Psychological Capital As A Factor Of Competitiveness, Growth, And Employment In Small Business In Croatia And In The European Union

The existing strategies, objectives, and measures undertaken to increase competitiveness, growth, and employment in small business in Croatia and in the European Union are partly based on the macroeconomic paradigm which says that the intangible human capital (knowledge, skills, and experience) is the most important factor in the competitiveness of business organizations. Industry and businesses in the interaction with other internal (other forms of capital and organizational skills) and external factors of competitiveness (e.g. legislative and institutional framework, access to finance, etc.) lead to the following final outcomes of competitiveness: economic growth, employment, and better quality of life for citizens. However, recent researches and findings show that the intangible psychological capital (self-efficiency, hope, optimism, and psychological resistance), being the latest form of capital or resources, is a more significant internal resource factor of competitiveness of business organizations as opposed to the traditional forms of capital (economic, human and social). In order to contribute to the understanding of significance and role of psychological capital as a new paradigm for increasing the competitiveness of business organizations, industries, and economies, and thus to increase its final outcomes, especially in small business in Croatia and in the European Union, the paper presents the concept and outcomes of psychological capital research, its relation to the more familiar forms of capital (economic, human, social), competitiveness, competitive advantage, and outcomes of competitiveness. This paper is concluded with measures regarding the small business proposed to the European and Croatian economic policy makers.