CHALLENGES AND DEVELOPMENT TRENDS IN BUILDING ENTREPRENEURIAL CAPACITY OF SMALL AND MEDIUM-SIZED BUSINESS ENTITIES

Abstract

The paper seeks to explore the structure of the entrepreneurial capacity of small and medium-sized business entities as a set of their inherent characteristics affecting the realized and latent components of the entrepreneurial success – the so called resident drivers (resources, economic activity types, customization level, competitive advantages, focus on creating social values, entrepreneurial process, customer-based approach) which are triggered by the internal (psycho-physiological, socio-demographic, intellectual and creative properties, universal cultural and professional competencies, the ability to innovate, adaptability level, communications, etc.) and external (the institutional environment, the competition (co-operation) relationships development level, social capital, macro- and mesoeconomic indicators dynamics, the dominant technological paradigm) factors affecting the choice of a business activity pattern (forced / voluntary entrepreneurship / intrapreneurship). It is argued that during the phases of crisis and depression within the medium-term economic cycle the importance of internal factors underpinning the entrepreneurial capacity of small and medium-sized business entities increases dramatically, while the periods of revival and recovery demonstrate greater significance of external factors which involve a range of global (the world markets competition), national (nation-wide legal acts, social capital) and local (regional normative legal acts, acts of representative bodies of local self-government, social capital of local community, ethnic or confessional, etc.) factors. Findings report for a correlation analysis method has revealed that the most significant elements in building the entrepreneurial capacity in terms of ensuring positive dynamics of business performance efficiency indicators are customer value creation, macroeconomic environment dynamics, competition level and the quality of entrepreneurial thinking as evidenced by the results of scenario-based forecasting of business activities.