CZECH REPUBLIC
STRENGTHS
• Clear and transparent state policy and programme based on Czech National Act № 299/1992
• The Government approval of the Industrial Policy Concept of the Czech Republic including various support possibilities applicable to SMEs
• Rapid adaptation to market demands
• Introduction of new technologies
• Creation of new jobs with low capital costs
• Contribution to quicker development of towns and villages through entrepreneurial activities
• Support to structurally affected and economically weak regions
• Sound infrastructure network for SMEs promotion – 7 Euro Info Centres, 29 Regional and Information Centres, 5 Business Innovation and Science and Technology Centres
WEAKNESSES
• Bureaucratic legal and administrative procedure of registering enterprises
• Lower economic power than large enterprises
• Lack of legal, economic, technical and managerial capacities
• Higher sensitiveness to law enforcement and to administrative problems and lengthy process of business disputes
• Insufficient orientation at foreign market
• Lower awareness of negative impacts of production on environment
OPPORTUNITIES
• Development of industrial production and industrial services
• Development of business relations with TNCs and wholesalers to become their suppliers
• Application of a innovative potential as a generator for added value production
• Creation of enterprise clusters
• Participation in the Multi-annual Programme for SMEs could strengthen infrastructure of supporting capacity
THREATS
• Higher competition as a result of market globalization
• Conservative approach of enterprise managers to introduction of certificated systems of management, including production quality management
• Lack of capital for development of entrepreneurial activities
Thursday, December 01, 2005
Thursday, September 01, 2005
Small and Medium-sized Enterprise in countries in transition--United Nations Economic Commission for Europe
The core of the political and economic transformation of any country in transition (CIT) is the creation of the private sector, the development of entrepreneurship and creation of small and medium-sized enterprises (SMEs). They are considered to be one of the principal driving forces in economic development. SMEs stimulate private ownership and entrepreneurial skills, they are flexible and can adapt quickly to changing market demand and supply situations, they generate employment, help diversify economic activity and make a significant contribution to exports and trade. SMEs also play an important role in innovation and the high-tech business, due to their flexibility and creativity many of them became large businesses. In this process emphasis should be laid on creation of a business friendly environment in which the transformation of the society towards a market economy should be taken place.
The present publication gives the characteristics of the SME sector in the CITs and emerging market economies, provides information on SME definition by countries, highlights the major legislative measures, laws, government decrees related to entrepreneurship and SMEs, summarizes the support measures that countries are doing to support SMEs, provides a SWOTanalyses of the SME sector in individual countries and finally presents the statistics collected from SME National Focal Points and other sources, like UNECE database, EBRD, etc.
The present publication gives the characteristics of the SME sector in the CITs and emerging market economies, provides information on SME definition by countries, highlights the major legislative measures, laws, government decrees related to entrepreneurship and SMEs, summarizes the support measures that countries are doing to support SMEs, provides a SWOTanalyses of the SME sector in individual countries and finally presents the statistics collected from SME National Focal Points and other sources, like UNECE database, EBRD, etc.
Friday, July 01, 2005
Do Pro-SME Policies Work?
This Note explores the relationship between the size of the small and medium-size enterprise (SME) sector and economic growth and pover ty reduction. A new study finds no support for the widely held belief that SMEs promote higher growth and lower pover ty. But it does provide some support for the view that the quality of the business environment facing all firms, large and small, influences economic growth.
Sunday, May 01, 2005
Why a new definition for SMEs?
The new definition is the result of wide-ranging discussions between the Commission, Member States, business organisations and experts as well as two open consultations on the internet.
The changes reflect general economic developments since 1996, and a growing awareness of the specific hurdles confronting SMEs. The new definition is more suited to the different categories of SMEs and takes better account of the various types of relationships between enterprises. It
helps to promote innovation and foster partnerships, while ensuring that only those enterprises which genuinely require support are targeted by public schemes.
To update thresholds
The changes reflect general economic developments since 1996, and a growing awareness of the specific hurdles confronting SMEs. The new definition is more suited to the different categories of SMEs and takes better account of the various types of relationships between enterprises. It
helps to promote innovation and foster partnerships, while ensuring that only those enterprises which genuinely require support are targeted by public schemes.
To update thresholds
Developments in prices and productivity made it necessary to adjust the financial thresholds4.
Their significant increase will allow an important number of enterprises to maintain their SME status and ensure their eligibility for support measures. The staff headcount thresholds remain at their previous levels, since to have raised them would have diluted the measures tailored for SMEs.
To promote micro enterprises
Throughout the Union, more and more micro enterprises are being created. The new definition
takes this development into account by setting financial thresholds for them. This refinement
aims to encourage the adoption of measures addressing the specific problems micro enterprises
face, especially during the start-up phase.
To improve access to capital
Access to capital is a perennial problem SMEs encounter, largely because they are often unable to give the guarantees traditional lenders require. To help tackle this, the new definition facilitates equity financing for SMEs by granting favourable treatment to certain investors, such as regional funds, venture capital companies and business angels5 without the enterprise losing its SME status. The same applies to small local autonomous authorities with an annual budget of less than 10 million euro and fewer than 5,000 inhabitants. They can invest in an SME up to a certain percentage without the enterprise concerned being at a disadvantage when applying for grants.
To promote innovation and improve access
to Research & Development (R&D) Specific provisions now apply to universities and non-profit research centres enabling them to have a financial stake in an SME. This cooperation will benefit both parties. It strengthens an enterprise by giving it a worthwhile financial partner and access to R&D. It also offers universities and research centres a route for the practical application of their innovative work.
To take account of different relationships between enterprises
One of the main objectives of the new definition is to ensure that support measures are granted only to those enterprises which genuinely need them. For this reason, it introduces methods to calculate the staff and financial thresholds to gain a more realistic picture of the economic situation of an enterprise. To this end, a distinction has been introduced between different types of enterprises: autonomous, partner and linked. The new definition also contains safeguards to prevent abuses of SME status. Clear instructions are given on how to treat particular relationships between an SME and other enterprises or investors when calculating the enterprise’s financial and staff figures. In essence, the new definition takes into account an SME’s ability to call on outside finance. For example, enterprises which are linked to others with large financial resources could come above the ceilings and would not qualify for SME status.
Their significant increase will allow an important number of enterprises to maintain their SME status and ensure their eligibility for support measures. The staff headcount thresholds remain at their previous levels, since to have raised them would have diluted the measures tailored for SMEs.
To promote micro enterprises
Throughout the Union, more and more micro enterprises are being created. The new definition
takes this development into account by setting financial thresholds for them. This refinement
aims to encourage the adoption of measures addressing the specific problems micro enterprises
face, especially during the start-up phase.
To improve access to capital
Access to capital is a perennial problem SMEs encounter, largely because they are often unable to give the guarantees traditional lenders require. To help tackle this, the new definition facilitates equity financing for SMEs by granting favourable treatment to certain investors, such as regional funds, venture capital companies and business angels5 without the enterprise losing its SME status. The same applies to small local autonomous authorities with an annual budget of less than 10 million euro and fewer than 5,000 inhabitants. They can invest in an SME up to a certain percentage without the enterprise concerned being at a disadvantage when applying for grants.
To promote innovation and improve access
to Research & Development (R&D) Specific provisions now apply to universities and non-profit research centres enabling them to have a financial stake in an SME. This cooperation will benefit both parties. It strengthens an enterprise by giving it a worthwhile financial partner and access to R&D. It also offers universities and research centres a route for the practical application of their innovative work.
To take account of different relationships between enterprises
One of the main objectives of the new definition is to ensure that support measures are granted only to those enterprises which genuinely need them. For this reason, it introduces methods to calculate the staff and financial thresholds to gain a more realistic picture of the economic situation of an enterprise. To this end, a distinction has been introduced between different types of enterprises: autonomous, partner and linked. The new definition also contains safeguards to prevent abuses of SME status. Clear instructions are given on how to treat particular relationships between an SME and other enterprises or investors when calculating the enterprise’s financial and staff figures. In essence, the new definition takes into account an SME’s ability to call on outside finance. For example, enterprises which are linked to others with large financial resources could come above the ceilings and would not qualify for SME status.
Günter Verheugen, Member of the European Commission
‘Micro, small and medium-sized enterprises (SMEs) are the engine of the European economy. They are an essential source of jobs, create entrepreneurial spirit and innovation in the EU and are thus crucial for fostering competitiveness and employment. The new SME definition, which entered into force on 1 January 2005, represents a major step towards an improved business
environment for SMEs and aims at promoting entrepreneurship, investments and growth. This definition has been elaborated after broad consultations with the stakeholders involved which proves that listening to SMEs is a key towards the successful implementation of the Lisbon goals’.
environment for SMEs and aims at promoting entrepreneurship, investments and growth. This definition has been elaborated after broad consultations with the stakeholders involved which proves that listening to SMEs is a key towards the successful implementation of the Lisbon goals’.
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