SME Policy Index – Western Balkans and TurkeyAssessing the Implementation of the Small Business Act for Europe
Launch28 April 2016OECD Conference Centre
co-funded by the European Union
2
Presentation outline
1. Introduction: Small Business Act Assessment and SME Policy Index
2. Overview: SMEs in the Western Balkans and Turkey
3. SME Policy Index: Key findings and way forward
What is the SBA assessment?
3OECD South East Europe Regional Programme
The Assessment is based on the Small Business Act for Europe which allows for benchmarking not only between Partner Countries but also with EU Member States.
The dedicated methodology – the SME Policy Index – has been specifically developed by the partner organisations for the application of the SBA in enlargement and neighbourhood countries.
The purpose of the SBA Assessment is to improve SME policy-making in Partner Countries and to enhance the capacity of policy-makers.
The objective is to improve the business environment 'on the ground' and to foster entrepreneurship and competitiveness. The SBA (Small Business Act for Europe) Assessment has been jointly developed and is undertaken by:
3. Methodology
4OECD South East Europe Regional Programme
ASSESSMENT FRAMEWORK REVISIONBy OECD experts and Partner Organisations
PhaseI
Phase IV
Phase V
PhaseII
PhaseIII
SBA assessment: methodology and process
SELF-ASSESSMENT by the national governments via
policy assessment questionnaire
INDEPENDENT ASSESSMENT
by OECD and its partners, and local experts via policy assessment
questionnaire
OFFICIAL STATISTICS
In the form of business demographics,
quantitative policy data and company survey data
for in-depth analysis & greater comparison
STAKEHOLDER MEETINGS IN EACH ECONOMYOECD, Government stakeholders, SBA coordinators, Partner organisations to
reconciliate
ANALYSIS AND DRAFTINGOECD, Government stakeholders, SBA coordinators, Partner organisations to
reconciliate
LAUNCH EVENT AND ROAD SHOWIn Paris with OECD, Government stakeholders, SBA coordinators, Partner organisations
and then in each of the 7 participant economies
Coverage of the SME Policy Index
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Since 2006, the SME Policy Index has been applied 9 times in 4 regions, covering 32 economies in total:
EU pre-accession region (the Western Balkans and Turkey) in 2007, 2009, 2012 and 2016
Eastern Partnership countries in 2012 and 2016 Euro-Mediterranean Partnership Countries in 2008 and 2014 ASEAN member countries in 2014. Regional SME policy assessments foreseen in Latin America and the
Gulf region
Eastern Partner Countries: 2 editions (2016, 2012)
Western Balkans and Turkey:
4 editions (2016, 2012, 2009, 2007)
Euromed region: 2 editions (2014, 2008)
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SBA scores for Western Balkan & Turkey economiesRegional Context: SME development is a key to economic growth
OECD South East Europe Regional Programme
SMEs represent on average 99.8% of total enterprises in the Western Balkans and Turkey
On average 74% of all employees are employed in SMEs, which is by 7,5% higher compared to EU average
Contribution of SMEs to total value added in the region varies from 53 to 67% (EU28: 60%).
SMEs’ contribution to employment and value added is comparable to EU28
Employment VA0
10
20
30
40
50
60
70
80
Average contribution of SMEs to employment and VA in the WBT and EU28 countries
WBTEU 28
Macro risks and administrative barriers are having an impact on SMEs through inflation, credit contraction, weak external demand and fiscal consolidation.
%
At the same time, opportunities exist (e.g., approximation to EU standards, proximity to EU markets) in addition to leveraging the region’s improvement on structural policies (e.g. human capital, strengthening of SME competitiveness, internationalisation)
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SBA scores for Western Balkan & Turkey economiesRegional Context: Stronger value added growth in post crisis period (2009-2012*)
OECD South East Europe Regional Programme
Source: OECD Structural and Business Demography Database, National Statistical offices* CAGR: Compound average growth rate 2009-2012
-8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12%-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
PRTESP
FYROMCZK
FRA
IRLDEN
POL
SLVSRB ITA
HUN
NED
GBR
FIN
BEL
AUT
DEU
SWEALB
EST
TUR
EU
EU pre-accession
CAGR of value added, (2009-2012), constant prices
CAGR
of e
mpl
oym
ent (
2009
-201
2)
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SBA scores for Western Balkan & Turkey economiesMajor obstacles for doing business in the Western Balkans and Turkey (WBT)
Albania Bosnia and Herzegovina
Kosovo The former Yugoslav
Republic of Macedonia
Montenegro Serbia Turkey0
10
20
30
40
50
60
70
% of SMEs
Practices of competitors in the informal sector
Corruption
Political instability
Tax rates
Crime, thief & disorder
Electricity
Access to finance
Source: Business Environment and Enterprise Performance Survey, 2013, EBRD
Top 3 obstacles for doing business in the WBT for SMEs:
Practices of competitors in the informal sector
Electricity
Political instability *
* This designation is without prejudice to position on status, and is in line with UNSCR 1244 and the ICJ opinion on the Kosovo declaration of independence.
Achievements: 10 years overview of SME Policy in the EU enlargement region
9OECD South East Europe Regional Programme
Effective policy transfer of good practices was observed through the SME Policy Index across a number of areas:
SME support agencies established
Administrative procedures for businesses simplified
Technical standards in line with Single Market requirements
Support to innovative SMEs and start-ups provided.
Level 1
Level 2
Level 3
Level 4
Level 5
Level 1: No framework
Level 2: Draft/pilot, some signs of government activity
Level 3: Solid framework in place
Level 4: Level 3 + concrete indications of effective policy implementation
Level 5: Level 4 + significant record of concrete and effective policy implementation
Note: This comparison only includes the average of indicators which remained the same over time.
Institu
tional and re
gulatory fr
amework
Business
registration
E-service
s and SME su
pport service
s
Enterpris
e skills
and training
SME policy convergence in the EU enlargement region
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1. Entrepreneurial learning and women's entrepreneurship
2: Bankruptcy and Second chance for SMEs
3: Regulatory framework for SME Policy Making
4: Operational Environment for SMEs
5a: Support Services for SMEs and Start-Ups
5b: Public Procurement
6: Access to Finance for SMEs
7: Standardisation and technical regulation
8a: Enterprise Skills
8b: Innovation Policy for SMEs
9: SMEs in a green economy
10: Internationalisation of SMEs
0.00
1.00
2.00
3.00
4.00
5.00
20162012
SBA scores for Western Balkan & Turkey economiesKey findings: SBA Scores for WBT economies
OECD South East Europe Regional Programme
Note: Direct comparison between 2016 and 2012 scores is limited due to changes in methodology (introduction of a whole range of new indicators).
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Key findings
Limited alternative sources of financing hindering access to finance for SMEs and poor financial literacy/readiness programmes.
Few second-chance programmes available Insufficient environmental policies and regulatory
incentives for greening of SMEs.
SME policy frameworks established in most WBT economies and more focus towards effective policy implementation.
Procedural delays and costs associated with business regulation reduced and introduction of e-government services, albeit with differences between the economies
Innovation policy frameworks are progressing Progress in aligning legislation with EU standards
and technical regulations Public procurement laws in place throughout the
region and efforts in developing e-procurement systems.
1. The region continues to perform well on SME Institutional Frameworks and the Operational Environment
2. There have been notable improvements on Innovation policy, Standards and Technical Regulations, and Public Procurement
3. Less progress has been made regarding Access to Finance, Bankruptcy and Second chance, and SME greening
Key findings
OECD South East Europe Regional Programme
9: SMEs in a green economy
1. Entrepreneurial learning and women's entrepreneurship
8a: Enterprise Skills
8b: Innovation Policy for SMEs
2: Bankruptcy and Second chance for SMEs
5a: Support Services for SMEs and Start-Ups
10: Internationalisation of SMEs
6: Access to Finance for SMEs
4: Operational Environment for SMEs
5b: Public Procurement
3: Institutional framework for SME Policy Making
7: Standardisation and technical regulation
1 2 3 4 5
2016 WBT average scores per dimension
2012 WBT average scores per dimension
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OECD South East Europe Regional Programme
Levels
Key findings: SBA Scores for WBT economies
Level 1: No framework
Level 2: Draft/pilot, some signs of government activity
Level 3: Solid framework in place
Level 4: Level 3 + concrete indications of effective policy implementation
Level 5: Level 4 + significant record of concrete and effective policy implementation
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OECD South East Europe Regional Programme
Level 1
No framework/ policy/ institution exists
Level 2
Pilot or draft framework/ policy/ institution exists
Level 3
Framework/ policy/ institution established and first signs of implementation
Level 4
Policy/ institution is operational; good levels of implementation
Level 5
Fully operational and functioning monitoring and evaluation system;Best practice level
Operational environmentSupport servicesPublic procurementAccess to finance
Enterprise skills Innovation policyGreen economyInternationalisation
Key findings: SBA scores per economy by dimension
Entrepreneurial learning and women’s entrepreneurship
Institutional framework
Standards and technical regulations
Bankruptcy and 2nd chance
ALB BiH KOS MKD MNE SRB TUR
Way forward
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OECD South East Europe Regional Programme
Strengthening the institutional, regulatory and operational environment for SMEs (D 2, 3, 4)
Develop SME access to finance (D 6)
Promoting skills and entrepreneurship development (D 1, 8a)
Strengthen monitoring and evaluation of SME strategies
Develop measures to address the informal economy
Continue simplification of business registration; reduce regulatory uncertainty
Promote second chance Continue to resolve problems of high levels of
NPLs Broaden the availability of credit information Develop alternatives sources of financing Strengthen financial readiness and literacy
among SMEs Integrating entrepreneurship into national
curricula
Promote women entrepreneurship in national strategies
Strengthen SME skills through training needs analysis and targeted programs
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Way forward
Enhancing SME competitiveness (D 5, 8b, 9)
Support SME internationalisation (D 7, 10)
OECD South East Europe Regional Programme
Ensure SMEs access to business support information
Adopt and strengthen innovation policy frameworks and/or innovation-related infrastructure
Improve access to public procurement
Provide guidance and incentives for greening of SMEs
Establish a single portal providing EU export information
Reduce regulatory barriers to trade and scale up export promotion programs
Start monitoring and evaluating export support activities to improve their efficiency
Promote SMEs integration into global value chains
Contact details:Marzena KISIELEWSKAHead of the OECD South East Europe Divisione-mail: [email protected]
Sandra HANNIGPolicy AnalystOECD South East Europe Divisione-mail: [email protected]
Anita RICHTERProject ManagerOECD South East Europe Divisione-mail: [email protected]
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