Exploring the Role of the Business Support Infrastructure in Albania: The Need for a Rethink?

Abstract

Introduction: the role of entrepreneurship in economic development It is widely recognised in the literature (Acs and Audretsch, 2003; Audretsch and Keilbach, 2004; Baumol, 2002) that entrepreneurial activity is among the most important determinants of the different economic performances of countries. Entrepreneurship activities and especially small-business activities have been connected to job creation (Audretsch et al, 2001; Bridge et al, 2003; Storey, 1994), economic competitiveness (CEC, 2004; Schumpeter, 1945), innovation, especially in skill-intensive industries in developed countries (Beck et al, 2003), and`imitation processes' in developing countries (Baumol, 2002). Moreover, although the above-summarised roles can be fulfilled in every context, the encouragement of entrepreneurship and the small-business sector in transition economies was based on the very unbalanced structure of entrepreneurial organisations with a focus on big firms, as functional to central planning but abnormal to a market economy (Chilossi, 2001; Smallbone and Welter, 2001). In these contexts, transition economies could also introduce more flexible production processes and a wider range of products to consumers, considering the inflexibility of production processes inherited from central planning (Smallbone and Welter, 2001). The evidence so far shows that the small and medium-sized enterprise (SME) sector developed spontaneously at the beginning of transition. Recently, governmental initiatives have been designed in various countries to support the`grass-roots development' of the SME sector. Despite the`bottom-up transformation' that has happened in some countries, such as Poland or Hungary, there is consensus in the literature over the role that institutions play in entrepreneurship and SME development which have constrained the development of this sector for many years, as crosscountry survey evidence has proved (

Are SME’s Product and Local Government Programs (OVOP)Coherent?

“…Therefore, what they receive is not a solution for the problems the faced, but instead will bring new problems for them. This finding is in line with the argument from Xheneti (2005); Smallbone & Welter (2001); and Berry, Sweeting, & Goto (2006).…”

“…This implies that, SME's in Central Java do not have managerial skills in terms of marketing, so understanding and knowledge of the market is crucial to solve. These results are in line with Xheneti (2005); Dominguez & Mayrhofer (2017);and Synovics, Kurt, & Synovics (2018). This has met the Central Java Medium-Term Development Plan (RPJMD) 2013-2018 objective, which aims SME's in the service sector to reach 0.12% of total SME's.…”

“…Therefore, the participants/ entrepreneurs tend to act as audience, not as the subject of business development process. This result support the argument from (Xheneti, 2005) that is evaluation of training is based on how many people attend it, there is "no values" that are attached in the training.…”

“…Alienation of local government/hidden role has caused the failure in the mergers and acquisitions in medium-sized companies (Wang & Han, 2008) which is influenced by economic and political benefits, although it is performed by individual and do not represent the local government. Other study are government's alignments to large industries (Fuller, 2005) and (Smallbone & Welter, 2001); supply side policy, corruption, goal disorientation (Xheneti, 2005); Government support is not in accordance with SME problems (Berry, Sweeting, & Goto, 2006) and (Smallbone D. , 2010); and Bureaucracy, unstable policy climate, unfriendly customs and trade regulations, strict monetary and credit policies, excessive tax regulations hinder SME's (Nyarku & Oduro, 2018) and (Fonseca, Michaud, & Sopraseuth, 2007).…”

Institutional constraints and SME growth in post‐communist Albania

“…Several studies have also identified access to finance as a barrier to business growth (Hashi, 2001;Bartlett and Bukvič, 2003;Brown et al, 2005). Finally, the legacy of the past, the persistence of customary behaviour and habits, has hindered the effectiveness of the formal institutions established to support SMEs in Albania (Xheneti, 2005). Burdensome regulation and little effective enforcement have also created "perverse" opportunities through increased incentives for corruption (Shleifer and Vishney, 1998;Hellman et al, 2003).…”