TIRANA, Oct. 30 – Albania has implemented business-friendly policies toward SMEs and improved their registration systems, but needs to make greater efforts to boost innovation and provide support services to both start-ups and more established firms, says a new joint report by the OECD, the European Commission, the European Training Foundation and the European Bank for Reconstruction and Development. The report recommends as priority actions for Albania continued government support to Albanian Investment Development Agency (AIDA) due to the important role it will play in SME advocacy and the provision of business services. “The replacement of AlbInvest with AIDA in 2011 has disrupted the development of a broader range of SME support services and AIDA’s information portal is yet to become fully active,” says the report. It also suggests the Albanian government to continue the adoption of European standards in order to become a full member of European standards organisations. Albania has already adopted more than 90% of European standards. Implementation of the innovation strategy approved in 2009, providing specific targeted services and training to those SMEs with the highest growth and export potential is also placed as a priority action.
The report praises Albania’s improved operational environment for businesses, in particular by facilitating company registration through initiatives such as a one-stop shop for company registration, single company identification numbers and online registration. Progress has been made in entrepreneurial skills and education, with entrepreneurship recently introduced as a subject across the secondary school curriculum and enterprise skills requirements being tracked by the Albanian Investment Development Agency (AIDA).
Bankruptcy legislation at an early stage, lack of tangible effect on private sector opportunities to comment on drfat laws and regulations rank Albania behind its regional competitors.
“Albania, Kosovo and Montenegro should improve their provision of administrative and regulatory information to the business community, and especially to SMEs. Albania and Montenegro have integrated export promotion programmes but they are more limited and in Montenegro, financial support for them has declined,” says the report.
SMEs Albania
SMEs in Albania account for 99.9 percent of all registered entities, 81.8 percent of employment, and 57 percent of the GDP. Data gathered from the housing and population census also measuring the number of enterprises show some 103,038 active businesses were reported at the end of 2010. Census data show around half of the 103,000 businesses were created during 2005-2009 with 50 percent of them operating in the country’s biggest Tirana and Durres regions, which according to the latest census data have a total resident population of 1 million people compared to 2.8 million nationwide.
More than 4/5 of SMEs in Albania operate in the services sector with 60 percent involved in the trade, bar, restaurant, hotel business. Women manage around a quarter of total businesses in Albania, 99 percent of which are SMEs, and make up 45 to 48 percent of employees in the industry and services sectors. Big enterprises employing more than 50 people contribute to 42 percent of total employment although representing a mere 1 percent of total businesses.
Some 2,739 of total enterprises in Albania are either wholly foreign owned or international joint ventures, with 64 percent of them operating in the services sector. The most surprising data coming from the poll is that around 2/3 of businesses, 62.7 percent of them, are run by self-employed people, meaning a single person.
