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Enterprise
and Industry
Enterprise and Industry
ROMANIA
2014 SBA Fact Sheet
In a nutshell
Romanias economy is dominated by small and medium-sized enterprises and has proportionally fewer micro-firms
than the EU on the whole. Despite an increase in the number of business start-ups in recent years, the impact of
micro-firms on the economy is still lower than average, providing about 23 % of private sector employment and only
13 % of economic added value. The manufacturing sector is very important for SMEs, accounting for a proportion of
employment 30 % higher than the EU average. SMEs in the service sector dominate the economy far less. They
focus on less knowledge-intensive activities such as retail and wholesale trade, food services and accommodation,
travel agencies, rental and leasing services, land transport and courier services.
The economic crisis has badly affected the business sector. SMEs in particular were badly affected, with real GDP
decreasing sharply during the crisis (-6.6 %) and post-crisis recovery setting in late, with modest growth of 2.2 % in
2011 and 0.7 % in 2012. However, growth picked up to 3.5 % in 2013, the highest rate of economic growth in the last
five years. In general, large enterprises appear to recover from the crisis much faster than SMEs. This is because
Romanian SMEs are less competitive, less innovative and have a weaker technological base than their larger
counterparts.
Romania had a catching up profile in 2013, with most areas scoring below average, but some progress in the past
few years. Romania performs above average only in entrepreneurship, albeit by a large margin. The lack of
innovation and a shortage of specialised skilled labour are the main obstacles to the business sectors
competitiveness. Poor administrative capacity continues to hamper the growth of business.
About the SBA Fact Sheets1 The Small Business Act for Europe (SBA) is the EUs flagship policy initiative to support small and medium-sized
enterprises (SMEs). It comprises a set of policy measures organised around 10 principles ranging from
entrepreneurship and responsive administration to internationalisation. To improve SBA governance, the 2011
review of the Act called for better monitoring. The SBA Fact Sheets are published annually and aim to improve
understanding of recent trends and national policies affecting SMEs.
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2014 SBA Fact Sheet Romania 2
1. SMEs in Romania basic figures
EU28 EU28 EU28
Number Proportion Proportion Number Proportion Proportion Billion Euros Proportion Proportion
Micro 373 944 87.4% 92.4% 931 091 22.9% 29.1% 7 13.4% 21.6%
Small 44 682 10.4% 6.4% 929 499 22.9% 20.6% 9 16.3% 18.2%
Medium-sized 7 669 1.8% 1.0% 848 216 20.9% 17.2% 10 19.7% 18.3%
SMEs 426 295 99.7% 99.8% 2 708 806 66.7% 66.9% 26 49.4% 58.1%
Large 1 455 0.3% 0.2% 1 349 456 33.3% 33.1% 26 50.6% 41.9%
Total 427 750 100.0% 100.0% 4 058 262 100.0% 100.0% 52 100.0% 100.0%
These are estimates for 2013 produced by DIW Econ, based on 200811 figures from the Structural Business Statistics Database (Eurostat). The data cover the 'business
economy', which includes industry, construction, trade, and services (NACE Rev. 2 sections B to J, L, M and N), but not enterprises in agriculture, forestry and fisheries
and the largely non-market service sectors such as education and health. The advantage of using Eurostat data is that the statistics are harmonised and comparable
across countries. The disadvantage is that for some countries the data may be different from those published by national authorities.
Number of enterprises Number of employees Value added
Romania Romania Romania
Romanias economy is dominated by small and
medium-sized enterprises and has proportionally
fewer micro-firms than the EU on the whole. Despite
an increase in the number of business start-ups in
recent years, the impact of micro-firms on the
economy is still lower than average, providing about
23 % of private sector employment and only 13 % of
economic added value. The distribution of SMEs
across sectors is comparable to the average EU
distribution, with most of them active in wholesale and
retail trade, manufacturing and construction. The most
noticeable disparity is in employment in the
manufacturing sector, where SMEs account for a
proportion of employment 30 % higher than the EU
average. The reason for this is the historical structure
of the economy, in which for generations the industrial
sector, including manufacturing, has generated much
of Romanias gross added value. SMEs in the service
sector dominate the economy far less than in other
EU Member States. They are mainly knowledge-
intensive activities such as retail and wholesale trade,
food services and accommodation, travel agencies,
rental and leasing services, land transport and courier
services.
The economic crisis has badly affected the business
sector. SMEs in particular were badly affected, with
real GDP decreasing sharply during the crisis (-6.6 %)
and post-crisis recovery setting in late, with modest
growth of 2.2 % in 2011 and 0.7 % in 2012. However,
growth picked up to 3.5 % in 2013, the highest rate of
economic growth in the last five years2
3.
Nevertheless, real GDP in 2013 was still below its
2008 pre-crisis level. So far the recovery has mainly
been driven by good results in the agriculture sector,
the performance of export activities (+10 % higher in
2013 compared to 2012, a difference of almost EUR
50 billion) and good industrial production4. In general,
large enterprises seem to recover from the crisis
much faster than SMEs. This is because they are less
competitive, less innovative and have a weaker
technological base5 than their larger counterparts.
The growth of value added in the SME sector can be
attributed to many sectors. The two exceptions are
construction, in which there has been a 16 %
decrease in the added value of SMEs since 2009, and
trade, with a lower decrease of 3 %. SMEs in
construction were badly affected by the economic
crisis in 20096 and investment in the sector continued
to decline after that. Even in 2013, investment in new
private construction decreased by 17 % compared to
20127, mainly because there is a large existing stock
of buildings. Government investment in new public
building has also decreased since 2012.
The 2010 decline in wholesale and retail trade was
triggered by a reduction in consumption due to
massive cuts in the salaries of public employees.
These only came to a halt at the beginning of 2013,
when approximately 80 000 new vacancies were
created in the sector.
Despite the good economic situation in 2013, the
number of registered new businesses8 was more or
less similar to the previous years (60 507 in 2013 and
61 744 in 2012). Most of these are active in trade
(28.7 % of total registered businesses) and agriculture
(17.4 %), a stable sector thanks to the potential of the
domestic retail market, government policy and
consistent financial support. In contrast, the energy
sector lost its importance in 2013 compared to
previous years. The number of registered businesses
doubled between 2011 and 2012, mainly due to
-
2014 SBA Fact Sheet Romania 3
investments in renewable energy sources and public
funding. Nevertheless, the government reduced its
support for investments in renewable energy through
structural funds. As a result, the number of newly
registered businesses decreased to 967 in 2013
compared to 1 488 in 2012.
For 2014, the government estimates economic
growth of 3 % compared to 2013, with the greatest
increase in gross added value expected to come
from construction (+5.2 %), services (+2.1 %),
industry (+1.6 %) and agriculture (+1.0 %).
Over 40 % of Romanias business leaders9 are
optimistic about the growth of their business in 2014.
This is significantly higher than the 25 % recorded in
2012. Most of them (67 %) expect their business to
grow moderately (an increase of up to 10 % in
turnover and a profit increase of between 1 % and
10 %). They also expect to be able to increase their
number of employees by 10 %-30 % in 201410
. Their
main goals for 2014 are to increase productivity and
reduce costs.
SME trends in Romania11
-
2014 SBA Fact Sheet Romania 4
2. Romanias SBA profile12
In 2013, most of the areas scored below average but
have registered progress in the past few years.
Romania performs above average only in
entrepreneurship, albeit by a large margin. This is due
to a high number of business start-ups and a positive
entrepreneurial culture, in which entrepreneurs are
admired and have high social status. The lack of
innovation and a shortage of specialised skilled labour
are the main obstacles to the business sectors
competitiveness. Poor administrative capacity
continues to hamper the growth of business.
The Department for SMEs, the Business Environment
and Tourism of the Ministry of the Economy is
responsible for implementing the SBA by developing
modern policies to support SMEs and integrating SME
policy into government policy. The new Strategy for
the development of the SME sector and the business
environment 201420 should be adopted this year.
Developed with the principles of the Small Business
Act in mind, it proposes to extend the think small first
principle by shifting policymakers attention from the
central to the local or regional level (Look at the local
level first). It also aims to support entrepreneurial
initiatives aimed at foreign markets (Act local, think
global) and to improve the public procurement
process (Value for money).
A new law on SMEs was passed in May 2014. It
introduces the mandatory application of the SME
test13
, creates a group to assess the economic impact
of regulations on SMEs and allocates about 0.4 % of
GDP a year to programmes supporting SMEs.
However, it is difficult to enforce due to the limited
availability of the human and financial resources
needed to do so.
In 2013, all SBA principles were addressed through
policy measures or actions. They include tax
measures to stimulate business growth, legislative
amendments to streamline public administration and
make it less bureaucratic, measures to enhance
innovation and creativity and action to further
encourage entrepreneurship. Business stakeholders
say that this only partly lives up to their expectations.
They think that one of the main priority areas for SME
policy should be to ensure that there is adequate
financial support for business development through
various financial tools (business angels, private
equity, venture capital, etc.). Something else that
could be done to improve the situation is setting up a
more structured, efficient system to monitor the
implementation of the SBA.
-
2014 SBA Fact Sheet Romania 5
Romanias SBA performance: status quo and
development between 2008 and 201414
Think small first principle The think small first principle aims to ensure that SME concerns are integrated into EU and national legislation
and policies. Policy-makers at all levels are expected to consult small businesses and keep their needs and
limitations in mind at all stages of the legislative and policy processes. The aim is to ensure that regulations do
not unnecessarily or excessively burden SMEs or hamper their competitiveness.
In Romania, all significant legislative proposals should be backed up by a regulatory impact assessment (RIA),
but this is not always the case. In general, RIAs are only just beginning to be carried out and their quality is
questionable. Line ministries lack expertise and comprehensive guidelines still need to be developed. The lack
of planning and the unpredictability of new legislative proposals make it difficult to develop comprehensive RIAs.
Stakeholders complain that many legislative proposals are insufficiently justified and proposed for adoption
without prior consultations, undermining democracy. In 2013, in collaboration with the World Bank, the general
government secretariat began a pilot project which should result in an action plan for implementing impact
assessment procedures, including developing a common methodology for impact assessments and the SME
test.
Under the new SME law, SME-related assessments (the SME test) are integral, mandatory components of RIAs
since May 2014. The new law is considered a big step in the right direction, but business stakeholders think it
will be difficult to enforce. Consultations with SMEs do take place but are considered more informative than
-
2014 SBA Fact Sheet Romania 6
consultative. Meetings with stakeholders take place through various consultative and advisory committees, but it
seems that continuous, structured dialogue on SBA issues is still lacking. This situation could be improved by
increasing the representativeness of SMEs and business stakeholders.
Business stakeholders have also expressed concerns about the governments and line ministries sometimes
inefficient and delayed consultation process on important measures recently adopted or proposed for adoption
on taxation, insolvency, public procurement and other matters that affect SMEs.
Entrepreneurship
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Media attention given to entrepreneurship (%); 2013; Romania: 61.3; EU avg: 49
High status given to successful entrepreneurship (%); 2013; Romania: 72.6; EU avg:65.5
Entrepreneurship as a desirable career choice (%); 2013; Romania: 73.6; EU avg:56.9
Degree to which school education helped develop an entrepreneurial attitude; 2012;Romania: 73; EU avg: 50
Entrepreneurial intentions (percentage of adults who intend to start a business within3 years); 2013; Romania: 23.7; EU avg: 13.5
Opportunity-driven entrepreneurial activity (%); 2013; Romania: 31.6; EU avg: 47
Established business ownership rate (%); 2013; Romania: 5.3; EU avg: 6.4
Early stage entrepreneurial activity for female population (%); 2013; Romania: 8; EUavg: 6
Early stage entrepreneurial activity (%); 2013; Romania: 10.1; EU avg: 8
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
Entrepreneurship is by far the best performing SBA
area, with steady progress made over the past few
years. Being an efficiency-driven economy (compared
to the innovation-driven economy of most Member
States), Romania has a high number of business
start-ups but fewer established efficient businesses.
Early stage entrepreneurial activity rates are above
the EU average for men and women, while
established entrepreneurial activity rates are below
average. Despite the numerous obstacles and
difficulties it is likely those who want to start a
business in the near future will face, future
entrepreneurial intentions are the highest in the EU at
almost 24 %. This is probably the result of a positive
entrepreneurial culture, in which entrepreneurs are
admired and have high social status, with frequent
media reporting of stories about successful
entrepreneurial ventures. Most Romanians (73 %
compared to 50 % in the EU) also believe that school
education cultivates an entrepreneurial mind-set in
students.
However, only 32 % of Romanian entrepreneurs,
compared to 47 % of European entrepreneurs, say
that a market opportunity, and a desire to be
independent and increase their income, led them to
start a business. The remaining 68 % decide to start a
business for the want of better alternatives to earn a
living.
In 2013, the government put a number of support
schemes in place to stimulate entrepreneurship and
create jobs. Most of them were continued from 2012
and some will be continued in 2014. For example, the
scheme put in place to encourage young people to
start a business and develop microenterprises was
continued. In 2013, 576 young entrepreneurs received
-
2014 SBA Fact Sheet Romania 7
support and advice on developing their business skills
and obtaining finance for their business plans.
The START scheme helps young people develop
business skills and obtain funds to set up a new
company or improve the economic performance of
existing ones. The scheme was continued into the first
quarter of 2014 to foster entrepreneurship in
Romania.
Second chance
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Fear of failure rate (%); 2013; Romania: 37.3; EU avg: 39.8
Degree of support for a second chance (%); 2012; Romania: 86; EU avg: 82
Cost of resolving insolvency (cost of recovering debt as percentage of the debtor'sestate); 2014; Romania: 11; EU avg: 10.29
Time to resolve insolvency (in years); 2014; Romania: 3.3; EU avg: 2
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
Although mixed, the indicators measuring second
chance show that the conditions for re-starters are
relatively unfavourable. Entrepreneurs whose
business has failed face lengthy insolvency
procedures, lasting about 3.3 years in Romania
compared to two years in the EU, although the cost
(11 % of the debtors estate) is similar to the EU
average. According to World Bank data, Romania
ranks last in the EU in terms of the effectiveness of its
insolvency proceedings.
Nevertheless, these lengthy insolvency procedures do
not seem to deter people from starting a business.
The high level of entrepreneurial activity and the less
pronounced fear of failure among Romanian
entrepreneurs reflect this. This may be partly because
the level of public support aimed at giving a second
chance to entrepreneurs who have gone bankrupt in
the past is higher than average.
Policy progress in 2013 was very modest. In an
attempt to reform the insolvency framework, a new
insolvency code was adopted in October 2013. The
need for a new code arose out of the current
economic context, which requires a legislative and
administrative framework to make the economic
process simpler, more transparent and more secure in
order to make the Romanian market more attractive to
investors.
The legislation introducing the new insolvency code
was declared unconstitutional, because it had
retroactive provisions and introduced the automatic
cancellation of the broadcasting licence of any audio-
visual company which began insolvency proceedings.
It was therefore repealed and the provisions of the old
law became applicable again. In December 2013, the
government amended the law by removing the
unconstitutional provisions and then submitted it to
parliament for debate and adoption. Business
stakeholders have expressed their concern about the
content of the proposal and the manner in which it
was adopted. They claim that it does not correct the
deficiencies of the old law. They also feel that 10 days
was not enough time for public debate of the proposal
and that very few of their comments and observations
were taken into account in the proposal submitted to
parliament.
-
2014 SBA Fact Sheet Romania 8
Responsive administration
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Burden of government regulations (1=burdensome, 7=not burdensome); 2013;Romania: 2.8; EU avg: 3.2
Licenses and permit systems (1=lowest level of complexity, 26=highest level ofcomplexity); 2011; Romania: 19.4; EU avg: 15.77
SMEs interacting online with public authorities (%); 2013; Romania: 64.54; EU avg:87.58
The complexity of administrative procedures is a problem for doing business(percentage of respondents who agree); 2013; Romania: 82; EU avg: 63
Fast-changing legislation and policies are a problem for doing business (percentageof respondents who agree); 2013; Romania: 88; EU avg: 70
Cost of enforcing contracts (percentage of claim); 2014; Romania: 28.9; EU avg:21.49
Time it takes to pay taxes (hours per year); 2014; Romania: 200; EU avg: 192.57
Number of tax payments per year; 2014; Romania: 39; EU avg: 12.54
Cost required to transfer property (percentage of property value); 2014; Romania:1.6; EU avg: 4.7
Time required to transfer property (in calendar days); 2014; Romania: 20; EU avg:27.7
Paid-in minimum capital (percentage of income per capita); 2014; Romania: 0.7; EUavg: 10.42
Cost of starting a business (in euros); 2013; Romania: 112.5; EU avg: 318
Time to start a business (in calendar days); 2013; Romania: 3; EU avg: 4.2
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
Conditions for SMEs in Romania are less business-
friendly than they are in the EU on average, despite
the comparatively good start-up and property
registration and transfer conditions. In Romania it is
possible to start a business in three days for around
EUR 100-125. This is faster and cheaper than the EU
average. The county trade registers are the
governments point of single contact for entrepreneurs
and businesses. The formal procedures for registering
and transferring property have improved in recent
years. It now takes only 20 days to transfer property
and costs less than the EU average to do so.
Despite reducing the number of annual tax payments
to 39, this is well above the EU average of only 12
annual tax payments. Studies done by the
Department for SMEs, the Business Environment and
Tourism in the Ministry of the Economy, together with
the National Institute of Statistics and consulting firms,
show that the greatest administrative barriers are tax
administration and procedures, checks and
inspections, public procurement regulations and
requirements for obtaining licences. Bureaucracy,
which is increasingly burdensome, particularly for
SMEs, must also be cut down. Romanias licensing
system is very complex, with costly, inefficient and
time-consuming procedures to get the licences to start
operating a business. A business survey carried out in
2013 shows that many Romanian companies think the
complexity of administrative procedures and the lack
of stability and predictability of the legislative
framework are major hindrances to doing business.
Policy progress is limited. The governments Horizon
2020 strategy for developing SMEs and the business
environment, expected to set out its strategic plans for
the growth of the SME sector, is in line with the SBA
initiative and Entrepreneurship 2020 action plan. The
strategy was to be put into practice during the first half
of 2014.
A project to measure the administrative burden arising
out of all existing legislation that affects the business
-
2014 SBA Fact Sheet Romania 9
environment began in 2009 and measurements
started in 2011. The final results are expected in
2014. They should serve as a basis for assessing the
extent to which property registration procedures and
procedures in the construction sector were simplified.
They can also help to identify opportunities for
simplifying procedures and monitoring the trend in
administrative costs over time.
State aid and public procurement
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Percentage of businesses submitting proposals in a public electronic tender system(e-procurement) (%); 2013; Romania: 14.53; EU avg: 12.85
Average delay in payments from public authorities (in days); 2013; Romania: 20; EUavg: 28.05
Percentage of businesses participating in public tenders (%); 2013; Romania: 30; EUavg: 37
Percentage SMEs account for in the total value of public contracts awarded (%);2013; Romania: 44; EU avg: 29
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
Romanias performance in state aid and public
procurement is average. SMEs share in the value of
public procurement contracts is increasing, having
reached 44 %, already much higher than the EU
average of 29 %. However, the gains from these
contracts are concentrated in fewer businesses.
Compared to 37 % on average in the EU, only 30 % of
businesses in Romania said that they had participated
in a public procurement procedure in 2013. Romanian
SMEs also make better use of e-procurement services
than their EU counterparts and public authorities take
less time to pay them.
In 2013, the government put a number of support
schemes in place to help private entities participate in
public procurement procedures and to grant state aid.
State aid to increase investments in SMEs, create
new jobs and make industrial products more
competitive was approved. Below is the list of what
the grant schemes supported.
- Investments in SMEs (financial support of up to EUR
100 000 for developing an SME 90 % grant of total
project budget).
- Making industrial products more competitive (up to
EUR 200 000 for each beneficiary).
- Investments in support of regional development (by
attracting investment, using new technologies and
creating new jobs).
Other measures to help SMEs participate in public
procurement were also introduced, such as the
simplified procedure for awarding goods, services and
works to private beneficiaries; a web application to
make it easier for private entities to participate in
public procurement under the structural funds; the
measure increasing the threshold for direct
acquisitions or public procurement and a better
payment claims settlement mechanism for
beneficiaries of structural funds.
In 2013, the National Authority for Regulating and
Monitoring Public Procurement organised information
sessions and courses on trading for beneficiaries.
These will continue in 2014. A public procurement
manual was published and distributed to beneficiaries.
The manual presents operating procedures, examples
of good practice and of problems encountered in the
course of acquisition and possible solutions to these
problems. The authority has also set up an online
helpdesk to answer questions about public
procurement procedures.
-
2014 SBA Fact Sheet Romania 10
Access to finance
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Strength of legal rights index (0-10); 2014; Romania: 9; EU avg: 6.82
Venture capital investments (percentage of GDP); 2012; Romania: 0; EU avg: 0.04
Bad debt loss (percentage of total turnover); 2013; Romania: 6.1; EU avg: 3.83
Total amount of time it takes to get paid (days); 2013; Romania: 34; EU avg: 50.76
Cost of borrowing for small loans relative to large loans (%); 2013; Romania: 15.12;EU avg: 23.82
Willingness of banks to provide a loan (percentage of respondents that indicated adeterioration); 2013; Romania: 15.6; EU avg: 24.6
Access to public financial support including guarantees (percentage of respondentsthat indicated a deterioration); 2013; Romania: 10.5; EU avg: 17.3
Rejected loan applications and unacceptable loan offers (percentage of loanapplications by SMEs); 2013; Romania: 18.4; EU avg: 14.4
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
SMEs access to bank loans stopped deteriorating in
2013, but it is still hard for them to access alternative
sources of finance, in particular equity funding through
business angels or venture capital funds. Banks have
started using the new financing schemes more flexibly
to meet market needs and those of entrepreneurs.
The 2013 figures on bank loans show that the
proportion of Romanian entrepreneurs who report that
banks are less willing than before to provide loans has
dropped from 41 % in 2011 to 15 % in 2013.
Nevertheless, 18 % of SMEs applying for bank loans
consider the conditions they impose unacceptable.
The conditions for accessing public financial support,
including guarantees, have also become less
restrictive. Access to structural funds also improved in
2013 because work procedures were simplified, funds
reimbursed more quickly and reporting procedures
and reimbursement checks simplified.
SME stakeholders identified late payments as a major
issue, even though the statistics show that payments
take less time than the EU average.
The Mihail Kogalniceanu Programme for SMEs
access to guarantees and credits, providing
subsidised interest for credit lines and state
guarantees, was well received, with applications from
4 000 firms.
The programme for developing and modernising
marketing activities for market products and services
was continued in 2013. It supported private entities,
SMEs and cooperatives by giving them access to
financing programmes to procure equipment and
consulting services.
The national multiannual programme supporting
SMEs in the arts and crafts sector helped small-scale
craftspeople promote their products at the National
Arts and Crafts Fair organised in Bucharest.
A legal measure (VAT cash-in system) that entered
into force in 2013 was updated in 2014. It aims to
improve the cash-flow of businesses with a turnover of
less than EUR 500 000.
Fiscal incentives for research, development and
innovation (R&D&I) activities (reducing the taxable
income of eligible taxpayers by deducting 50 % of the
expenses incurred in the previous fiscal year for
R&D&I activities) were provided for businesses whose
R&D&I activities account for at least 15 % of their
yearly expenditure.
-
2014 SBA Fact Sheet Romania 11
Single market
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Number of pending infringement proceedings; 2013; Romania: 25; EU avg: 30
Average transposition delay for overdue directives (in months); 2013; Romania: 6.1;EU avg: 8
Number of single market directives not yet transposed; 2013; Romania: 14; EU avg:8.69
Public contracts secured abroad by SMEs (percentage of total value of publiccontracts); 2013; Romania: 0.5; EU avg: 2.6
SMEs with intra-EU imports of goods (percentage of SMEs in industry); 2011;Romania: 24.03; EU avg: 17.47
SMEs with intra-EU exports of goods (percentage of SMEs in industry); 2011;Romania: 14.17; EU avg: 13.89
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
Romania is below the single market average, but its
performance across different indicators is mixed.
More than 14 % of manufacturing SMEs reported
exports of goods within the single market, mirroring
the performance of their EU counterparts. However,
exports of services do not match the performance of
the manufacturing sector, although statistics for SME
exports are not available. Business stakeholders say
that there has recently been a shift in the way
companies behave. Aware of the advantages of
entering foreign markets, firms have increased their
promotion activities and begun to form partnerships in
order to access foreign markets. Romanias Chamber
of Commerce and Industry has supported this
approach by organising several events on accessing
foreign markets. It has also developed the national
business information system (www.snia.ro), giving
free access to all those interested in finding Romanian
and foreign partners to develop businesses with.
Companies can enter and search for new business
opportunities posted on the site, which provides data
for companies who want to present their products and
services.
The country has not yet transposed many single
market directives, although the deadline for doing so
has passed. It also has about 25 infringement cases
in which transposition is considered not to comply with
the directive it transposes or single market rules. Most
of these cases concern atmosphere pollution, waste
management, direct and indirect taxation, etc.
Romanian SMEs are less successful than their EU
counterparts in securing public contracts in other EU
countries.
In 2013 the National Export Strategy 201420 was
developed and is expected to be put into practice this
year. It will address certification and standards
aspects by proposing institutional development of the
national standardisation body and increasing the
capacity of testing labs to assess the characteristics
and performance of exported material. The
government also plans to help companies deal with
the increase in requests.
-
2014 SBA Fact Sheet Romania 12
Skills and innovation
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Percentage of all enterprises that train their employees; 2010; Romania: 24; EU avg:66
Turnover from e-commerce; 2013; Romania: 5.87; EU avg: 13.98
Percentage of SMEs purchasing online; 2013; Romania: 17.95; EU avg: 26.31
Percentage of SMEs selling online; 2013; Romania: 9.03; EU avg: 13.87
Sales of new-to-market and new-to-firm innovations (percentage of turnover); 2010;Romania: 14.28; EU avg: 14.37
Percentage of innovative SMEs collaborating with others; 2010; Romania: 2.93; EUavg: 11.69
Percentage of SMEs innovating in-house; 2010; Romania: 10.75; EU avg: 31.83
Percentage of SMEs introducing marketing or organisational innovations ; 2010;Romania: 25.54; EU avg: 40.3
Percentage of SMEs introducing product or process innovations; 2010; Romania:13.17; EU avg: 38.44
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
The lack of innovation and a shortage of specialised
skilled labour are the countrys main problems with
regard to competitiveness. Romania lags very far
behind in this area, covering skills, training and
innovation.
All core innovation indicators are below the EU
average, some of them very much below it. Romanian
SMEs are overall less likely to introduce innovations in
products or processes, to collaborate with each other
or to innovate in-house. This situation worsened
during the economic crisis. One of the Council of the
European Unions key recommendations in the
context of the Europe 2020 strategy is for Romania to
forge closer links between research, innovation and
industry, in particular by prioritising research and
development activities that have the potential to
attract private investments.
Romanian SMEs also perform below the average in
other areas, such as IT-readiness, defined as the
ability to sell products and make purchases online.
At only 24 %, the proportion of businesses that
provide vocational training for their employees is far
below the EU average of 66 %.
The government provided support for business
growth, the creation of business incubators and the
development of the existing ones. In 2013 14
incubators received support, 10 of which are existing
and four of which are new.
The innovation voucher scheme provided an efficient
tool for supporting productive SMEs in technological
development and increasing their innovation by
fostering cooperation with research institutions. The
vouchers were available for any economic and
scientific sector, to increase or accelerate the
technological transfer between research units and the
private sector or SMEs. The national programme for
R&D&I/partnership sub-programme helped set up joint
applied research projects (with R&D units in the
private sector) to increase the competitiveness and
pace of the development of solutions to socio-
economic problems. Calls for proposals under this
measure were also published in previous years
The programme for developing private R&D
infrastructure and creating new jobs, implemented in
2008, 2010 and 2012, was continued to enable the
development of private (including SME) research and
development infrastructure to further encourage SMEs
to cooperate with public institutions, make them more
competitive and create new jobs in SMEs.
An important measure implemented in 2013 was the
law on internship for graduates of higher education. It
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2014 SBA Fact Sheet Romania 13
aims to ensure that the qualifications of higher
education graduates are better adapted to the skills
needs of the market.
Environment
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Percentage of SMEs that have benefited from public support measures for theirproduction of green products; 2013; Romania: 60; EU avg: 26
Percentage of SMEs with a turnover share of more than 50% generated by greenproducts or services; 2013; Romania: 27; EU avg: 22
Percentage of SMEs that offer green products or services; 2013; Romania: 22; EUavg: 26
Percentage of SMEs that have benefited from public support measures for theirresource-efficiency actions; 2013; Romania: 23; EU avg: 35
Percentage of SMEs that have taken resource-efficiency measures; 2013; Romania:89; EU avg: 95
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
Romania scores below average in this area, but its
performance varies across the individual indicators.
Romanian SMEs are less likely to take steps to
increase their resource efficiency than SMEs in the
rest of the EU. This is partly because they do not
receive as much public support to do so as their
European counterparts. Compared to the EU average
of 26 %, only 22 % of companies have begun to exploit
the opportunities offered by the demand for green
products and services. But those who have done so
are more successful in generating a significant
proportion of their revenue from selling such products
than their EU counterparts. Public support seems to
have played an import role, since 60 % of Romanian
SMEs say that they have benefited from support for
producing green products.
Two finance facilities to help SMEs invest in energy
efficiency and renewable energy solutions were set
up, offering support based on loans, grants and free
technical assistance for SMEs who want to invest in
energy efficiency and renewable energy. The facilities
are
- the SMEs Sustainable Energy Finance Facility, set
up to help SMEs invest in energy efficiency;
- the Energy Efficiency Finance Facility, providing a
grant-supported credit line for SMEs through the EU
and the European Bank for Reconstruction and
Development, to help them invest in energy efficiency
actions.
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2014 SBA Fact Sheet Romania 14
Internationalisation
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0
Number of documents required to export; 2014; Romania: 5; EU avg: 4.25
Time required to export (in days); 2014; Romania: 13; EU avg: 11.82
Cost required to export (in USD); 2014; Romania: 1485; EU avg: 1034.64
Number of documents required to import; 2014; Romania: 6; EU avg: 4.68
Time required to import (in days); 2014; Romania: 13; EU avg: 10.71
Cost required to import (in USD); 2014; Romania: 1495; EU avg: 1069.89
SMEs with extra-EU imports of goods (percentage of SMEs in industry); 2011;Romania: 7.09; EU avg: 8.18
SMEs with extra-EU exports of goods (percentage of SMEs in industry); 2011;Romania: 4.45; EU avg: 9.68
Note: Data bars pointing right show better performance than the EU average and data bars pointing left show weaker performance.
Variation from the EU average(measured in standard deviations, EU average=0)
Romania is well behind the EU average here. Without
exception, the general framework conditions for
trading are less favourable than those in other EU
countries on average. The indicators for the goods
trading of manufacturing SMEs in markets outside the
EU are also poor. However, 2013 data show that the
Romanian economys export performance was an
important driver of economic growth. It was able to
achieve growth in 2013 (mainly due to growth in non-
EU markets), reaching a historical high (+10 %
compared to 2012). This means that exports in 2013
were worth EUR 49.6 billion and imports EUR 55.2
billion. Compared to 2012, exports increased by
10.0 % and imports by 1 %. However, because these
statistics do not differentiate between the size of
companies, it is very likely they are the results of the
good performance of the large companies that
dominate Romanian exports. In 2013, the value of
trade in goods between Romania and EU countries
was EUR 34.5 billion for exports and EUR 41.86
billion for imports, 69.6 % of total exports and 75.7 %
of total imports. The three sectors accounting for
74.4 % of total exports are machinery and transport
equipment (42.0 %), manufactured products mainly
classified by raw material (17.1 %) and miscellaneous
manufactured articles (15.3 %).
In 2013 several older schemes aiming to support
exporting SMEs were further developed. Among them
are the portal for external trade
(www.portaldecomert.ro), incentives for export
promotion offered through an EXIM Bank scheme and
the services offered by the Enterprise Europe Network
(with partners such as the Chambers of Commerce,
banks, NGOs and local authorities). Together with the
local chambers of commerce, the Chamber of
Commerce and Industry organised trade missions to
help identify new foreign partners and develop
business activity in foreign markets.
Despite these efforts, business stakeholders say that
there is a lack of strategic and operational support for
internationalisation activities (i.e. a lack of training and
information on external markets, standards, legal
procedures, tax matters, etc.). The inefficiencies
caused by the overlapping of responsibilities and
activities between various support organisations
highlight the need for better coordination and
collaboration.
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2014 SBA Fact Sheet Romania 15
3. Good practice Below is an example of an interesting policy practice from Romania to show what governments can do to
support SMEs:
The practice firm and business plan competition
The concept of the practice firm was introduced in technical and vocational education and training in
Romania through a project begun under the Stability Pact and run in cooperation with the Austrian Ministry of
Education and Culture since 2001 the ECO NET project.
The concept has been a compulsory part of the technological high-school curriculum (services profile, grades
XI and XII) since 2006. The curriculum contains the general and specific competences to be acquired, the
values and attitudes to be developed and methodological and evaluation suggestions.
From 2010 to 2013, through a SOPHRD project, 600 teachers from technological high-schools were trained
and certified to teach entrepreneurial skills using the practice firm method and guidelines on setting up and
running practice firms were developed.
The business plan competition, for all registered practice firms, was introduced in the 200809 school year
as a joint initiative of the Ministry of National Education, the National Centre for the Development of
Vocational and Technical Education, KulturKontakt Austria and social partners (PTIR and EURO 26). The
competition is run in economic high-schools by a partnership involving the Ministry of National Education and
the business community. It has been organised at local, county, regional and national level every year since
2008.
The learning objectives of the project are to develop an entrepreneurial mind-set, to provide better
entrepreneurial skills for the business environment and to support creativity, initiative and innovation.
Some quantitative results: in the 201314 school year, the following numbers of students and teachers took
part in the competition:
at local level: 379 practice firms ( 758 students and 379 teachers)
at county level: 93 practice firms (186 students and 93 teachers)
at regional level: 39 practice firms (78 students and 39 teachers)
at national level: 8 practice firms ( 16 students and 8 teachers).
References:
http://firmaexercitiu.tvet.ro/index.php/achizitii
http://firmaexercitiu.tvet.ro/
http://www.roct.ro/competitia-business-plan/
http://www.ptir.ro/
Important remarks The Small Business Act (SBA) Fact Sheets are produced by DG Enterprise and Industry as part of the SME
Performance Review (SPR), which is its main vehicle for economic analysis of SME issues. They combine the
latest available statistical and policy information for the 28 EU Member States and nine non-EU countries which
also contribute to the EUs Competitiveness and Innovation Framework Programme (CIP). Produced annually, the
Fact Sheets help to organise the available information to facilitate SME policy assessments and monitor SBA
implementation. They take stock and record progress. They are not an assessment of Member States policies but
should be regarded as an additional source of information designed to improve evidence-based policy-making. For
example, the Fact Sheets cite only those policy measures deemed relevant by local SME policy experts. They do
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2014 SBA Fact Sheet Romania 16
not, and cannot, reflect all measures taken by the government over the reference period. More policy information
can be found on a database accessible from the SPR website. Please also see the end notes overleaf.
For more information SME Performance Review:
http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htm
Small Business Act:
http://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htm
The European Small Business Portal:
http://ec.europa.eu/small-business/index_en.htm
1 The 2014 SBA Fact Sheets benefited substantially from input from the European Commissions Joint
Research Centre (JRC) in Ispra, Italy. The JRC made major improvements to the methodological approach,
statistical work on the dataset and the visual presentation of the data.
2 AMECO Annual Macroeconomic Database of the European Commission:
http://ec.europa.eu/economy_finance/ameco/user/serie/SelectSerie.cfm.; accessed: 25.02.2014
3 Romanian Government website
http://gov.ro/fisiere/stiri_fisiere/GUV_evolutii_importante_in_economie.pdf; accessed: 24.02.2014.
4 Press conference given by the Prime Minister of Romania: http://gov.ro/ro/stiri/primul-ministru-victor-ponta-
a-prezentat-intr-o-conferinta-de-presa-rezultatele-economice-in-anul-2013-tintele-pentru-2014-
2015&page=1; accessed: 12.02.2014.
5 Government of Romania, website of the Department for SMEs, the Business Environment and Tourism
article http://www.imm.gov.ro/CMS/0/PublicMedia/GetIncludedFile?id=133, ; accessed 28.02.2014 p. 1, first
paragraph.
6 Report Situatia curenta a IMM-urilor din Romania, 2012 edition, Fundatia Post-Privatizare, p. 11.
7 http://www.business24.ro/companii/investitii/consilier-ponta-scaderea-investitiilor-este-cauzata-de-
reducerea-lucrarilor-din-constructii-1534870.; accessed: 24.03.2014.
8 Only legal or juridical persons (except physical persons or individuals).
9 Ernst & Youngs study on the perception of the Romanian business environment in 2014 is based on a
survey on the perceptions of 117 top executives from local organisations in various industries. Most
respondents (52 %) were from companies with a turnover of over EUR 50 million.
10 Ernst & Youngs study (A vision for growth) on the perception of the Romanian business environment in
2014:http://www.ey.com/Publication/vwLUAssets/Press_release_Business_Outlook_Survey_11_Feb_2014_(
EN)/$FILE/Press%20release_Business%20Outlook%20Survey_10Feb14_EN.pdf; accessed: 13.02.2014.
11 The three graphs below present the trend over time for the variables. They consist of index values for 2008
to 2015, with the base year 2008 set at a value of 100. As from 2012, the graphs show estimates of the
development over time, produced by DIW Econ on the basis of 200811 figures from the Structural Business
Statistics Database (Eurostat). The data cover the business economy, which includes industry, construction,
trade and services (NACE Rev. 2 sections B to J, L, M and N). They do not cover enterprises in the financial
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2014 SBA Fact Sheet Romania 17
sector, agriculture, forestry and fisheries or largely non-market service sectors such as education and health.
A detailed methodology can be consulted at: http://ec.europa.eu/enterprise/policies/sme/facts-figures-
analysis/performance-review/index_en.htm.
12 The policy measures presented in this SBA Fact Sheet represent only a selection of the measures taken
by the government in 2013 and the first quarter of 2014. The selection was made by the national SME policy
expert contracted by CARSA Spain (DG Enterprises lead contractor for the 2014 Fact Sheets). The experts
were asked to select only those measures that, in their view, were the most important, i.e. were expected to
have the highest impact in the specific SBA area. The complete range of measures that the experts compiled
in producing this years Fact Sheets will be published alongside the Fact Sheets in the form of a policy
database on the DG Enterprise website.
13 The methodology for carrying out the SME test has been approved by the Minister for SMEs, the Business
Environment and Tourism.
14 The quadrant chart combines two sets of information: first, it shows the status quo performance based on
data for the latest available years. This information is plotted along the x-axis measured in standard
deviations of the simple, non-weighted arithmetical average for the EU-28. Secondly, it reveals progress over
time, i.e. the average annual growth rates for 200814. The growth rates are measured against the individual
indicators which make up the SBA area averages. Hence, the location of a particular SBA area average in
any of the four quadrants provides information not only about where the country is located in this SBA area
relative to the rest of the EU at a given point in time, but also about the extent of progress made in 2008-14.