Entrepreneurship and Globalization from Below in Kyrgyzstan

Researcher: Philippe Rudaz


This subproject will examine entrepreneurial dynamics in Kyrgyzstan in relation to globalization from below as defined in the overall research project.

Small and Medium-sized Enterprises (SMEs) in the Kyrgyz Republic are an important pillar of the economy and their role needs more consideration. Altogether, the SME sector accounts for 42% of GDP. However, breaking it down by the type of SME, individual and agricultural enterprises contribute a lot more to GDP (30%) than small and medium-sized businesses (12%). One reason is that individual entrepreneurs and farmers account for 98% of the private sector in terms of registered businesses, while small, medium and large businesses account for only 2% (IFC, 2010). There do exist a number of studies related to economic development and entrepreneurial activities in Kyrgyzstan (Abazov 1999, Luthans & Ibrayeva 2006, Yalcin & Kapu 2008, von der Dunk & Schmidt 2010, Lasch & Dana 2011, Aziz et al. 2012), but to our knowledge, none is tackling the issue of entrepreneurship against the background of the phenomenon of globalization from below.


Thus one needs to understand: (1) how globalization from below influences the entrepreneurial processes; (2) if there are linkages between Kyrgyz individual entrepreneurs participating in globalization from below and those who are not; and (3) if globalization from below represents a driving force of private sector development.

The main interest of this subproject is thus to identify the barriers and enabling factors of entrepreneurship within the framework of globalization from below. Are the participants of globalization from below entrepreneurs by choice having identified an opportunity in trans-border trade or are they compelled by circumstances to engage in these activities? Are these individuals better positioned to establish a structured business than non-participants in globalization from below? In other words, does globalization from below represent a barrier or an enabling factor for entrepreneurship?


To investigate these questions we will rest on the conceptual framework designed for the research project the “emergence and evolution of entrepreneurship in Georgia”, which Rudaz coordinates, and adapt the focus to suit the questions and hypotheses at hand. The study of entrepreneurship in transition economies asks for a particular sensitivity to the environment in which the entrepreneurs are involved, which makes institutional economics theories particularly fit for this purpose (North 1997, Welter & Smallbone 2003). We will use “entrepreneurship” as referring to “discovery and exploitation of profitable opportunities” (Shane and Venkataraman 2000). This definition implies a two-fold process and is general enough to encompass the multi-dimensionality of entrepreneurship. To capture how participants in globalization from below understand their activities and interact with the broader economic and institutional environment, we will conduct face-to-face interviews mixing closed-ended survey questions and semi-structured interviews. These methods will allow a better understanding of the context of globalization from below and enable us to identify possible linkages with entrepreneurship. The sample does not need to be representative as the goal is not to prove correlations between variables but rather discover new ones.

Collaboration with other group members and contribution to the joint project

Formal and informal institutional environments, as well as the value dynamics constraining all entrepreneurs, influence and are influenced by economic actors and market activities. The subproject will therefore contribute to the three points of convergence mentioned earlier and the hypotheses and questions attached to these.

The topic of entrepreneurship is interdisciplinary. It needs contribution from the field of economics, but also from psychology, anthropology, and other social sciences as well. The other subprojects will help to provide valuable information and data on economic networks and the flow of ideas, values, and goods. This subproject, in return, will inform the others whether, how, and to what extent these variables affect entrepreneurial processes.

Moreover, all team members will contribute to the dataset, which will develop from this subproject. All project members will collect similar data in their specific research areas. For example, the interviews in Kyrgyzstan will be conducted in collaboration with Karrar (and the help of students) who is working on informal traders in Central Asia, thus benefiting directly from his experience on this topic. Similarly, Rudaz will participate in the interviews that Karrar will conduct in Tajikistan. Rudaz will also train the group members and students working in the Caucasus in the techniques of data collection and coordinate the conduction and publication of the survey. A final result thus will be a cross regional dataset, which will be publically available.