The Impact of the Advance of SME's for the Romanian Economy

The Impact of the Advance of SME's for the Romanian Economy

The aim of the paper is to determine the state of IT within the Romanian organizations and its impact for the Romanian economy.

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Published in: 6th International DAAAM Baltic Conference

One of the powerful forces of economic development is the advance of IT. The developing countries perceive IT as an opening to achieve access to knowledge and services. The internet is one of the IT parts that bring value added for organizations as well as for whole economy. Even though it was created as a medium to distribute information, it became an instrument for the organisations to promote and sell their services and products around the world. Even conventional technologies are undergoing considerable transformations due to information technology applied in manufacturing process, product developing and e- commerce.

It was initiated an exploratory research in order to determine the state of IT within the Romanian organizations and its impact for the Romanian economy. It was made an allowance for the fact of considering as starting point the idea that between IT and economical development is a positive relation, and that IT development requires and generates high skilled educated labour. Targeted companies were SMEs. 

The Romanian economy was in transition after the events from December 1989. Its economic development has been constrained by the centralized economy inherited from the former communist regime. The government had played a fundamental role in the creation of a framework for the structural and systemic changes needed to promote economic reforms. A set of economic reforms was issued. The major accent was on the privatization and restructuring of the economic system. The government made great efforts for the approach of a market economy. Unfortunately, only few reforms had effective results. This fact created a downward spiral of events that led to economic backup by 1997.

Legal reform had a slow pace also. Business units from the private sector were in very different conditions and did not exist a unique set of recommendations applies to all. The reform of large state companies took place very slow, generating the increase of losses. Energy-intensive companies continued to function uneconomically, while the government falsely held the price of energy low, in this manner moving economic troubles to upstream industries. Labor-intensive industries created demands for subsidies and direct credits from the State budget.

In spite of this contradictory development, all measures and restructuring underlined their target to increase the pace of reforms and to assure EU accession in 2007. Although it is a country with a large population in Balkans, Romania shared the same institutional problems of the Southeast Europe region. Despite the fact that the country ranked at a good position in the human resources, the infrastructure and the investment indicators, it had an unsatisfactory economic and financial performance ranking. Competitiveness also requires the ability to cooperate as a cluster. It depends on the capability to form strong alliances and partnerships. At the industry level, business associations can participate in efforts representing business sector before government. The Romanian companies with a long tradition and exportable products and services have to exploit the new opportunities from European markets. The organizations that do not have tradable products and services for international markets and which supply only the national market, can investigate the trends in bordering countries with greater experience. 

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