What Are the Main Barriers to Small Business Growth in Southeast Europe?

Small and medium sized enterprises are increasingly viewed as a major engine of economic reconstruction and growth in South-East Europe. For example, in its 1999 Transition Report the European Bank for Reconstruction and Development asserts that small firms (start-ups) are “central to a successful transition”, and “they act as a main spur to employment expansion and growth” (EBRD, 1999). A recent report on South-East Europe by the World Bank remarks that “small and medium sized enterprises … have a crucial role in the transition process” (World Bank, 2000). Compared to the relative neglect of the small business sector until recently such statements represent a dramatic re-evaluation of the significance of the sector for transition economies, and affirm the increased importance now being given to small and medium sized enterprises (SMEs) in the transition process in general.