Strategic role of SMEs in the regional economy

• Author: Mimoza Luta
• Pages: 85-90

European Journal of Economics, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

Vol. 1 No. 2

June, 2017

ISSN 2519-1284

Acces online at www.iipccl.org

85

Strategic role of SMEs in the regional economy

Msc. Mimoza Luta

Abstract

A itudes towards regional economy should be permanently straight and honest. The objective

of the Municipality of Peja is favouring the free market economy, promotion of SMEs mainly

in processing production and enterprises, tourism development, privatization, revitalization

and youth employment creation of infrastructure , creation of conditions for a racting and

encouraging investment from domestic and foreign donors, such as EU funds, IMF, World

Bank etc. Also, priority is se ing an Industrial Zone, incubators and business parks, association

and the consortium of businesses, etc.

Keywords: SME, Albania, Economy.

Introduction

SMEs are the main pillars of the national economy. They are the basis of the economic

system of the free enterprise. For many, the ownership of an SME, due to the great

independence and fi nancial gains it brings, is very tempting. Even some have

dreamed of having all their lives owned by their own business. However, many

people are reluctant to give birth to a dream of life because they think they have no

education, experience, or money, or simply fear that they may fail. However starting

a business again, the real di culties and risks arise. In the last few years, there has

been a great revival of SMEs towards the developed world. Even in Eastern Europe

and the Soviet Union, such skills are highly appreciated. In most of the developed

economies, 6-15% of the working population are men and women of SMEs. For

example, In the United Kingdom from 27 million people working around 3.4 million

employed in trade and industry working in SMEs. It is well known that a er the

collapse of centralized economies, the private sector appears at an impressive rate in

all transition economies and the number of SMEs grows day by day. It is also known

that the growth of entrepreneurial activity is more oriented to trade than to industry

or production.

SME development is an essential element of economic development. The strategic

importance of SMEs is well-known around the world for the following reasons:

• SMEs contribute to employment growth to a greater extent than large enterprises.

• SMEs are the main pillars of the market economy and for transition economies in

the long run it can secure the bulk of employment.

• SMEs produce mainly for the domestic market, using mainly national resources.

• Relocation from large state-owned enterprises to smaller enterprises and private

fi rms will increase the number of owners, representing a group of people with a

greater commitment and responsibility than in the former centralized economies.

• The increased number of SMEs will bring more fl exibility to society and the

economy, and can facilitate technological innovation and provide signifi cant