SME POLICY INDEX : eastern partner countries 2020.

Preface
Foreword
Acknowledgements
Abbreviations and acronyms
Executive summary
Policy framework, structure of the report and assessment process
	The Small Business Act for Europe as underlying policy framework
	The 2020 SBA assessment framework and structure of the report
	Supplementary data
	The 2020 SBA assessment process
		Timing of the 2020 assessment
	The Eastern Partnership and the Small Business Act for Europe
		The Eastern Partnership
			Political framework
			Multilateral track: Platform 2
		Small Business Act for Europe: A key policy tool for EU Member States
	References
	Notes
Overview: 2020 SME Policy Index scores and key findings
	Overview of 2020 key findings for Eastern Partner countries
		Key findings by pillar
			Level playing field in EaP countries
				Competition
				Contract enforcement and alternative dispute resolution
				Business integrity
			Pillar A – Responsive government
				Institutional and regulatory framework
				Operational Environment
				Bankruptcy and second chance
			Pillar B – Entrepreneurial human capital
				Entrepreneurial learning and women’s entrepreneurship
				SME skills
			Pillar C – Access to finance
				Access to finance
			Pillar D – Access to markets
				Public procurement
				Standards and technical regulations
				Internationalisation
			Pillar E – Innovation and Business Support
				Business development services
				Innovation policy
				Green economy
		Key findings for each country
		Overview of regional performance
	2020 SME Policy Index scores for Eastern Partner countries
	References
	Notes
Economic context
	A heterogeneous region with a diverse economic structure
	Regional recovery but uncertain prospects
	Persistent cyclical and structural weaknesses
		Trends in remittances inflow are an important determinant of domestic demand
		Despite some export diversification, competitiveness remains low and market concentration high
		The weak economic environment and the uncertain geopolitical outlook undermine investor confidence
		SMEs have not yet tapped their full potential for competitiveness and economic growth
	Stronger level-playing field is needed to unleash the potential of SMEs
		The operational environment for SMEs has improved significantly…
		… but there is a need to make EaP economies more competition-friendly and to work on level-playing-field fundamentals
	References
	Notes
		Part I. Small Business Act assessment: Findings by pillar
Part I. Small Business Act assessment: Findings by pillar
	Chapter 1.  Level playing field in the Eastern Partner countries
		Introduction
		Competition
			Assessment framework
				Scope of action
				Anti-competitive behaviour
				Probity of investigation
				Advocacy
			Analysis
				Solid legal frameworks are in place, but implementation is insufficient
				Wide range of tasks, but lack of essential investigation tools
				Hard-core cartels are not prosecuted, and the number of reviewed mergers is low
				Transparency and predictability support agency independence
				Competition assessment is essential, but advocacy should also target the private sector
			The way forward
		Contract enforcement and alternative dispute resolution
			Assessment framework
				Enforcement of contracts by the judicial system
				Mechanisms for protecting companies’ property rights
				Alternative means of resolving commercial disputes
			Analysis
				Legal frameworks for contract enforcement are largely in place and the justice sector reforms are ongoing
				Property rights of SMEs face challenges when it comes to litigation against public authorities and enforcement of IP rights
				Alternative dispute resolution mechanisms should be further promoted by the EaP governments
			The way forward
		Business integrity
			Assessment framework
				Legal and institutional framework for business integrity
				Mechanisms for prevention and enforcement of corruption in the private sector
				Promotion of business integrity measures by the government
			Analysis
				Institutional and legal frameworks for business integrity need to be strengthened
				Mechanisms for prevention and enforcement of corruption in the private sector lack efficient implementation
				EaP governments’ initiatives to promote business integrity are limited
			The way forward
		Policy Instruments – Level playing field
		References
		Notes
	Chapter 2.  Pillar A – Responsive government
		Introduction
		Institutional and regulatory framework for SME policy
			Assessment framework
				Institutional framework
				Legislative and regulatory simplification and RIA application to SME policy
				Public-private consultations
			Analysis
				Institutional framework
				Legislative and regulatory simplification and RIA application
				Public-private consultations
			The way forward
		Operational environment for SMEs
			Assessment framework
				E-government services
				Business licenses and permits
				Company registration
				Tax compliance procedures for SMEs
			Analysis
				E-government services
				Business licenses and permits
				Company Registration
				Tax compliance procedures for SMEs
			The way forward
		Bankruptcy and second chance
			Assessment framework
				Preventive measures
				Survival and bankruptcy procedures
				Promoting second chance
			Analysis
				Despite recent improvements, measures to promote business rescue and second chance are still lacking
				Implementing more comprehensive and systematic preventive measures
				Insolvency laws and procedures have improved, but more can be done to encourage restructuring
				Promoting second chance for honest entrepreneurs
			The way forward
		Policy instruments – Responsive Government
		References
		Notes
	Chapter 3.  Pillar B – Entrepreneurial human capital
		Introduction
			Methodological changes to the assessment framework
		Entrepreneurial learning
			Assessment framework
			Analysis
				Reinforce policy and partnership arrangements to include employment authorities
				Attention should turn to pre-service teacher training for the entrepreneurship key competence
				Practical entrepreneurial experience continues to rely primarily on student mini-company approaches
				Education-business co-operation improving particularly in vocational education
				Extend entrepreneurship career guidance to general education
				Government and private sector should reach out to higher education institutions
				Reinforce awareness-raising and good-practice sharing, and extend advocacy networks
				Improved capacity and tools to support monitoring and evaluation
			The way forward
		Women’s entrepreneurship
			Assessment framework
			Analysis
				Women’s entrepreneurship policies moved up in the national policy agenda
				Engaging with women’s entrepreneurship civic interest groups at the policy and practice levels
				Planning women’s entrepreneurship policies with the impact in mind
				Improving the quality and relevance of women entrepreneurs’ training and support actions
			The way forward
		Enterprise skills
			Assessment framework
			Analysis
				Deliberate steps are needed to ensure that skills intelligence generates deeper insights on SME capabilities and training needs
				Smart specialisation is opening new ways to boost SMEs’ skills
				Training provision has improved across economies but important gaps remain
				Digitalisation, an important driver of globalisation, is an area with still untapped potential
				Monitoring and evaluation need to be systematically implemented
			The way forward
		Policy instruments – Entrepreneurial Human Capital
		References
		Notes
	Chapter 4.  Pillar C – Access to finance
		Introduction
		Assessment framework
		Analysis
			Legal and regulatory framework
				Legal frameworks for secured transactions are in place across the region but enforcement remains an issue
				Registers for security over movable assets are being developed
				The coverage of credit information systems has expanded but is still relatively low
				Banking regulatory frameworks have started to align with Basel III
				Capital markets require significant development before SME segments could be considered
			Bank financing
				Bank lending is well below levels seen in OECD economies
				Many governments have put in place new credit guarantee schemes but their effectiveness remains to be tested
			Non-bank financing
				Microfinance is commonly available in most countries, but primarily focussed on consumer lending
				Leasing and factoring has gained momentum as legal reforms are being implemented in some countries, but market penetration remains low
			Venture capital
				Venture capital remains in its infancy across the region, with efforts focussing on building a conducive ecosystem
			Financial literacy
			The way forward
		Policy instruments – Access to finance
		References
	Chapter 5.  Pillar D – Access to markets
		Introduction
		Public procurement
			Assessment framework
			Analysis
				The regulatory environment is improving, especially for DCFTA countries
				Institutions handling public procurement could favour greater SME participation
				E-procurement is being developed, but SME participation remains low
			The way forward
		Standards and technical regulations
			Assessment framework
				Overall co-ordination and general measures
				Approximation with the EU acquis
				SME access to standardisation
			Analysis
				Progress on overall co-ordination and general measures varies across the region
				Approximation with the EU acquis is proceeding at different speeds, with AA/DCFTA countries leading the way
				More effective measures should be taken to promote SME use of standards and participation in standardisation committees
			The way forward
		SME Internationalisation
			Assessment framework
				SME Export promotion
				Integration of SMEs into global value chains
				OECD Trade facilitation indicators
				SME use of e-commerce
			Analysis
				Export promotion needs to be further embedded in policy frameworks
				Tools for SME integration into global value chains need to be further developed
				The EaP region performs poorly in trade facilitation compared to OECD countries
				Policies to support e-commerce adoption by SMEs are still taking shape
			The way forward
		Policy instruments – Access to markets
		References
		Notes
	Chapter 6.  Pillar E – Innovation and Business Support
		Introduction
		Business Development Services
			Assessment framework
				SME support services provided by the government
				Government initiatives stimulating private business development services
			Analysis
				Government provision of BDS would benefit from regular SME needs analysis and market research, as well as result-oriented monitoring tools
				Uneven stages of development of private BDS markets in the EaP countries require further incentives to ensure sustainability of private BDS provision
			The way forward
		Innovation policy for SMEs
			Assessment framework
				Policy framework for innovation
				Government support services for innovative SMEs
				Government financial support
				Non-technological innovation and diffusion of innovation
			Analysis
				Policy frameworks for innovation are improving, but focus on SMEs still limited
				Although the network of innovation infrastructure is expanding, science-industry collaboration remains underexploited
				Financial support for innovative SMEs is generally available, but its design and scope could be improved
				Support for non-technological innovation and diffusion of innovation is only sporadic
			The way forward
		SMEs in a green economy
			Assessment framework
				Environmental policies
				Incentives and instruments for greening SMEs operations
			Analysis
				Policy frameworks for greening SMEs continue to develop, but concrete action plans and measurable indicators are needed
				SMEs need greater information and resources about why and how they can benefit from green practices
			The way forward
		Policy instruments – Innovation and Business Support
		References
		Notes
			Part II. Small Business Act assessment: Eastern Partner country profiles
Part II. Small Business Act assessment: Eastern Partner country profiles
	Chapter 7.  Armenia: Small Business Act country profile
		Key findings
		Context
			Economic snapshot and reform priorities
			Business environment trends
			SME sector
		SBA assessment by pillar
			Level playing field pillar
				Competition
				Contract enforcement and alternative dispute resolution
				Business integrity
			Pillar A – Responsive government
				Institutional and regulatory framework for SME policy
				Operational environment for SMEs
				Bankruptcy and second chance
			Pillar B – Entrepreneurial human capital
				Entrepreneurial learning
				Women’s entrepreneurship
				Enterprise skills
			Pillar C – Access to finance
				Legal and regulatory framework
				Sources of external finance for SMEs (bank financing, non-bank financing, venture capital)
				Financial literacy
			Pillar D – Access to markets
				Public procurement
				Standards and technical regulations
				SME internationalisation
			Pillar E – Innovation and Business Support
				Business Development Services
				Innovation policy
				SMEs in green economy
			Sectoral analysis: SME perspectives on the agribusiness sector in Armenia
		The way forward
		Conclusion
		References
		Notes
	Chapter 8.  Azerbaijan: Small Business Act country profile
		Key findings
		Context
			Economic snapshot and reform priorities
			Business environment trends
			SME sector
		SBA assessment by pillar
			Level playing field pillar
				Competition
				Contract enforcement and alternative dispute resolution
				Business integrity
			Pillar A – Responsive government
				Institutional and regulatory framework
				Operational environment for SMEs
				Bankruptcy and second chance
			Pillar B – Entrepreneurial human capital
				Entrepreneurial Learning
				Women’s entrepreneurship
				SME skills
			Pillar C – Access to finance
				Legal and regulatory framework
				Sources of external finance for SMEs (bank financing, non-bank financing and venture capital)
				Financial literacy
			Pillar D – Access to Markets
				Public procurement
				Standards and technical regulation
				SME Internationalisation
			Pillar E – Innovation and Business Support
				Business Development Services
				Innovation policy
				Green economy
			Sectoral analysis: SME perspectives on the agribusiness sector in Azerbaijan
		The way forward
		Conclusion
		References
		Notes
	Chapter 9.  Belarus: Small Business Act country profile
		Key findings
		Context
			Economic snapshot and reform priorities
			Business environment trends
			SME sector
		SBA assessment by pillar
			Level playing field pillar
				Competition
				Contract enforcement and alternative dispute resolution
				Business integrity
			Pillar A – Responsive government
				Institutional and regulatory framework for SME policy
				Operational environment for SMEs
				Bankruptcy and second chance
			Pillar B – Entrepreneurial human capital
				Entrepreneurial learning
				Women’s entrepreneurship
				Enterprise skills
			Pillar C – Access to finance
				Legal and regulatory framework
				Sources of external finance for SMEs (bank financing, non-bank financing and venture capital)
				Financial literacy
			Pillar D – Access to markets
				Public Procurement
				Standards and technical regulations
				SME internationalisation
			Pillar E – Innovation and Business Support
				Business Development Services
				Innovation policy
				SMEs in a green economy
			Sectoral analysis: SME perspectives on the textile and garment sector in Belarus
		The way forward
		Conclusion
		References
		Notes
	Chapter 10.  Georgia: Small Business Act country profile
		Key findings
		Context
			Economic snapshot and reform priorities
			Business environment trends
			SME sector
		SBA assessment by pillar
			Level playing field pillar
				Competition
				Contract enforcement and alternative dispute resolution
				Business integrity
			Pillar A – Responsive government
				Institutional and regulatory framework for SME policy
				Operational environment for SMEs
				Bankruptcy and second chance
			Pillar B – Entrepreneurial human capital
				Entrepreneurial learning
				Women’s entrepreneurship
				SME skills
			Pillar C – Access to finance
				Legal and regulatory framework
				Sources of external finance for SMEs (bank financing, non-bank financing and venture capital)
				Financial literacy
			Pillar D – Access to markets
				Public procurement
				Standards and technical regulations
				SME internationalisation
			Pillar E – Innovation and Business Support
				Business development services
				Innovation policy for SMEs
				Green economy policies for SMEs
			Sectoral analysis: SME perspectives on the agribusiness sector in Georgia
		The way forward
		Conclusion
		References
		Notes
	Chapter 11.  Republic of Moldova: Small Business Act country profile
		Key findings
		Context
			Economic snapshot and reform priorities
			Business environment trends
			SME sector
		SBA assessment by pillar
			Level playing field pillar
				Competition
				Contract enforcement and alternative dispute resolution
				Business integrity
			Pillar A – Responsive government
				Institutional and regulatory framework for SME policy
				Operational environment for SMEs
				Bankruptcy and second chance
			Pillar B – Entrepreneurial Human Capital
				Entrepreneurial learning
				Women’s entrepreneurship
				SME skills
			Pillar C – Access to finance
				Legal and regulatory framework
				Sources of external finance for SMEs (bank financing, non-bank financing and venture capital)
				Financial literacy
			Pillar D – Access to markets
				Public procurement
				Standards and technical regulations
				SME internationalisation
			Pillar E – Innovation and Business Support
				Business Development Services
				Innovation policy
				Green economy
			Sectoral analysis: SME perspectives on the agribusiness sector in Moldova
		The way forward
		Conclusion
		References
		Notes
	Chapter 12.  Ukraine: Small Business Act country profile
		Key findings
		Context
			Economic snapshot and reform priorities
			Business environment trends
			SME sector
		SBA assessment by pillar
			Level playing field pillar
				Competition
				Contract enforcement and alternative dispute resolution
				Business integrity
			Pillar A – Responsive government
				Institutional and regulatory framework for SME policy
				Operational environment for SMEs
				Bankruptcy and second chance
			Pillar B – Entrepreneurial human capital
				Entrepreneurial learning
				Women’s entrepreneurship
				Enterprise skills
			Pillar C – Access to finance
				Legal and regulatory framework
				Sources of external finance for SMEs (bank financing, non-bank financing, venture capital)
				Financial literacy
			Pillar D – Access to markets
				Public procurement
				Standards and technical regulations
				SME internationalisation
			Pillar E- Innovation and Business Support
				Business Development Services
				Innovation policy
				Green economy policies for SMEs
			Sectoral analysis: SME perspectives on the agribusiness sector in Ukraine
		The way forward
		Conclusion
		References
		Notes
Annex A. Methodology for the Small Business Act assessment
	Scoring methodology
		Scoring methodology
		Recent change in the methodology for the Entrepreneurial human capital dimensions
		Supplementary data
	Notes
Annex B. Organisation profiles
	Organisation for Economic Co-operation and Development (OECD), Eurasia Competitiveness Programme
	European Commission, DG NEAR and DG GROW
	European Training Foundation
	European Bank for Reconstruction and Development
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