sme policy index – western balkans and turkey: assessing the implementation of the small business...

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


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

5

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)

6

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)

7

SBA scores for Western Balkan & Turkey economiesRegional Context: Stronger value added growth in post crisis period (2009-2012*)


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)

8

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


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

10

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


Note: Direct comparison between 2016 and 2012 scores is limited due to changes in methodology (introduction of a whole range of new indicators).

11

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


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

12


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

13


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

14


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

15

Way forward

Enhancing SME competitiveness (D 5, 8b, 9)

Support SME internationalisation (D 7, 10)


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]

mailto:[email protected]



sme policy index – western balkans and turkey: assessing the implementation of the small business...

Government & Nonprofit