development of entrepreneurship and smes … · the sme development ... impacts of the declaration...

DEVELOPMENT OF DEVELOPMENT OF ENTREPRENEURSHIP ANDENTREPRENEURSHIP ANDSMEs IN SEE & CITsSMEs IN SEE & CITs

Dr. Antal Szabó, Regional Adviser on Entrepreneurship and SMEsUNECE

24 May 2005

UNECE Industrial Restructuring, Energy & Enterprise Development Division

PART OF THE GENERAL PART OF THE GENERAL ECONOMIC POLICYECONOMIC POLICY

There is no unique way of elaborating such policies; they clearly depend on a number of factors, such as national endowments of a country, the degree to which entrepreneurship already play a part of economic activity, the existence of entrepreneurial skills.


CATEGCATEGOORIESRIES OF OF THETHE SME DEVELOPMENTSME DEVELOPMENT

• Emerging market economies (V4, 3 BALTIC STATES: EE, LV, LT, SI)

• Countries making rapid progress (EU candidate countries: BG, CR, RO + RF)

• Countries at an intermediate stage of transition (AL, AR, AZ, Serbia & Montenegro; MD KY)

• Countries making slow progress with less commitment (majority of the CIS countries)


Definition of SMEsDefinition of SMEs

The majority of the associated countries adopted the recommendation of the EU definitions of SMEs and generally follow the EU recommendations. A mechanical copying of the criteria concerning number of employees and financial criteria (balance-sheet and annual turnover) is not appropriate in all cases, because countries should take into consideration the scale of national economies.


Definition of SMEsDefinition of SMEs

The definitions of SMEs in the CIS countries are very inhomogeneous and it is very difficult to compare the share of the SME-sector of individual countries. In Azerbaijan, Belarus, Kazakhstan, Republic of Moldova, Russian Federation, Tajikistan and Turkmenistan there is no defined criteria of medium-sized enterprises at all.


SME POLICIESSME POLICIES

Every CIT is developing some kind of national SME policy and programme. Experience shows that more and more countries are following the integrated approach to SME development suggested by the UNECE when developing the private and SME sector in the transition economies


INTEGRATED APPROACH OF INTEGRATED APPROACH OF SME SECTOR DEVELOPMENTSME SECTOR DEVELOPMENT

(i) STRATEGIC level (policy making);

(ii) INSTITUTIONAL level (support institutions);

(iii) ENTERPRISE level (entrepreneurs and business entities)


SME POLICIESSME POLICIESSOUTHSOUTH--EASTER EUROPEEASTER EUROPE

• Albania (Law on SMEs, No 8957 17 October 2002.)• Bulgaria (National Strategy on the Development of Small

and Medium-sized Enterprises in Bulgaria for the period 2002-2006);

• Croatia (Law on Small Business Development Encouragement, prepared by the Ministry for Crafts and SMEs, accepted in 2002, Small Business Development Program till 2004);

• The former Yugoslav Republic of Macedonia (National SME Strategy, 2002);

• Romania (Establishing the National Credit Guarantee Fund for SMEs and Measures for Simulating, the Starting up and Developing SMEs, 2002)

• Serbia Strategy for the Development of Small and Medium-sized Enterprises and Entrepreneurship in the Republic of Serbia 2003-2008, January 2003; and Law on Business Registration Agency as of 21 May 2004


SME POLICIESSME POLICIESCAUCASIAN TRANSITION ECONOMIESCAUCASIAN TRANSITION ECONOMIES

• Armenia (SME State Support Programs for 2002/2003)

• Azerbaijan (Changing the Law on State Support for Small Entrepreneurship, 04 November 2003; President Decree 2002: State Program on Development of Small and Medium Entrepreneurship)

• Georgia (Decree No 309 Prove Small and Medium Enterprise State Support Program 2002-2004);


SME POLICIESSME POLICIESCOMMONWELATH OF INDEPENDENT COMMONWELATH OF INDEPENDENT

STATESSTATES• Belarus (Program of the state support of small business in

Belarus 2002.) • Kazakhstan (Decree of the President of the Republic of

Kazakhstan (RK) of 29 December 2003, N1268, “On State Program for Support and Development of Small Business in 2004-06”);

• Kyrgyzstan (“Ratification of the State Programme on Entrepreneurship Development in the Kyrgyz Republic in 2001-2003”, August 2001);

• Republic of Moldova (State Programme for the development of Small and Medium sized Enterprises 2006-2008);

• Russian Federation (Decree No 118 on Creation of Russian Development Bank aiming at financing small enterprises including farming entities);

• Uzbekistan (Law on Guarantees for the Freedom of Entrepreneurial Activities, May 2002).


DECLARATION ON SMEsDECLARATION ON SMEs

BOLOGNA CHARTA June 2000;CEI DECLARATION ON SMEs AT THE DAWN OF THE 21st CENTURY 24 November 2000, Budapest;EUROPEAN CHARTER OF SMEs June 2000, Santa Maria de Feira;EXPANDING THE EU CHARTER April 2002 Maribor;BSEC DECLARATION ON SMEs September 2001, Istanbul;OSCE DECLARATION ON SMEs May 2003 Bern;EXPANDING THE EU CHARTER BY WESTERN BALKAN 21 June 2003 & MOLDOVA in 2004


REVIEW OF THE IMPACT OF REVIEW OF THE IMPACT OF THE BSEC DECLARATIONTHE BSEC DECLARATION

• The Permanent International Secretary of the Organization of BSEC in cooperation with the United Nations Economic Commission for Europe prepared this Questionnaire in order to review the impacts of the declaration on the development of entrepreneurship and SMEs sector.

• As of 20 May 2005 the following countries send their self-evaluation report: AR, AZ, RM & the Republic of Montenegro


INDEX OF SME INDEX OF SME DEVELOPMENTDEVELOPMENT

Complex economic indicator, which incorporates

- share of private ownership; - share of SMEs in GDP; - share of the labour force of SMEs in

the total labour force of a country, expressed in terms of percentage and/or GDP per capita


Emerging Market Emerging Market EconomiesEconomies

• SHARE OF PRIVATE SECTOR IN TOTAL ECONOMY [%] 75.6%

• SHARE OF SME-SECTOR IN GDP [%]48.6%• SHARE OF EMPLOYEES IN SMEs IN

TOTAL EMPLOYMENT [%] 58.4%• INDEX OF SME DEVELOPMENT

1,238 [US$/capita]


Countries Making Rapid Countries Making Rapid ProgressProgress

• SHARE OF PRIVATE SECTOR IN TOTAL ECONOMY [%] 68.9 %


TOTAL EMPLOYMENT [%] 48.8%• INDEX OF SME DEVELOPMENT 396

[US$/capita]


Countries with Countries with intermediate intermediate stage of transitionstage of transition




[US$/capita]


Countries Making Low Countries Making Low ProgressProgress




[US$/capita]


THE ROLE OF THE ROLE OF GOVERNMENTSGOVERNMENTS

Creation of an enabling business friendly environment; Creation of an adequate legislation; Formulating & implementing national SME support programmes; and Building SME support infrastructure.


GOVERNMENT POLICY GOVERNMENT POLICY SHOULD BESHOULD BE

Legislation should be oriented on creation of a suitable laws on company creation, acceptable taxation, social security & insurance systems, compliance with the labour & environment requirements, creation of a simplified accounting systems;It should be predictable, coherent, consistent and transparent. The creation of a supporting infrastructure should be based on the establishment of an entrepreneurial fostering infrastructure.


SME SUPPORT SME SUPPORT INFRASTRUCTUREINFRASTRUCTURE

The key elements, which required for a successful national SME support programme in CITs and emerging market economies is the establishment and strengthening of infrastructure/institutions and networks promoting the creation and growing the SMEs.


GOOD GOVERNANCEGOOD GOVERNANCEFOR SMEsFOR SMEs

review corporate governance practices in advanced market economies, the new EU candidate countries as well as in CITs; analyze the models of the SME-sector governance in associated EU countries and economies in transition; and explore the situation at the micro-level, how do the SMEs understand corporate governance, what are their problems and what governments and non-governmental organizations can do to help them.


LEGISLATIONLEGISLATION

• Parliaments and Governments should review their legislative acts on enterprises, especially small ones without juridical personality and start-up small-sized incorporated enterprises with juridical personalities. It would be advisable to prepare of a documents with all legislation in this field.


SME REGISTRATIONSME REGISTRATION

• Parliaments and Governments are encouraged to review the practices of enterprise registration including procedures and fees to be paid. Governments should elaborate e-government procedure for registration of start-up small enterprises, which allow their registration within a period of time of two-to-three weeks.


Please contact us:Please contact us:

• Dr. Antal SzabóRegional Adviser on Entrepreneurship and SMEs

• Phone: (+41 22) 917 2471• Fax: (+41 22 917 0178• [email protected]

development of entrepreneurship and smes … · the sme development ... impacts of the declaration...

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