Serbia aims to get 35,000 new SMEs and 200,000 new jobs in 5 years - What will SME Development Strategy bring?

This long-announced document is the Serbian government's response to the problems experienced by companies that account for 99.8% of all juristic persons in Serbia.

Namely, if the objectives of the Strategy were met, the number of SMEs in our country would grow from current 315,412 to 350,000 and the number of employees from less than 770,000 to 950,000.

In order to achieve this strategic vision - development of entrepreneurship and competitiveness based on private entrepreneurial initiative, knowledge and innovation, which will strengthen Serbian companies to a satisfactory extent so as to be able to readily respond to the pressure of competition in the EU market and contribute to the improvement of living standard in the Republic of Serbia, the Government has adopted 6 pillars.

The Government plans to improve the business environment and access to the sources of finance, and it works on the development of human resources, strengthens the sustainability and competitiveness of SMEs, improves access to new markets, develops and promotes the entrepreneurial spirit, and it will also encourage women's, youth and social entrepreneurship.

Incentives for lower interest rates

In order for the business environment to get improved, the Strategy calls for the reduction of tax and non-tax obligations of the economy sector, introduction of more efficient investment procedures, as well as the improvement of regulatory and legislative framework. According to the adopted Strategy, small and medium-sized enterprises should be given better terms for participation in public procurements.

One of the priorities of the Strategy is also the improvement of access to the sources of finance. In order for this goal to be achieved, the plan is to enhance the quality of offer of the banking sector and to develop new financial instruments, including the development of new models of funding, improvement of the loan guarantee issuing system, and the use of leasing and factoring.

If it keeps sticking to the Strategy, the state will use incentives to tackle one of the major problems faced by SMEs - high banking interest rates.

How to improve export?

In order to improve export, the state will improve the availability and quality of available information on foreign (priority) markets, enhance the knowledge of exporters and provide them with expert support, and it will also mediate in the establishment of contacts with potential business partners.

Katarina Jovanovic, assistant to the economy minister, said in her guest appearance on the national television RTS that the biggest problem related to new markets was the impossibility of connecting with other markets and enterprises.

From paper to implementation

Dragoljub Rajic from Mreza za poslovnu podrsku (Business Support Network) says to eKapija that the new Strategy is improved when compared to the previous one that was valid until 2013, but he also notes that it does not tackle the key problems of entrepreneurs.

- The state must solve systemic problems faced by businessmen: unfavorable sources of finance and high taxes that substantially aggravate the operations of entrepreneurs - says Rajic.

Rajic cites Macedonia as a positive example we could follow because this country cut taxes imposed on entrepreneurs two years ago and, thus, achieved a stable economic growth as well as a better living standard than in Serbia.

- For a better situation in Serbia's entrepreneurship sector, it is necessary to make a serious change to the whole system - Rajic adds.

Katarina Jovanovic, assistant to the economy minister, says that the Strategy provides framework for the period ending 2020, while concrete measures to improve the situation will be specified every year on the basis of action plans.

In order to implement the Strategy, the state plans to include the representatives of the economy sector in the process of passing regulations, and it is also announced that the Council for SMEs, Entrepreneurship and Competitiveness will be established.

Following the adoption of the Strategy, which is also aligned with the policy of the European Union, the plan is to educate the Council that will supervise and coordinate the implementation of the Strategy.

As Jovanovic says, the results of implementation will be measured on the basis of indicators, that is, quantitative values for each of the six pillars of the Strategy.

For more information on the Strategy