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As identifed by the SBA, Small and Medium Enterprises (SMEs) are the

backbone o integrated, inclusi!e, smart and sustainable gro"th and

economic de!elopment# $n SEE%E& member states, the !ast ma'ority o

established enterprises are SMEs, and strengthening SMEs "ill result in more'ob opportunities and greater prosperity#

he de!elopment o the SME sector has consistently been highlighted in

national SME strategies, programs and action plans as one o the economic

priorities o South East European countries# o achie!e this economic priority,

the ocus has been placed on ostering the competiti!eness o SMEs by

impro!ing the competences o SMEs human capital# he education and

training system, "hich plays a crucial role in strengthening the competences

o SMEs human capital, should remain *e+ible and respond accurately to the

demands o the labor market# he discrepancy bet"een the e+pressed needs

or training and the training pro!ision oered in the market and the lack odata on SMEs training needs should be addressed through systematic

raining -eeds Analysis (-A)#

A number o SEE%E& member states are taking di!erse initiati!es to build a

comprehensi!e -A system# his shit to e!idence.based policy making is

important i SEE%E& member states are to ensure that the signifcant

in!estment in training is cost eecti!e#

his is "hy a regional -A has been identifed by national stakeholders as

one o the key de!elopment priorities o SEE%E&s "ork# -ot only does a

regional -A gi!e concrete results or all SEE%E& member states but it alsopro!ides support to e+isting national -A de!elopments in terms o

e+perience, instruments, tools and net"orks# he SEE%E& de!eloped

instrument and associated methodology as "ell as the frst implementation

o an SEE."ide -A has planted the seed or a uture raining -eeds Analysis

System (-AS), a cyclic process that "ill ensure the continued rele!ance and

e/ciency o training or micro, small and medium enterprises#

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he recent global economic de!elopments presented an opportunity or

Europe to gro" stronger and to promote smart, sustainable and inclusi!egro"th# $n order to take ad!antage o this opportunity, steps "ere outlined in

the E1 2323 Strategy "hich set the targets and key priorities and initiati!es#

4ecogniing that Europe can 6count on the talent and creati!ity o 7its8

people9, the E1 2323 strategy places a great ocus on the de!elopment o

Europes human capital# $n particular, it stipulates that promoting smart

gro"th dri!en by kno"ledge and inno!ation necessitates reorms "hich

should impro!e the :uality o education and training, and reorms should


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contribute to 6ensuring that inno!ati!e ideas can be turned into ne"

products and ser!ices that create gro"th, :uality 'obs and help address

European and global societal challenges# But, to succeed, this must be

combined "ith entrepreneurship, fnance, and a ocus on user needs and

market opportunities#9

$n the de!elopment o human capital, special ocus should be put on the

de!elopment o a lielong learning system that supports indi!iduals through

education and training ; as defned in the Education and raining 2323

strategic rame"ork# he basis or this system in Europe is a set o eight key

competences that defne the kno"ledge, skills and attitudes necessary or a

successul lie in a kno"ledge society#

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he implementation o the lielong learning process "as urther elaborated in

the European


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helping them tackle the remaining problems "hich hamper their

de!elopment#

Page 0D

State o play in the region

As the backbone o economies in pre.accession countries, SMEs are a priority

in all policy documents# As a part o their accession process, countries are

ully implementing the Small Business Act or Europe and regularly reporting

to the European %ommission# heir participation in the process began in

233? "hen they signed the agreement to implement the European %harter

or Small Enterprises#

ollo"ing that re:uest, policy indicators "ere de!eloped and are used as a

planning instrument or pre.accession countries in their E1 accession

process# $ndicators, other"ise kno"n as the SME Policy $nde+ (Anne+ ?), "ere

de!eloped 'ointly by the European %ommission, European rainingoundation, European Bank or 4econstruction and @e!elopment and E%@,

together "ith -ational %harter>SBA coordinators# his strong cooperation on

a regional le!el has urther resulted in the signing o 6A %harter or

Entrepreneurial &earning= the Feystone or Gro"th and Hobs9 ; signed at the

Entrepreneurship.Education 4egional Summit, hosted by the Ministry o

Entrepreneurship and %rats and the SEE%E&, in Iagreb on 2? ctober 2302#

he %harter builds on an e+isting cooperation rame"ork pro!ided by the

SEE%E&, "here each countrys education and economy>entrepreneurship

ministries are represented# By signing the %harter, the participating parties

reconfrmed their ull support to the systematic de!elopment o lielongentrepreneurial learning as a key competence through continued policy

impro!ement, good practice sharing and regional cooperation#

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Pre.accession countries are acing the conse:uences o the global economic

crisis that SMEs eel especially# As a response to the challenges posed by the

crisis, countries defned human capital de!elopment as one o the key areas

or ostering the competiti!eness o SMEs as the basis or sustainable

gro"th# A systematic approach to de!eloping human capital re:uires the

identifcation o training needs o SMEs through -A#Jence, the benefts o a regional -A is that it identifes the similarities,

dierences and training needs o SMEs on an SEE.le!el, all o "hich benefts

the home and host country alike# $n order to ensure the success o

international SME operations, SMEs need specifc training and ad!isory

ser!ices#

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Methodology and ob'ecti!es

SMEs needs or training change o!er time and it is important to establish a

system "hich "ill continuously monitor this change and impro!e training

pro!ision, starting "ith needs assessment#

$n such a "ay, synergy among indi!idual learning needs and the eorts topromote eecti!eness, 'ob perormance, as "ell as strategic organiational

de!elopment is ensured#

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General enterprise and employee sample inormation and business trends

he o!erall sample used in the analysis contains 2#??5 enterprises in eight

SEE countries, "hich o 50L are micro, ?DL are small and 05L are medium.

sied enterprises#

Page D3

%hallenging areas

SMEs ace many !aried challenges in their gro"th and operations# hese

include both generic problems that SMEs e!ery"here in the "orld ha!e to

struggle "ith, and a number o issues that are more specifc to the region#

A number o important challenges need to be tackled in order to allo" or

SMEs to de!elop e/cient gro"th, business and de!elopment strategies and

plans# Some o these challenges include issue o fnancing, accounting,

human resource issues, bureaucracy, challenges and opportunities o

internationaliation in order to con!ert problems into opportunities "hile ully

respecting dierences#

Page D?

$n case o Macedonia, Montenegro and Serbia, the highest scores are

attributed to a decrease in production and ser!ice re:uests#

$n the ollo"ing f!e challenges the highest scores relate to access to fnance

and capital "hich "as o particular importance in %roatia#

Serbia and urkey also set the highest importance on access to fnance and

capital, "hich defnitely leads to the conclusion that the entire SEE region

aces challenges in attracting capital and fnancing possibilities# aking into

account the t"o mentioned challenge areas, it can be concluded that

impro!ement in :uality may stimulate in!estors interest or the region,

"hich "ill lead to attraction o capital and easier fnancing, benefting all#

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rganiation and unding o human resources (J4) and training

Juman resources are the most !aluable asset o each enterprise, as a key

dri!er o indi!idual, organiational, ci!ic, and national integrated, inclusi!e,

smart and sustainable gro"th# $mpro!ing human resources is essential as

impro!ed competences, higher moti!ation and greater acti!ation oemployees are crucial preconditions or increasing producti!ity, inno!ation

and high perormance.competiti!eness o SMEs# Jo"e!er, SMEs are acing

both e+ternal and internal barriers in impro!ing their key business

competence base# $n addition to this there are also practical fnancial and

organiational barriers2# NE+isting training oers and programs are normally

designed and organied rom the point o !ie" o larger companies and they

simply dont ft into the organiational needs o smaller companies#6?; this is

particularly e!ident in terms o fnancing o training "here SMEs cannot

match the learning and training in!estments o larger companies# here

appear to be a number o misconceptions about SMEs and their capacity to

pro!ide timely, practical and eecti!e learning and training acti!itiesD# his is

largely due to una!orable comparisons "ith larger companies in terms o

organiation, fnancing and training and learning acti!ities# $n this part o the

analysis, the main ocus is on the organiation and unding o human

resources and training in SEE%E& countries#

Page DO

he share o enterprises that does not ha!e assignments or J4

de!elopment and training acti!ities decreases "ith enterprise sie in the

ma'ority o obser!ed countries, "hile the share o enterprises in "hich there

is a department or responsible person or J4 increases "ith enterprise sie inall obser!ed countries e+cept Serbia#

here are signifcant dierences bet"een countries in e!aluating the

importance o reasons or organiing the training acti!ities# Serbia has the

highest a!erage score o all reasons meaning that all mentioned reasons

"ere !ery important in their enterprises, "hile the most important one "as

to remain in business# he smallest dierence bet"een countries "ith the

highest and the lo"est "eighted a!erage relates to impro!ing the skills o

ne" employees "hich means that this reason or organiing the training is

uniormly highly important in all obser!ed countries#

Page D

2Buscheld, @# and all, 2300= inal report= $dentifcation o uture skills needs in micro andcrat (.type) enterprises up to 2323, %ologne, Jamburg, ienna, 2300?E%, @irectorate.General or Employment, Social Aairs and E:ual pportunities, 233C=Guide or raining in SMEs, p# 0ODQatt, @#, Fitaga"a, F# 233C= !er!ie" report= Qorkplace &earning in SMEs= Eecti!ePractices or $mpro!ing Producti!ity and %ompetiti!eness, he %onerence Board o %anada


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o remain in business is the most important reason or organiing training

acti!ities or enterprises employees, particularly stressed in Serbia, but this

reason is also the most pronounced in Foso!o# All other countries stated

that increasing the :uality o ser!ices and>or products "as the most

signifcant reason# -e!ertheless, all o the obser!ed our reasons ha!e a !ery

similar a!erage le!el o moti!ation or organiing trainings, althoughremaining in business and catching up "ith ne" technologies and trends

ha!e the highest dierence bet"een the minimum (Montenegro or

remaining in business and Macedonia or catching up "ith ne"

technologies and trends) and the ma+imum (in both cases Serbia) "eighted

a!erage by countries, sho"ing heterogeneity o the obser!ed countries# he

process o business de!elopment planning and planning the learning and

training acti!ities and de!elopment o employees is an important part o the

management strategy o a business entity and its human resources# urther

to that, it is e+tremely important that e!ery enterprise has clearly

determined goals, and in accordance "ith that, clearly defned de!elopmentand fnancial plans or training in!estments# 1nortunately, the ma'ority o

the sampled enterprises do not ha!e their o"n annually reser!ed budgets or

training in!estments# -e!ertheless, this percentage signifcantly diers

bet"een countries#

Page DK

he share o enterprises that prepare fnancial and budgeting plans or

learning and training in!estments and human resources de!elopment

increases "ith the sie o the enterprise, "hich is an e+pected result#

Gi!en that so e" SMEs ha!e budgets or training, it is interesting to analysethe specifc sources o their unding ; as listed in the fgure belo"#

he de!elopment and enhancement o employees competences is mainly

fnanced by the enterprise itsel#

Page DC

$nsignifcant dierences can be seen by comparing results "ith regard to the

sie o the SMEs, so the stated share is generally higher in medium.sied

enterprises, in comparison "ith micro and small# %onse:uently, in micro and

small enterprises a slightly higher percentage o inter!ie"ees stated that J4de!elopment is fnanced mostly by employees themsel!es#

Go!ernmental subsidies in the orm o total fnancing are e+tremely rarely

used# he highest share o enterprises that use such subsidies is recorded in

urkey and amounts to only 00L, "hile in Macedonia there are no such

enterprises in the sample#

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Go!ernmental subsidies in the orm o co.fnancing are also rarely used, but

slightly more oten than subsidies in the orm o total fnancing#

Go!ernmental subsidies in the orm o ta+ incenti!es are generally the least

used subsidy orm# nly %roatia has a higher share o enterprises that use

ta+ incenti!es compared to other state support or J4 de!elopment andtraining ; in total it amounts to o!er 05L#

Page 50

Although in the last three years many enterprises "ere strongly aected by

the impact o the crisis, in!estments made in de!elopment o human

resources generally stayed on the same le!el or e!en slightly increased# his

is undoubtedly an important fnding, particularly as most enterprises had to

reduce their operating costs, "hich usually leads to a restriction o the

a!ailable budget or training and J4 de!elopment# his study confrms that

enterprises in SEE region are still !ery a"are o the need or constant

employee competence de!elopment# urthermore, they recognie the :uality

and e+pertise o employees as a necessary precondition or the maintenance

and de!elopment o business entities in di/cult market and economic

conditions#

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Past, current and uture training

he :uality o employees and their de!elopment through education, learning

and training are ma'or actors in determining long.term proftability and

sustainability o SMEs# Specifc benefts such as increased producti!ity,reduced employee turno!er, and increased e/ciency, all o "hich result in

direct fnancial gains, are indicati!e o SMEs "hich in!est in the de!elopment

o their employees#

Page 5?

raining programs or enterprises employees is one o the prere:uisites or

successul cooperation bet"een SMEs and learning and training pro!iders#

SMEs rom the sample stressed that media is one o the most important

source or inormation on a!ailable learning and training programs and

opportunities#

n the other hand, in Albania only K#DL o enterprises ac:uire inormation

rom media, but o!er 3L o Albania SMEs obtain inormation rom other

sources# Mouth to mouth ad!ertisement is the most pronounced in %roatia

and holds the same place o importance as media (?O#OL)# $n Serbia, this

percentage accounts or 25#2L# inding inormation about a!ailable training

rom other enterprises is also relati!ely important in countries "here


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appro+imately one third o enterprises rom the sur!ey stressed its rele!ance

(Serbia ??#?L)#

Page 5O

$t is noticeable that there are dierent training needs amongst the obser!ed

countries, that training programs pro!iders are not ully ad'usted to theneeds o SMEs and that policy makers should base uture de!elopment o

programs and policies on concrete eedback pro!ided by the SMEs

themsel!es# $n order to increase the e/ciency o spending on training

acti!ities in uture, as "ell as to pro!ide inormation on the real SMEs needs

or learning and training or policy de!elopers and pro!iders o such ser!ices,

the relati!e useulness o training areas should be closely e+amined#

aking into account the entire regional sample, it may be concluded that

fnancial management, inormation technologies and accounting "ere the

most useul training areas perormed "ithin the company, "hile intellectual

and industrial property rights and inno!ation management "ere the least

useul training areas perormed "ithin the company, although they may be

considered as partially useul#

Page 5

he highest useulness o the training areas is associated "ith market trends

and regulations, and fnancial management in case o Macedonia and

accounting in case o Albania, "here e!ery enterprise that responded to the

:uestionnaire ound these training areas useul# Bosnia and Jerego!ina and

%roatia also set accounting as the most useul one# n the other hand,

Foso!o and urkey put the highest useulness score on marketing and sales,"hile Serbia put it on market trends and regulations#

Page 5K

E+port>import related kno"ledge and skills ha!e the lo"est a!erage

useulness score amongst the f!e obser!ed training areas, as "ell as the

highest standard de!iation among countries#

he o!erall highest useulness score is associated "ith product de!elopment

and the lo"est one "ith intellectual and industrial property rights#

Page O2

$n the decision.making process or the selection o training and learning

programs, there are many actors that play an important role, e#g# proper

timing, duration, applicable competencies in "ork en!ironment, location,

methodology applied, certifcates, price, :uality and so on#


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More details on important decision actors or learning and training programs

by countries "ill be described in the ollo"ing table#

Page O?

he highest importance is recorded in Serbia "here in a!erage COL o these

decision actors are considered important#

All SMEs (033L) that responded to the :uestion rom Serbia speciy that the

duration o the program, the de!elopment o rele!ant competencies

applicable in "ork en!ironment and the applied methodology, the price and

the trainers :uality and eligibility are important to make the decision#

Page OD

here are signifcant dierences amongst the obser!ed countries related to

the most suitable timing or conducting the training, education and skill

impro!ement programmes# Macedonian and Serbian enterprises think that

the most suitable timing or training o the employees is during "ork hours,

"hile on the other hand the ma'ority o enterprises rom Foso!o

(appro+imately O?L) and Albania (5DL) think that the timing during "ork

hours is not appropriate#

Page O5

Practical on.the.'ob training and a mi+ o lecturing and interacti!e approach

are generally the most appropriate methods used or conducting the learning

and training programmes, "ith :uite a similar le!el o appropriateness in all

countries# echnology and $% oriented methods like using simulation, distant

learning, !ideo conerence and similar, as "ell as dierent kinds o study

tours may also be considered as appropriate methods in the ma'ority o the

obser!ed countries, although sho"ing a generally lo"er le!el o

appropriateness than the frst t"o# Albania and Serbia preer practical on.

the.'ob training, a mi+ o lecturing and interacti!e approach and technology

and $% oriented methods#

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