WITH THE FINANCIAL SUPPORT OF THE

EUROPEAN UNION

SME Policy Index 2012

RCC HeadquartersSarajevo, Bosnia and Herzegovina 25 April 2012

Update for the South East Europe Investment Committee

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

Introduction: new features of the SME Policy Index 2012

• Third regional assessment of SME policy across the Western Balkans after 2007 and 2009;

• Addition of Turkey to the group of assessed economies;

• Transfer to the European Small Business Act from the European Charter for Small Enterprises and elaboration of a new assessment grid;

• Company survey to better gauge the implementation of policy areas.

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

Objectives of the Framework

• To measure Enterprise Policy Development using the European Small Business Act framework, on the basis of inputs from government, private sector and SME policy experts;

• To allow a comparative independent evaluation of progress on policy implementation on the same set of policy dimensions included in the Small Business Act, across the SEE countries and with reference to good practices;

• To support SEE countries in setting targets on SME Policy Development that are measurable, comparable, relevant and consistent with the Small Business Act policy framework;

• To promote exchange of experiences and cross country policy evaluation among the SEE countries and the donor countries.

Approach

The SME Policy Index MethodologySME Policy Index Dimensions – The ten Policy

Principles of the SBA

1. Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded

2. Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance

3. Design rules according to the “Think Small First” principle

4. Make public administrations responsive to SMEs’ needs

5. Adapt public policy tools to SME needs: facilitate SMEs’ participation in public procurement and better use State Aid possibilities for SMEs

6. Facilitate SMEs’ access to finance and develop a legal and business environment supportive to timely payments in commercial transactions

7. Help SMEs to benefit more from the opportunities offered by the Single Market

8. Promote the upgrading of skills in SMEs and all forms of innovation

9. Enable SMEs to turn environmental challenges into opportunities

10.Encourage and support SMEs to benefit from the growth of markets

Gathering information for evaluation will follow a specific process

Process

OECD/EC/ETF Evaluation

• Desk Research

• Local Consultant Research: interviews with local experts, input from private sector organisations.

• Entrepreneur and Private Sector Perceptions - focus groups and surveys.

Government Self-evaluation

• Governments perform self-evaluations.

• Set priorities for the next period.

Bilateral Meetings

• Government, EC, OECD, ETF, experts, private sector and SME representatives conduct policy dialogue based on the OECD/EC/ETF evaluation, government self-evaluation and list of priorities.

• Finalisation of list of priorities.

Final • Synthesis of all inputs and Regional Report launching

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

The SME Policy Index Evaluation Process

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

Overall results• Incremental progress throughout the region in areas, which recorded good

progress in 2009 (e.g. Regulatory Reform, Company Registration)

• Regression due to financial crisis (Access to Finance) and due to restructuring of government bodies and agencies (Institutional Framework)

• Top performers: Turkey, Croatia, and Serbia

• Intermediary level of policy development: Albania, FYR Macedonia, and Montenegro

• Policy framework still in development phase: Bosnia and Herzegovina and Kosovo*

• Most overall progress achieved since 2009: Serbia

*This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo declaration of independence

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

SBA Principle 3 “Think Small First” (2)

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

SBA Principle 3 “Think Small First” (3)

Institutional Framework – main findings

- Overall the institutional structure is comparatively well established in the region. Turkey, Croatia and Serbia scored particularly high.

- SME definition is consistent in legislation and employment size complies with EU SME definition in Croatia, Turkey, FYR Macedonia and Albania.

- SME policy making body and executive agency most advanced in Turkey (KOSGEB) and Serbia (NARD); Albania’s new SME agency (AIDA) replaced AlbInvest in 2011. BIH has yet to strengthen the capacity of the state agencies and improve coordination between the entities.

- Implementation of the SME development strategy with clear targets and budget allocation in Turkey, Serbia, Croatia and Montenegro.

- Measures to tackle the informal economy have been best implemented by Albania and Croatia.

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

Next Steps

• Finalisation of first draft of SME Policy index 2012: April

• Internal and External Review Process: May – June

• Preparation for publication: June – September

• Publication and launch at EU SME Week: October

WITH THE FINANCIAL SUPPORT OF THE

EUROPEAN UNION

Western Balkans Regional Competitiveness Initiative

RCC HeadquartersSarajevo, Bosnia and Herzegovina 25 April 2012

Update for the South East Europe Investment Committee

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

Western Balkans Regional Competitiveness Initiative

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Greater time and staff commitment

Objectives

•Support medium and long-term competitiveness•Provide capacity building support via pilot projects•Transfer lessons learned through regional working groups

Focus Areas

• Human capital development – address major skills gaps• Innovation – Strengthen innovative capacities of the private sector

Duration: 2010-2013

Beneficiaries: Seven Western Balkan economies

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

RCI Timeline

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Greater time and staff commitment

2010 2011 2012

Experts’ workshop on innovation and human capital issues

Best practice papers on innovation policies and skills gaps

Review of domestic and donor actions

5 Roundtables for project selection

1st RCI Steering Committee

Experts’ workshop on innovation and human capital issues

Best practice papers on innovation policies and skills gaps

Review of domestic and donor actions

5 Roundtables for project selection

1st RCI Steering Committee

Pilot projects in:

•Bosnia and Herzegovina•FYR Macedonia•Montenegro•Serbia

Working Groups on Innovation and Human Capital

2 Roundtables for project selection

2nd RCI Steering Committee

Pilot projects in:

•Bosnia and Herzegovina•FYR Macedonia•Montenegro•Serbia

Working Groups on Innovation and Human Capital

2 Roundtables for project selection

2nd RCI Steering Committee

Pilot projects in:

•Albania •Croatia•Kosovo*

Working Group on Human Capital

Working Group on Innovation

3rd RCI Steering Committee

Pilot projects in:

•Albania •Croatia•Kosovo*

Working Group on Human Capital

Working Group on Innovation

3rd RCI Steering Committee

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo Declaration of Independence

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

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Development of a national innovation policyNational innovation system review identified strengths and weaknessesSurvey and focus groups to understand company needs Innovation forum organised to involve wide stakeholder base

Strategy drafted for 2013-2020Action Plan drafted for 2013-2015, with the appropriate evaluation and monitoring toolInnovation is part of Government Programme

Impact of 2011 Pilot projects

Design of a Competence Technology Centre Improved understanding of models and operations of Competence Centres and Technology CentresAssessment of business and research needs in agro-food sector and biomedicine sectorUse of focus groups to supplement surveys and obtain clearer picture of how businesses and researchers could collaborate under a CTC

‘Triple Helix’ partnerships between science, business and local government in agri-food sectorEstablished Triple Helix network of 250 participantsBest practice from OECD and transition countriesStudy trip in Flanders to get first hand experience Generated 24 proposals from BiH consortiaImplementing three projects: « Omega » egg; refining of field peas and development of an organic disinfectant; “Omega” egg being launched in the market

Voucher schemes for SMEsImproved understanding of benefits and limitations of a voucher schemeUnderstanding of innovative activities of MNE firmsScheme designed according to company needs Government committed funds to implement pilot scale voucher scheme

Montenegro

Bosnia and Herzegovina FYR Macedonia

Serbia

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

National innovation policy

Over 500 firms and researchers participated in surveys and focus groups to develop an innovation strategy. An innovation forum was organised which brought together over 100 representatives of government, business and research.

Impact of 2011 Pilot projects – Stimulating social dialogue between government, industry , and researchers

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Design of a Competence Technology Centre

Over 300 businesses and researchers in agro-food and biomedicine contributed to surveys and focus group meetings.

‘Triple Helix’ partnerships

Over 350 businesses and researchers participated in surveys, workshops and seminars organised as part of the triple helix project. 24 consortia formed which submitted proposals for innovation partnerships; three of those have been helped during implementation and many more continue implementation in parallel

Voucher schemes for SMEsOver 150 businesses participated in a survey to assess SME innovation needs.Launch event in Nov 2012 brought together over 60 representatives from government, business, and academia.

Montenegro

Bosnia and Herzegovina FYR Macedonia

Serbia

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

2012 Pilot projects

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• Support for young enterprises and start-ups• Improve capability of entrepreneurs to develop business ideas• Improve investment readiness of entrepreneurs

Albania - Business plan competition

Kosovo* - Innovation strategy

Croatia - Innovation strategy

*This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo declaration of independence

• Full OECD Review of innovation policy executed in parallel

• Surveys of businesses and research institutions• Methods to measure innovation performance• Development of a whole-of-government strategy

• Assessment of innovation system• Surveys of businesses and research institutions• Development of a whole-of-government strategy

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

RCI Working Groups

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• Spilt, Croatia (8 June 2011) and OECD headquarters (20-21 March 2012) • First meeting reviewed sector specific and horizontal approaches to close skills

gaps• Second meeting was a training event which raised awareness on how to

conduct skills gap analysis, skills planning using foresight techniques, and policy responses. The group discussed what capacities are needed to implement skills gap analysis, and reviewed data requirements

• Follow up meeting in autumn 2012 will review whether capacities are in place for a skills gaps analysis across the Western Balkans.

Working Group on Human Capital Development

Working Group on Innovation • Split, Croatia (9 June 2011)• Lessons learned with implementation of pilot projects.• Discussed elements to be included in SEE 2020 Vision• Next meeting planned for 21-22 June 2012 at OECD headquarters

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

From RCI to the Next Generation Competitiveness Project

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How will the results of RCI be used to advance the NGC Project? RCI Steering Committee to be used as the Steering Committee for NGC . A consensus emerged on this point at the last RCI Steering Committee meeting on 13 December 2012 in Sarajevo at the RCC. Structure of RCI Working Groups on Innovation and Human Capital Development will be used to develop the industry specific working groups. Methodology for pilot projects in RCI (e.g., mixed teams of beneficiary representatives and OECD officials) will be used to implement pilot projects in NGC. RCI revealed interest for industry specific work in the agro-food sector (pilot projects in Bosnia and Herzegovina and Serbia). Other sectors could include textile production, wood processing, ICT, automotive, energy, or services like tourism. NGC could try to implement some of the projects from RCI in a cross-border fashion in one specific industry. For example, regional triple helix partnerships between multiple beneficiaries or regional competence centres in specific sectors.

WITH THE FINANCIAL SUPPORT OF THE EUROPEAN UNION

Jakob FexerPolicy Analyst

Milan KonopekProject Manager - Regional Competitiveness Initiative

OECD Investment Compact for South East EuropePrivate Sector Development Division

Organisation for Economic Co-operation and Development (OECD)

Milan.konopek@oecd.org

www.investmentcompact.org

Thank you for your attention