The impact of SMEs in the economic development of Kosovo

• Author: Sami A. Morina - Edisona G. Kurhasku - Ilir Krasniqi
• Position: NTP Gllareva & NPP AMO - Faculty of Economics, University of Prishtina - Tax Administration of Kosovo
• Pages: 265-270

ISSN 2410-3918

Acces online at www.iipccl.org

265

IIPCCL Publishing, Tirana-Albania

Academic Journal of Business, Administration, Law and Social Sciences Vol. 2 No. 1

March 2016

The impact of SMEs in the economic development of Kosovo

MSc. Sami A. Morina

NTP Gllareva & NPP AMO

MSc (C.) Edisona G. Kurhasku

Faculty of Economics, University of Prishtina

MSc. Ilir Krasniqi

Tax Administration of Kosovo

Abstract

The vast majority of enterprises around 98% operating in Kosovo are micro-, small- and medium

enterprises. In 2012, SMEs provide 80% of jobs from all companies.

Therefore, SMEs are the biggest contributor to economic growth and employment and generate

the bulk of the state budget. Therefore, development of SMEs is one of the most important

aspects for economic growth and competitiveness. Legal and institutional reforms have led to

a system that enables the rapid and free development of SMEs in the market, and tax policy

and tax rates are among the lowest in the region. Medium-term strategy for development of

SMEs defines different priorities and policy measures for the development and growth of

SMEs.

Keywords: Management, SME, development, strategy, economics.

Introduction

The impact of SMEs in Kosovo’s economic development has to do with the very

important field of accelerating economic growth in Kosovo. Kosovo has gone through

very difficult periods and has experienced significant material damage, destroyed

enterprises during the war. SMEs are the basis of economic development and growth

and need great support by the government of Kosovo. This paper will explore the

positive and negative aspects of the development of SMEs.. Kosovo needs the

experience of EU countries and other developed countries and well educated experts

to be integrated into the business, in order to create a successful business. SMEs are

carriers of economic development and job openings, which also reduce

unemployment, which is one of the biggest problems in Kosovo.

The importance of SME development for the economy of Kosovo

Kosovo SMEs faces numerous challenges. Currently the sector is weak and not

competitive. More than half of SMEs are involved in retail and 10% in manufacturing,

while products are not competitive in the markets of the region and the EU. This

situation is a factor for reducing the economic growth, after considering the number

of new job seekers entering the labor market every year, it is estimated that economic