THE ROLE AND IMPACT OF SMES ON THE MACEDONIAN ECONOMY

Gosevska L.

PhD, International Slavic University Gavrila Romanovich Derzhavin Sveti Nikole- Bitola-R.Macedonia

THE ROLE AND IMPACT OF SMES ON THE MACEDONIAN ECONOMY

Abstract

Small and medium enterprises are the main drivers of economic activity in Macedonian economy. Enterprises, so they can survive in the environment where competition is more pronounced and sharper, you must create strategies that will contribute to their efficient operation. Productivity and competitiveness are weak points of the Macedonian economy. Therefore particular attention should be given to improving national competitiveness and productivity.

Finally, to improve the efficiency of businesses, the Government of Macedonia has developed a national strategy for the development of businesses in which the emphasis is on small and medium enterprises, taking into account that they are most in R. Macedonia.

Keywords: entrepreneurship, economically, entrepreneurship.

In the past we have witnessed two different processes that take place in the country. On the one hand inventive people, full of hope and ideas, create new opportunities, new businesses and new jobs that create their own entrepreneurial endeavors, the other giants in failed state, laid off workers, etc.

Using them, any chance entrepreneur starts a new business that paves its own path building your future. Free market economy with the logic of functioning of the economic mechanism is based on measures of maintaining market or the effect of corrective actions of its existence. Entrepreneurship is most years free operation, the system below norms regulation or sociological tell- freedom for smooth expression of the spirit of entrepreneurs.

The overall interaction of global economic, social, and political factors cultural affect the determination of the entrepreneurial society in general or on the business behavior of companies and individuals. These factors imply the development of entrepreneurship in Macedonia, as well as the economic system and macroeconomic policy oriented towards the market and the market valuation of entrepreneurial skills and business people. It is also essential to system produces individuals, companies or teams, create and produce new products and services and to evaluate their own activities that increase opportunities and social own life. The R.M is more prevalent emphasized role and function of the state in the form of economic and intervention measures to regulate the material base of society and fulfill its social functions .

Small and medium enterprises are the main drivers of economic activity in Macedonian economy. Enterprises so they can survive in the environment where competition is more pronounced and sharper, you must create strategies that will contribute to their efficient operation. Productivity and competitiveness are weak points of the Macedonian economy. Therefore, particular attention should be given to improving national competitiveness and productivity through increased microeconomic reforms, including:

        - Reduce operating costs of small and medium enterprises by reducing the tax burden ;

        - Introduction of mandatory certification of Macedonian products intended for export, and the products are imported in Macedonia ;

        - Increasing the flexibility and mobility of the labor force, which includes harmonization of labor law with the social partners ;

        - Increasing the budget for science, research and development ;

        - Reforms in education, in accordance with the needs of the modern market economy and the establishment of a center for management education . [1]

Finally, to improve the efficiency of businesses, the Government of Macedonia has developed a national strategy for the development of businesses in which the emphasis is on small and medium enterprises, taking into account that they are most in R. Macedonia. The most important goals are:

• Simplification of legal regulation and regulatory environment ;
• Improving access to finance ;
• Simplification of taxation ;
• Improvement in policymaking ;
• Promotion of information and communication technology ;
• Promoting entrepreneurship, development of entrepreneurial spirit and entrepreneurial culture ;
• Promoting innovation and competitiveness ;
• Improving conditions for business development ;
• Internationalization of businesses ;
• Getting the international quality certification and safety standards such as ISO, HACCAP, TQM etc. ..[2]

The legal and regulatory environment still creates favorable conditions for the development of enterprise and entrepreneurship in the Republic of  Macedonia. Although taken several measures ( introduction of single window system, etc. ), there are difficulties regarding the introduction of licenses. The tax system also is not a sufficient stimulus and on the other side and the tax administration is not efficient enough. In addition to tax cuts and the introduction of a flat tax, or tax credits for reinvestment of profits, other measures undertaken to achieve certain benefits in terms of taxation is the possibility of electronic payment of taxes and track their tax obligations by taxpayers. The internationalization of enterprises is accompanied by high cost and high financial and business risk. The main goal of this is to reduce barriers to export and import dutie, there is greater awareness of owners of foreign markets, laws and regulations.[3]

Capital investments bring economic development rather than unproductive costs. Investments in fixed assets according to the purpose of investment and ownership in the form of traveling by the following dynamics, number of business entities by number of persons employed is presented in the table. Private ownership of the company is dominant and it will continue in the future because some of the companies have not yet privatized. The biggest invest privatized ment is in construction and mining, other sectors are less dynamic but in the future it might be a different dynamic because of the influx of foreign investment and the development of free zones. Promotion of our country to foreign investors must develop a higher level and a different direction of movement him you it had before. That would cause the introduction of procedures through which mean making changes followed by organized coordinated actions.

Table 1 - Number of active business entities by sectors of activity according to the National Classification of Activities NKD Rev. 2 and by number of persons employed, 2013 - estimated data -

  ¹⁾ Including business entities with unascertained number of persons employed

Source: State Institute of Statistics, Quarterly bulletin IV/2014, p.9.

Although financial and economic conditions began to improve, there are still risks, especially due to the large current account deficit and vague flow rate and progress of the global economy and financial markets in the world. The policy of our country should move towards risk reduction and towards supporting growth. The forecasts that the IMF makes sure that Macedonia's economy will gradually recover as a result of the growth of trade partners of Macedonia, improved financial conditions and relatively stable position of the Macedonian banking sector. Experts are optimistic about the Macedonian economy and argue that flexibility will lead the country in the right direction of growth and development.

If you talk with a large dose of reality would be given a full picture of the Macedonian economy in 2014:

• Economic growth by about 3,5 % due to the decline in exports, foreign investment and reduce consumer spending ;
• Increasing inflation of 2.5 % to 3 %, due to the fall in the prices of oil and food, due to declining personal consumption ;
• Decline in exports, especially metallurgy and textile industry as a result of lower demand from abroad;
• Further growth deficits in the balance of payments in foreign countries and increased pressure on the exchange rate, which will depend on monetary and fiscal policy;
• Reduction and deferral of foreign investment due to reduced liquidity crisis;
• Reduction of domestic investment as a result of difficulties in financing through banks ;
• Loans for the economy will be less, will be more expensive, will get harder and will be short-term;
• Dismissal of hundreds of workers in textile, leather and metal industry .[4]

SMEs are an important factor of economic growth, but their challenges and their promising initiatives to support the sector by international investment funds business give an inch, clear and certain important role of SMEs in their growth and development. A challenge for SMEs is their successful adaptation to the changes and challenges of the market economy. Attempt to successful adjustment by entrepreneurial management requires certain assumptions and actions specifics. It means radical changes in production, technological, strategic approach to solving problems and challenges.

The development and growth of small and medium enterprises throughout the world contributed to the promotion and use of resources, increase employment and improve the living standards of the population, use of sophisticated equipment and technology, application of innovation and growth and development among others.

The SMEs sector has shown a crucial role in the overall industrial development of the economy in countries where there. In recent years, SMEs recorded high growth rate compared to the overall industrial sector. They are characterized by adaptability to market conditions and compliance with the rules of the games that are in it. They have lower costs, increased competitiveness and realize greater profits. On the other hand, consumers demand lower prices due to the global shift of things, developing countries have cheaper labor force is skilled and educated and an incentive to invest in foreign capital. This link could be the basis for the development of entrepreneurship in future frames and increase the number of SMEs.

The policy of our country should move towards risk reduction and towards supporting growth. The forecasts that the IMF makes sure that Macedonia's economy will gradually recover as a result of the growth of trade partners of Macedonia, improved financial conditions and relatively stable position of the Macedonian banking sector. Experts are optimistic about the Macedonian economy and argue that flexibility will lead the country in the right direction of growth and development.

Young people should be exposed to entrepreneurship and to support the effort to develop entrepreneurial skills. Throughout the campaign that entrepreneurs can expose the business ventures that will lead to success should be highlighted uses that will bring to society. This should be directed at those who play a key role in supporting future entrepreneurs such as schools, universities, investors, local communities, regions, business organizations, and media counselor.

References

1. J. The Theory of Economic Development, Harvard University Press, 1934.p.24
2. Philip Neck:„Role et importance despetives enterprise,Le development despetives enterprises: Politiques et programs, Bureau Intemational dutravil, Geneve, 1981, p.14.
3. Minister of ekonomy of the Republik of Macedonija:Program of meazureaktivities for enterpreneursship promotion and creation of competitivnes of the small and medium-sized enterprises in the Republik of Macedonia Skopje,December, 2012.
4. Kapital business magazine, No. 647, Skopje,2014, p. 32.