Policy Workshop on Entrepreneurship Indicators ____________________________________
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Transcript of Policy Workshop on Entrepreneurship Indicators ____________________________________
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Policy Workshop on Entrepreneurship Indicators____________________________________
The SME Policy Index
Methodology, data requirements and results: The case of the Western Balkans Countries________________________________
Antonio FanelliDeputy Head – OECD Investment Compact
____________ Istanbul
27 June 2007
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• Background and objectives of the SME Policy Index
• Methodology and application process
• The case of the Western Balkans
• How can we improve policy targeting and impact measurements?
• Which SME statistics are most important for targeting and impact measurement?
Content
Content
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Introduction to the OECD Investment Compact for South East Europe
Programme active since 2000 Main objective: assist the countries of South East
Europe in attracting private direct investment Focus on FDI policy and SME Development Main activities: policy reviews, monitoring and
evaluation, policy advice and coaching Local partners: Ministry of Economy, Investment
Promotion Agencies, SME Development Agencies International partners: EC, EBRD, ETF, World Bank,
bilateral donors
Intro to the OECD-IC
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Regional Scope: Southeast Europe
Intro to the OECD-IC
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The OECD IC initiatives in the SME policy area
2001-2002 – SME Policy Reviews (Romania, fYR Macedonia), conducted by the OECD IC and the EBRD
2003-2006 – Enterprise Policy Performance Assessments (EPPAs).
Scope: all the SEE Stability Pact countries. Methodology: focus group interviews
In parallel: European Charter for Small Enterprise reporting, led by the EC (DG Enterprise and Industry)
2006-2009 – New unified process, based on the SME Policy Index only for the Western Balkans
OECD Initiatives
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The SME Policy Index
The Index is a tool to monitor SME policy development, from policy elaboration to policy implementation
It covers key policy dimensions related to SMEs, including the business environment, entrepreneurship and skill development, and innovation and technology
The Index is based on a scoring system, which is obtained by converting qualitative indicators into quantitative scores
The SME Policy Index
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The SME Policy Index
The Index was developed for the Western Balkans to support the
implementation of the European Charter for Small Enterprise (the
Charter), therefore it is based on the Charter framework, structured
around 10 policy dimensions
It has been designed by the OECD together with the European
Commission, the EBRD and the ETF and in consultation with the
Western Balkan SME policy Coordinators
The Index is part of a multi-year process of policy dialogue and
cooperation between the Western Balkan countries, the EC, the OECD
Investment Compact and the other institutions involved in the process
The objective is to provide a comparative, consistent and
independent evaluation of progress on policy implementation on the
policy dimensions included in the Charter, across the Western Balkans
The SME Policy Index
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Approach
The SME Policy Index Measures Support To Small Enterprises Along The 10 Dimensions Of The European Charter
SME Policy Index Dimensions
1. Education and training for entrepreneurship
2. Cheaper and faster start-up
3. Better legislation and regulation
4. Availability of skills
5. Improving online access
6. Getting more out of the single market
7. Taxation and financial matters
8. Strengthening the technological capacity of SMEs
9. Successful e-business models and top-class business support
10. Developing stronger, more effective representation of small enterprises
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SME policy cuts across a number of dimensions
The Charter 10 policy dimensions can be divided in three categories:
Dimensions related to the SME operational environment (Dimension 2,3,6,7 and 10);
Dimensions related to innovation and competitiveness (Dimension 5, 8 and 9);
Dimensions related to human capital development
(Dimension 1 and 4);
The country performance is assessed against those three categories
Approach
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2 Cheaper And Faster Start-up
Su
b-d
imen
sion
s
2.1Reduce Cost And Time For
Start-up Towards The World’s Most Competitive Standards
How long does it take to register an SME? How much does it cost? Silence is consent principle?
2.2
Increase On-line Access For Registration
Is there an on-line registration system in place?
Each dimension is broken down into main sub-dimensionsExample: Cheaper And Faster Start-up
Approach
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2 Cheaper And Faster Start-up
Su
b-d
ime
ns
ion
s
2.1 Reduce Cost And Time For Start-up Towards The World’s Most Competitive Standards
Ind
ica
tors
2.1.1 Number Of Days For Registration
How long does it take to register a SME?
2.1.2 Number Of Administrative Steps
For Registration
How many administrative steps are required for SME registration? Is there a one-stop-shop?
2.1.3 Costs Connected With Registration
What are registration costs as a percentage of GNI per capita?
2.1.4 Minimum Capital Requirements
What are minimum capital requirements as a percentage of GNI per capita?
2.1.5Administrative
Identification Numbers
Is there a unique identification number used in dealing with all standard functions of public administration?
Each sub-dimension is broken down into core indicators
Example: Reduce Cost And Time For Start-up Towards The World’s Most Competitive Standards
Approach
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Policy Development Steps
Approach
2.1 Reduce Cost and Time of Start-Up
Level 1 Level 2 Level 3 Level 4 Level 5
Ind
icators
2.1.1
Number of Days for Registration
Registration in more than 30 days.
Registration takes more than 15 days, but less than 30 days.
Registration takes more than 5 days, less than 15 days.
Registration takes less than 5 days, but more than 1 day
Registration in 1 day.
2.1.2
Number Of Administrative
Steps For Registration
Registration requires more than 10 administrative steps.
Registration requires 8-9 administrative steps.
Registration requires 5-7 administrative steps.
Registration requires 2-4 administrative steps.
One-stop-shop.
Meaning of levels 1 – 5:
• Level 1 & 2: Legislation is being drafted
• Level 3: Legislation adopted
• Level 4 & 5: Legislation is being implemented
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Dimensions Sub-dimensions Indicators
The ten policy dimensions are disaggregated into 28 sub-dimensions, which are composed of a specific set of analytical indicators; in total there are 56 analytical indicators
A simple weighting system is applied to sub-dimensions and indicators; weights range from 1 to 3 according to the importance assigned by experts and national co-ordinators
However, the ten dimensions are not combined in a single indicator and neither are they weighted
There is thus no one single index-score for the country performance
Approach
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The SME Policy Index is organised to involve all key stakeholders in the evaluation and input process
EC/ OECD CoreTeam
ETF and EBRD contributions
EC/OECD Experts
National Charter Co-ordinators
Private Sector
Local Consultants
KEY ACTORS:
EC/OECD Core Team leads project.
European Training Foundation (ETF) and European Bank for Reconstruction and Development (EBRD) provide inputs on their relevant Charter dimensions.
ETF: Dimensions 1 & 4 (Human Capital) EBRD: Dimension 7 (Finance)
The National Coordinator’s Team conduct a self-assessment based on the SME Policy Index.
An independent assessment is conducted with the support of a team of consultants led by an international consultancy company.
Process
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Gathering information for evaluation followed a specific process
Process
OECD/EC Evaluation
• Desk Research
• Partner Organisations: EBRD, ETF.
• Local Consultant Research: interviews with local experts, input from private sector organisations.
• Entrepreneur and Private Sector Perceptions: 2006 - use of EBRD and other data. 2007 - focus groups and surveys.
Government Self-evaluation
• Governments perform self-evaluations.
• Set priorities for the next period.
Bilateral Meetings
• Government, EC, OECD, experts, private sector and SME representatives conduct policy dialogue based on the OECD/EC evaluation, government self-evaluation and list of priorities.
• Finalisation of list of priorities.
Final• Synthesis of all inputs and final report
• Final Report launched in Dubrovnik on 27 March 2007
• April - June 2007: Dissemination of the report in the Western Balkans
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Dimension 2: Cheaper and faster start-up
Assessment Framework
Results 2007
Company Registration
Notification Compliance
No. of days to obtain company registration certificate
No. of steps to obtain company registration certificate
Official cost of obtaining company registratio n certificate
Administrative identification numbers
No. of days to obtain required identification numbers
Number of days to complete overall process
Number of steps to complete overall process
Application of silence is consent rule Total cost of overall process Minimum capital requirements On- line registration
Phase 1 Phase 2 Phase 3
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1
2
3
4
5
Alb
ania
Bos
nia
and
Her
zego
vina
Cro
atia
UN
MIK
/Kos
ovo
FY
R M
aced
onia
Mon
tene
gro
Ser
bia
Average
Dimension 2: Results
Results 2007
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Key Issues – Dimension 2
• Good overall progress on company registration
• First priority: systematically tackle issue of licences and permits
• Second priority: further improve the notification phase and move to one-stop-shop system
• In the medium term: develop electronic business registers
Results 2007
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Overall Conclusions
In terms of enterprise policy development and Charter implementation, the Western Balkans can be divided into three groups:
1. Legal institutional framework still under development, average score around 2: Albania, BiH, UNMIK/Kosovo
2. Legal institutional framework largely complete, beginning of implementation, score around 3: fYR Macedonia, Montenegro, Serbia
3. Implementation well advanced, score between 3 and 4: Croatia
Results 2007
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How can we improve policy targeting and impact measurements?
SME population is large, very diverse and its composition changes rapidly, even in the small Western Balkan countries
In a typical transition economy, the bulk of the SME population is made of micro enterprises, family based, slow growing, but they are still essential for e unemployment and poverty reduction
There are also a certain number of enterprises that are growing, are investing, are generating new employment and are important for the broadening the tax base, but they are operating in traditional sectors
There are finally a small number of fast growing and innovative enterprises
Policy targeting & impact measurements
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How can we improve policy targeting and impact measurements?
The first group is particularly sensitive to the general business environment
The second group to specific dimensions, such as access to finance, tax policy, labour policy
The last group will benefit from policy measures supporting innovation and skill development
Targeting and impact evaluation are at the core of SME policy
Policy targeting & impact measurements
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Which SME statistics are most important for targeting and impact measurement?
Ideally, a business register should keep track of key characteristics of registered companies throughout their life-cycle, as much as a civil register does for people
Dynamic company data combined with quantitative company surveys and qualitative focus group interviews are key tools for impact measuring
A reliable business register should be therefore be the source for:
– A wide range of data that can be aggregated whenever and however necessary
– Company surveys (i.e. full contact details, key information for sample selection and stratification)
SME stats
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Which SME statistics are most important for targeting and impact measurement?
SME statistics, at least in the Western Balkans, are generally of poor quality and incomplete, allowing for limited cross-country comparison
For targeting impact measurement, reliable aggregated statistics are necessary (e.g. employment, turnover, value added contribution per enterprise class and sector).
BUT: most important is a reliable and regularly updated business register
SME stats
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SME Policy Index: Next Steps
For the Western Balkan countries we are:– Improving the indicators of the SME Policy Index 2007– Understanding the process of policy targeting for a set of specific
dimensions (innovation and competitiveness)– Introducing more advanced tools for policy impact measurement – we
are exploring a combination of company surveys and focus group interviews to complement quantitative and qualitative information
Simultaneously we are exploring the application of an adapted version of the Index to other geographical areas (e.g. the Mediterranean/North Africa)
Next steps
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You can download the
SME Policy Index 2007: Report on the Implementation of the European Charter for Small Enterprises
from our website:
www.investmentcompact.org