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SME Policy Index: Western Balkans and Turkey 2016

Assessing the Implementation of the Small Business Act for Europe

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The SME Policy Index is a benchmarking tool designed for emerging economies to assess SME policy frameworks and monitor progress in policy implementation over time. The Index has been developed by the OECD in partnership with the European Commission (EC), the European Bank for Reconstruction and Development (EBRD), and the European Training Foundation (ETF) in 2006 for the Western Balkans. The South East European Centre for Entrepreneurial Learning (SEECEL) joined as an additional partner in 2014. The SME Policy Index has since 2006 been applied in four regions and nine assessment rounds overall.

The SME Policy Index: Western Balkans and Turkey 2016 presents the results of the fourth assessment of the Small Business Act for Europe in the Western Balkans and, since 2012, Turkey. The assessment framework is structured around the ten principles of the Small Business Act for Europe (SBA). It provides a wide-range of pro-enterprise measures to guide the design and implementation of SME policies based on good practices promoted by the EU and the OECD.

The Index identifies strengths and weaknesses in policy design, implementation and monitoring. It allows for comparison across countries and measures convergence towards good practices and relevant policy standards. It aims to support governments in setting targets for SME policy development and to identify strategic priorities to further improve the business environment. It also helps to engage governments in policy dialogue and exchange good practices within the region and with OECD and EU members.

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Internationalisation of SMEs (Dimension 10) in the Western Balkans and Turkey

Encourage and support SMEs to benefit from the growth of markets (Small Business Act Principle 10)

Accessing international markets and integrating into global value chains can enhance SMEs’ growth and productivity and lead to higher employment, innovation, knowledge and skills transfer, and improved business networks. Internationalisation brings greater competition with foreign firms, which is particularly valuable for most of the economies of the region which have a relatively small domestic market. This chapter assesses the policy areas defined under SBA Principle 10, measuring trade performance and governments’ approach to helping SMEs to access international markets and integrate into global value chains. It considers the removal of regulatory barriers to trade, implementation of export promotion strategies, government export promotion programmes and agencies, and specific measures to promote integration into global value chains. As in the previous SBA assessment 2012, the Western Balkans and Turkey perform relatively well in this dimension. The costs and bureaucracy involved in importing and exporting are falling and moving closer to the OECD average although performances vary across the region. In general, all economies have export promotion programmes with various activities in place and, except in Bosnia and Herzegovina, they are all linked with export promotion strategies. The level of implementation varies among the economies, however. The remaining challenges are the lack of programmes targeting SMEs’ integration into global values chains, weak monitoring, and limited staff and budget for export promotion agencies.

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