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SBA Fact Sheet 2012 Serbia1

ENEnterprise and Industry

SERBIA

SBA Fact Sheet 2012

1. SMEs in Serbia basic figures

EU27 EU27 EU27

Num be r Shar e S h a r e Num be r Share S h a r e Million Share S h a r e

Micro 72.062 86,2% 92,1% 207.164 20,2% 29,8% 1.730 13,3% 21,6%

Small 8.939 10,7% 6,6% 180.875 17,7% 20,4% 2.436 18,8% 18,9%

Medium-sized 2.121 2,5% 1,1% 222.425 21,7% 16,8% 2.341 18,0% 17,9%

SMEs 83.122 99,4% 99,8% 610.464 59,7% 66,9% 6.507 50,1% 58,4%

Large 509 0,6% 0,2% 412.884 40,3% 33,1% 6.469 49,9% 41,6%

Total 83.631 100,0% 100,0% 1.023.348 100,0% 100,0% 12.976 100,0% 100,0%

The 2010 figures have been provided by Serbia's National Statistical Office.The data cover the 'business economy' which includes

industry, construction, trade, and services (NACE Rev. 2 Sections B to J, L, M, N). The data does not cover the enterprises in

agriculture, forestry, fishing or the largely non-market services such as education and health.

Number of Enterprises Employment Value added

Serbia Serbia Serbia

According to the data provided by the Serbian

National Statistical Office, Serbias SME sector has

a higher share of small, medium, and large

companies than the EU average. Micro firms are

thus comparatively less prevalent.

The SME sector contributes less to employment and

value-added than in the EU, but it still accounts for

more than half of all workers in the business

economy, and half of the contribution to gross

domestic product.

On average, SMEs in Serbia employ 7.3 workers,

which is significantly higher than the 4.5 EU

average, suggesting a need to do more to develop

Serbias framework conditions for entrepreneurship.

SMEs in Serbia are concentrated in the business

service sector, followed by trade, transport, tourism,

construction and manufacturing.

In a nuts hell:

- Areas where Serbia performs on a par with the EU average include Entrepreneurship and Access to

finance.

- In 2011 policy action was taken in eight out of ten SBA areas, with the focus falling on Responsive

administration and Entrepreneurship.

About the SBA Fact Sheets1:

The Small Business Actfor Europe (SBA) is the EUs flagship policy initiative to support small and medium-

sized enterprises (SMEs). The aim of the annually updated Fact Sheets is to improve understanding of

recent trends and national policies affecting SMEs.
http://ec.europa.eu/enterprise/policies/sme/small-business-act/http://ec.europa.eu/enterprise/policies/sme/small-business-act/

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2. Serbias SBA profile

0,0

0,2

0,4

0,6

0,8

1,0

1.Entrepreneurshi

p

2. Secondchance

3. Think smallfirst

4. Responsiveadministration

5. State aid &public

procurement

6. Access tofinance

7. Single market

8. Skillsand

innovation

9. Environment

10.Internationalizati

on

Serbia EU average +/- 0,5 standard deviations

The overall performance of Serbia for the different

SBA indicators has been trailing behind the average,

and there is some room for improvement even in

major areas.

Areas where Serbia performs on a par with the EU

average include Entrepreneurship and Access to

finance. And even though these areas are

considered essential indicators of the status of

businesses in the country, Serbia still needs to

improve its performance in such areas as

Responsive administration, Internationalisation,

Environment, Skills and innovation, and Second

chance.

Action2 has been taken in seven out of ten SBA

areas. Some measures were introduced in the first

quarter of 2012 so results in the respective

categories are expected to improve accordingly in

the future.

Serbias SBA performance: Status quo and development over 2007-20123

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I. Entrepreneurship

-2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0

Media attention for entrepreneurship (%); 2009; Serbia: 56; EU-avg: 50

Share of adults who think that successful entrepreneurs receive a high status in

the society (%); 2009; Serbia: 56; EU-avg: 69

Entrepreneurial intention (% of adults who intend to start a business within 3

yrs); 2009; Serbia: 22; EU-avg: 13

Note: Data bars pointing right show stronger than EU-average performance and data bars pointing left show weaker performance.

Distance from the EU-average(measured in standard deviations, EU-average=0)

Entrepreneurship is one area where Serbia performs

on a par with the EU in general. The picture

emerging at individual category level, though, is

quite mixed, as entrepreneurial intent is quite high,

at 22%, and this is reflected in the attention themedia give to successful entrepreneurs, which is 6 %higher than the average. However, it is not reflected

in the percentage of people who regard

entrepreneurs as enjoying high status in society.

On the policy front, action was taken in 2011 and at

the beginning of 2012 in a couple of main areas.

Attention was given to education and strategic

piloting, with the aim of promoting innovation in

entrepreneurship. Also, the Council of Partnership

for Entrepreneurial Learning was established. Its

main responsibilities are to coordinate policy action

in order to develop a lifelong entrepreneurial

learning system (LLEL). The other main area where

action has been taken is womens entrepreneurship.

A network for supporting women entrepreneurs has

been developed, with the support of the National

Agency for Regional Development along with the

Association of Business Women of Serbia. The

Ministry of Economy, in collaboration with the UN,

initiated a project called Advancing WomensEconomic and Social Rights, aimed at improving

womens entrepreneurship activities in Serbia.

II. Second chance

-2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0

2.3 Recovery rate (cents on the dollar); 2012; Serbia: 24,4; EU-avg:

60,38

Cost to close a business (cost to recover debt as % of the debtor's

es tate); 2012; Serbia : 23; EU-avg: 10,64

Time to clo se a bu si nes s (i n years); 2012; Serbia: 2,7; EU-avg: 1,94


Distance from the EU-average

(measured in standard deviations, EU-average=0)

The performance of Serbia in terms of Second

chance has been significantly low: this is due to the

collective negative score on all three measured

indicators. It takes longer to close a business, and it

is also almost twice as expensive to do so, than inthe EU in general. The recovery rate is almost 2.5

times lower, which might mean that businesses that

do not perform well and have to declare bankruptcy

face tougher conditions than their peers in the EU.

On the policy side, a law on Financial Restructuring

was established to deal with the liquidity issues of

medium-sized enterprises with foreign banks ascreditors.

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III. Think small first

-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);

2011; Serbia: 2,3; EU-avg: 3,09



Think small first is an area where we can draw no

conclusions about Serbias performance, as the onlyindicator available just hints at the administrative

burden placed on businesses which in this case

is higher than in the EU. The SME test will be

introduced into the existing Regulatory Reform and

Impact Assessment Scheme in the next couple of

years. The draft strategy, already in place, featuresthree steps that should result in a rigorous

assessment of the impact of forthcoming initiatives

on SMEs.

IV. Responsive administration

-2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0

Cost to enforce contracts (% of claim); 2012; Serbia: 31,3; EU-avg: 20,6

Time requi red to comply with major taxes (hou rs per year); 2012;Serbi a: 279; EU-avg: 206

Number of tax payments per year; 2012; Serbia: 66; EU-avg: 15

Cost required to transfer prope rty (% of property val ue); 2012; Serbia :

2,8; EU-avg: 4,69

Time requi red to transfer property (in ca le ndar da ys); 2012; Serbia: 11;

EU-avg: 36

Paid i n mini mum capital (% of income pe r capi ta); 2012; Serbia : 6; EU-

avg: 16

Cost to start a bus ine ss (% of in come per capi ta); 2012; Serbia: 7,8; EU-

avg: 4,98

Time to sta rt a busi nes s (i n cale ndar days); 2012; Serbia : 13; EU-avg:

14




The performance in this category is slightly below

average, with no significant changes since the year

before. What is worth noting is that one indicator

improved significantly, namely the time required to

transfer a property, which was reduced to 11 days

from 91 the year before. This is probably due to

legislation introduced in association with the new

Company Law, that states that in the event of the

death or loss of working capacity of an entrepreneur,

his/her heir could continue running the business

activity in agreement with the other heirs. Although it

takes almost the same time to start a business in

Serbia as in the EU in general, the cost of doing so

is almost 15% higher. On the other hand,businesses have to pay in much less start capital.

Tax payments are relatively higher, as is the time it

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takes to deal with them, and this could be

considered as an administrative burden on SMEs in

Serbia.

On the policy front, various measures were taken. A

new Law on Registration enabled all documents

related to business registration to be submitted

electronically, thus reducing registration time and

getting closer to the SBA Action Plan

recommendation. This innovation will also achieve

savings of some EUR 1 million annually. Further

electronic innovations concern the electronic

submission of VAT forms, which came into force in

June 2011. Another important change in the Serbian

legislation concerns minimum capital which fell

for LLCs by almost 500 times, to around one euro.

Further organisational costs have been reduced by

removing the necessity of having a company seal.

From a more organisational perspective, the Office

for Regulatory Reform and Impact Assessment has

formed the Business Council, comprising all relevant

business associations. The aim is to obtain timely

feedback from all stakeholders basis on

burdensome and inefficient procedures. In 2011, a

Serbian Enterprises Parliament was established togive company representatives the chance to discuss

all burning business issues.

V. State aid and public procurement

No policy measures were taken in this area in 2011

or Q1/2012.

VI. Access to finance

-2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0

Depth of credit information index; 2012; Serbia: 5; EU-avg: 4

Strength of legal rights; 2012; Serbia: 8; EU-avg: 7

Willingness of banks to provide a loan (% of respondentd that indicated a

deterioration); 2011; Serbia: 20; EU-avg: 27

Access to public financial support including guarantees (% of respondents that

indicated a deterioration); 2011; Serbia: 29; EU-avg: 22



Serbias score in this area is virtually average. The

separate indicators paint quite a positive picture,

however, exceeding the average in the main areas,

such as willingness of banks to provide finance,

strength of legal rights and depth of credit

information. The first of these might result from the

fairly stable collateral and bankruptcy laws, which

would in theory facilitate lending. The only area

where Serbia has clear room for improvement iswhen it comes to access to public financial support,

including guarantees.

On the policy side, Access to finance in general is

one of the areas where SMEs are actively

supported, in a variety of ways. The Ministry of

Economy, in alliance with the National Agency for

Regional Development (NARD), provides funding for

SMEs that want to improve their information

systems. NARD is also directly involved in providing

support for businesses to run projects that aim to

improve operations and organisation under theEntrepreneurs Association Support Programme. In

2011 another project was started with the aim of

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improving access to finance, namely the Western

Balkan SMEs Platform Project. The aim here is to

establish aid facilities for the Western Balkans. The

component parts are: 1) the Enterprise Innovation

Fund, focusing on early development and

expansion-stage equity financing in innovative

SMEs; 2) the Enterprise Expansion Fund, focusing

on development and expansion capital in

established SMEs with high growth potential; 3) a

Guarantee Facility, aimed at lowering borrowing

costs at the expansion stage. Lastly, the fourth step

will focus on improving the regulatory framework for

innovative and high-potential SMEs and in general

stimulate the build-up of a venture capital

ecosystem.

VII. Single market

No relevant data are available for analysis in this

sector.

In terms of policy, the Institute for Standardisation

translated the CEN/CENELEC Guide 17, setting out

guidelines for the requisite standards regarding

SMEs needs and representation. A web portal

called TECHNIS was launched to boost awareness

of the technical requirements which have to be met

in order to place products on the market.

VIII. Skills and innovation

-2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0

SMEs purchasi ng onl ine (% of SMEs); 2007; Serbia: 14; EU-avg: 28

SMEs se ll ing on li ne (% o f SMEs); 2007; Serbia: 12; EU-avg: 13

SMEs participa ting in EU funde d rese arch (number per 100.000 SMEs);

2010; Serbi a: 4; EU-a vg: 23

Sale s of new-to-market and new-to-firm innovations (% of turnover);

2008; Serbi a: 10; EU-a vg: 13

Innovati ve SMEs col la borating wi th others (% of SMEs); 2008; Serbia : 4;

EU-avg: 11

SMEs inn ovating i n-hous e (% of SMEs); 2008; Serbia: 28; EU-avg: 30

SMEs introducing marketing or organizationa l innovations (% of

SMEs); 2008; Serbi a: 18; EU-avg: 39

SMEs introducing product or proces s innovati ons (% of SMEs); 2008;

Serbia: 18; EU-avg: 34




In this section Serbia scores way below the average,

leaving room for improvement in the performance of

all component indicators. This paints a clear picturewhen it comes to introducing innovations, exercising

collaboration or introducing innovations in-house

Serbia is much less likely to do it than its EU peers.

The categories that need drastic improvement

include introducing product and process innovations,

marketing and organisational innovations, and

participating in EU-funded research.

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On the policy side, one very important measure

taken is the Innovation Serbia Project, which aims at

strengthening competitiveness by improving the link

between R&D and economic development. The

project does so by using financial instruments

combining features of debt and equity, while

complying with State Aid Rules. The project is

funded by the EU and is being run by the World

Bank. Its components will include Innovation Fund

capacity building, implementation of financial

instruments to support enterprise innovation, a mini-

grants programme, and provision of technical

assistance. There is also the IPA-funded project

Integrated Innovation Support Programme. Its aim

is to improve institutional capacity.

IX. Environment

-2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0

SMEs that have bene fitted from publi c support measures for their

production of green products (%); 2012; Serbia: 1; EU-avg: 8

SMEs with a turnover share of more tha n 50% gene rated by green

products or services (%); 2012; Serbia: 25; EU-avg: 22

SMEs that o ffer green products or s ervices (%); 2012; Serbia : 19; EU-

avg: 26

SMEs that were sa tisfie d or fai rly sa tisfie d with the le vel of publi c

supp ort for the e nvironmental actions (%); 2012; Serbia : 59; EU-avg:

56

SMEs that have bene fitted from publi c support measures for their

resource-effi ciency actions (%); 2012; Serbia : 10; EU-avg: 9

SMEs that have taken resource-efficiency measures (%) ; 2012;

Serbia: 92; EU-avg: 93

Note: Data bars pointing right show stronger than EU-average performance and data b ars pointing left show weaker performance.



It was possible for the first time this year to analyse

the overall performance in this category as sufficient

data are now available for six different categories.

The overall performance is below the average, being

dragged down mainly by the comparative lack ofcompanies offering green products and services,

and hence the low percentage of SMEs benefiting

from public support measures for their production of

green products. The percentage of firms taking

resource-efficiency measures is almost exactly

average, and the country scores positively when it

comes to public support measures for these

resource-efficiency measures. No significant policy

initiatives were taken in 2011/2012

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X. 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; 2012; Serbi a: 6; EU-a vg: 5

Time required to export (in days);

2012; Serbi a: 12; EU-avg: 11

Cost required to export (in USD);

2012; Serbia: 1430; EU-avg: 1032

Number of documents required to

import; 2012; Serbia: 6; EU-avg: 5

Time required to import (in days);

2012; Serbi a: 14; EU-avg: 11

Cost required to imp ort (in USD);

2012; Serbia: 1610; EU-avg: 1101




Serbias performance in the area of

Internationalisation has not improved particularly

over last year. The overall score is still well below

the average, and some of the main categories have

had deteriorated performance. In particular the costs

associated with exporting and importing have

increased, at an average of $32 and $50

respectively. It still takes longer to import goods into

the country and almost the same time to export

goods compared with the situation in the EU. One

reason why the situation appears negative is

because no targeted policy action was taken in 2011

to improve the trading conditions in the country.

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3. Good practice

To show what the government is doing to promote SMEs, we include an example of goodpractice.

Still to be identified

About the SBA Fact Sheets

The Small Business Act (SBA) Fact Sheets are produced by DG ENTR as part of the SME Performance

Review (SPR), which is its main vehicle providing an economic analysis of SME issues. They combine thelatest available statistical and policy information for the 27 EU Member States and another ten non-member

countries. They also feed in to the EUsCompetitiveness and Innovation Framework Programme (CIP). The

Fact Sheets produced annually help to marshal the available information to facilitate SME policy

assessments and monitor SBA implementation. They document the status quo and progress. They are not

an assessment of Member State policies but should be regarded as an additional source of information to

underpin evidence-based policy making. For example, the Fact Sheets cite only those policy measures

deemed relevant by local SME policy experts. They do 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

[email protected]
http://ec.europa.eu/cip/http://ec.europa.eu/cip/http://ec.europa.eu/cip/http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htmhttp://ec.europa.eu/small-business/index_en.htmhttp://ec.europa.eu/small-business/index_en.htmmailto:[email protected]:[email protected]:[email protected]://ec.europa.eu/small-business/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htmhttp://ec.europa.eu/cip/

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1 The SBA Fact Sheets 2012 benefited substantially from input by 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.2The policy measures presented in this SBA Fact Sheet may be only a selection of the measures taken by

the Government in 2011 and the first three months of 2012. The selection was made by the national SME

policy expert contracted by Ecorys (DG ENTRs lead contractor for the 2012 Fact Sheets). The experts were

asked only to select 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 inproducing this years Fact Sheets will be published alongside the Fact Sheets in the form of a policy

database on the DG ENTR website.3The quadrant chart combines two sets of information. Firstly 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 EU-27. The vertical corridor marked by the

dotted lines defines the EU average. Secondly, it reveals progress over time, i.e. the average annual growth

rates for the period 2007-2012. The growth rates are those of 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

indicates not only where the country is located in this SBA area relative to the rest of the EU at a given point

in time, but also the extent of progress made in the period 2007-2012.

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