The effect of return migration driven social capital on SME internationalisation: a comparative case study of IT sector entrepreneurs in Central and Eastern Europe

Abstract

Transition to a market-based economic structure in the post-communist countries of the Central and Eastern Europe (CEE) region since the early 1990s has been accompanied by intense IT-driven technological change. Internationalisation opportunities have emerged for IT sector small and medium sized enterprises (SMEs) based on the region’s strong possession of technical skills. However, while enhanced SME internationalisation is desirable in policy terms, the current socio-economic transitional context of the region is not compatible with a highly competitive global business environment. While transition has facilitated outward migration, return migrants who acquire social capital abroad and establish businesses upon return home may positively influence entrepreneurship, organisational human capital and SME internationalisation in the CEE region. This chain of phenomena remains relatively unresearched in a CEE context, hence this article presents an initial attempt to address it. A process-oriented qualitative case study approach is used to compare the experience of three IT sector entrepreneurs in Hungary who previously worked and studied abroad. Primarily, the acquisition of social capital from abroad is crucial for re-configuration of organisational human capital at home in order to drive ‘born-global’ SME internationalisation. This study therefore provides a basis for further empirical investigation of the overall transformative effect of individual return migrant entrepreneurs upon organisational human capital re-configuration and ensuing SME internationalisation. Additionally, policy suggestions are derived for development of international entrepreneur exchange programmes to enhance social capital development and human capital re-configuration in local innovative SME sectors.