Increasing the competitiveness of MSMEs by promoting innovation and entrepreneurship (ProSME)

Project description

Title: Increasing the competitiveness of MSMEs by promoting innovation and entrepreneurship (ProSME)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Albania
Lead executing agency: Ministry of Economic Development, Trade and Entrepreneurship
Overall term: 2014 to 2016

Context
On 24 June 2014, Albania was granted EU candidate status. However, the country still needs to establish the foundations for a functioning market economy. This in turn will serve as a basis for Albania to move closer towards EU membership. Although Albania’s business climate improved last year according to the World Bank’s Doing Business Report 2015 (from position 108 to 68) thanks to reforms in the areas of business registration, property registration and issue of construction permits, it still ranks below the regional average. Despite progress in establishing market-oriented institutions, Albania continues to face considerable political, legal and institutional challenges in its efforts to comply with international and European standards.

Objective
The competitiveness of micro, small and medium-sized enterprises (MSMEs) in key sectors is increased by the promotion of innovation and entrepreneurship.

Approach
At national, regional and local level, the programme focuses on three core areas which were also identified in the EU-compiled SME Policy Index 2012 as posing the greatest challenges to the development of the SME sector. These are (women’s) entrepreneurship, innovations and a green economy.

GIZ is supporting the Albanian partners in three fields of activity:

  1. Strengthening MSMEs through start-up measures and business advisory services, innovation capacity development and development partnerships
  2. Strengthening the capacity of non-governmental organisations, such as private self-help organisations, MSME service providers (pool of business counsellors/Nucleus Albania) and consultant Networks
  3. Developing and enhancing the expertise of the Ministry of Economic Development, Trade and Entrepreneurship, of downstream institutions and of participants in public-private dialogue forums with regard to the implementation of MSME support strategies.

Results
The following results have been achieved:

  • With the support of GIZ, one in five small enterprises is now paying for and using new services, such as ISO certification courses, market research, financial advisory services and services when attending trade fairs. Half of the MSMEs surveyed (49.06 per cent) have confirmed to external auditors that they have strengthened their organisational and managerial capacities.
  • More than 60 per cent of MSMEs have indicated that they are using new or modified operating processes and procedures internally. More than 75 per cent have a better overview of the market. Their products and services have become better known among customers.
  • The project has worked together with three associations/chambers in Albania in order to introduce ‘nucleus groups’. Under this approach, MSMEs in a particular sector meet up in groups to get to know one another, jointly identify problems, draw up action plans, carry out benchmarking activities, define their own demand for services and to develop self-confidence. All of these measures are geared towards making their enterprises more competitive.
  • 40 individuals have been trained as MSME nucleus counsellors. They provide their services in exchange for payment to 130 MSMEs from a number of sectors, including hotel and restaurant owners, olive farmers and olive oil producers, livestock farmers and dealers, honey producers, carpenters, hairdressers and artisans in ten active MSME groups (nuclei).
  • Five Albanian private-sector business associations/chambers have joined forces to set up Nucleus Albania, a non-profit organisation providing MSME business services.
  • A regulatory reform of the private sector has been carried out with the support of GIZ. This reform is helping to shorten business registration and licensing times through the implementation of a one-stop shop.
  • In its capacity as a lobbyist for the private sector, the Albanian Tourism Association (ATA) is playing its part in promoting competitive tourism in the country.
  • The municipalities of Korça, Shkodra and Tirana have set up Local Economic Development (LED) Offices to promote economic development and tourism.
  • The programme has successfully supported selected companies from the Albanian textile and garment industry in taking their first steps towards developing and marketing collections by Albanian designers.

Contact

Katja Röckel
katja.roeckel@giz.de