Dr.

Alexandrina Maria Pauceanu

PHD THESIS RESEARCH

BUSINESS INCUBATORS AND TECHNOLOGICAL PARKS

1. HUNEDOARA INDUSTRIAL PARK
It is located in the city of Hunedoara (70.000 inhabitants), 15 km away from one
another city, Deva (80.000 inhabitants). Hunedoara steel industry was heavily dependent.
Steelworks in Hunedoara development peaked during 1980 - 1985, when he had over
20,000 employees. After 1990, steel production in Hunedoara entered - a pronounced
decline and successive job reduction. The last wave of layoffs occurred in May-June
2003, when they were dismissed over 3.500 employees.
Making industrial park began in spring 2003. Park area is 193.000 sqm, divided in
26 plots with area of 2.500-10.000 square. Parcels will be granted for a period of up to 49
years or will be sold to investors who will locate in the park. Parceling is flexible, in
order to meet the specific demands of the investors. The access to the park is made
directly from Hunedoara-Deva county road. The Park is fully equipped for any type of
investment industries: electricity, natural gas, potable water, sewage, natural drainage,
cable communications, roads, parking, public safety, and facilities for extinguishing fires.
Amongst the advantages offered to investors Hunedoara Industrial Park we note:
1. Employment-related benefits:
There is a well qualified workforce in many trades. Steelworks, giant steel plant
built large model of French Lorraine or the Ruhr, was in fact an integrated industrial
complex, where workers from all trades worked. Tradition has been perpetuated until
today. Virtually any well-trained skilled workers are to be found in Hunedoara.
Long industrial tradition. Hunedoara has been an industrial city for about 125
years. The states of Central and Eastern Europe have very few places to take advantage of
such tradition, which is a guarantor of quality jobs.
Availability of labor to accept working and pay conditions are worse than in more
developed European countries, and high availability due to the recent increase in the
unemployed number.
Malleable nature of the workforce. Hunedoara County has not registered social
conflicts; there was no strike, even in moments of massive redundancies.
The town of Hunedoara has a University, providing a network of quality secondary
education and suitable training to prepare quality graduates.
2. Market benefits:
The town lies in the center of the historical province of Transylvania. Within a
radius of 200-250 km, there is a market with approximately 6.5 million consumers, the
highest consumption consumer rate in Romania.
It is located 7 km away from the main road which crosses Romania.
Its position is more than 20 km of the highway that is going to be done on the
European road corridor 4: Budapest - Nadlac - Bucharest - Constanta, the main corridor
that crosses Europe from West to South-East.
Its position is away from the existing 15 km of the railway transport corridor 4:
Budapest Bucharest; this railway is being currently modernized in a European Union
project.
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Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
It lies at about 200 km from Romanian border with European Union.
3. Advantages related to location:
The ability to perform new construction, modern, unrestrained to a place
providing all utilities. It combines the advantages of a green field" location (investments
cost reduction).
The feasibility of fast investments. There are construction companies with proper
organization and tradition in the realization of civil and industrial in the town.
Existing companies providing services appropriate to carrying out maintenance
works of equipment and machinery.
More opportunities for recreation. The location is close to the Retezat Mountains and
Cincis Lake (the lake with water features), and major ancient history sites: Sarmizegetusa
or Huniades Medieval Castle. To these is added the fact that Romania is starting to
become an attractive emerging market for foreign investment: re-launch economic
activity since 2000; political
progress Romania is a NATO member since 2004; and joining the Single Common
Market will make the flow of foreign investments grow in the near future.
2. THE CURRENT STATE OF THE INDUSTRIAL PARK HUNEDOARA
Industrial park area of land reaches 20.35 ha, and a 15 ha surface area. Currently,
there are 27 parcels that were subject to grantee, meanwhile the remaining nine plots are
for public use. Of the 27 subject of the concession, there are only three concession lots. In
the park there are 19 leasing companies, some of them granting even 2-3 parcels if
necessary. Currently, only seven operating companies effectively work, with different
industries (steel construction, light industry, textiles, electronics, civil engineering and
furniture, etc.). Of these seven companies, there is a Swedish company, two companies
are Italian, and 4 of them are Romanian. They have created approximately 700 jobs.
In relation to promoting the image and park facilities, we can talk about the
following ways and means:
- Promotion through its website, which is constantly updated.
- Existence of park details uploaded on MEI website, government and other
promotional channels.
- Close cooperation with the Agency for Foreign Investment and Development,
Agency 5 West (Timisoara).
- A member of APIIAR, a non-governmental nonprofit association, which
promotes the park.
- A member of EURADA.
- Working visits in Europe to exchange experience and domain promotion.
- Promotion through the media (newspapers, Yellow Pages, business sites, etc.)
The major purpose of creating Hunedoara Industrial Park was the creation of new
jobs alongside with area development. Alternatively, we wanted to create an area suitable
for both business development and attracting more investors, covering the entire surface
of land for the industrial park. Such a location is very attractive to investors because lease

Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
or purchase costs are very low, and also due to the existence of logistical support and
expert advice.
Services on the industrial park covers:
- Electricity,
- Methane,
- Drinking water,
- Sewerage,
- Roadways,
- Telephone companies,
- Protection and security services,
- Postal services,
- Medical services,
- Catering services,
- Maintenance services and environmental park area.
Regarding to the duration of the land granted to investors, the grant is valid for 49
years, with possibility of extension within the law, or there is the possibility of land
selling by the operator if they want to use it for the same purpose in the future, as long as
it complies with all their obligations acquired by Letter of intent. Concession is made by
public auction. To participate in the public auction for land grant in Hunedoara Industrial
Park, the trader must meet the following conditions:
- Be a registered trader in the Trade Register Office of Romania;
- Company's principal activity is the production activity. The concession contract
will require the completion of the share of production activities - at least 80%.
- Production activities planned to be completed on the new location must be
within the park following fields: electronics, mechanical engineering and
equipment, wood processing, production activities and production using
advanced technologies and produce high added value (manufacturing
household goods, fine mechanics, metal manufacture, metallurgy goods
produced by plastic deformation and powder metallurgy, and agricultural
products manufacture, etc.)
- Do not be insolvent, in bankruptcy or liquidation;
- Their managers are not convicted in criminal trials;
- Do not have payment arrears on taxes, local taxes, state budget, local budgets
and contributions, and other statutory obligations;
- Do not provide false qualification documents;
- The minimum level of fee for parcels to be leased is 0.10
EUR/sqm/year (equivalent in RON at the NBR, from the date of payment).
- The fee, including legal rate of VAT, should be payable in four quarterly
installments, within 30 days of the end of each quarter. For each day of delay interest
shall be charged daily - interest equal to the set of legal regulations in force at that time,
out of the amount of unpaid royalties. In case of fee nonpayment for a period of 3
consecutive months, the contract is dissolved
by law, without any formal notice or any prior formality, and that the operator is obliged
to issue within three months or lease its investment to market and provide explicit
assumption made by the new owner of the rights and obligations under its grant contract;

Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
the investor also is obliged to complete the sale within 3 months after grant
determination.
Tariff rate to use and exploit the leased parcel (management fee) which was
established by Hunedoara City Hall by City Council Resolution no. 136/2006 shall be:
- Including 0.12 EUR/sqm/month for plots leased within up to 3000 m area.
- Exclusive 0.10 EUR/sqm/month for plots leased from 3001 sqm - 5500 sqm.
- Including 0.08 EUR/sqm/month for surface parcels leased to over 5500 square
meters.
Charge for use and operation of leased plots (management fee) includes
providing the following services under a contract concluded with S.C. Industrial Park
S.R.L.:
- Security services within the entire premises of the park;
- Street lighting of the park;
- Common area maintenance and sanitation of the park;
- Maintenance of common network utilities to the park;
- Access to conference room and administrative flag;
- Support for early information on Local Government wishes concession
companies;
- Parking for tenants of the park.
3. Conclusions and recommendations
Critically analyzing information gathered from the field, helps us draw the
following conclusions on the advantages of the existence and functioning of Hunedoara
Industrial Park:
1. For municipalities, these industrial parks are a reliable source of income.
2. Financial reasons to lease land that is appropriate to present the following issue
is favorable to local budget: City Hall will receive a regular basis throughout the
concession, the fee will be used for solving other problems of the local community: it will
also receive all payroll taxes for all newly created jobs, and taxes on new buildings to be
built.
3. For the industrial parks are arranged, these are jobs for long-term residents.
4. For businesses, tax relief means, easy access to the best infrastructure and
connections, low cost rent, and other facilities to the content.
5. Investments works will be made only on environmental permits, and thus
ensure that none of the ongoing activities the leased land will not adversely
affect the environment.
For a competitive entrepreneurial development in the Hunedoara Industrial
Park it is imperative to consider implementing the following management direction:
1. Attracting an institution that put on a business incubator in the industrial
park of Hunedoara, with the stated aim of assisting companies in developing internal and
business consulting.
2. Better promotion of the Industrial Park, particularly in economic journals.
3. Specialization of the Industrial Park on one particular sector, for increased
efficiency. Following data collection, we consider appropriate specialization in Industrial
production, as there is already available specialized workforce.
4. To sign a contract with a consulting company specialized in production

Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
management, and to implement effective management processes in industrial societies
located in the park.
5. In collaboration with the Mayor, establishment of facilities more attractive to
investors, in order to solve local social problems (high rate of unemployment, social
problems of poverty, etc.) so there are both long term economic growth and sustainable
development.
TELIUCU INFERIOR BUSINESS INCUBATOR
Teliucu Inferior Business incubator, Hunedoara County, was initiated under a
program funded by the World Bank for a period of 3 years, and the consultant selected to
support the project initially was Gruppo SOGES spa. Subsequently, this incubator has to
go into administration to local authorities.
As a marketing strategy and a strong trend in the promotion and further
development of the business incubator is the involvement of the local community. The
incubator was set up for the local community, and its involvement in development is a
necessary thing.
I strongly believe that strict specialization of the business incubators on a domain,
specifically the potential of the area to be developed is an important step and necessary
for sustainable development. These companies will create new jobs and training
opportunities for local educational organizations.
As part of its economic development policy, business incubator is the local
community's desire to stimulate business development, creating new jobs and improving
the tax base. The advantages of the establishment of a business incubator are much more
numerous and consistent than the disadvantages of such initiatives.
I continue to support the idea that a business centre (business incubator, industrial
or technological park, cluster, etc) must be supported by the local business community
and even local government and key individuals involved in the development of
regional/local areas. It is certain that a business incubator is not a worthwhile investment
without a permanent support from the local community; otherwise, it may go bankrupt
before they show as a tool for local development (regional).
The business incubator is a tool for stimulating entrepreneurs to start a business
through the provision of a set of common quality services at competitive rates on the
market.
The business incubator is a powerful tool for local development because its
purpose is to identify and accommodate companies and guide them to success. It is an
organization that offers new companies or startups an environment designed to help them
maximize their success after a period of time, usually three years (as an average).
In the usual way, business incubators are of three types: financed from public
funds, public-private partnerships and funded.
The concept of business incubator has a valuable meaning in terms of long-term
economic growth and job creation, because it felt like its establishment as part of a
comprehensive economic development plan. Once become operational, business
incubator stimulates and supports the growth of small businesses, and thus can be
adequately supported by the local network of technical experts, financial managers and
marketing specialists.

Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
Business incubator reduces the risk of investments in small businesses by
providing a stable business environment in which new companies are focused on business
development strategies. The association of a new business with an incubator will
improve the chance to obtain credit. These companies will create new jobs and training
opportunities for local educational organizations.
As part of its economic development policy, business incubator is the local
community's desire to stimulate business development, creating new jobs and improving
the tax base. The advantages of the establishment of a business incubator are much more
numerous and consistent than the disadvantages of such initiatives.
Teliucu Inferior Business Incubator offers the following services for the
companies who wishes to become part of the project:
assistance in preparing a Business Plan;
advice on company management;
advice on business marketing (market, customer identification, methods of
promotion, etc.)
financial planning, funding applications;
human resources management consulting;
seminars and training courses in the field of business management;
participation in different events organized by Teliucu Inferior Incubator;
For the companies and other entities outside the incubator, it offers the following
services:
consultancy and information legal forms to start a business, and information on
the procedure for setting up costs and duration, respectively;
advice and information about potential markets to embark on an affair;
advice and information about the types of funds to finance a business;
advice and information about the business plan, business marketing, financial
management and human resources management;
To local public authorities, it provides the following:
upgrading local development plans;
feasibility studies, business plans, drawing up requests for funding from the
structural funds;
advice and assistance for the implementation of the structural funds;
advice and assistance for the establishment of community development
associations, partnerships, etc. Despite the fact that the construction is placed in a small
community (Haeg area), business incubator Teliucu Inferior represents an opportunity
for real people with entrepreneurial spirit who want to start a business and, in general,
and for entrepreneurs who have already done so and who may benefit from the presence
of such a business incubator in the area.
The incubator Teliucu Inferior will combine advisory services, training, financial
services and more so will also provide a "full service". The services provided should lead
towards the modernization and development of competition in the market.

Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
The business incubators philosophy is to develop the local community in the
coverage and raising the standard of living of the population in this area.
It should be stressed that the potential growth in Teliucu Inferior is weak and real
market opportunities are few. For this reason, an information campaign should be carried
out in order to attract local investors, regional and possibly foreigners, considering that
the area is economically disadvantaged, and regeneration is needed.
After the completion of the strategy the company will adopt the penetration on the
market in the future on a strategy for the development of the services market. Business
potential in Teliucu Inferior was identified in the analysis of business opportunities and it
comprises:
tourism
metal and textiles
agriculture
mining real
Opportunities that have been identified in the Haeg area are as follows:
livestock
horticultural areal;
tourism and agro-tourism;
industry (foundries, casting);
forestry;
processing of food products (milk, meat and wool)
textile apparel
Prospective customers are expected to come from Deva, Hunedoara and Teliucu
Inferior.
The attitude of the business environment, locally, is very good and the local
authorities (in particular the Town Hall) are decided to support entrepreneurs.
There is a special interest of local entrepreneurs to start businesses in the field of
livestock farming, tourism and processing of organic food.
Another chance for local entrepreneurs is the development of textile, apparel
industry, metal and woodworking. These opportunities may be included among the
criteria for the selection of businesses that will be incorporated.
The marketing plan is based on the following objectives:
1. maintaining a degree of employment of at least 80%;
2. increased sales of services to customers outside the Centre;
3. involvement throughout the year in various community events;
SWOT ANAISYS OF TELIUCU INFERIOR BUSINESS INCUBATOR
Strenghts:
- building renovated and connected to the utilities;
-support from local authorities;
-incubation procedure very advantageous;

Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
- effective building management;
Opportunities:
-entering the market with consulting services and training;
-the conclusion of partnerships with other authorities and institutions;
-attracting a revolving loan fund;
Weaknesses:
-poor reaction reviews target towards the services placed on the market;
-location of the Centre;
-high cost of utilities;
-lack of qualified human resources in Telicu Inferior;
Threats:
-the lack of specialized personnel in management;
-high operating costs;
-decrease of employment of the Centre;
Product policy for incubator Teliucu Inferior, Jud. Hunedoara
Criteria
The size and structure of
offers

The qualitative level of

services

The degree of products

renewal

Strategies
Products: horizontal
diversification: involves
increasing the number of
services within the set.
Qualitative adjustment: with
custom-made services: involves
the adaptation of the special
requests of clients.

Quality stability assured.

The improvement of services:
implies improving market
information.

Solutions
Creating new training and
consulting services.

Order execution services;

personalized services.

Regular data collection from

customers.

I strongly believe that Teluicu Inferior Business Incubator should be specialized

on tourism. Community benefits through tourism development, specialization of the
incubator in this direction can be:
Attract tourists-the increase in the number of tourists who come and increase the
length of stay, through the improvement and diversification of tourist offer and ways to
promote direct-electronic and paper, by the tourist office, the internet, promotional
materials, media, etc.;
The creation of a comprehensive database, updated and monitoring the various
operative, quantitative and qualitative indicators that may be put at the disposal of the
various stakeholders.

Dr. Alexandrina Maria Pauceanu

PHD THESIS RESEARCH
The three above mentioned effects find their reflection in the following positive
changes:-growth of gross domestic product as a result of the momentum generated by
increased monetary unit has revenues of tourism activity;
-increase of sales volume resulting from economic transactions (excluding
inventory);
-multiplying revenue, as a result of additional tourist spending units;
-creation of new jobs in almost all branches of national economy with tourism
which is linked, directly or indirectly;
-increasing the revenue of the State budget, through the taxation of economic
activities can thrive on tourism development;
Direct revenue growth from tourism (direct effect);
Multiplier Effect of tourism-by developing an overall mission both in other
branches of the economy and the social sphere: indirect-effect-impact of increased
expenditure for the travel service branches producing consumer goods in which tourism
enterprises inevitably resorts to bolster tourism offer at competitive parameters;
Industrial effect of aggregate demand multiplier at the macro-scale (entire national
economy in general and in particular area) because both revenue to those who work
directly in tourism, as well as those payable by the manufacturer of consumer goods are
reinvested to purchase other goods and services that they need.