Employment by property forms 1992-foreigh, joint property with foreigh participation the joint russian (without foreigh participation) private property a property of non-commercial organizations public and municipal 1992 1993 1994 1995 1996 1997 1998 1999 2000 Fig. 1. Employment dynamics by property forms in Karelia 1992-2000 (Source:
Trudovie resursi v Respublike Karelia, Goskomstat RK- Petrozavodsk 2001 ) Labour turnover in Karelian labour markets In Karelian Republic, the highest rates of labour turnover (Hirings + Separations) were in construction, housing and utilities, trade and catering, agriculture and forestry in the year 2000 (Table 2.). In forestry, manufacturing and trade and catering the high rates of labour turnover are accompanied by recruitment outpacing separations. For the year 2000 all other branches, except administration, separations exceeded hirings. Administration is also the most stable sector of labour markets presenting the lowest rates of hirings and separations.
The most common reason for leaving the job is officially workers own initiative (fig 2.). Decision to leave one’s job can be result of better job opportunities elsewhere or as a result of poor work conditions and low wage. In latter case employees only option is to quit work and to start search better one. But as we saw on the sectoral turnover rates (Table 2.) the variation between sectors is high and those presenting lowest turnover rates the reason to stay might also be the lack of opportunities. Especially on the sector of administration low turnover rate can be affected by the strict occupational boundaries and skills needed to administration cannot be transferred to other sectors. The individual element on labour turnover and turnover behaviours connection to occupations can be also seen as total picture on labour turnover. The highest turnover rates are on the “blue collar” work and specialised fields like administration, science and education are more stable.
Labour reallocation across sectors, as a percentage of the labour force Years 1997-2000 (Source: Trudovie resursi v Respublike Karelia, Goskomstat RK- Petrozavodsk 2001) Branch Hirings % (H) Separations % (S) H-S H +S 1997 1998 1999 2000 1997 1998 1999 2000 2000 Total for economy 23,1 25,2 37,2 36 28,6 28 34 36,8 -0,8 72,Manufacturing 21,2 27,5 56,3 40,6 29,7 31,5 47,6 39,9 0,7 80,Agriculture 20,1 24,6 39,9 51,8 31,5 32,9 37,1 55,6 -3,8 107,Forestry 38,3 56,8 63,7 55,8 42,6 51,3 50 47,4 8,4 103,Transport 17,3 14,6 19,3 21,8 26,3 20 18,4 25,9 -4,1 47,Communications 26,2 22 21,2 25,4 28,2 24,6 24,9 27 -1,6 52,Construction 34,3 45,6 63,3 63,4 45,1 55,9 63,5 64,9 -1,5 128,trade & catering 34,5 31,5 50,6 55,3 45,5 37,7 47,9 54,8 0,5 110,Housing and 42,1 43,8 47,5 58,6 34,4 40,1 48,1 60,3 -1,7 118,communal services Public health 19,5 20,2 22,5 25,8 23,1 20,4 21,4 26,8 -1 52,and social protection Education 20,5 19,8 18,2 21,5 23,6 20,9 19,4 23,2 -1,7 44,Culture and arts 19,1 23,6 24,5 28,1 18,6 25,1 20,8 29,2 -1,1 57,Science 21,9 19,7 20,3 24 31,2 22,9 15,8 25,1 -1,1 49,Finance, credit 18,5 14,4 13,1 31,3 22,9 17,4 18,8 38,2 -6,9 69,and insurance Admistration 12 15,7 19,7 19,3 12,8 15,8 17,3 18,7 0,6 staff reduction own initiative 1996 1997 1998 1999 Figure 2. Reported reasons for turnover behaviour (Source: Trudovie resursi v Respublike Karelia, Goskomstat RK- Petrozavodsk 2001) Conclusions These preliminary findings on labour turnover in Karelian Republic labour market do give reason to ponder differentiated opportunities of labour market participants. On the one hand Karelian labour markets are highly flexible according gross-flows of employees to different jobs.
For the year 2000 the Karelian Republics overall turnover rate was as high as 72,8. On the other hand Karelian labour markets also include “calm havens” like administration and science, where turnover rates are modest. It is a pity that available statistical data does not allow to investigate gross turnover rates more deeply in details. Implicit hypothesis can be drawn from the sectoral turnover numbers that public and municipal sectors are more stable employers. The overall picture on turnover is predicted on structural forces and individual choices, which are constrained by labour market opportunities. In order to understand the true nature of labour turnover we would need additional data on labour market participants’ aspirations and subjective interpretations of labour market opportunities.
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University of Joensuu, Reports of the Karelian Institute. N:o13/2004. (pp.
10-32) Evgenia Prokhorova Doctoral student Department of Geography University of Joensuu FOREIGN GREENFIELD INVESTMENT AND COMMUNITY: THROUGH MUTUAL ADAPTATION TO SUCCESS.
This paper discusses foreign direct investment as a learning process and outline some practical application of such approach for a host territory. Foreign direct investments can be classified by their motivation, duration, mode of entry, etc. This paper is dealing with greenfield investment which refers to the investment into new facilities and the establishing of new entities through entry as well as expansion (UNCTAD 2005) as distinguished from brownfiled investments (investments into already existing facilities). According to UNCTAD (2005, 10), FDI enter developing countries mainly in form of joint ventures or greenfield projects in contrast to developed countries, where merges and acquisitions are more common mode of entry.
Foreign direct investment is nowadays a topical issue and opinions about FDI and its role in territorial economic development is far from being united. Foreign direct investment is praised as a mechanism of modernisation and development by some and accused for being exploitative by others. Bradshaw (2005, 13-14) sums up theoretical assumptions on positive impact of FDI on economic restructuring as following: FDI provides an access to capital sources beyond domestic economy, transfers technology (both in form of machinery and management know-how), brings international standards of corporate governance, provides income to the state through privatisation and taxation, increases foreign trade turnover. Bradshaw (2005, 14) points out that there are not so many studies on post-socialist countries, which would offer more critical point of view on impact of FDI. One of the exceptions is a research by Smith and Pavlinek on FDI in Czech Republic and Slovakia, which argues that FDI’s positive effect on economic restructuring is less significant than it was assumed and it is weakened among others by limited upgrading skills of local workforce, limited effect on local employment, and small impact on local supply chains (Smith and Pavlinek 2000, from Bradshaw 2005, 14). It lies outside the scope of this paper to discuss thoroughly long-term effects of FDI upon economic development of a host territory. It is enough to state here, that FDI is not a panacea for economic restructuring, but it is an intrinsic part of healthy market economies and it is essential to understand mechanisms behind investment process in order to maximise benefits of all parties involved.
A citation from Dyker (1999, 22) is a good starting point of the discussion - “FDI is pregnant with possibilities of various circles of networking, technological upgrading and enhancement of human competences, but there is nothing automatic about these virtuous circles. Unlearning curves are as plausible as learning curves, and some elements of networking maybe so exploitive as to kill any possibility of creative mutual interaction”. A host territory may receive benefits of FDI in various forms but following Dyker knowledge exchange and learning which occurs between actors involved is one of the most important benefits of FDI. Establishing of a new enterprise through greenfield investment requires development of multiple socioeconomic interactions between parent company, newly established subsidiary, local development offices, employees, etc. Those relations create micro level of investment climate (Kuznetsov 1994, 79) and may play a decisive role in implementing, functioning and future expansion of the investment project. Those relations sprung from a single investment episode become valuable resources of development both for the company and the host territory because they are channels of mutual learning.
Why are interactions so important for learning Learning through interactions is a key mechanism behind successful development for both company and region. Cook and Morgan (2000) offer a conceptual framework, which brings together institutional change and innovation (learning) based on interactions. Their framework is elaborated on theoretical insights of evolutionary political economy and interactive model of innovation. They define innovation as an interaction between different actors in which information and feedbacks are circulated in up and downstream flows (Cook and Morgan 2000, 12-13). Learning occurs not only through interaction between different actors, it can also be gained through indirect sources such as printed media. However, some forms of knowledge is possible to be acquired only through direct contacts between actors. Cook and Morgan (2000, 16) distinguish between first-order learning (doing things better) and second-order learning (doing better things). “While first-order learning can be achieved through better use of codified (tradable) knowledge, secondorder learning is more difficult for firms, not least because novelty involves a great degree of tacit knowledge, which had been defined simply but effectively by ‘we can know more than we can tell’ (Polanyi, 1966 from Cook and Morgan 2000, 16). Because tacit knowledge is personal and context-dependent, it is difficult if not impossible to communicate other than through personal communication in a context of shared experiences.” (Cook and Morgan 2000, 16). Relations established during investment process are able to channel valuable tacit knowledge exchange between partners involved.
What kind of learning occurs through investment episode and what implications might it have for a host territory Well-established body of literature within organisational studies deals with ways companies are learning from their experiences at a new host territory. Very and Schweiger (2001) single out two types of learning, which foreign investors have to face during investing process76. The first type refers to acquiring knowledge about target company (in case of acquisition) or, more broadly, about business environment at the possible host territory (both in case of acquisition and of greenfield investment). Very and Schweiger call this type target learning process. This learning process is the most obvious one and as a rule host regions and their development offices do not have problems with realising immediate requirements of a potential investor and responding to them. Territorial development agencies should maintain intensive dialogue with each interested investors to collect data about their specific needs. Requirements of investing companies can vary considerably and have very specific characteristics, therefore, host territories should be flexible in their work with potential investor and react fast to meet specific requirements of potential investor (Young 2005, 105).
The second type of learning refers to the fact that foreign investors draw their future plans on their past experiences. Very and Schweiger (2001) have named it experience accumulating process. Experience accumulating process partly determines future strategy of a company within a host region. Though a decision on further investment and Note that Very and Schweiger have constructed their model based on analysis of acquisition process but the same logic can be easily adapted to greenfield investments.
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