Knowledge-Based Companies in Central Europe After Market Liberalization

Abstract

Knowledge-based companies of former socialist countries and state run economies in Central Europe were for many years protected from any kind of competition and nurtured with relatively high domestic prices. Sudden shift to market economies and opening up of home markets in the nineties had a strong impact on the business performance as local companies have suddenly encountered a global competition. Knowledge-based companies in CE-countries neglected their technological innovation capability, marketing way of thinking and performing, and underestimated process of globalization. All these have resulted in deteriorated performance, lost competitiveness and dominance as market leaders. Sustainable growth in knowledge-based industry sectors can be achieved only through superior technological innovation, strategic marketing and aggressive pursuit of international presence. After market liberalization many local companies embraced give-up strategy approach resulting in crossborder takeovers and loss of stand-alone status. attention to investing in intellectual capital and promoting technological innovation rather than focusing on economic productivity issues only should involve building regional business clusters and regional hubs for application of engineering and technical knowledge in the future.