Sme Entrepreneurship and Its Contribution to Economic Activity in the Republic of Srpska

Abstract

Research on the role and importance ofentrepreneurship in economic development is influenced bythe orientation of development policies in advancedeconomies. Considering that the orientation towardsentrepreneurial activity and development of small businessis present in developed economies, the aim of this researchis to determine the impact of entrepreneurial activity ofSMEs on the economy in the Republic of Srpska. Themethods used in the paper are: analysis, synthesis,induction, deduction, comparison, benchmarking. Theresults of the research have shown that SMEs in theRepublic of Srpska generate more new jobs, achieve higherturnover and create more added value than big companies.However, big firms are more profitable and have higherproductivity, leading to the conclusion that developmentpolicies should not be rigorously limited to the developmentof only one sector, but rather to encourage their coexistence.