conceptual model and offer The survey was partly funded by the European Union several managerial implications. Managers of firms should through the European Social Fund. Co-financing was imple- put additional emphasis on training related to the sustain- mented within the framework of the Operational Programme able use of water as it is an important instrument for the for Human Resources Development for the 2007–2013 improvement of the technology of work processes, the period, Priority axis 1 “Promoting entrepreneurship and ad- quality of products and services, and the implementation aptability_1.3: Scholarship Scheme.” 12 Melita Moretti, Mirko Markič: Training on Sustainable Use of Water in the Processing Industry References 1. Armstrong, M. (2009). Armstrong’s handbook of human resource management practice. 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His bibliography comprises more than 470 publications in the field of management and organizational sciences. Usposabljanje o trajnostni rabi vode v predelovalni industriji Izvleček Namen prispevka je predstaviti izide iz raziskave o vplivih dejavnikov usposabljanja o trajnostni rabi vode (o podpori usposabljanju, ki jo kažejo nadrejeni in sodelavci, spodbudah za uporabo znanj in veščin, pridobljenih med usposabljanjem) in vplivu usposabljanja na tehnično in delovno učinkovitost zaposlenih. Empirično raziskavo smo opravili na vzorcu 328 srednje velikih in velikih podjetij v slovenski predelovalni dejavnosti. Ugotovili smo, da podpora usposabljanju, ki jo kažejo nadrejeni in sodelavci, ter spodbude za uporabo znanj in veščin, pridobljenih med usposabljanjem, statistično značilno in pozitivno vplivajo na uposabljanje o trajnostni rabi vode, uposabljanje o trajnostni rabi vode pa statistično značilno in pozitivno vpliva na tehnično učinkovitost. Izidi iz raziskave prinašajo nova teoretična spoznanja in praktične usmeritve za vse, ki se ukvarjajo z menedžementom trajnostnega razvoja z vidika ohranjanja naravnih virov. Ključne besede: menedžement, voda, predelovalna dejavnost, raziskava, trajnostni razvoj, usposabljanje 14 E-business in Micro Companies: ORIGINAL SCIENTIFIC PAPER Lessons learned RECEIVED: JANUARY 2015 Simona Sternad Zabukovšek REVISED: MARCH 2015 Faculty of Economics and Business, University of Maribor, Slovenia simona.sternad@uni-mb.si ACCEPTED: MARCH 2015 Irena Šišovska Faculty of Economics and Business, University of Maribor, Slovenia DOI: 10.1515/ngoe-2015-0006 irena.sisovska@uni-mb.si UDK: 659.23:004:334.012.61-022.51 Monika Mravljak Dobja vas 54, Ravne na Koroškem, Slovenia JEL: M10 monika.mravljak@gmail.com Samo Bobek Faculty of Economics and Business, University of Maribor, Slovenia samo.bobek@uni-mb.si Abstract E-business is entering its mature stage. E-business in large companies has been researched in several surveys, whereas SMEs and micro companies have been researched less often. Micro companies are, together with SMEs, a critical part of national economies worldwide; both are central to the EU’s development strategies. It is well known that, in an information society, business models are driven by e-business concepts, and e-business models are emerging. An in-depth understanding of e-business use in micro companies is crucial for the success of such companies. The main purpose of this paper is to research the intensity of e-business use, advantages and disadvantages of e-business, the biggest problems of e-business implementation/maintenance, and attitude toward trends of e-business in micro companies. The paper presents findings from a survey carried out on a sample of micro companies. Data were collected via an e-questionnaire, and results were calculated using SPSS. The data confirmed that e-business in micro companies is most often used in connection with e-banking; e-business with the government also appears to be very important. Keywords: E-business, micro companies, e-business adoption, e-business CSFs 1 Introduction The rapid development of information technology has enabled e-business to NAŠE GOSPODARSTVO become a global phenomenon. As the Internet became more commercialized OUR ECONOMY and users began to participate in the World Wide Web in the early 1990s, the term e-business was coined and e-business applications expanded rapidly Vol. 61 No. 2 2015 (Turban, Chung, & Lee, 2000). Organizations adopt e-business for several reasons and perceived benefits (Wang & Zheng, 2011). Authors mention the better management of information, better integration of suppliers and vendors, pp. 15–23 15 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 better channel partnership, lower transaction costs, amongst the firms’ groups emerged from an analysis of the improved market understanding, expanded geographical percentages of companies using e-business applications to coverage (Abid, Rahim, & Scheepers, 2011; Damanpour, support marketing and sales. In particular, the percentag- 2001), and trading time expanded to 24 hours a day, 7 days es of small companies using CRM systems and specific a week, 365 days a year (Tsao, Lin, & Lin, 2004). ICT solutions for marketing and sales are half of those for large companies. E-business in large companies has been researched in several surveys, but SMEs have been researched more Raymond and Bergeron (2008) examining the perfor- rarely and the smallest companies—often referred as micro mance outcomes of the alignment between SMEs’ e-busi- companies—have only seldom been researched (Abid ness capabilities and their business strategy by studying et al., 2011). Micro companies are, together with SMEs, SMEs in Canada. Their findings indicated that the ideal an important part of national economies worldwide, and e-business profiles vary in relation to the company’s stra- both are central to the EU’s development strategies. In an tegic orientation; in addition, e-business alignment has information society, business models are driven by e-busi- positive performance outcomes for the SMEs studied in ness concepts, and e-business models are emerging. An terms of growth, productivity, and financial performance. in-depth understanding of e-business use in micro compa- nies is crucial for the success of such companies. In their study Ghobakhloo, Arias-Aranda, and Ben- itez-Amado (2011) researched the factors within the tech- This paper presents findings from a survey carried out on a nology–organization–environment (TOE) framework that sample of micro companies. The research model included affect the decision to adopt e-business as well as to adopt where and how e-business is used in communication with or not different e-business applications within SMEs. They business partners, how micro companies use e-business found that e-business adoption within SMEs is affected to communicate with governmental institutions, which by a perceived relative advantage, perceived compatibil- benefits are they seeking through e-business, which ity, CEOs’ innovativeness, information intensity, buyer/ problems are arising, and what influences e-business use supplier pressure, support from technology vendors, and in micro companies. competition. Ng (2005) studied business to business (B2B) e-business models for Australian agribusiness companies and defined 2 E-business in the Global Marketplace factors (both internal and external) influencing the choice of e-business models as well as insights into the current Various researchers in different contexts have demon- practices of Australian agribusiness in relation to the se- strated that e-business is rapidly growing and expanding. lection process of B2B e-business models. A study conducted in Europe by e-Business Watch (2008) showed that e-business activities are mainly determined Globalization and technology effects appear to have forced by value chain characteristics and company size. Regional smaller firms around the world to implement e-business factors are less important in this regard. The study con- practices, however, there is considerable variability in cluded that, on average, EU companies are on the same adoption and usage from country to country (Fillis, Jo- level as their competitors in other advanced economies hannson, & Wagner, 2004). Fillis et al. (2004) identified in terms of electronic business activity (e-Business several reasons behind adoption and non-adoption in Watch, 2008). SMEs—namely, macro-level, industry-level, and com- pany-level factors. They also researched owner/manager Another study conducted in Europe by European Com- motivations and attitudes toward e-business adoption. munities (2008) highlighted big differences between different areas of e-business use in companies and also Taylor and Murphy (2004) explored a range of issues sur- defined differences between small and big companies. rounding the adoption e-business technologies by SMEs. One of the first pieces of evidence for e-commerce ac- They examined models of e-business adoption by SMEs tivities amongst enterprises belonging to the industrial and analyzed barriers to the adoption of e-business tech- sectors selected in a 2006 report is that, regardless of size, nologies. They concluded that the take-up of e-business by buying online is more developed than selling online. At SMEs needs to be seen as a means to an end rather than the European level, the Internet channel is used by 54% an end in itself. of small companies for placing orders and by 26% for re- ceiving orders; amongst large companies, the percentages Mendo and Fitzgerald (2005) set out to critique the ap- are 68% and 26%, respectively. The expected differences plicability of e-commerce staged models in explaining 16 Simona Sternad Zabukovšek, Irena Šišovska, Monika Mravljak, Samo Bobek: E-business in Micro Companies: Lessons learned the progression of SMEs in their use of e-business tech- 3 Research Study nologies. The premise of this study was that examining the evolution of websites over time provides insights into The aim of this research study conducted among micro actual evolving strategies and motivations behind e-busi- companies was to clarify participants’ attitude toward ness investments. They proposed that a multidimensional e-business and gain insights into how they are adopting framework combines three dimensions of organizational e-business. The data were collected by survey using an change: process, content, and drivers. e-questionnaire. We sent the questionnaire hyperlink to the e-mail addresses of more than 500 micro-entrepreneurs. Comprehensive research on e-business in SMEs in Questionnaires were sent to randomly assembled micro-en- Scotland conducted by Fillis and Wagner (2005) indicat- terprises, regardless of the field with which they were doing ed that industry factors, customer influences, the degree business. The questionnaire was available on the website of entrepreneurial orientation of the key decision maker, for 20 days. Ultimately, 110 entrepreneurs answered ques- and the level of competency development within the or- tionnaire. In addition, another 100 respondents looked at ganization play important roles in the level of e-business the questionnaire but decided not to complete it. development achieved. They also found that some small firms only embrace e-business to a certain level and even The number of employees in the companies ranged from revert to more conventional business practices. one to nine according to the categorization of micro compa- nies. Most respondents (23%) employed only one person; Simmons, Armstrong, and Durkin (2008) examined what another 46% employed from two to four employees, and determines small business website adoption, focusing in the rest employed five to nine employees. In addition, 58% the role that the small business marketing context plays of participants were limited liability companies, compared within e-business technology adoption. to 42% that were sole proprietorships. Wynn, Turner and Lau (2013) recently performed in-depth Respondents’ level of education ranged from vocational research, using two case studies to explore the impacts education (18%) to professional education (22%), bache- of e-business technology adoption at the process level lor’s degree (50%), and master’s or doctoral degree (9%). in SMEs. They illustrated how contrasting information Regarding knowledge of computer, software solutions, system strategies can successfully embrace e-business and e-business, by level of education, the arithmetic mean process change. They also suggested the importance of (average self-assessment) was 3.34 while the standard organizational issues in determining the degree of benefits deviation was 0.803 and median and mode were 3. Thus, delivery. most participants indicated that their computer knowledge was good. Behind the rapid developments summarized above are business models implemented and applied by companies around the world. These companies are driving force behind the innovative use of new technologies in all 4 Research Findings business areas. The e-business model, like any business model, describes how a company functions, how it We categorized participants’ e-business activities into four provides a product or service, how it generates revenue, groups. We also determined the intensity of e-business use and how it will create and adapt to new markets and tech- using a five-stage grading scale (never, rarely, occasional- nologies. The four traditional components of the e-busi- ly, often, and constantly) (see Figure 1): ness concept are value proposition, sources of revenue • E-business with customers: 43% of companies use it and the required activities, resources, and capabilities all the time, 35% often, and 14% occasionally. (Prudens, 2008). • E-business with other companies in areas beyond selling activity: 42% perform it all the time, 37% The review of the literature leads us to the following hy- often, and 8% never. potheses: E-business is most often used in connection with • Interaction with government administration based on e-banking; e-business has the largest impact in B2B micro e-business in area where already sometimes required companies; micro companies’ attitude toward e-business as a necessity: 43% conduct it all the time, 16% often, is high; micro companies see the biggest problems of and 10% never. e-business in the high costs and lack of educations and • Internal communication between employees in the experiences; and micro companies do not lead trends of company based on e-business technologies: 42% use e-business. We tested these hypotheses using descriptive e-business-based internal communication all the time statistics. and 17% use it often. 17 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 Figure 2 details how participants most often use business 90% answered that they always use bank transactions, 8% solutions such as electronic funds transfer (ETF; and elec- answered that they often use them, and only 2t of them have tronic payment system), customer relationship management never used them. Receiving customer orders via e-business (CRM), supply chain management (SCM), and electronic CRM solutions is always used by 27% of companies, 37% data interchange (EDI). use them often, 23% use them occasionally, and only 13% use them rarely or never. Ordering goods/services using Banking transactions are very useful e-business services SCM solutions via e-business occurs always in 34% of com- because they enable banking services from the office or at panies, often in 38% of companies, occasionally in 22% of home, they are adapted so every user can quickly and easily companies, and rarely or never in only 6% of companies. find everything, and they can be used to safely carry out the Finally, 46% and 30% of companies always and often, re- necessary activities. The results of the survey also indicated spectively, use EDI solutions, indicating an advanced level that bank transactions are very popular among participants: of e-business. Figure 1: Areas of activities conducted as e-business 43 % E-bussiness with 35 % 14 % customers 6 % 2 % 42 % E-bussiness with 37 % 11 % other companies 2 % 8 % 43 % Interaction with government 15 %17 % administration 15 % 10 % 42 % Internal 17 % 12 % communication 19 % 10 % 0 % 10 % 20 % 30 % 40 % 50 % Permanently Often Occasionaly Rarely Never Figure 2: Use of e-business solutions 90 % Electronic payment system 8 % 0 % 0 %2 % 27 % 37 % E-business CRM 23 % 11 % 2 % 34 % 38 % E-business SCM 22 % 5 % 1 % 46 % Electronic data 30 % interchange (EDI) 17 % 7 % 0 % 0 % 20 % 40 % 60 % 80 % 100 % Permanently Often Occasionaly Rarely Never 18 Simona Sternad Zabukovšek, Irena Šišovska, Monika Mravljak, Samo Bobek: E-business in Micro Companies: Lessons learned Business to government (B2G) is gaining importance. services provided while nearly the same percentage (87%) Because of the rapid development of e-services provided believe that the services provided by the e-taxes solution by the government as well as governmental requirements, facilitate their business. companies are increasingly using e-business-based interac- tions with the government and its agencies. In this study, we Concerning the advantages and disadvantages of e-business, researched the use of e-business-based communication with we asked micro companies to list what advantages they the government in micro companies, focusing on partici- have using e-business models and solutions. Participants pants’ attitudes toward e-taxes. The results are presented in were asked to indicate if they agree or disagree with selected Figure 3. The majority of participants (90%) were familiar benefits of e-business (see Figure 4): with e-taxes; 91% trust such interaction with the tax agency, • Reduction of the operating costs: 34% completely agree 88% feel that the necessary information is obtained from the with this statement, 50% agree, and 13% did not express e-taxes solution, and 88% have detailed knowledge of the an opinion. Figure 3: Attitude to the e-taxes services and their use 92 % 91 % 91 % 90 % 90 % 89 % 89 % 88 % 88 % 88 % 87 % 87 % 86 % 85 % Do you obtain Do you spend Are the services Do you trust Do you know Do you know necessary less time provided in this the use of the the services of the portals? information? way facilitate portal? the portal? your business Yes Figure 4: Advantages of e-business in the surveyed enterprises 20 % 49 % 29 % Better communication with customer/partners 4 % 11 % 48 % 37 % Greater adaptability to consumers 3 % 47 % 50 % Increased access to information 7 % 59 % 33 % Fast responsiveness to change 2 % 24 % 41 % 32 % Shorter delivery times 3 % 34 % 62 % Immediate implementation of payments/transfers 13 % 50 % 34 % Reduction of the operating costs 0 % 20 % 40 % 60 % 80 % 100 % Completely false False Neither True Completely true 19 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 • Immediate implementation of payments and transfers: the 5-stage grading scale than with the assessed advantages 62% completely agree, and a little more than 30% spec- (see Figure 5): ified that the statement is true. • 41% of respondents (the largest percentage) could not • Shorter delivery time: 24% did not indicate if delivery identify whether the costs of implementation and main- time is actually reduced through e-business while 73% tenance are too high. stated that this statement is true or completely true. • More than half of respondents did not agree that • Speed of response to changes: 59% answered that the e-business means they do not experience significant speed of responding to changes is faster with the use of benefits. e-business. • 38% of companies did not agree that they do not have • Increased access to information: Half of all respondents experts for implementation, support, and maintenance completely agree with this statement, and a few percent- of e-business solutions. age points less only agree with the statement. • 43% percent of participants did not agree that employees • Increased adaptability to customers: 48% believe that do not show an interest in and willingness to implement this is true, and 33% say this is completely true. or develop e-business. • Better communication with customers: 1% said this is • 44% of respondents saw a problem in the statement that completely false and another 1% said it was false; 20% e-business does not bring personal contact with custom- did not comment; and the highest percentage—49%— ers, which is crucial for some specific activities. considered this statement to be true while 29% said it is • 40% of respondents could not identify whether the completely true. e-business problems are a result of the small number of users. On average, the companies did not assess any of the proposed • The question about the lack of time for trainings and advantages as being less than 4 or the descriptive assessment transition to the new, improved way of doing business “true”; therefore, we can conclude that their attitude toward was answered as “neither” by 33% of respondents, e-business is high and that companies have adopted e-busi- meaning they could not decide about this statement. ness to such a level that they have used all of the advantages Only one percentage point less answered that the state- in their favor. ment was false. Yet e-business also brings disadvantages and raises Due to their size, micro-entrepreneurs are very sensi- problems for entrepreneurs. When assessing these disad- tive to financial issues and to human resource manage- vantages, we noted a greater dispersion of responses on ment issues, so one of our hypotheses suggested that Figure 5: Disadvantages of e-business in the surveyed enterprises Lack of time for trainigs 6 % 32 % 33 % 24 % 5 % and transition to the new way od doing bussiness 4 % 11 % 48 % 37 % 2 % Little number of users 7 % 18 % 18 % 44 % 13 % There is no personal contact with the customer 7 % 59 % 33 % 33 % 3 % The employees have no interest and will There is no experts 19 % 38 % 21 % 19 % 3 % for implementation/ maintaince 12 % 52 % 24 % 10 % 2 % We don't expect significant benefits The costs for 9 % 26 % 41 % 21 % 3 % implementation/maintance are too high 0 % 20 % 40 % 60 % 80 % 100 % Completely false False Neither True Completely true 20 Simona Sternad Zabukovšek, Irena Šišovska, Monika Mravljak, Samo Bobek: E-business in Micro Companies: Lessons learned micro-entrepreneurs see the biggest problems of e-busi- Figure 7: Attitude toward trends of e-business ness in the high costs and lack of education and experi- 2 % ence. Based on the collected data, we can neither disprove 12 % 7 % nor confirm the hypothesis. In both cases, the largest per- centage of respondents answered that they neither agreed nor disagreed with the statement (Figure 6). However, the second largest percentage answered in the positive, sug- gesting a rejection of the hypothesis. In addition, 26% of the respondents did not agree that the cost of implementa- tion and maintenance is too high, and 32% did not agree 33 % that they lack time for education and transition to a new way of doing business. Certainly, the information in the opposite direction is not insignificant; indeed, an insig- nificant proportion of respondents defined this as (21%) 46 % compared to true (26%). E-business, as with all modern concepts and approaches, 1 (No, we are not interested) is developing very rapidly. We wanted to research partic- 2 (No, we have no time for such tings) ipants’ attitudes toward future trends in e-business and 3 (Yes, we follow the trends but we don't implement them) how they are familiar to micro-entrepreneurs. Figure 7 4 (Yes, we are training in this direction and we grade our business) shows the answers in the negative direction (left side) and 5 (Yes, we know the trends well and we regularly implement positive direction (right side). them) As indicated, 9% of all respondents were not familiar with the trends and have no time to follow them, whereas the 5 Conclusion remaining 91% were informed about e-business trends. In addition, 33% of respondents follow the trends, but do not We can conclude that entrepreneurs in micro-companies implement them, while the largest percentage (46%) move have very positive ideas about e-business. The research in this direction and update operations. The remaining 12% also confirmed the majority of our hypotheses. E-business are familiar with the trends and always implement them. is most often used in connection with e-banking. The data Figure 6: Attitude toward costs for implementation/maintenance and toward training 45 % 41 % 40 % 35 % 32 % 33 % 30 % 26 % 24 % 25 % 21 % 20 % 15 % 9 % 10 % 7 % 5 % 5 % 3 % 0 % The costs for implementation/maintenace Lack of time for training and transition to are too high new business Completely false False Neither True Completely true 21 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 indicate that micro-entrepreneurs most frequently use In the last part of the survey, we questioned the adoption of e-business services for banking. E-business is comprehen- new trends in e-business. Interestingly, 91% of all respond- sive concept that enables cooperation inside the company ents follow the e-business trends, and 12% of these recog- and with other companies, doing business with customers, nize that trends are very good and implement them regularly. suppliers, and the government. We expected e-business to The survey itself did not explain in detail what the given have the largest impact when doing business with other statements mean, but a good explanation of trends and their companies. However, the data did not prove or disprove this regular implementation were understood to be news and hypothesis, although e-business-based interactions with the updates that occur in this area. The percentage given here, government appeared very important. based on these statements, is very high. We cannot define if the consequence of this result is a misunderstanding of the We also researched the advantages and disadvantages of and statement or if participants truly do follow and implement problems with e-business. All of the listed advantages were innovation in e-business. We can only say that the participat- demonstrated to be applicable. Micro-entrepreneurs familiar ing micro companies were interested in trends emerging on with e-business are also familiar with the advantages that the market and implemented them according to their abilities. this business approach brings, confirming our hypothesis. Yet the hypothesis regarding the disadvantages was not con- Irrespective of the size of the companies, we have to gain firmed as the percentage of responses between the descrip- the necessary skills and experience to succeed in e-business. tive assessments (i.e., false, neither, or true) were extremely The latest ICT will not bring the desired benefits and impacts similar. if we cannot cope with and manage them in our favor. References 1. Abid, A. A., Rahim, M. M., & Scheepers, H. (2011). Experienced benefits and barriers of e-business technology adoption by SME suppliers . Communications of the IBIMA, 1. 2. Damanpour, F. (2001). E-business e-commerce evolution: Perspective and strategy . Managerial Finance, 27(7), 16–33. http://dx.doi. org/10.1108/03074350110767268 3. eBusiness Watch. (2008). Industry perspectives on e-business developments and ICT impact. European Communities. Retrieved from http://ec.europa.eu/enterprise/archives/e-business-watch/key_reports/documents/BRO08.pdf 4. 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Journal of Small Business and Enterprise Development, 20(4), 913–933. http://dx.doi.org/10.1108/JSBED-03-2012-0044 22 Simona Sternad Zabukovšek, Irena Šišovska, Monika Mravljak, Samo Bobek: E-business in Micro Companies: Lessons learned Authors Simona Sternad Zabukovšek is an assistant professor of e-business at the Faculty of Economics and Business at the University of Maribor. Her research areas include business process reengineering, ERP and e-business solutions, and the implementation and maintenance of ERP solutions. Her bibliography includes more than 70 articles, conference papers, book chapters, and research reports. She teaches several courses at the undergraduate, master’s, and doctoral levels in the areas of e-business and information management. Irena Šišovska is a teaching and researching assistant in the Department of e-Business, Faculty of Economics and Business, University of Maribor. She graduated in 2009 from the Faculty of Economics and Business in Maribor after completing her final paper entitled “Benefits and problems of implementing ERP system in the company.” She earned her master’s degree at the same faculty in September 2013, studying information system management and e-business; her thesis was titled “The quality of banks portals in the case of banks in Macedonia.” Her research work includes the field of e-business, e-business models, e-business concepts, ERP systems, and implementation of ERP systems. Monika Mravljak graduated from the Faculty of Economics and Business at the University of Maribor in 2009, where she studied information management. In 2012 she completed her master’s degree in information system management and e-business at the Faculty of Economics and Business, University of Maribor. She wrote her master’s thesis on e-business in micro enterprises. While studying she was active and gained experience in various companies through compulsory work placements and student work. Her knowledge and experience combine knowledge in the field of electronic business as well as the fundamentals of information technology, economics, project management, marketing, and human resource management. Samo Bobek is a professor of e-business at the Faculty of Economics and Business at the University of Maribor. He teaches undergraduate, master’s-level, and doctoral courses in the areas of e-business and information management. His research areas include strategic information systems management, e-business, and business solutions. He has published several books and books chapters, and his bibliography includes more than 200 articles, conference papers, and research reports. He is the chair of the E-Business Department. E-poslovanje v mikro podjetjih – nova spoznanja Izvleček E-poslovanje vstopa v svojo zrelo fazo. Področje e-poslovanja v velikih podjetjih je bilo raziskano v številnih raziskavah, po drugi strani pa je zelo malo raziskav, ki obravnavajo njegovo delovanje v malih, srednje velikih in mikro podjetjih. Mikro podjetja so skupaj z malimi in srednje velikimi podjetji zelo pomemben del nacionalnih gospodarstev v svetu in imajo tudi osrednji pomen za razvoj strategij Evropske unije. Znano je, da so koncepti e-poslovanja v informacijski družbi vodilo za razvoj poslovnih modelov, vse bolj pa se pojavljajo tudi modeli e-poslovanja. V bistvu je razumevanje uporabe e-poslovanja v mikro podjetjih ključnega pomena za njihov uspeh. Glavni namen prispevka je raziskati intenzivnost uporabe e-poslovanja, njegove prednosti in slabosti, največje težave pri implementaciji/vzdrževanju ter odnos do trendov v e-poslovanju v mikro podjetjih. V glavnem delu prispevka bodo predstavljene ugotovitve na podlagi raziskave, ki je bila izvedena v mikro podjetjih. Podatki so bili zbrani z elektronskim vprašalnikom, rezultati pa izračunani s programom SPSS. Raziskava je potrdila, da se e-poslovanje v mikro podjetjih najpogosteje uporablja v povezavi z e-bančništvom, zelo pomembno pa postaja tudi e-poslovanje z vlado (Business to Government – B2G). Ključne besede: e-poslovanje, mikro podjetja, sprejetje e-poslovanja, kritični dejavniki uspeha e-poslovanja 23 ORIGINAL SCIENTIFIC PAPER Advantages and Disadvantages of the Single European Patent RECEIVED: FEBRUARY 2015 Klara Glazer ACCEPTED: MARCH 2015 Šarhova ulica 5, Radlje ob Dravi, Slovenia klara.gla@gmail.com DOI: 10.1515/ngoe-2015-0007 Abstract UDK: 347.771(061.1EU) In February 2013, the European Union successfully completed more than 30 JEL: O34 years of negotiations and formally signed an agreement establishing a single European patent. The agreement brought about a more competitive patent law compared with that in the United States and Japan. The agreement resulted in a number of advantages, especially for small and medium-sized enterprises, such as the reduction of costs by as much as 80%, simplification of procedures, and the adoption of the Unified Patent Court. With the new unitary patent, intellectual property will grow in importance. Yet experts warn that the new patent results in new forms of unwanted behavior, such as forum shopping and the emergence of patent trolls. This study presents both sides—the pros and cons—to predict the effects on business and cover the widest possible range of experts, providing their views on the topic. Keywords: Single European patent, single patent court, reduce costs, patent trolls, simplified procedures, forum shopping, European Union 1 Introduction Since signing the European Patent Convention, member states of the European Union (EU) tried to establish a patent system that would have a unitary effect on the entire area of the union and to foster a more competitive patent regime compared to the previous situation. Negotiations were extended (European Patent Office, 2014a). The main issues were language and legal arrangements. After more than 30 years, on February 19, 2013, the EU adopted a third and final part of the EU Patent Package,1 opening the door to a single European patent. The single patent was accepted by 24 EU member states (exceptions were Spain, Italy, and Portugal), who have been unified in opinion that the creation of unitary patent system is important for the EU’s economic development. Intellectual property, which represents an important part of the patents, has gained importance in recent years and is becoming an indispensable element of successful companies (Baecker, 2007). Intellectual property rights are closely linked to innova- tions that significantly contribute to competitiveness (Langinier & Giancarlo, 2002). It seems that promoting links (EPO & OHIM, 2013), leading from the research NAŠE GOSPODARSTVO and development (R&D) to new jobs—through innovation, competitive advantage, OUR ECONOMY 1 Vol. 61 No. 2 2015 Unified Patent Court Agreement (UPC, 2013). In December 2012, member states also adopted the European Parliament and the Council implementing enhanced cooperation in the area of the creation of Unitary Patent protection Regulation (EU No.1257/2012) and Regulation implementing enhanced cooperation in the area of the creation of Unitary Patent pp. 24–34 protection with regard to the applicable translation arrangements (EU No. 1260/2012). 24 Klara Glazer: Advantages and Disadvantages of the Single European Patent and economic success—has never been more important than and define them in detail in the subsections. In the third part, in today’s world of increasingly globalized markets and the we focus on the weaknesses of the new patent system, what knowledge-based economy. it means for business, and what types of unethical behavior might occur. The fourth section provides key findings. One of the main features of the current patent system has been the fragmentation that occurred as a result of bringing the 27 national patents together as one (EESC, 2012); such fragmentation is not known in other major economies, such 2 Benefits of the Single Patent as Japan, China, and the United States. This disunity has had a significantly negative impact on business and has contrib- The European patent system, as in force to date and only uted to: representing a set of national patents (Evropska komisija, • a high level of uncertainty and increased complexity of 2014a), was significantly more expensive than the system in, management; for example, the United States (11 times more expensive) or • a high cost of lawsuits in the case of multiple or parallel Japan (13 times more expensive), considering only the trans- litigation; and lation costs and costs of gaining a patent. If we include the • economic and legal inconsistencies. costs of 20 years of protection in the equation, the European patent is still almost 9 times more expensive than those in the Through centralization, the new unitary patent will not United States and Japan. However, if we limit the analysis only reduce financial expenditures, but also increase the to only patent claims, the differences in financial expenses efficiency and attractiveness of the system (Danguy & Pot- increase even further (Evropska komisija, 2007). As a result, telsberghe, 2009). the EU is behind the other two countries in patent activity. In total, 7.3 million inventions were patented in 2010, including A single patent provides numerous benefits for individuals— 2 million in the United States and 1.4 million in Japan. Their including the ability to achieve unitary patent protection is total value represented almost a half (48%) of all worldwide easier and faster, primarily due to simplified procedures and the patents (Komisija evropskih skupnosti 2007). reduced costs of obtaining it—as well as member states and the EU, while it represents an important part of the single market. The EU wanted to create a system that would be more at- One without the other cannot perform in its optimal form. Of tractive than the existing one (Evropska komisija, 2007). In course, we cannot overlook the fact that the new system brings today’s increasingly competitive global economy, it is par- new challenges that those market players will have to face ticularly important that the EU does not lag behind others in (Hilty & Drexel, 2012), such as increased legal imbalances, the the field, which is so crucial for innovations as patent policy complexity of intellectual property protection, and an increased (Evropska komisija, 2006). Patents are a driving force for number of newly established patents in the signatory countries, promoting growth, competitiveness, and innovation (Lang- thereby allowing—according to experts (Pentland & Muk- inier & Giancarlo, 2002). From 2008 to 2010, the industrial herjee, 2012)—many unwelcome business behaviors, such as sectors in the EU, particularly those dealing with intellectual forum shopping and the emergence of patent trolls. property, created almost 26% of all jobs, and patents rep- resented 10% of the total value. Many jobs were produced The purpose of this research is to describe all the benefits in industries indirectly connected with areas of intellectual brought about by a single European patent (i.e., reduced property and the supply of goods and services. If we also costs, simplified procedures, and the adoption of the Unified take into account indirect jobs, the total number increases to Patent Court) and the weaknesses and possible forms of un- more than 35%. ethical business behavior (i.e., forum shopping and patent trolls). The objectives of the research are to define more pre- During the same period, IPR-intensive branches (together with cisely how patent law will change in the EU, define the ad- patents, this group also includes brands and designer indus- vantages and disadvantages brought about by a single patent, tries) represented 39% of total economic activity—of which and demonstrate how the latter will affect the business oper- patents accounted for 14%—in the EU and took a leading ations of companies. The theme is new. A single patent was position in the EU’s trading activity with the rest of the world adopted in February 2013 and did not enter into force. Due outside of its borders. The added value per employee is higher to the actuality of the theme, not much material connected than in other sectors; in the patent sector, the number is even with unitary patent is available, despite the emergence of higher at 64% (EPO & OHIM, 2013). Key features of patents, many new possibilities for European companies. from an economic point of view, are that patents: • Deal with new knowledge, as already foreseen in the This paper consists of an introduction followed by the second item of product or process innovation, and chapter, in which we present the benefits of the single patent • Grant a limited monopoly right to the inventor. 25 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 New knowledge enables the production of new products or costs of filling and maintaining a single European patent, in- processes and has great economic value. A patent ensures cluding patent office translation and court fees, decreased by property rights, positively impacts the promotion of inno- 80%. The number was slightly lower initially (around 70%). vation, and can increase the flow of these rights (Langinier & Giancarlo, 2002). The increase in the number of patents Patent costs consist of the following (Evropska komisija, is particularly desirable; otherwise, a market system might 2013): provide little new knowledge. European patent Single European Patent Although differences exists between industrial sectors and Translation 23.375 € 5.610 € member states, the overall “patent premium” for member Publication 2.987 € 308 € states included in the survey2 from 1994 to 1996 was 1% Representation 5.750 € 500 € of the national GDP. From 2000 to 2002, this number in- Total 32.112 € 6.418 € creased to 1.16% of the GDP (WIPO, 2013). The overall economic crisis in 2008 caused a decline in the number of The largest costs reduction will be a result of the single pro- patents (3.6%) in 2009, but the number started to grow again cedure for granting a patent (EU no. 1260/2012, article 6–7). in 2010. The economic recovery in the field of intellectual property was faster and stronger than in other industries. Determining and designing annual renewal fees for the Patents increased by 7.2%, which is much higher than the patent were especially difficult. Before the single patent global GDP growth (5.1%). was adopted, the Patent Office examined and granted the patent, but the owners had to pay an initial registration fee A strong connection exists between innovation effectiveness in each country in which they wanted patent protection and the use of intellectual property. Countries that are highly (EPK, 2002, Article 141). Of course, fees were not only efficient in terms of innovation tend to have a higher level an initial, one time-cost. Patent holders were required to of patenting and the use of other rights (e.g., design, model, pay the renewal fees each year in every country in which and trademark rights). Highly patented sectors are also more their patent was valid. These fees represented around 15% innovative. of total patent costs (Edmondson, 2013). Many countries also requested several translations and the participation of The patent system affects the overall economy. Once a their lawyers in the proceedings. Such practices meant that survey or an invention is publicly known, the benefits and obtaining a patent in Europe represented a large financial advantages are available to the entire economy in a par- burden,3 especially for small and medium-sized enter- ticular industry. Such information leaves little doubt that it prises. Indeed, one of the main arguments in favor of the was necessary to take action in the EU to provide a simple, creation of a unitary patent was cost reduction and, con- high-quality, and cost-effective patent system to provide sequently, the partial elimination of the financial burden everything in one place: the start of the process for ob- for business (EU no. 1260/2012, Article 5). Patenting in taining patent rights, the granting of patents as post-grant Europe was considerably more expensive than obtaining a procedures, and inclusion of the legal litigations (Komisija patent, for example, in the United States (2000€) or China evropskih skupnosti, 2007). A new patent system is attrac- (600€) (Parreira, 2013), two major competitive markets for tive for businesses and provides cost reductions, the sim- the EU. plification of procedures for obtaining patents, and a single patent court. In the single European patent, fees will be divided, with 50% going to the European Patent Office (EPO), which 2.1 Reducing costs is responsible for keeping a register of all patents, and the remaining half to national patent offices, which will ratify the treaty (EU no. 1257/2012, Chapter 5, Article 13). The success of a new single patent system is largely based EPO is responsible for the management and approval of on reducing the costs of obtaining a patent, which will ease the unitary patent and will act as a kind of virtual national business processes, especially for small and medium-sized office in the territory of all the participating EU member enterprises. Large companies have the advantage in covering states. Renewal fees for the unitary patent will be lower the costs of enforcing patents (especially those incurred as a result of the translation), and they accept it as a price they have to pay if they want to do business in the EU (Riley, 3 At a time when the intense negotiation for the creation of a unitary 2002). Member states predicted that the total administrative patent began, in 2012, the European Patent Office recorded a record number of patent applications. Patent applications have been made primarily by the most successful European companies 2 World Intellectual Property Organization - Highlights on Patents. in eight of the top 10 technology areas (Edmondson, 2013). 26 Klara Glazer: Advantages and Disadvantages of the Single European Patent before the product is on the market and in the first years. we must guarantee translation into the three remaining lan- Such a decision makes sense, as in the first years the guages within two months (EU no. 1260/2012, Article 10). product does not bring in a lot of money. Later, after 10 to The process then continued at WIPO in Geneva. Once the 12 years, when the product becomes successful and gener- process was complete, the applicant must request the grant ates higher revenues, fees for the renewal of patent rights of a patent at the appropriate authorities of the countries will increase (EU no. 1257/2012, Chapter 5, Article 12). in which he wished to gain protection (European Patent The highest level of fees will be from 15 to 20 years after Office, 2014c). For all of these previous procedures, the the initial validity of the patent. applicant needed a representative for the various foreign authorities. The costs of a single patent application and fees for its extension have not been determined (Evropska komisija, With the adoption of the single European patent, these pro- 2014a). This area represents one of the most sensitive cedures were simplified and shortened. Now, the applicant issues. It is necessary to create a system that will be at- can submit an application for a single patent at any national tractive to applicants for EU patents (EU no. 1257/2012, office or directly at the EPO. All further processes take Chapter 5, Article 12, paragraph 2), which essentially place before the EPO, and the applicant can fulfill the re- means that costs for a single European patent should not quirements himself or through a European patent attorney be higher than the costs of three of four national patents4; (European Patent Office, 2014b). The applicant must also if these costs are higher, especially given the fact that the pay all maintenance fees. effect of the unitary patent does not include Spain, Italy, and Portugal, it will be much harder to create a sufficient fi- An important part of the procedures for obtaining a single nancial structure that is attractive for future patent holders. patent is also the language regime. There are 23 official languages in the EU, and to date the majority of member states have required a translation of patent claims into their 2.2 Simplified procedures own language. Thus, translation costs have traditional- ly been very expensive and represented a large financial Another important advantage of the single European patent burden for businesses and individuals. Through the process is simplifying the procedures for obtaining a patent (EU of negotiation, this area was one of the most complicated no. 1257/2012, Article 4). The previous system involved a and lengthiest problems among member states (Roberts & more complex and time-consuming process for obtaining Venner, 2014). Despite all the effort, the language arrange- a patent. Previously, acquiring a patent required submit- ment is still not acceptable for all EU member states; par- ting a national application for the grant of a patent at the ticularly strong opponents are Spain and Italy, which claim National Patent Office for the protection of intellectual the insufficient linguistic regime is one of the main reasons property rights first (Malešević, 2007). Once the office why they did not join unitary patent system. concluded that the application met all the requirements, it published the patent application and granted the patent. However, after many negotiations, the signatory countries The applicant then had two options (EPK, 2002): file a came to a compromised solution for how patent transla- national application with the competent authority of the tions will be arranged. They have decided that applications foreign country, carried out through an agent enrolled in for patents must be in one of the three official languages: the country’s Register of the Office (some countries have French, German, or English. The application can be filed similar procedures, as Slovenia, while others—before with the EPO in any other language (EU no. 1260/2012, granting the patent—check if it is innovative, industrially Article 10), but within two months should be translated into useful, and new), or submit an international application one of the three official languages (EU no. 1260/2012, 7th under the Patent Cooperation Treaty (PCT). In the latter and Article 12). The official language of the proceedings case, we could apply (in German, French, English, or Slo- before the Patent Office is the one in which the application venian) to the Slovenian office for a patent for more than was filed or to which it was translated. Specifications of 140 PCT member states. If we decide to use Slovenian, the single European patent are also published in the official language of the proceedings (EU no. 1260/2012, Article 7) 4 According to statistics from the European Commission (EPO and contain a translation of the patent application into the Statistic, 2013), until 2013, among all EU member states, only remaining two official languages. about 2% of European patents—8% in 13 countries or more and 40% in 5 countries—were approved. The remaining half of the patent was valid in only three EU countries. The geograph- The long-term or ultimate goal of the unitary patent will ical coverage of European patents, covering on average 5 EU begin to be realized only after a 12-year transitional member states, and the costs of patent protection and renewal fees for patents are relatively lower than anticipated fees for a period, when the translation into other languages will no single patent with wider geographical protection. longer be required (EU no. 1260/2012, Articles 12 and 13). 27 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 The program, which EPO aims to develop, will be called ensures the neutrality of judges and presence of trained “Patent Translate” and will be designed to provide users professionals in the patent field (UPC, 2013, Chapter 3, with free online access to information and automated Article 15). With the participation of professional judges translations of all European patent applications and patents qualified for a specific field of technology, linked to patent (Kuhnen, 2013). Exclusively, in the event of litigation or at examples, court proceedings will gain significant weight the request of the court (EU no. 1260/2012, Article 8), the and knowledge, which to date has often been lacking in patent holder will have to provide “human” translation into legal processes in the field of patents (Pagenberg, 2013). an appropriate language. Many times judges have not been adequately trained or did not have enough knowledge to make decisions about the infringement and validity of patents. 2.3 Unified Patent Court Local departments, highlighting the decentralized nature, Prior to February 2013, the competent authorities that can be established in any contracting state at its wish or decided on the validity and infringement of European request. The Administrative Committee will make deci- patents were National Courts and authorities of the Con- sions to establish local departments, with each country tracting States of the European Patent Convention (EPC deciding where the seat of a department will be located 2002 Rule 5 (2)). In practice, this represented numerous (UPC, 2013, Chapter 2, Article 7). A maximum of three problems, especially when the patentee wanted to enforce a additional local divisions can be established in one country patent in different European countries or when a third party for every 100 patents per year (Esche, 2013). For example, wanted to cancel the validity of the patent. The decentral- in Germany alone, the national courts deal with more than ized legal area resulted in particularly high costs, the high 1,400 cases a year, which means that it might require up to possibility of contradictory decisions, and the lack of legal four local departments. certainty (Esche, 2013). Patent holders and third parties involved in legal disputes could interpret court decisions Regional divisions can be set up at the request of two or in their own way. Processes were long, and no one knew more signatory countries (UPC, 2013, Chapter 2, Article exactly who was responsible for decision making in patent 7 (5)), who will determine where the seat unit will be. The litigation. With the adoption of the Unified Patent Court, regional division is designed to be wider, not limited to ad- participating countries wanted to limit irregularities in the dressing cases in only one location, but can discuss matters field of patent law and—due to the different national legal at several locations (Kuhnen, 2013). It would be wrong to systems—prevent participants in litigations from finding say that local and regional divisions have national charac- loopholes and avoiding legal responsibility. ter, although they will act within national borders. Despite the small scale of operations, they are still internationally The Unified Patent Court comprises (UPC, 2013, Chapter formed bodies. 2, Article 6): • The Court of First Instance, The composition of the Patent Court is expected to • The Court of Appeals, and deliver more efficient work while dividing responsibil- • Various committees (e.g., Budget Committee, Govern- ities; the central division will be in charge of the en- ing Board). forcement of patents, and local and regional divisions will address infringements (UPC, 2013, Chapter 6). The Court of First Instance is divided into: Patents will be granted faster and legal disputes resolved • A central division, more quickly. More courts, at the expense of local and • Local divisions (for each state party), and regional divisions, also mean a reduction of queues, less • Regional divisions (two or more state parties, only burden on judges and, as a result, of course, once again, if they prefer to establish a common division) (UPC, faster handling of cases (IPO, 2014). For business it is 2103, Chapter 2, Article 7). important that, when patent rights have been violated, the disagreement be resolved as quickly as possible The central division consists of: so the business processes can continue. It is expected • Two legally qualified judges who are citizens of differ- (Komisija evropskih skupnosti, 2007) that the costs of ent state parties, and an average case in the Court of First Instance will be • One qualified judge with qualifications and experience reduced by 10% to 45% and from 11% to 43% in the in the field of concerned technology. second stage. In big patent cases, savings should be even higher, as these have thus far taken place mostly before The central division will be chaired by a legally qualified the courts in the UK, where the litigation costs are the judge (UPC, 2013, Chapter 2, Article 8). The new structure highest in Europe. 28 Klara Glazer: Advantages and Disadvantages of the Single European Patent 3 Weaknesses of the Unitary Patent the winner, but the question of whether the companies need protection in such a large number of countries has not been Most European Union countries and their European rep- raised. Costs will, of course, be much lower in the frame- resentatives strongly believe in the positive effects and work of a unitary patent system than when obtaining 24 benefits brought about by the European patent with unitary separate national patents (Reddie&Grose, 2013). However, effect (Evropska komisija, 2014c)—namely, a user-friend- when compared with patent fees that the patent holder ly, simpler, and cheaper system. On the other hand, pro- should pay to acquire patent protection in a smaller number fessional experts, legal experts, and large enterprises seem of EU countries, the reduction is called into question. This to strongly oppose the single patent. Opponents of the EU may result in the reduced flexibility of the unitary patent. Patent Package (Hilty & Drexel, 2012) have accused the In the previous system, the patent holder could decide if he new regime of insufficiently regulating several aspects of wanted to save money, which rights he wants to abandon, patent law and, to some extent, providing even worse solu- and which to invest more money in (CIPA, 2013). With the tions than before. unitary patent, the choice is reduced to one: pay in full or lose all rights. Like the existing European patent, the single patent is not innovated in any way, especially regarding the conditions Concerns about the actual performance of the new patent for patenting and the definition of exclusivity and its ex- system have not only been raised by experts in this field. ceptions (Ullrich, 2012). The Chartered Institute of Patent Even before the European Parliament adopted the single Attorneys (CIPA) strongly criticized the new system, be- patent regime via a plenary vote, big names in the business lieving that responsible agencies adopted the new European world sent an open letter6 with a call to reject the text patent reform with excessive haste and put too much hope before them. Nokia, Ericsson, and BAE7 represent some on the unitary patent system to help the Eurozone recover of the most important and largest patent owners (European from economic problems (CIPA, 2013). However, if the Patent Office, 2012). All three companies have been united EU wants to transform the patent system in such a way in the opinion that the adopted text will cause more harm to contribute to economic recovery, it is important that than good to European companies. The accepted regulation changes be properly formatted. Otherwise, the opposite is supposed to be sufficient, but instead of a better unitary effect can result. patent system that would help business—much more than the previous one—the currently proposed fails to do so Before the new system is implemented in practice, 13 (Macpherson, 2012). The three business giants have ex- member states—which must include France, Germany, and pressed concern that the new system will harm competi- England—have to ratify it (Evropska komisija, 2014b). tion, innovations, and entrepreneurship in Europe. The Thus far the requested quota has not been achieved. As a damage will be measured not in years, but in decades. result, its performance and impact on the economy remain unclear. The accepted patent package can bring serious damage to Europe and place it in an unenviable position compared Official registration and maintenance fees are still not with other nations and commercial markets worldwide. well-defined (Weal, 2014).5 Experts warn that some patent It can create unfavorable conditions for companies doing proposals could create an even less sufficient patent system business in Europe (Lichtenberger, 2012). The regula- than the existing one (Hitly & Drexel, 2012)—namely, one tion will make unethical business behavior much easier. that is more uncertain, less flexible, and more expensive in Holders of invalid or weak patents will be able to use the terms of both obtaining protection and its execution. Argu- threat of pan-European orders to gain money from legiti- ments that the new system will be much cheaper for com- mate European companies that create and sell products in panies are based on rather doubtful assumptions, without Europe. Such actions will have negative consequences for reliable evaluations on how high fees for the renewal of both small and large companies with business offices in the patents or judicial proceedings will be (Weal, 2014). These statements are only a comparison between the costs of 6 In September 2013, 16 companies from Europe and the United gaining patent protection in the form of 24 different national States (including Adidas, Apple, Blackberry, Google, and Intel) addressed a public letter to the bodies of the European Union patents through the EPO and the acquisition of a patent to draw attention to different issues of unitary patent—namely, with unitary effect. The single patent was, without a doubt, bifurcation and patent trolls (Adidas AG et al., 2013). 7 According to data from the European Patent Office, in 2011 Ericsson ranked among the top 25 patent holders and Nokia 5 The only indication of the estimated amount of fees is the fairly among the top 50. BAE System represents a subsidiary of the general statement of the president of the European Patent Office: General Electric Company and British Aerospace, which were “Renewal fees will be higher, as many had hoped, but lower than the third largest government parties in the world (European some had fear” (Battistelli, 2013). Patent Office, 2012). 29 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 EU. Business activities will become much more vulnera- EPO representatives answered that forum shopping is, in ble. The patent package in its current form mainly forces terms of costs and efficiency, a welcome result and, to a European companies to find space for their infrastructure, certain extent, inevitable (Richardson, 2012). They believe such as factories and warehouses, somewhere beyond that there is a very low possibility that this kind of behavior the borders of the EU and discourages them from active will occurs, but even if it does, the system is designed in investments in companies headquartered outside the EU such a way that it will repair itself. This will be ensured by (European Patent Office, 2012). Such an environment will the Court of Appeals, which will resolve this matter in the worsen employment opportunities and economic growth in best possible means. the contracting states. Those companies that operate or will operate in this environment will face a significantly worse Forum shopping is a serious problem for all users of the economic position than others. Unified Patent Court, especially because of the separa- tion of powers in relation to the infringement or validity According to Nokia, Ericsson, and BAE, the EU was not of patents—namely, bifurcation (Pinsent Mason, 2013). successful in reaching an agreement. The adopted Article8 Google, Samsung, and Apple have expressed concern over of Regulation, which should solve the problem in a the system, where actions against the violation and revo- complex area of law, did not adequately improve the status cation will be discussed before different courts. Particu- quo. The EU created even greater legal uncertainty, instead larly troubling is the possibility that the court may issue of reducing it. The groundwork for unfair and unethical an injunction against the importation or exportation of a business behavior has been laid. The abuse of patents by certain product alleged to infringe on the patent rights of an patent owners will increase (McDonagh, 2014). Many already established patent, when ultimately the original in- experts—not only the three business giants already men- vention may turn out to have been invalid from the begin- tioned—have warned of the growing potential for manipu- ning (Roberts & Venner, 2014). Such sharing also allows lation through the judicial system; such behavior is called the potential complications associated with the language in “forum shopping” (Radcliffe, 2012, p. 6). Forum shopping, which the trial will take place. a specific concept of private international law, refers to the situation where both the complainant and the defend- In addition to new arrangements in the legal arena, new ant have two optional courts in which the specific legal challenges are projected to increase in the number of concerns can be addressed. The involved parties, based patented inventions in countries. For decades, there has on their own benefits, decide on a court based on which been an explosion of patent applications and adopted one they believe is more likely to rule in their favor. This patents in the EU, similar to the trend observed in other undesirable behavior is eliminated by the rules of civil pro- major patent markets, such as the United States, where this cedure, but not completely. To draw attention to the danger growth is a little more obvious. Despite the 2009 crisis, of forum shopping, it seems, according to the Single Court, when the number of new patents was at its lowest point which has a common set of legal rules and procedures and in recent years, the EPO recorded a new record in 2012 a common court of appeal, at best, a bit strange (Johnson, (Edmondson, 2013). The exact causes of the increase in 2013). However, a closer look reveals parallels with the patents remain unknown. An indisputable fact is that, due operation of the district courts in the United States and to the increasing number of patents, the European patent its appeal system, where unwanted conduct is already oc- system has become a victim of its own success. It has curring. There, actors involved in legal proceedings often already been overloaded due to mass production, and the choose the district court, which they consider to favora- single patent system encourages an even greater number bly resolve their cases; this often leads to power-sharing of patents because of its low cost and simpler procedures. battles (Whytock, 2011). It is concerning that the adopted Thus, the expected consequences are an increased burden patent system, allows similar consequences: Patent holders on patent offices and, as a result, the adoption of “low will be able to hold their legal disputes before various local quality” patents (Bisthoven, 2013). These types of patents or regional central divisions. The possibility of unwanted cause the most damage and represent a significant art of behavior grows, and its actual manifestation is not so far- patent litigation. fetched anymore. Although weak patents might be highly profitable (Vary, 2012), one should not overlook the fact that we are talking about technologically and economically inappropriate in- 8 The infamous Article 5a, which was adopted in order to move ventions that have little scientific value (Bristhoven, 2013). the negotiations deadlock and was the result of a compromise In the long term, it could have a significantly negative among the countries involved in the framework of enhanced cooperation, introduces and specifies uniform protection in this impact on the economic environment. The lack of quality area (European Patent Office, 2014a). and inability to achieve economic standards will have a 30 Klara Glazer: Advantages and Disadvantages of the Single European Patent negative impact on two areas essential for the successful A single patent system undoubtedly carries many benefits operation of enterprises: competitiveness and innovation. for businesses. It reduces the costs of acquiring a patent, They can also have a harmful effect on consumers, espe- simplifies procedures, and regulates the linguistic area in cially when we talk about patents in the field of technology a user-friendlier manner than before. In the past, compa- for people. nies faced a much more difficult decision about the imple- mentation of a European patent, as it represented a major With the adoption of low-quality patents, the possibili- financial challenge. Small and medium-sized enterprises in ties for increasing so-called patent trolls increase (Davis, particular lacked the necessary capital funds. They often 2012). Patent trolls do not have their own assets, apart from remain limited within national borders, and development patents, and are not manufacturing any products; attorneys and innovation brought by operating in international floor represent the most important part of the working staff and were taken from them. It was harder to prevent the exploita- are the patent holders, even if they do not invest in innova- tion of patents from competitors in countries where they tive technologies. These entities do not invest in research did not hold patent rights. It is particularly important to and development and do not perform any work on the ease the process of patenting from small and medium-sized product subjected to patenting. In other words, they want enterprises, especially based on experts’ findings that lower a shiny pot of gold in exchange for no effort whatsoever.9 costs and simplified patent procedures help promote inno- Their business model is quite different from that of other vation between them and consequently promote economic market players (Bristhoven, 2013). The business practice growth in general. of patent trolls is to wait until someone else develops new industries that lead to the new invention they want to Another important achievement is certainly a simplification patent, and then reveal that a specific product or service is of the procedures. A simpler system would facilitate the already patented (and in their possession). They then put work of the company. All application procedures would unreasonable demands on the disproportionate share they be resolved in one place, thereby reducing the unnecessary want, based on non-reimbursable aids. Their main activity waste of time. The new language regime is expected to is to strengthen patents on behalf of various suppliers iden- reduce financial burdens. The new system is more under- tified as offenders and force them to pay high licensing fees standable for users and easier to maneuver. Unnecessary ob- under the threat of costly legal battles (Pohlman & Optiz, stacles are removed—obstacles that discourage companies 2013). We are talking about individuals who constantly with complex bureaucratic procedures and require valuable speculate about the potential value of patents, try to obtain time that would otherwise be used more beneficially (e.g., these patents from inventors for a lower price, and remain for new research and development in the company). alert to the bankruptcy of companies or small businesses that do not have their own legal capacity and experience for In addition to the potential benefits, the new legal regu- the protection and effective enforcement of patent rights. lations mean the court’s composition will allows neutral- ity of judicial decisions and greater objectivity, especially with the participation of knowledgeable judges trained in a specific field of technology bound to the patent case. 4 Conclusion Thus far, judges making decisions in patent litigations have often not been trained adequately or did not have enough The European Commission’s reports and expert opinions knowledge to decide on the objections and the validity of are unanimous in the fact that intellectual property is patents. Courts will work faster. The new legal system will growing in importance and becoming an increasingly sig- bring greater unity in the patent field. Through the estab- nificant part of the economy. An effective system of intel- lishment of local or regional divisions, the court will be lectual property protection brings a positive contribution easily accessible to all businesses and individuals who find for business: Companies can protect their inventions and themselves in a patent dispute. take advantage of all the benefits that protection affords them, transforming patented inventions into money. These The new system will certainly create a more busi- so-called cash patents are a lure for potential investors, ness-friendly Europe. The territory of Europe will become and they are indicators of the innovative potential of economically attractive for all who wish to obtain patent enterprises. protection. 9 The impact of patent trolls on the economy is huge. 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Retrieved from http://www.wipo.int/export/sites/ www/ipstats/en/wipi/pdf/941_2011_highlights.pdf Author As a Zois scholar, after graduating from high school in Ravne na Koroškem, Klara Glazer entered the Faculty of Social Sciences to study European studies. Through her studies, she deepened her knowledge of work and structure of the European Union. Her academic career continued at the Economic and Business Faculty in Maribor. She has a master’s degree in unitary patent, which was also the inspiration for the present article. Currently, she works as a member of the Supervisory Board of the Municipality and is gaining work experience through entrepreneurship and business consulting as well as working in the travel industry. 33 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 Prednosti in slabosti enotnega evropskega patenta Izvleček Evropska unija je februarja 2013 uspešno zaključila več kot tridesetletna pogajanja in uradno podpisala sporazum o uvedbi enotnega evropskega patenta. Sporazum prinaša bolj konkurenčno patentno pravo v primerjavi z ameriškim in japonskim. V dogovoru je predvidena vrsta prednosti, predvsem za mala in srednje velika podjetja. Ključne so: zmanjšanje stroškov za kar 80 %, poenostavitev postopkov in uvedba enotnega patentnega sodišča. Intelektualna lastnina bo z enotnim patentom pridobila pomen. Toda strokovnjaki opozarjajo, da lahko novi patent povzroči nove oblike neželenega vedenja, kot sta izbira najugodnejšega sodišča (ang. forum shopping) in pojav patentnih škratov. V raziskavi želim predstaviti predvsem obe plati, prednosti in slabosti, predvideti, kakšne učinke bodo imele na poslovanje podjetij, zajeti čim širši krog strokovnjakov ter prikazati njihove poglede na tematiko. Ključne besede: enotni evropski patent, enotno patentno sodišče, zmanjševanje stroškov, patentni škrati, poenostavljeni postopki, izbira najugodnejšega sodišča, forum shopping, Evropska unija 34 Effect of Rurality and Human Capital ORIGINAL SCIENTIFIC PAPER Resources in the Entrepreneurial Opportunity Identification Process RECEIVED: FEBRUARY 2015 REVISED: APRIL 2015 Irena Kedmenec ACCEPTED: APRIL 2015 Faculty of Organisation and Informatics Varaždin, University of Zagreb, Croatia irena.kedmenec@foi.hr DOI: 10.1515/ngoe-2015-0008 Urban Šebjan Faculty of Economics and Business Maribor, University of Maribor, Slovenia UDK: 005.13:005.95/.96(1-22)(497.4) urban.sebjan@uni-mb.si JEL: L26 Polona Tominc Faculty of Economics and Business Maribor, University of Maribor, Slovenia polona.tominc@uni-mb.si Abstract In this paper, that is a country study of Slovenia, we tried to determine why individuals in rural residential areas are less likely to recognize entrepreneurial opportunities. Our results show that the increase in resources in human capital, consisting of education, skills, knowledge, and experiences in entrepreneurship, has a significant and positive effect on opportunity identification. For policy creators, our results suggest that policies focused on entrepreneurial education— especially education that would enable the acquisition of real-life entrepreneurial experiences and skills—are useful, especially in rural areas. Keywords: entrepreneurship, human capital, opportunity identification, rural areas 1 Introduction “Rurality defines a territorially specific entrepreneurial milieu with distinct physical, social and economic characteristics” (Stathopoulou, Psaltopoulos, & Skuras, 2004, p. 404). Rurality viewed as a dynamic entrepreneurial resource is what makes rural entrepreneurship an interesting field of research. This paper focuses on the process of entrepreneurial opportunities recognition. Although en- trepreneurship is seen as a means of revitalizing rural areas, we believe that this topic is especially interesting for research because of the constraints and sources that individuals in rural areas are facing in terms of entrepreneurial activity. According to the entrepreneurship literature, small new start-up entrepreneurial NAŠE GOSPODARSTVO ventures encounter initial resource disadvantages compared to large established OUR ECONOMY firms and, as a result, they need to depend on outside resource suppliers to com- pensate for their inherent resource disadvantages (Cooper & Folta, 2000; Venkat- araman, 1997). In other words, external network partners can help prospective Vol. 61 No. 2 2015 entrepreneurs overcome their inherent resource constraints (Floyd & Wooldridge, 1999; Johannisson, Alexanderson, Nowicki, & Senneseth, 1994; Low & MacMil- pp. 35–44 lan, 1988), and this is one of the reasons why the entrepreneurial process can start 35 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 and develop based on repeated interactions with external of these two member states, the largest proportions of the resource providers (Aldrich & Zimmer, 1986). The social population living in intermediate regions were observed in networks needed for new firm creation can be developed Sweden (56%), Estonia (52%), and Bulgaria (45%). The and fostered through geographic proximity—namely, new largest shares of the population living in rural areas were venture locations in urbanized clusters (Cooper & Folta, registered in Ireland (73%), Slovakia (50%), Estonia (48%), 2000). However, a rural environment does not provide pro- and Hungary (47%). In Slovenia, almost half of the popu- spective entrepreneurs with such location-specific advan- lation (43%) lives in rural areas, less than one third (31%) tages, resulting in an uneven distribution of resources for in intermediate, and 26% in urban areas. The average pop- individuals across rural and urban regions. A better under- ulation density in Slovenia is 101.1 inhabitants per square standing of resources and the usage of those resources in kilometer. the process of opportunity identification for their further ex- ploitation within the entrepreneurial activities could support In the EU, the urban–rural typology, as previously described, the creation and improvement of existing public policies for is based on a classification of grid cells within a square fostering rural entrepreneurship. Opportunities are viewed kilometer as either urban or rural (Eurostat, 2012). To be as a key concept within the entrepreneurial process, and considered as urban, grid cells should fulfill two conditions: the concept of alertness to profit opportunities is receiving a population density of at least 300 inhabitants per square a lot of attention, especially within the contemporary en- kilometer and a minimum population of 5,000 inhabitants in trepreneurial literature (Kirzner, 2009; Shane, 2003; Shane contiguous cells above the density threshold. The other cells & Venkataraman, 2000; Short, Ketchen, Shook, & Ireland, are considered as rural. NUTS 3 regions have been classified 2010). Venkataraman and Sarasvathy (2001) described en- into three groups based on the classification of these grid trepreneurial opportunity using four components: (i) new cells: ideas or innovation; (ii) either subjectively perceived or ob- • predominantly urban region: the population in the grid jective goals; (iii) beliefs in the possibility of achievements cells classified as urban makes up more than 80% of the of these goals; and (iv) the implementation of goals through total population the creation of output within the entrepreneurial–economic • intermediate region: the population in the grid cells activity. This description combines two different elements or classified as urban makes up between 50% and 80% of steps of the entrepreneurial process, where the opportunity the total population (population in rural cells between recognition or discovery process precedes the opportunity 20% and 50%) exploitation process (Bhave, 1994; Shane & Venkataraman, • predominantly rural region: the population in the grid 2000). In this paper, we focus on the first factor—that is, the cells classified as rural makes up 50% or more of the opportunity recognition process. total population. The EU typology is also used by the Statistical Office of Republic of Slovenia (with some slight modifications); this 2 Theoretical Background typology is also adopted in this paper. Urban settlements and settlements within urban areas are determined based on 2.1 Rural and urban areas four criteria (Statistical Office of the Republic of Slovenia, 2012): (i) settlements with 3,000 inhabitants or more (formal In 2011, 41% of the population of the European Union (27 criterion); (ii) settlements with 2,000–2,999 inhabitants and member states) lived in urban regions, 35% in intermediate more workplaces than persons in employment living in these regions, and 23% in rural regions (Eurostat, 2012), with settlements (formal, functional criterion); (iii) settlements the regions being classified as urban, intermediate, or rural that are seats of municipalities and have at least 1,400 in- based on an analysis of the population density and total habitants and a surplus of workplaces or settlements that are population. The largest shares of the population living in seats of municipalities and have at least 2,000 inhabitants urban regions were recorded in Malta (entire population), (formal, functional criterion); and (iv) suburban settlements the Netherlands and the United Kingdom (both 71%), and that have fewer inhabitants but are gradually being spatially Belgium (68%). Luxembourg and Cyprus (each a NUTS 3 and functionally integrated with an urban settlement with region1) were classified as intermediate. With the exception 5,000 inhabitants or more, thereby becoming urban areas; functional criterion linking labor migration is used, while 1 The Nomenclature of Territorial Units for Statistics or Nomen- the share of agricultural holdings in the suburban settlement clature of Units for Territorial Statistics (NUTS) is a geocode is used as a separation criterion (physiognomic-morpho- standard for referencing the subdivisions of countries for statis- logical, functional criterion). Non-urban settlements are all tical purposes. The standard is developed and regulated by the European Union and, thus, only covers the member states of the other settlements that do not meet the statistical definition of EU in detail. urban settlements and settlements within urban areas. 36 Irena Kedmenec, Urban Šebjan, Polona Tominc: Effect of Rurality and Human Capital Resources in the Entrepreneurial Opportunity Identification Process 2.2 Differences in the opportunity recognition (Kulawczuk, 1998). Large distances and low population process in rural and urban areas density cause problems with infrastructure (lack of suitable business premises, less developed transport and commu- The realization of entrepreneurial activity begins with the nications infrastructure), shortages in essential services identification of an entrepreneurial opportunity (Bhave, (limited access to public services, finance, information, 1994). As already pointed out, Kirzner (1979) defined en- and advice), and limited opportunities for networking and trepreneurs as individuals who are more likely than others to collaboration (less diversification of the rural economies be alert to the identification and exploitation of profit oppor- compared to the urban ones, absence of private investors) tunities. This is why we consider it important to investigate (Kulawczuk, 1998). opportunity identification in light of the effect of rural or urban characteristics of living areas. The results of existing literature also suggest that the resi- dential area—whether rural or urban—might affect the co- Opportunities are viewed as a key concept within the en- hesiveness of networks in which individuals are embedded; trepreneurial process and have attracted a lot of attention individuals embedded in less cohesive networks (urban (Eckhardt & Shane, 2003; Short et al., 2010; Venkataraman areas) are more likely to recognize opportunities than those & Sarasvathy, 2001). Bhave (1994) defined the process embedded in more cohesive networks (rural areas) (Arenius of the entrepreneurial venture creation as a linear model, & De Clercq, 2005). where entrepreneurs proceed from opportunity recogni- tion to selection and the commitment to physical creation; Entrepreneurial venture creation is undoubtedly embedded meanwhile, phases ranging from alertness to opportunities, in the institutional and cultural context of a country or the discovery of opportunities, and action upon discovered region; therefore, the reasons behind the degree of involve- opportunities can be stretched over long time periods. ment in entrepreneurial activities might vary across regions according to the context (Driga, Lafuente, & Vaillant, 2009). As entrepreneurship is a key tool for stimulating diversi- The Slovene countryside, as is also the case in many EU fied and endogenous growth in rural development policy countries, is not homogeneous, but encompasses diversified (OECD, 2004), rural entrepreneurship contributes not demographic, economic, and social structures. In typical only to economic growth but also to social and cultural Slovenian rural areas, the aging structure of the rural pop- preservation and development of the rural areas. Business ulation indicates that there is still satisfactory reproduction creation retains the local population in rural areas (Istenič & Kveder, 2008). However, 40% of the Slovene ter- (Bryden, 2007), and the precondition of rural economic ritory consists of rural areas characterized by depopulation development retains the younger generation. In European (Perpar, 2007). Slovenian rural areas face problems such as countries with rural enterprise policies, the emphasis is maintaining schools, kindergartens, ambulances, and other on strengthening the viability and competitiveness of necessary services (Perpar, 2007). This leads to the follow- existing SMEs rather than focusing on the entrepreneur- ing research hypothesis: ial capacity of peripheral rural areas by, for example, fostering a positive attitude toward entrepreneurship H1: Rural areas have a negative effect on entrepreneurial amongst young people and women (North, Smallbone & opportunities’ detection process. Vickers, 2001). Potential entrepreneurs in different stages of entrepreneur- 2.3 I ndividuals’ human capital that supports ial venture creation in rural areas face a unique set of chal- entrepreneurial opportunity identification lenges not generally encountered in urban contexts. These challenges derive mainly from the varying degrees of ac- Alvarez and Busenitz (2001) applied resource-based theory cessibility of rural areas, the small size and low population to their entrepreneurship research, arguing that entrepre- densities of rural communities, their social and economic neurs have individual-specific resources that facilitate the composition, and the nature of internal and external identification of new opportunities and the assembling of linkages (European Commission, Agriculture and Rural resources for the venture. Thus, an individual’s ability to Development, European Network for Rural Development, detect and act upon discovered opportunities is supported 2011). Specific social composition includes the lack of an by easier access to resources (Davidsson & Honig, 2003). entrepreneurial tradition combined with the lack of models Therefore the difference in entrepreneurial activity between for successful business ventures and the rural labor force, rural and urban areas has many causes, one of them being which tends to suffer from low skill levels and diversity, the difference in the amount of resources that people have at as well as a structural mismatch in the local labor market, their disposal, including social, financial, and human capital caused by the emigration of the young and well-educated resources that might be utilized. 37 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 The focus of this paper is the role of human capital resources Table 1: Sample structure in the process of perceiving entrepreneurial opportunities. Human capital theory claims that knowledge increases Characteristics Fi fi% cognitive abilities, leading to more productive and efficient Residential area: potential activity (Davidsson & Honig, 2003). Knowledge Rural 3,343 47.5 % Urban 3,688 52.5 % can be acquired as a result of formal education (for example, secondary and university education), non-formal education Gender: male 3,618 51.5 % (for example, adult education), and/or informal education female 3,413 48.5 % (for example, work experience). In this paper, we measure Age: the amount of human capital by the level of education and 18 – 24 years 945 13.4 % prior work experience. Experience and education (Cooper, 25 – 34 years 1,566 22.3 % 35 – 44 years 1,552 22.1 % 1981) are seen as “antecedents” to the decision to start a 45 – 54 years 1,600 22.7 % company. 55 – 64 years 1,369 19.5 % Source: Authors Individuals with high general as well as specific human capital are more likely to exploit entrepreneurial opportu- nities (Clausen, 2006). Davidsson and Honig (2003) found Computer-assisted telephoning interviews were performed that years of education positively influence the chance that a in this survey. A random number generator was used to person could identify new opportunities. Dolinsky, Caputo, select the telephone numbers for the interviews and de- Pasumatry, and Quanzi (1993) argued that less educated termine whether the selected telephone number refers to women might face financial or human capital constraints a household in a rural or urban residential area (as defined that limit their business pursuits. The relatively low skill in chapter 2.1). Therefore, the assigned value of the “res- and education levels of the rural workforce have an adverse idential area” variable equaled 1 for rural and 2 for urban effect on the supply of entrepreneurs, the form and scale residential area of the selected household. of enterprise development, and the quality and chances of success of new enterprises (North & Smallbone, 2006). The dependent variable used in testing was “opportunity Thus, to analyze an individual’s human resources impor- identification”; respondents were asked if they believed tance in opportunity identification process, the following that, in the 6 months following the survey, good business hypothesis was formed: opportunities would exist in the area in which they lived. The variable is a dichotomous nominal, with yes (1) and no H2: An individual’s entrepreneurial opportunity iden- (0) answers. tification is influenced by his/her formal education and self-estimated skills, knowledge, and experience needed for Predictor variables refer to variables describing respondents’ entrepreneurship. human capital. These variables included: • Education: Respondents were assigned to three catego- ries in terms of their educational level: less than second- ary, secondary, or post-secondary degree. 3 Methodology • Self-confidence in terms of skills, knowledge, and ex- perience in entrepreneurship: Respondents were asked The main data sources for our study were Global Entre- whether they believed they had the knowledge, skills, preneurship Monitor surveys of the adult population in and experience required to start a business. The variable Slovenia in 2010, 2011, and 2012.2 As entrepreneurial is a dichotomous nominal with yes/no answers. activity does not shift significantly from one year to another (Acs, Arenius, Hay, & Minniti, 2005), a consol- Two control variables were also included to check if hypoth- idated sample of respondents was formed. The use of a esized predictor variables affect the level of opportunity rec- consolidated sample is based on the assumption of the ognition beyond the impact of these variables. These control stability of phenomena researched in several consecutive variables were age (continuous variable, from 18 to 64 years years (Kelley, Brusy, Greene, & Litovsky, 2011). This old) and gender (dichotomous variable; males were assigned procedure makes estimates more robust. The consolidated 0 and females 1). sample consists of N = 7,031 respondents. Some charac- teristics of the sample structure are presented in Table 1. We formally tested hypotheses H1 and H2 using binomial logistic regression (Hosmer & Lemeshow, 2000) that esti- 2 The Global Entrepreneurship Monitor research methodology mates the probability of an event happening, which in our and data are presented in detail in Reynolds et al. (2005). case was the recognition of opportunities or not. We ran two 38 Irena Kedmenec, Urban Šebjan, Polona Tominc: Effect of Rurality and Human Capital Resources in the Entrepreneurial Opportunity Identification Process binomial logistic regressions. Model I included only control predictor variables, is significant at the 0.001 level (Model variables; Model II included the predictor variables and χ2 = 263.009, p < 0.001). As Block χ2 is also significant control variables. Maximum likelihood estimations were (Block χ2 = 156.190, p < 0.001), the inclusion of predictor used to estimate the coefficients of the logistic regression variables in the model leads to the significant improvement function; these denote changes in the log odds of the in- of the model compared to Model I. dependent variable. The goodness of fit of the model was assessed using the Model χ2-test, the rate of correct classifi- In Model II, the relationship between the area of living and cations, and the Nagelkerke R2. In order to test whether the the identification of entrepreneurial opportunities is signifi- inclusion of predictor variables led to statistically significant cant (β = -0.450, p < 0.001), indicating that those individuals improvements of the model, we used the Blok χ2-test. In living in rural areas are less likely to perceive entrepreneur- order to test the significance of the regression coefficient, ial opportunities than those living in urban areas. Thus, we we used the Wald test. The 0.05 (two-tailed) significance found support for hypothesis H1—namely, that rural areas level was used. have a negative effect on the entrepreneurial opportunities detection process. Model II also provided support for hypothesis H2, showing 4 Results that an individual’s entrepreneurial opportunity identifica- tion is influenced by his/her formal education and self-es- The results from Models I and II are presented in Table 2. timated skills, knowledge, and experience needed for Each variable included the maximum likelihood estimates entrepreneurship. Individuals who believed that they have (β), the significance of the estimates, and the estimates of the skills, knowledge, and experience for entrepreneurship standard errors of estimated coefficients, and both the Wald were more likely to perceive profitable entrepreneurial op- statistics and the odds ratio (Exp(β)) are reported. Table 2 portunities than those who did not (β = 0.649, p < 0.001). indicates that Model II, which includes both control and Those individuals with a secondary degree were less likely Table 2: Results of Logistic Regressions: Models I and II Model I Model II Variable Variable categories Coeff. β S.E. Wald Exp(β) Coeff. β S.E. Wald Exp(β) Age 0.019** (0.003) 59.919 0.981 -0.021** (0.003) 67.969 0.979 Gender 0-male -0.455** 1-female (0.067) 46.553 0.634 -0.355** (0.069) 26.679 0.701 Area 0-urban -0.450** 1-rural (0.067) 44.824 0.637 Skills, knowledge, 0-no 0.649** and experience 1-yes (0.071) 83.274 1.914 Education Less than secondary -0.210* (0.086) 6.039 0.810 Secondary degree -0.196* (0.079) 6.118 0.822 More than secondary (base category) 8.250 Constant 0.181 (0.142) 1.624 1.199 0.090 (0.173) 0.272 1.094 Model χ2 106.818** 263.009** (df) (2) (6) Block χ2 156.190** (df) (4) Nagelkerke R2 0.030 0.072 % of correct predictions 77.9 78.0 Note: ** significant at p < 0.001; * significant at p < 0.05 Source: Authors 39 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 to perceive opportunities than those with more than a sec- Meanwhile, those individuals who believe that they have ondary degree (β = -0.196, p < 0.05) or less than a secondary the skills, knowledge, and education needed for entrepre- degree (β = -0.210, p < 0.05). neurial activity were on average almost twice as likely to perceive business opportunities as those who do not In terms of control variables, we found both a gender and ((Exp(β) = 1.914). age effect. Men are more likely than women to perceive entrepreneurial opportunities (β = -0.355, p < 0.001). Age If we further focus on individuals already identified as en- is also significant, having a negative effect on opportunity trepreneurs (to further illustrate the research results) in early identification (β = -0.021, p < 0.001). stages of entrepreneurship who are living in urban or rural areas in Slovenia, no significant differences were found, indicating that entrepreneurship is an individual’s personal decision, regardless of the urban or rural characteristics of 5 Discussion and Conclusion the environment in which he/she lives. The highest propor- tion of entrepreneurs had post-secondary formal education Opportunity identification activity that represents the most and lived in both urban and rural areas; a similar pattern distinctive and fundamental entrepreneurial behavior is not was observed in both groups in terms of the proportion of evenly distributed: Individuals in rural areas in Slovenia entrepreneurs who believe in self-skills, knowledge, and ex- are much less likely to recognize entrepreneurial oppor- perience needed for entrepreneurship. Such results support tunities than those in urban areas. On average, 18.6% of the conclusions of previous surveys suggesting that entre- the population in rural areas and 26.5% of the population preneurs in Slovenia would have to endeavor to re-orientate in urban areas expect business opportunities in the near their cultural and social norms and become more proactive future. Our research results suggest that individuals living in the identification of various opportunities (Korez-Vide, in rural areas are on average only 0.6 times as likely to rec- Bobek, Čančer, Perko, & Hauptman, 2010). ognize an opportunity as those living in urban environments ((Exp(β) = 0.637). In terms of control variables, the significant effect of age and gender reflects the fact that entrepreneurial ventures’ In the next step of the analysis, we tried to determine why creation process is generally more intense among younger rural individuals are less likely to recognize entrepreneurial individuals than older individuals as well as among males opportunities. The data showed that rural areas are mar- than females. These results were expected as the liter- ginalized in the process of generating the human capital ature provides evidence of significantly and systemati- resources needed for entrepreneurship. The “supply side” cally lower participation of women than men as well as of potential entrepreneurs shows many disadvantages of elderly individuals than younger individuals in all phases rural areas compared to urban ones in Slovenia. Significant of entrepreneurial activity (Arenius & Minniti, 2005; van differences were found in terms of the characteristics im- der Zwan, Verheul, & Thurik, 2011). As entrepreneurial portant for the entrepreneurship creation process between activity fuels economic growth, women have been recog- populations in rural and urban areas. nized as an untapped source that should use their potential (OECD, 2004). The analysis of human capital resources among the popu- lation in rural areas revealed that the level of formal edu- Driga et al. (2009) mentioned that an important social cation is significantly different than among the population function of entrepreneurship in rural areas could be to in urban areas. In rural areas, more than 40% of individuals provide women with local career alternatives; however, received less than a secondary education and less than one empirical evidence shows that this does not seem to be the third pursued post-secondary education; meanwhile, the case. Women in rural areas do not have many opportunities urban population pursued post-secondary education to a for quality employment, so they are often forced to work greater extent while only 34.8% reported completing less in low-paying and low-status jobs (European Commission, than a secondary education. A larger proportion of individu- 2012). Much of today’s rural demography in Europe is als in urban areas (55.6%) possessed skills, knowledge, and characterized by an often critical absence of women, which experience in entrepreneurship than in rural areas (51.2%). has serious social and demographic repercussions, such as the aging problem faced by many rural populations (Driga Our research suggests that individuals who completed a et al., 2009). In Spain, young men and women are drawn secondary education or less were on average only 0.8 times away from rural life, and from agriculture in particular, as likely to recognize a promising entrepreneurial opportu- because of the difficulties of attracting partners to the rural nity as those who completed more than a secondary educa- lifestyle (Regidor, 2000). Chiappe and Flora (1998) wrote tion ((Exp(β) = 0.822 and (Exp(β) = 0.810, respectively). about a stereotypical image (held by both men and women) 40 Irena Kedmenec, Urban Šebjan, Polona Tominc: Effect of Rurality and Human Capital Resources in the Entrepreneurial Opportunity Identification Process that rural women are especially well suited for domestic necessary abilities to start with entrepreneurial activity. and reproductive activities. Some research results show that the most important sources of entrepreneurial education and training in entrepreneurs’ Yet rural women in some European countries are showing opinions not only include formal education, but also stem the potential to play an important role in the development from especially informal working trainings and self-studies and sustainability of rural areas. Regarding the new and by observing other people in business or in someone else’s non-agricultural farm activities, research has shown that business. Such experiences offer the strongest impact for the wife is often the one who creates new on-farm business entrepreneurial activity as the training support is reported to (Clemenz, Helfenberger, Joris, Rossier, & Wacker, 1995; have positive effects primarily on individuals’ skills related Högbacka & Siiskonen, 1996; Ilbery, Healy, & Higginbot- to the identification and capturing of business opportunities, tom, 1997; Pezzini, Ortensi, Mancini, & Baracani, 1997; the organization of resources, interpersonal communica- Toutain, 1995). tions and economic negotiations, increased self-confidence, and more achievement-motivated behavior (Petridou & The gap between women’s shares in the total and in the eco- Glaveli, 2008). Trainings that are not of a formal nature and nomically active rural population is noticeable throughout that are aimed at different capacity-building initiatives, es- the European Union, although it varies across countries. It pecially in terms of entrepreneurial and management skills, is deepest in the rural areas of Italy (9.9% in 2009) whereas could have a positive effect on promoting individuals’ en- the difference is the lowest in the rural areas of Finland trepreneurial use of resources in the rural environment. (0.7%) (European Commission, 2012). It is interesting that Slovenia has the highest percentage of women in the Several extensions of our work are also possible. Applying agricultural population in the new EU-25. However, the po- the assumption of the moderating effect of rurality, future tential for women to contribute to agricultural development research could analyze whether differences in the oppor- is, in many respects, less favorable than in other European tunity identification and entrepreneurial activity between countries because the great majority of women in Slovenia rural and urban individuals could be explained only by the who own and manage their farms are old, probably already difference in the amount of human resources that they have widowed, with poor general and agricultural education and or also by the difference in the intensity of the use of those own small farm estates with mixed, less productive output resources for opportunity identification and entrepreneurial (Istenič, 2006). activity—in other words, to investigate whether resources have the same supporting effect on opportunity identifica- Our results demonstrate that the increase in human capital tion and entrepreneurial activity in urban and rural areas. resources consisting of education, skills, knowledge, and Thus, the question is whether rurality has a moderating effect experiences for entrepreneurship has had a significant and on the impact of resources on the opportunity identification positive effect on opportunity identification. For the policy and entrepreneurial activity. Another possible extension of creators, our results suggest that the policies focused on this work could relate to the gender perspective. The lack of entrepreneurial education, especially education that would data concerning the prevailing gender system and the levels lead to the acquisition of real-life entrepreneurial experi- of gender equality in Slovenian urban and rural locations ences and skills (Čančer, 2014; Širec & Rebernik, 2011), could be addressed in future qualitative research. Research are useful—especially in rural areas, where the acquired could also benefit from the investigation of the moderating levels of individuals’ human capital are in general lower effect of rurality on opportunity identification and entrepre- than those in urban areas of Slovenia. 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Van der Zwan, P., Verheul, I., & Thurik, A. R. (2011). The entrepreneurial ladder, gender, and regional development. Small Business Economics, 39(3), 627–643. http://dx.doi.org/10.1007/s11187-011-9334-7 48. Venkataraman, S. (1997). The distinctive domain of entrepreneurship research: An editor's perspective. In J. Katz & R. Brockhaus (Eds.), Advances in entrepreneurship, firm emergence, and growth (pp. 119–138). Greenwich, CT: JAI Press. 49. Venkataraman, S., & Sarasvathy, S. D. (2001). Strategy and entrepreneurship: Outlines of an untold story. Darden Business School Working Paper No. 01–06. http://dx.doi.org/10.2139/ssrn.275186 Authors Irena Kedmenec works as assistant in the Faculty of Organization and Informatics, University of Zagreb, in Varaždin, where she finished her master’s degree in economics. She is currently finishing her doctoral studies in economics and business sciences at the Faculty of Economics and Business University of Maribor. She actively participates in different projects in the entrepreneurship field (EDU-PRENEUR, Youth in Action programs, etc.), in Croatia, Slovenia, and abroad. Her research activity comprises in particular rural entrepreneurship, social entrepreneurship, and entrepreneurial intentions. Urban Šebjan is currently a Ph.D. student in the Department of Quantitative Economic Analysis and Organization and Informatics at the University of Maribor–Faculty of Economics and Business. He has long worked with Triglav Insurance Company. His research focuses primarily on quantitative methods, statistical analysis software, analytical CRM, and modern information technology. He is employed by the Faculty of Economics and Business as an assistant in the field of quantitative economic analysis. Polona Tominc, PhD, is a full-time professor in the Department of Quantitative Economic Analysis at the Faculty of Economics and Business, University of Maribor. Her research is focused on statistical methods in economics, especially in the field of entrepreneurship and gender differences. She teaches statistics and quantitative methods in entrepreneurial research. She has participated in more than 30 scientific and professional conferences, is the author of various chapters in books and articles in scientific and professional journals, and has published in Slovenia and abroad. She is participating in the DIANA network analyzing female entrepreneurship and is a team member of GEM Slovenia and the Slovenian entrepreneurship observatory research team. 43 NAŠE GOSPODARSTVO / OUR ECONOMY Vol. 61 No. 2 / April 2015 Vpliv ruralnega okolja in človeškega kapitala v procesu zaznavanja podjetniških priložnosti Izvleček V prispevku, v katerem je predstavljena študija na primeru Slovenije, smo želeli odgovoriti na vprašanje, zakaj posamezniki iz ruralnih okolij v svojem okolju manj pogosto razpoznavajo poslovne priložnosti. Naši podatki kažejo, da ima povečanje virov človeškega kapitala, sestavljenega iz izobrazbe, znanja, izkušenj in sposobnosti za podjetništvo, pomemben in pozitiven vpliv na identificiranje poslovnih priložnosti. Za oblikovalce ukrepov ekonomske politike so naši rezultati pomembni, saj nakazujejo, da so politike, usmerjene v podjetniško izobraževanje (predvsem tisto, ki vključuje pridobivanje izkušenj in veščin v realnem podjetniškem okolju), koristne, in to predvsem na ruralnih območjih. Ključne besede: človeški kapital, podjetniško izobraževanje, razpoznavanje poslovnih priložnosti, ruralno okolje 44 NAŠE GOSPODARSTVO OUR ECONOMY NAVODILA AVTORJEM INSTRUCTIONS FOR AUTHORS Revija za aktualna ekonomska in poslovna vprašanja Journal of Contemporary Issues in Economics and Business Revija Naše gospodarstvo / Our Economy objavlja izvirne The journal Naše gospodarstvo / Our Economy publishes original znanstvene članke iz vseh področij ekonomije in poslovnih scientifi c articles covering all areas of economics and business. Letnik 61, št. 2, 2015 Vol. 61, No. 2, 2015 ved. Avtorje vabimo, da v uredništvo pošljejo original- Authors are invited to send original unpublished articles which have ne prispevke, ki še niso bili objavljeni oz. poslani v objavo not been submitted for publication elsewhere. Authors are com- v drugi reviji. Avtorji podeljujejo lastniku revije ekskluziv- pletely responsible for the contents of their articles. Only articles Izdajatelj: Published by: no pravico za komercialno uporabo članka, ki stopi v veljavo receiving a favorable review are published. The authors hereby grant Ekonomsko-poslovna fakulteta Maribor (EPF) Faculty of Economics and Business, Maribor (FEB) na osnovi sprejetja članka v objavo. Avtorji v celoti odgovar- the Journal Owner the exclusive license for commercial use of the jajo za vsebino prispevka. Objavljamo samo članke, ki dobijo article throughout the world, in any form, in any language, for the pozitivno oceno recenzentov. full term of copyright, effective upon acceptance for publication. Uredniški odbor: Editorial Board: Prispevki naj bodo napisani v angleškem jeziku. Na posebni Please write your text in English (American or British usage José Ernesto Amorós (University of Desarrol o, Čile), José Ernesto Amorós (University of Desarrol o, Chile), stani navedite ime avtorja, njegov polni habilitacijski in znan- is accepted, but not a mixture of these). 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Sprotne Footnotes should be numbered consecutively and placed at the Urška Kosi (Vienna School of Economics and Business, Urška Kosi (Vienna School of Economics and Business, opombe naj bodo oštevilčene in navedene pod tekstom pripada- bottom of the relevant page. Equations should also be numbered. Avstrija), Monty Lynn (Abilene Christian University, Abilene, TX, Austria), Monty Lynn (Abilene Christian University, Abilene, TX, joče strani. Oštevilčite tudi morebitne enačbe. References in the text and in the list of references should be ZDA), Borut Milfelner (EPF), Emre Ozsoz (Fordham University, USA), Borut Milfelner (FEB), Emre Ozsoz (Fordham University, Vire v tekstu in na koncu besedila uredite skladno s stilom APA – arranged according to APA style – see Bronx, NY, ZDA), Peter Podgorelec (EPF), Peter N. Posch Bronx, NY, USA), Peter Podgorelec (FEB), Peter N. Posch http:/ www.apastyle.org/learn/tutorials/basics-tutorial.aspx. http:/ www.apastyle.org/learn/tutorials/basics-tutorial.aspx. (Technical University Dortmund, Nemčija), Gregor Radonjič (Technical University Dortmund, Germany), Gregor Radonjič Nekaj osnovnih napotkov za navajanje virov v tekstu: Some elementary directions: (EPF), Miroslav Rebernik (EPF), Kaija Saranto (University of (FEB), Miroslav Rebernik (FEB), Kaija Saranto (University of Primer 1a: Another graphic way of determining the stationari- ty of time series is correlogram of autocorrelation References in the text Eastern Finland, Finska), Milica Uvalic (University of Perugia, Eastern Finland, Finland), Milica Uvalic (University of Perugia, function (Gujarati, 1995). Example 1a: Another graphic way of determining the station- Italija), Igor Vrečko (EPF), Martin Wagner (Technical University Italy), Igor Vrečko (FEB), Martin Wagner (Technical University Primer 1b: Another graphic way of determining the stationari- arity of time series is correlogram of autocorrela- Dortmund, Nemčija) in Udo Wagner (University of Vienna, Dortmund, Germany), Udo Wagner (University of Vienna, ty of time series is correlogram of autocorrelation tion function (Gujarati, 1995). Avstrija) Austria) function (Gujarati, 1995, p. 36). Example 1b: Another graphic way of determining the station- Primer 2a: Engle & Granger (1987) present critical values arity of time series is correlogram of autocorrela- tion function (Gujarati, 1995, p. 36). Glavni in odgovorni urednik: Editor-in-Chief: also for other cointegration tests. Example 2a: Engle & Granger (1987) present critical values Vesna Čančer Vesna Čančer Primer 2b: Engle & Granger (1987, p. 89) present critical values also for other cointegration tests. also for other cointegration tests. Example 2b: Engle & Granger (1987, p. 89) present critical Naslov uredništva: Editorial and administrative office address: Nekaj osnovnih napotkov za navajanje virov v seznamu virov: values also for other cointegration tests. Maribor, Razlagova 14, Slovenija, Maribor, Razlagova 14, Slovenia, Primer 1 – Knjiga: Gujarati, D. N. (1995). Basic Econometrics. telefon: +386 2 22 90 112 phone: +386 2 22 90 112 New York: McGraw-Hill. References in the list of references Primer 2 – Članek v reviji: Engle, R. F., & Granger, C. W. J. Example 1 – Book: Gujarati, D. N. (1995). Basic Econometrics. New York: McGraw-Hill. Elektronska pošta: E-mail: (1987). Co-integration and Error Correction: Representation, nase.gospodarstvo@uni-mb.si our.economy@uni-mb.si Estimation and Testing. Econometrica, 55(2), 251-276. Example 2 – Journal article: Engle, R. F., & Granger, C. W. Primer 3 – Poglavje v knjigi, prispevek v zborniku: MacKinnon, J. (1987). Co-integration and Error Correction: Representation, Estimation and Testing. Econometrica, 55(2), 251-276. Spletna stran: WWW homepage: J. (1991). Critical Values for Cointegration Tests. In R. F. Engle & C. W . J. Granger (Eds.), Long-Run Economic Relationships: Example 3 – Book chapter or article from conference proceedings: ht p:/ www.epf.um.si/rsd/Vsebina/nase_gospodarstvo.aspx ht p:/ www.epf.um.si/eng/Vsebina/journal_oureconomy.aspx Readings in Cointegration (pp. 191-215). Oxford: University MacKinnon, J. (1991). Critical Values for Cointegration Tests. In R. F. Press. Engle & C. W . J. Granger (Eds.), Long-Run Economic Relationships: Revija je indeksirana v ABI/INFORM Global, EconLit in The review is indexed in ABI/INFORM Global, EconLit and Primer 4 – Elektronski vir: Esteves, J., Pastor, J. A., & Readings in Cointegration (pp. 191-215). Oxford: University Press. ProQuest ter vključena v EBSCO in Ulrich's Periodicals bazo. ProQuest. It is included in EBSCO and Ulrich's Periodicals Casanovas, J. (2002). Using the Partial Least Square (PLS): Example 4 – Web source: Esteves, J., Pastor, J. A., & Casanovas, Directories. Method to Establish Critical Success Factors Interdependence J. (2002). Using the Partial Least Square (PLS): Method to in ERP Implementation Projects. Retrieved May 5, 2010, from Establish Critical Success Factors Interdependence in ERP Im- http:/ erp.ittoolbox.com/doc.asp?i=2321 plementation Projects. Retrieved May 5, 2010, from http:/ erp. ittoolbox.com/doc.asp?i=2321 Prispevek naj ne bo daljši od ene avtorske pole (30.000 znakov). Stran naj bo velikosti A4, s tricentimetrskimi robovi in oštevilčeni- The size of the article should not exceed 30,000 characters mi stranmi. 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Dodajte tudi kratek CV For the author and co-authors please add their postal address, e-mail address, telephone number as well as their CV (which range ISSN 0547-3101 (obsega 500 do 550 znakov, upoštevajoč presledke). from 500 to 550 characters including spaces) in one paragraph. Revijo sofi nancira Javna agencija za raziskovalno dejavnost Republike Slovenije. NG OE NG N A Š E G O S P O D A R S T V O Revija za aktualna ekonomska in poslovna vprašanja OE L E T N I K O U R E C O N O M Y VOLUME 61 Journal of Contemporary Issues in Economics and Business Document Outline Mobbing in Slovenia: Prevalence, mobbing victim characteristics, and the connection with post-traumatic stress disorder _GoBack 13