UNECE Industrial Restructuring, Energy & Enterprise ...€¦ · UNECE Industrial Restructuring,...

UNECE Industrial Restructuring, Energy UNECE Industrial Restructuring, Energy & Enterprise Development Division& Enterprise Development Division

DEVELOPMENT OF SMEs IN COUNTRIES IN TRANSITIONDr. Antal Szabó, Regional Adviser on Entrepreneurship and SMEs

UNECE Industrial Restructuring, Energy & Enterprise Development Division

SMEs as DRIVING FORCE in SMEs as DRIVING FORCE in ECONOMIC DEVELOPMENTECONOMIC DEVELOPMENT

• STIMULATE PRIVATE OWNERSHIP & ENTREPRENEURSHIP;

• FLEXIBLE & QUICKLY ADOPT TO CHANGING MARKET DEMANDS;

• GENERATE EMPLOYMENT; &• HELP DIVERSIFY ECONOMIC ACTIVITIES,

CONTRIBUTE TO GDP, ECONOMIC GROWTH, EXPORT & TRADE


EFFECT OF GLOBALIZATION EFFECT OF GLOBALIZATION CITsCITs

new opportunities for expansion and growth by taking advantage of international market possibilities;

growing economic globalisation brings competitive challenges and threats


PROVIDING OPPORTUNITIES PROVIDING OPPORTUNITIES & CHALLENGES FOR CITs….& CHALLENGES FOR CITs….

CHANGING CORPORATE STRATEGIES & PRODUCTION SYSTEMS OPEN NEW POSSIBILITIES FOR CITs TO ENTER

TECHNOLOGY-INTENSIVE & EXPORT-ORIENTED ACTIVITIES THEY COULD NOT OTHERWISE UNDERTAKE, & BECOME A PART OF INTERNATIONAL PRODUCTION

SYSTEMS.


SMEs INSMEs INGLOBALIZING WORLDGLOBALIZING WORLD

• The core of political and economic transformation of any CITs is the creation of private SME sector

• 8.5 million firms from the 11 million SMEs in CITs are micro-enterprises

• THINK GLOBAL - ACT LOCAL


CATEGCATEGOORIESRIES OF OF THETHE SME DEVELOPMENTSME DEVELOPMENT

• Countries making rapid progress (V4, 3 BALTIC STATES: EE, LV, LT, SL & CR

• Countries at an intermediate stage of transition (BG & RO, 3 CISs COUNTRIES: KY, RF & UZ)

• Countries making slow progress with less commitment (SEE, majority of CIS)


96/280/EC: Commission 96/280/EC: Commission Recommendation of 3 April 1996 Recommendation of 3 April 1996

Definition of SMEsDefinition of SMEsSmall enterprise is defined as an

enterprise which:- has fewer than 50 employees;- has either an annual turnover not

exceeding ECU 7 million, or an annual balance-sheet total not exceeding ECU 5 million;

- independency


96/280/EC: Commission 96/280/EC: Commission Recommendation of 3 April 1996 Recommendation of 3 April 1996

Definition of SMEsDefinition of SMEs

Small and medium-sized enterprises are defined as enterprises which:

- have fewer than 250 employees;- have either, an annual turnover not

exceeding ECU 40 million, or an annual balance-sheet total not exceeding ECU 27 million;

- independency.


DEFINITION OF SMESDEFINITION OF SMESIN CEECsIN CEECs

• CZ, EE, HU, LV, PL, RO, SK & SL are in full in line with EU; recommendations concerning number of employees;

• Only EE, PL & SK accepted the financial criteria


DEFINITION OF SMESDEFINITION OF SMESIN CISIN CIS

• In the RF the term of medium-sized enterprises does not exist. Only legal entities are taken into consideration while supporting small businesses;

• Majority of CIS follows the Russian economic trend. Like AR, AZ, BY, UA & UZ

• Lack of comparable SME statistics


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)


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 and insurance systems, compliance with the labour and environment requirements, creation of a simplified accounting systems;It should be predictable, coherent, consistent and transparent.


GOVERNMENT POLICY GOVERNMENT POLICY SHOULD BESHOULD BE

The creation of a supporting infrastructure should be based on the establishment of an entrepreneurial fostering infrastructure, which did not existed during the former centrally planned economies.


PART OF THE GENERAL PART OF THE GENERAL ECONOMIC POLICYECONOMIC POLICY

• The good examples of the new EU candidate countries shows, that their Governments have a concept for promotion of small businesses within the general economic policy of which the enterprise promotion in an integral part.

• 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.


COMMITMENT OF PRESIDENT COMMITMENT OF PRESIDENT PUTINPUTIN

“ We can stay that small businesses are a big state affair

…[but] we have not yet are bigmanaged to do everything

necessary for the development of this sphere….

Russia will depends on energy sector it until develops a strong layer

of small businesses”Vladimir Putin


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.


ELEMENTS OF THE SME ELEMENTS OF THE SME INFRASTUCTUREINFRASTUCTURE

1. Business service institutions (business advisory, consultation and information services);

2. Business incubation;3. Promotion of FDI and linkages; 4. Creation of quality and environment

management systems;5. Training and education of entrepreneurship

(development of entrepreneurial spirit and new business culture); and

6. Financial instruments for new and growing SMEs.


BUSINESS SERVICE BUSINESS SERVICE INSTITUTIONSINSTITUTIONS

1. Assist in set-up businesses;2. Offer services in• Preparing business planning;• Assistance in management;• Financing;• Innovation;• Find partners;• Find technologies;• Information on and access to markets;

etc.


The missions of the EICsThe missions of the EICsIdentify the needs of the Enterprises

and meet themINFORM enterprises on all Community policies,activities and programmes

ASSIST enterprises in their efforts to grow and to internationalise

ADVISE enterprises

FEED BACK INFORMATION to the Commissionon the concerns and interests of enterprises and on the impact of Community programmes and legislation


Geographical coverageGeographical coverage

37 countries

265 cities

Proximity to enterprises


BUSINESS INCUBATIONBUSINESS INCUBATION

Incubators are “start-up ventures whose purpose is the development of other start-up companies” (Rice and Matthews).“Business incubation” - an interactive development process aiming at encouraging people to start their own businesses and supporting start-up companies in the development of innovative products


BUSINESS INCUBATORSBUSINESS INCUBATORSIN ADVANCED CEECsIN ADVANCED CEECs

13115634624TOTAL

16OTHER TYPE OF BUSINESS INCUBATORS

363414SCIENCE & TECHNOPARKS

5834BISs

95317216BUSINESS INCUBATORS

SLSKPLHUEECZCOUNTRY


ASSOCIATION OF INNOVATIVE ASSOCIATION OF INNOVATIVE ENTREPRENEURSHIP CRENTREPRENEURSHIP CR

WWW.AIPCR.CZWWW.AIPCR.CZ


ESTONIA TECHNOLOGY AGENCYESTONIA TECHNOLOGY AGENCYWWW.ESTAG.EEWWW.ESTAG.EE


ENTREPRENEURIAL ENTREPRENEURIAL INCUBATORSINCUBATORSASSOCIATIONASSOCIATIONWWW.VISZ.HUWWW.VISZ.HU


POLISH BUSINESS AND INNOVATION POLISH BUSINESS AND INNOVATION CENTERS ASSOCIATIONCENTERS ASSOCIATIONWWW.SOOIPP.ORG.PLWWW.SOOIPP.ORG.PL

• CREATING AN INFORMATION SYSTEMS• ORGANIZING MEETINGS, LECTURS, TRAINING,

CONSULTATIONS, CONFERENCES, COMPETITIONS;

• PUBLISHING INFORMATION AND TRAINING MATERIALS;

• CO-OPERATING WITH OTHER INDIGENOUS AND FOREIGN ORGANIZATIONS;

• INCREASING BUSINESS RESEARCH, INNOVATION & LOCAL DEVELOPMENT;

• CO-OPERATING WITH SELF-GOVERNMENTS, LOCAL AND CENTRAL AUTHORITIES, R&D CENTERS.


BUSINESS AND INNOVATION BUSINESS AND INNOVATION CENTERSCENTERS


TEAM OF EXPERTS ON QMSTEAM OF EXPERTS ON QMShttp://www.unece.org/http://www.unece.org/

operact/quams.htmoperact/quams.htm

The focus of this component of the UNECE sub-programme on Industrial

Re-structuring and Enterprise Development is the promotion of

international quality standards and quality management

systems among enterprises, especially among SMEs, in countries

in transition.


THE ROLE OF GOVERNMENT THE ROLE OF GOVERNMENT IN TNCIN TNC--SME RELATIONSSME RELATIONS

Government should:• formulate and adopt adequate laws and

incentives; • set up an appropriate institutional framework; • make sure that support required is provided

(by public or private service providers) to the firms targeted; and

• policy coherence.


KEY ELEMENTS TO PROMOTE KEY ELEMENTS TO PROMOTE SMEs TO BE SUPPLIERSSMEs TO BE SUPPLIERS

1. Setting the policy objectives of promotion of a supply programme

2. Identifying the targets of the programme 3. Identifying specific measures to be adopted 4. Setting up institutional and administrative

framework to implement and monitor the programme


FORUM ON SMEsFORUM ON SMEs

Forum on Best Practice in the development of Entrepreneurship and SMEs in Countries in Transition:2 June 1999 – CZECH REPUBLIC1 November 2000 – HUNGARY23 October 2001 – POLAND24 October 2001 - BELARUS


FORUM ON SMEsFORUM ON SMEs

19 MARCH 2003Forum on Best Practice in the

Development of Entrepreneurship and SMEs in Countries in Transition:

THE CROATIAN & SLOVENIAN EXPERIENCES


DECLARATION ON SMEsDECLARATION ON SMEs

• CEI DECLARATION ON SMEs AT THE DAWN OF THE 21st CENTURY (24 November 2000, Budapest);

• BSEC DECLARATION ON SMEs(27 September 2001, Istanbul);

• CIS DECLARATION ON SMEs (Assistance to the CIS Consultative Committee on Small Entrepreneurship)

• EUROPEAN DECLARATION ON SMEs?


ACHIEVEMENTS ACHIEVEMENTS OF THE RASPOF THE RASP

• Virtual network of SME focal points• Model for SME-sector development• SME Development web-site at

www.unece.org/indust/sme/ece-sme.htm• Statistics/Guidelines/Discussion papers• Assistance to regional groupings (BSEC, CEI,

CIS, SECI)• Organizing seminars, workshops,

conferences, training courses


SEMINARS/WORKSHOPSSEMINARS/WORKSHOPS

• Expert Meeting on Creation of Quality Assurance Systems to Enhance the Competitiveness of SMEs on 25-26 October 2001 in Geneva

• Expert Meeting on How to Become Supplier of Large National Enterprises and TNCs on 20-21 March 2003 in Geneva


SUCCESS IN SUCCESS IN INTERNATIONALISATION OF INTERNATIONALISATION OF

SMEsSMEs

1. BUILD AND OBTAIN MANAGERIAL SKILLS

2. GOOD PLANNING3. APPROPRIATE FOREIGN STRATEGIC

PARTNERS4. RIGHT MARKET ORIENTATION5. TECHNICAL CAPABILITY AND

KNOWLEDGE6. QUICK ADOPTIBILITY & RESPOND


MAJOR TOOLS FOR IMPROVING MAJOR TOOLS FOR IMPROVING INTERNATIONALISATIONINTERNATIONALISATION

i. BUSINESS INFORMATION CENTRES FOR SMEs;

ii. TRAINING PROGRAMMES IN THE FIELD OF INTERNATIONALIZATION;

iii. PROMOTION OF FOREIGN DIRECT INVESTMENT;

iv. PROMOTION OF THE SUPPLY INDUSTRY.


MESSAGEMESSAGE

“THE ROAD TO INTERNATIONALISATION OF ONE COMPANY COULD BE SHORT OR

LONG –HOWEVER, THERE ARE NO

SHORTCUTS”

Rainer VainionkulmaFinnish Foreign Trade Association


BEST WISHES FOR SMEs ON THE WORLD MARKET!


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]

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