Cooperation of Universities and SME in BSR: the Case of Latvia Prof. Elina Gaile-Sarkane Prof. Nataļja Lāce Riga Technical Univeristy, Latvia

Agenda Actuality of the topic Facts about Higher education in Latvia Facts about SME in Latvia How do ACADEMIA understand BSR Bridging SME and Academia in field of BSR

Actuality of the topic When widely shared by employees, values reflect broad acceptance of organizational missions and obligations. In the transition in Latvia, ongoing changes in work values and institutions reflect complementary and conflicting forces. Original Latvian and other Nordic values compete with a changing balance of western and Russian influences, and a slow demontage of Soviet institutions. Changes in values can be provided by bridging academia, business and science.

Facts about higher education in Latvia HEI in Latvia,

HE System in Latvia Universities - 6 Academies - 10 Other HEI - 15 Colleges - 26

Main Indicators of HE IndicatorNumber (year) Students (1990) (2010) Students per population172 (1990)492 (2010) HE funding26,7 mil. LVL* (1995)237 mil. LVL (2008) HE funding, % of GDP1,1 % (1995)1,5 % (2008) EU funds: improvement of infrastructure, content and competitiveness of HE and R&D 40 mil. LVL ( ) 380 mil. LVL ( ) * 1 LVL = 1.42 EUR = 1.76 USD

Facts about SME in Latvia There are 72,4 thousand economically active business entities in Latvia: More than 99.4% of economically active enterprises fall in the category of SME The distribution of SME according to their size: micro enterprises – 76.9% small enterprises – 18.7% medium-sized enterprises – 3.8% large enterprises – 0.6%

The dynamics of economically active business entities from 2004 to 2008 ( ; ; 2006 – 1.19; 2007 – 1.30; 2008 – 1.36) speaks for positive quantitative growth (Central Statistical Bureau of Latvia, 2009).

Entrepreneurial activity can’t be sustainable and successful only on the basis of having certain knowledge on how to launch new enterprises without the other components of entrepreneurship. It also puts forward a principal question for discussion – can the quantity of enterprises be an appropriate criterion for judging about the entrepreneurial activity of a country?

Social Responsible enterprises in Latvia (2007/2008): 85% of Large companies 90% of all Banks 20% of Medium size companies Less than 5% of SME

Understanding of CSR in Latvian Enterprises 46 % of respondents have heard about CSR before 69 % wants to learn more about CSR 49 % does not understand the term 84% does not want to compete for the prize

Where does initiative to start CSR come from it is a modern issue today 26.7% personal initiative 41.8% market competition 39.6%

“The Economist” about Latvia in summer 2009 Cold winds are blowing through Latvia. The sun might be shining on the beautiful beaches along the Baltic Sea in this small European Union state, but the temperature of the economy is plunging below zero. Recent rapid growth of the Latvian economy has now turned into rapid shrinkage.

“The Economist” about Latvia in summer 2009 The global financial crisis has hit Latvia hard. Gross domestic product has fallen by 18% percent on an annual basis. As a response to the crisis, public- sector wages have already been lowered more by 20%. Many schools and hospitals are shut. The consequences are also political: Latvia's elections to the European parliament on 6 June 2009 showed increased support for the opposition.

First conclusions Economical crisis impact development of CSR in Latvia negatively: Decrease of economic growth; Negative changes in legislation (for both – individuals and legal entities); The ethical attitude is changing to more negative; All achievements for SME’s are derogate; Increase of social insecurity; Insufficient philanthropy; Decreasing interest in Social Responsibility BUT.....

The mission of a university The mission of the University was and still remains the development and promotion of higher human values as well as their transfer to future generations, respecting the national language, culture, peculiarities and needs of the development of Latvia (LU) To provide the Latvian national economy with qualified human resources for its stable growth and development. (RTU)

Bridging SME and Academia in field of BSR

How to build the bridge?

Bridging SME and Academia in field of BSR Common fields of interest Decomposition of market needs Elaboration of new study programs Including BSR issues in study programs and study courses Participation in various networks Execution of different projects Joining to PRME network (Principles for Responsible Management Education)

Needs for bridging : Organizational goals: Profit maximization, high productivity, competition, organizational efficiency, organizational growth, industry leadership. Social conscience: Social welfare, employee welfare, equality, compassion, cooperation, and tolerance. Personal Achievement: Achievement, success, creativity, autonomy, and ability, and individuality.

Programs and curriculums

Overall conclusions: Due to economic growth the overall attitude to Social Responsibility was increasing in all market Attitude to SR were increasing also in SME’s in spite of fact that they are not sufficient for functioning effectively in the dynamically changing context. Universities are developing new curriculums and each of them includes CSR or BSR components

Anyway, it is going to be long journey...