Importance and impact of small and medium enterprises in Albania

• Author: Fabian Pjetri
• Position: Lecturer at Luarasi University, Faculty of Economics, Department, Finance - Bank
• Pages: 172-177

172

Vol. 4 No.2

September, 2018

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

Importance and impact of small and medium enterprises in Albania

PhD Fabian Pjetri

Lecturer at Luarasi University, Faculty of Economics, Department, Finance - Bank

Abstract

"This paper gives a description of the situation in which Small and Medium Business and the

growing impact of innovation in the Albanian economy are located.

The problems faced by the Albanian economy are diverse: Informality, Political Situation

in the Country, Unemployment, Continuing Competition, Foreign Direct Investment (FDI),

Consumer Price Index.

Currently, the largest share of the employed in Albania is in the service sector (about 75%

of the labor force), but a sustainable development of the economy necessarily requires

the increase of the specifi c weight of the manufacturing economy, both in the number of

employees and in the providing economic income. This is a broad fi eld for the application of

innovations. It would be good for agricultural products to be processed in the country more

widely and be er packaged. The growth of the taxpayer base, the increase of new businesses,

the be er management of revenues should be made to create new jobs. Intending to reduce

unemployment, especially at younger ages, their professional qualifi cation.

Keywords: Small and Medium Enterprise SME, Performance, Competitive Advantage,

Sectoral Work, Foreign Direct Investment Flow, Banking Lending.

I) A brief description of SME in Albania

a) Defi nition of SME.

SMEs play an important role in economic development anywhere in the world.

They are considered very fl exible, very e ective, very progressive and very important

in an economy. In the early 1990s, Albania faced fundamental changes, both in the

political, economic and social spheres.

During that period we have a transition from a closed, centralized economy to

a market economy. The Albanian economy is an economy that has passed from a

transition period to a situation with very large uncertainties, a transition that has

a ected the development of the economy in general and the SME sector in particular.

During this period we have the creation and consolidation of many small and medium

enterprises, which continue their activity, up to the present day.

Small and medium enterprises are the backbone of the economy.

They are the main source of jobs and a nurturing ground for business ideas.

Small enterprises should be considered as the main drivers for innovation,

employment and social integration. Consequently, it is necessary to create the best

possible environment for small business and entrepreneurship.

b) Micro businesses, small businesses, middle businesses.

Today, Small and Medium-sized Enterprises account for over 98% of total enterprises

operating in Albania. Referring to INSTAT data Year 2017:

According to the number of employees:

90.1% are employed in 1-4 employees.