Development and Predicaments of Entrepreneurship and Family Businesses in Russia
The collapse of the Soviet Union’s centrally-planned economy suggests that resources’ allocation, under socialist rule, was woefully inefficient and, ultimately, gave way to a market economy. For the successful transformation from socialism, entrepreneurship is essential. In the meantime, family business becomes an essential organisational form of private enterprise, facilitating market transformation. Family entrepreneurship plays a pivotal role in transition economies. In this chapter, we first stipulate the importance of entrepreneurship and market process for transition economies by focusing on three main activities, including the discovery of opportunity, mobilisation of resources, and creation of organisation; we then discuss the concept of family entrepreneurship. Secondly, we review the development of Russian family businesses for both big family businesses and SMEs. Thirdly, based on analysing the entrepreneurial process, we are able to identify the underlying predicaments during the promotion of entrepreneurship in transition economies. Although many transition economies are in the process of the market transformation, given their different political, social, and economic institutions, the path chosen might be different, and it is essential for transition economies to clear the obstacles for entrepreneurial activities.