Out of over 400,000 SMEs operating in Serbia today, a group of around 500 highly competitive, innovative and growing export-oriented SMEs stands out, representing the hidden champions of the domestic economy. Even through their development alone, small and medium-sized enterprises contribute both to prosperity and to other dimensions of the 2030 Agenda. They employ 40,000 people and have a total annual turnover of 4 billion euros, of which 2.4 billion come from exports. They are good employers, pay salaries higher than the average in their areas, actively contribute to the life and development of the local community, especially in smaller ones, do business responsibly, produce products and services with more added value, innovate, adapt, learn, use local knowledge and create new knowledge. With these characteristics small and medium-sized enterprises significantly contribute to the implementation of the 2030 Agenda in Serbia, primarily to economic growth and decent employment (SDG 8), innovations (SDG 9), development of local communities (SDG 11), and reduction of regional inequality (SDG 10).

These companies were the focus of the panel discussion Serbian SMEs facing global challenges at the Kopaonik Business Forum. According to Nemanja Šormaz, director of the Center for Advanced Economic Studies (CEVES) which manages the economic pillar within the “SDGs for All” Platform, in a business environment that would be geared towards encouraging investments by SMEs, the number of such companies could be multiplied.

This subset of small and medium enterprises can play a very important developmental role and become and push forward other small enterprises – if they are given the necessary attention.

One of the most effective ways to achieve this goal would be to restore the tax credit, a financial instrument that was available until 2013. “Many of these 500 most successful companies made their first investment steps using the tax credit while it was still available, and today Serbia is the only country in Europe that has a tax credit, but it is intended only for large companies, i.e. unavailable to small companies”, explained the director of CEVES noting that the initiative to reinstate the tax credit for small and medium-sized enterprises was “revived” by CEVES precisely within the Platform “SDGs for All”.

“The state has shown that it can be an excellent partner to the economy, but only one part of it – foreign direct investments, which receive more than 200 million EUR from the budget every year enjoying an excellent institutional support. There’s no reason why such a business environment couldn’t be set up for domestic SMEs, so that they are provided with the conditions – in practice, not only declaratively – to become the driving force of economic development,” said Šormaz.

According to him, in the case of tax credit amounting to 50% of the investment, it would cost the state 300 to 400 million EUR per year. “It is not a small amount of money, but the effect would be a growth of private investments by 40% over the medium term of 5 years. In today’s terms, that is one and a half billion EUR, and on an annual level, about 20 thousand jobs would be generated. Both in the economy and in the professional community, there is an absolute consensus that the time has come to reinstate this instrument for small and medium-sized enterprises to use”, said Šormaz.

The panel discussion Serbian SMEs facing global challenges was moderated by Jasna Atanasijević, a member of the Presidency of the Serbian Association of Economists. Alongside Nemanja Šormaz, panelists discussing the importance of much broader and more thoughtful cooperation and coordination in the development of adequate instruments to strengthen support for this segment of the domestic economy were Tomislav Knežević, Team Leader for Green Economy at GIZ, Igor Anić, President of ProCredit Bank Executive Board, Darko Budeč, Owner and President of Buck, and Katarina Obradović Jovanović, Assistant Minister in the Ministry of Economy.

Sustainable development for all

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