Entrepreneurship in Transition Economies

Abstract

This book is about successful companies from Central and Eastern Europe (CEE) and Russia; about entrepreneurs, like Ivo, who not only defied the odds at home but also managed to build a global presence and reputation for their enterprises. We call them Entrepreneurial Icebreakers. We shed new light on how these entrepreneurs created value in less-friendly environments — for themselves as well as others. Our findings can enrich global and especially transitional entrepreneurship practice and research. We hope that prospective entrepreneurs will be encouraged to pursue and realize their ideas and are not stopped by the perception that it is an “impossible dream” when starting a company in a context that seems to put one on the downside of advantage. We also wish that professors and other players and organizations in the entrepreneurship-related ecosystem will benefit from the insights in this book and the materials we provide in order to improve business and entrepreneurship education.

When Ivo Boscarol, CEO of Pipistrel — a light aircraft manufacturer from Slovenia — started his company, it was unimaginable for private persons in Yugoslavia to own their own aircraft, let alone their own aircraft manufacturing facility. If ultralight pilots wanted to fly, they had to do it covertly. They had to wait until the sports and army pilots finished flying for the day, then sneak in an hour or two of flying before darkness fell. As they flew late in the evening, using aircraft lights with triangular hang-glider wings, the local people jokingly referred to them as “bats” — in Latin, Pipistrellus.

Ivo’s first business was printing. He also had a passion for photography and even managed some rock bands. The photography helped him pay his way through college, though he got so busy with his businesses that he never graduated with the economics degree he had set out for.

At that time he had also developed an interest in flying. However, during the late 1980’s, it was difficult to fly an aircraft freely in the totalitarian regime of Yugoslavia, as the military controlled the movement of all aircraft. Ivo had a desire to fly when and where he wanted. On a visit to Italy, he saw a motorized hang glider and decided then and there that he was going to own and fly his own aircraft. Ivo knew it was difficult, if not impossible, to bring the glider into the country in one piece, as it was not legal to own your own ultralight aircraft at the time. He purchased it anyway and imported it into Yugoslavia in bits and pieces, disguised as parts for something other than an aircraft. When he finally had it all and put it together, he wasn’t satisfied with the construction. His conclusion was that it not only looked dangerous — it was made of aluminum and wire, with fabric wings and a small engine at the rear — but it was dangerous.

Ivo first modified his own glider to make it more robust and later those of other pilots who approached him. Eventually, the Italian company he had purchased the glider from contacted him and wanted Ivo to make the same modifications to their aircraft. Normally, modifications to an aircraft were not permitted without permits and drawings approved by federal aviation bodies which also require significant associated design drawings and so on, all of which must be carried out by a licensed aircraft maintenance engineer (LAME). As he spent more and more time modifying gliders he decided to build one of his own.

Ivo approached the country’s aviation authority to get the required permits and approvals to build and sell ultralight aircraft, as they were technically not permitted in Yugoslavia. He was received with a great deal of laughter because no one believed that a private individual would try to build an aircraft in the Socialist Federal Republic of Yugoslavia. Furthermore, what kept the aviation department bewildered was that he wanted to build an ultralight aircraft — something nobody in the aviation department knew anything about as they were mostly managed by the military. The aviation department contacted a Slovenian state-owned aircraft manufacturer and asked if they knew anyone who could help them deal with the case, someone who was known as an expert in the field. They were given the name of Ivo Boscarol.

After many meetings, they gave Ivo approval. The problem, however, was that there were no systems, exams or regulations for those who wanted to manufacture their own ultralight aircraft. Ivo took this opportunity to write the exam — the same exam that he himself was required to pass to get approval to manufacture his aircraft. He subsequently wrote many of the regulations and requirements for manufacturing ultralight aircraft in his country. Ivo became the first totally private aircraft manufacturer in the former Yugoslavia — and went on to write additional chapters of aviation history.

Source: CASE 11: Pipistrel: The Freedom of Flight; p. 290