Objectives for 2007

1. Identifying the relationships between the entrepreneurship initiative and local development

The entrepreneur concept is highly debated in specialized economic studies, especially after 1990, where its role in speeding up the local economy is being highlighted. As defined by law 133 from 199, the entrepreneur is person or a firm, which by associating with another person or firm, organizes a company with the purpose of conducting lucrative activity, by creating goods and services, or by selling them under competition laws.

The entrepreneurship initiative is defined as a complex of actions coordinated by a main idea which aims to develop an economic activity.

For the current phase of research in territorial modeling, theories of regional development are mostly representative and have a broad applicability. We are talking about the theories of localization (theories based on transport cost, based on the independence of localization, based on interregional exchanges), theories of regional growth (growth polls theory), unequal growth theory (center – periphery relationship, circular and cumulative causal theory, and endogenous development theory (regional decline theory, long cycle of regional development theory).

Identification of the territorial discrepancies is done by using a complex of methods among which the degree of concentration (specialization) of some activities which offer valuable information regarding the level of economic development, the evolution and the economic growth rate as well as the specific of the region.
The first attempt of economic and social growth of settlements severely struck down by the industrial restructuring, and massive layoffs, is constituted by the delimitation of areas severely damaged, named by the official paper unfavorable areas.

According to the provision of paragraph 1 of the Government ACT no 24/1998, by unfavorable area we understand a geographical area, strictly highlighted from a territorial point of view, which fulfills one of the following conditions:

the unemployed percentage in total workforce of the area is at least three times as large as the percentage of unemployed in the total workforce at national level, within the last 3 months preceding the date of the drawing up of the papers

there are isolated areas, with no means of communication with a poorly developed infrastructure.
Article 141, Paragraph 1, of the Government Act 24/1998 stipulates that all firms working in such areas are exempted from paying any profit tax corresponding to new investments, until reaching the maximum state help intensity mentioned the Law of State Aid, and its subsequent modifications.

In Gorj county three such areas were declared:

Albeni, through GA. no 191/1999

Schela- GA no192/1999

Rovinari - GA no 193/1999

The main advantage given to the investors in such areas are the fiscal facilities valid up to period of 10 years. The Treaty of Ascension to the EU, Appendix VII, provides for such areas a transition period: for the companies who have received the status of permanent investor before 1st of July 2003, Romania can provide exemptions from profit tax as provided by GA no 24/1998 regarding the unfavorable region regime, by respecting the following conditions: the state aid is given for regional investments; the net intensity of such aids cannot exceed 50% of the total aid give. This level can be increased by 15% for small and medium sized enterprises.

2. The relationship between local development and the optimization of the geographical area.
The slow disappearance of the regional differences constitutes, without any doubt, a major challenge of European construction. Regional differences represented a potential source of instability, especially taking into account the fear the economic polarization can turn into social polarization, potential source of amplification of differences that threaten the system. Spatial development inequality is mostly social relationship inequality between various strata of economic and socio-professional activities, inequality which triggers a hierarchy of the area based on domination type of relationships. The regional differences are the results of structural disfunctionalities of the economic and social system, upon which there is the need to intervene in order to reduce the inequality of spatial development.

The appearance of entrepreneurship in a geographical space, the dynamic and differentiated distribution depends of various factors, such as: entrepreneurship culture, managerial culture and geographic area resources.

In geographic areas with economical differences, entrepreneurship has an important role, regarding its field of activity.

The relationship between the entrepreneurship and the functional structure of the geographic area is obvious due to transformations of territorial systems, one with the appearance of small and medium companies as a result of entrepreneurship.

There are 2 types of relationships between the entrepreneurship and the local development: direct and indirect, which will be analyzed related to the way the geographic area transforms.
These relationships are influenced by the type of environment: urban or rural. In the urban area, the high density of population and higher income led to the development of small and medium companies, especially in the services area. From here, the entrepreneurship spirit has propagated towards the urban areas, towards settlements on the circulation axis, especially towards small and middle size towns, and finally towards rural settlements, with low accessibility.

The regional economic model represents the conventional simplified image of a region or geographical area which needs to be analyzed, a logical or mental construction which portrays the essential elements and their relationships, with the purpose of discovering new relationships, and establishing strategies and policies to ensure a balanced growth of the region. Starting from the simplified models with theoretical value and which do not take into account the variables which may influence the development of the region, we have evolved to present complex model, based on influences exterior to the region, model which highlight the reactions of the region to outside stimuli.

The general level of economic development constitutes the primary explanation for the distribution and concentration of the regional entrepreneurship initiatives. Furthermore, the evolution of several factors specific to each area (historical, social, cultural, political, environmental), can help or not the distribution of economic activity. During econometrical analysis they tested a hypothesis according to which when the general level of economic development is high, or the economic growth rate is high, there are more chances that the economic activities are distributed more uniformly. One study (Jula, Jula 1998), which tested such a model from Romania from an econometrical point of view, shows that in the long run (1950-1996) regional unbalances care negatively correlated with the level of economic development; moreover this correlation is maintained both during economic growth and decline.

In the analyzed area it is very obvious how the entrepreneur sector becomes fundamental for the development of a geographical area. This analysis gives the local and central authorities a well documented scientific basis regarding the development of entrepreneurship at a regional level, and also solutions based on decisional chains with a purpose of reducing regional differences. At the same time it gives a clear picture of the regional components which need support in order to foster development.
The results of the research will have an economic and social impact because they shed new light on the entrepreneurship initiatives, in the sense of local development.