Small

Small & Medium Sized Enterprises have an important role in the economical development of Albania. They represent the majority of private business and they are the main source of innovation ,employment generation and productivity growth. In this context an important determinant of the Albanian economy development lies in the development of small and medium enterprises, which is not based only on the number of start-ups but also on the positive change of business environment and entrepreneurial skills. SMEs represent roughly 99% of registered businesses in Albania and generate a share of about 75% of GDP. The highest concentration is in the central area of the country. The sectors of industry, agriculture processing and construction are dominated by SMEs. During the years of transition, SMEs have played a very important role in the economy so the Albanian government has always pay attention to their development as a catalyst for rapid increases in domestic production and employment. Strong and dynamic development of private sector is considered a priority of the government since in the beginning of economic reforms. SMEs are important to the local economy as they constitute the majority of businesses in Albania. Thus government policies are focused on SMEs by developing the private sector. Also SMEs sector is the most viable sector of the economy. In terms of employment, the SME sector covers about 58% of employment in the private sector Most of employees are in the trade sector, followed by the service sector and industrial one. “Micro “enterprises are 92% of total number of business and they give the main contribute to employment of 34%. Many times SMEs are seen as a source of innovation at the aggregate level because they are flexible, dynamic and sensitive to changes in demand in comparison to larger companies. By taking in consideration the political and economic conditions of Albania, SMEs are not only dominant in the economy but they have the ability to be a dynamic force in the country’s economic development. SMEs specifically contribute as an integral part of economic structure as they are suppliers of the major enterprises and contribute to foreign competition of these firms.

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