Bulgaria’s small, medium and micro enterprise (SME) sector has stabilised after the crisis with noticeably more businesses, jobs and value added than the European Union as a whole, according to an EU study released on October 15 2012.
The EU-wide study said that SMEs in Bulgaria represent 99.8 per cent of all businesses and account for 61.9 per cent of the economic added value and 75.7 per cent of employment in the private non-financial sector. 1
Sixteen per cent of SMEs in Bulgaria are active in the high-tech manufacturing and knowledge intensive service sectors which are considered key for the future competitiveness of the country.
Bulgarian SMEs tend to be larger across all size classes than their EU peers. The sector they are most likely to be active in is trade, rather than services, as in the EU as a whole.
The Bulgarian SME sector has stabilised after the crisis with noticeably more businesses, jobs and value added than the EU as a whole, compared with the base year 2005, the study found
While the Bulgarian government has not yet adopted a national strategy to implement the Small Business Act, significant measures have been taken, especially in the areas of “responsive administration”, “single market” and “think small first”, the study said.
“Responsive administration” means, among other things, the time, costs and minimum paid-in capital required to start a business. “Single market” refers to the transposition of relevant EU directives. “Think small first” refers to licensing and permit systems, communication and simplification of rules and procedures, and the burden of government regulation.
Yet, according to the study Bulgaria still lags behind in five areas (“second chance”, meaning the time it takes to close a business and the cost of recovering debt, along with the degree of support for getting going again, “environment” and “internationalisation” – referring to, among other things, the number of documents required to begin exporting, “entrepreneurship”, which among other things means the degree to which school education encourages entrepreneurship, and “skills and innovation”, referring to the degree to which SMEs innovate in-house and innovative SMEs collaborate with others).
The study found that Europe’s SMEs are continuing to strive for recovery.
“If we take the EU as a whole so far their overall efforts have mainly led to ‘jobless’ growth, as shown by diverging trends in the EU27 member states.”
Despite the challenging environment, SMEs stood their ground as the backbone of the European economy, accounting for more than 98 per cent of all enterprises with about 20.7 million firms and more than 87 million people employees.
The lion’s share, 92.2 per cent, of SMEs is represented by micro firms with fewer than 10 employees. It is estimated that SMEs account for 67 per cent of total employment and 58 per cent of gross value added (GVA).
Trends in EU member states are increasingly divergent and there has yet to be a positive signal on the employment front. In this fragile situation, decisive policy action to tackle the factors that determine SME growth may tip the balance, a statement on the study said.
European Commission Vice President Antonio Tajani, Commissioner for Industry and Entrepreneurship, said: “SMEs have the potential to restore growth in Europe. They are at the heart of our efforts — as highlighted by the proposal to reindustrialise Europe that I released a few days ago. The most ambitious action plan to boost entrepreneurship Europe has ever seen will follow in November. We offer support and advice at a so far unknown level. We try to restore confidence so that SMEs can make progress once again and drag us out of the current crisis”.
(Photo: Darren Shaw/sxc.hu)