The Mediterranean Middle East and North Africa 2018

Scope of the report

This interim assessment is not a full update of the 2014 SME Policy Index, which includes ten policy areas and more than 100 policy indicators (see Box 1).1 Rather, it consists of an overview of the progress made by MED economies with respect to the implementation of key reforms identified in 2014.

The report covers five policy domains: 1) the foundations of SME policy – definitions, statistics and institutions; 2) improving business environments for SMEs and entrepreneurs; 3) fostering access to finance; 4) nurturing start-ups and SME growth; and 5) entrepreneurial human capital development. The following sections briefly describe the rationale and the specific policy aspects analysed in this report.

Box 1. Overview of the SME Policy Index for the Mediterranean Middle East and North Africa 2014: Implementation of the Small Business Act for Europe

The SME Policy Index for the Mediterranean Middle East and North Africa 2014 was co-ordinated by the OECD, the European Commission and the European Training Foundation (ETF), in consultation with the European Investment Bank (EIB). The assessment measured SME policy convergence between the European Union and the MED region. It also included an overview of SME policy in Libya.

The SME Policy Index is an analytical tool developed by the OECD, in co-operation with international partners including the European Commission and the ETF, to assess and compare SME policy across economies and time. It was developed within the framework of regional programmes conducted by the OECD with non-member emerging economies. It has been implemented in Eastern Europe and Central Asia, the Western Balkans and Turkey, Latin America, and Southeast Asia.

The SME Policy Index has been adapted for the MED region building on the Small Business Act for Europe (SBA),1 an SME policy framework adopted by the EU in 2008, which is becoming the reference for Euro-Mediterranean co-operation for enterprise development. It was first carried out in 2007-2008, leading to the publication of the Report on the Implementation of the Euro-Mediterranean Charter for Enterprise.2 The 2014 assessment updated the previous 2007-2008 exercise to show progress made over the period covered.

The exercise was structured around the ten policy principles of the SBA:

a) Education and training for entrepreneurship, including women’s entrepreneurship.

b) Efficient bankruptcy procedures and “second chance” for entrepreneurs.

c) Institutional and regulatory framework for SME policy making.

d) Operational environment for business creation.

e) Support services for SMEs and public procurement.

f) Access to finance for SMEs.

g) Supporting SMEs to benefit from Euro-MED networks and partnerships.

h) Enterprise skills and innovation.

i) SMEs in a green economy.

j) Internationalisation of SMEs.

1. https://ec.europa.eu/growth/smes/business-friendly-environment/small-business-act_en.

2. http://www.oecd.org/global-relations/41779100.pdf.

1. The foundations of SME policy: definitions, statistics and institutions

SME and entrepreneurship policies involve a wide range of institutions and actors. Establishing the right co-ordination and consultation mechanisms is essential for effective policy implementation.2 This interim assessment analyses the progress made in the MED economies concerning:

The existence of official SME definitions and the availability of SME statistics;

The institutional framework for SME policies (sub-dimension 3.1 in the SME Policy Index 2014), particularly the development and implementation of SME strategies and improved institutional or multi-stakeholder co-ordination; and

Public-private consultations (sub-dimension 3.3 in the SME Policy Index 2014). This area assesses whether multi-stakeholder committees (public and private) have been created/improved.

2. Improving business environments for SMEs and entrepreneurs

The business environment can significantly affect SME and entrepreneurship performance. Most MED economies are implementing measures to enhance their business environments. The interim assessment attempts to assess these reform efforts by focusing on:

Better legislation and administrative simplification (sub-dimension 3.2 in the SME Policy Index 2014), in particular the introduction/improvement of regulatory impact analysis (RIA) and the implementation of the SME test of the “think small first” SBA principle;

The operational environment for business creation (dimension 4 in the SME Policy Index 2014), assessing reforms related to the ease of company registration and notification and compliance (e.g. progress in the implementation of single company identification numbers, online registration and one-stop shops);3 and

Bankruptcy procedures (sub-dimension 2.1 in the SME Policy Index 2014), capturing reforms and implementation of bankruptcy laws.4

3. Fostering access to finance

Facilitating access to finance is one of the most essential areas for the promotion of SMEs and entrepreneurship.5 The interim assessment looks at:

The legal and regulatory environment for access to finance (sub-dimension 6.2 in the SME Policy Index 2014), analysing in particular progress in the implementation of credit information systems and registries of movable assets; and

Sources of external finance (sub-dimension 6.1 in the SME Policy Index 2014), focusing on progress made on access to credit and other sources of finance.

4. Nurturing start-ups and SME growth

Beyond measures to improve the business environment, SMEs face specific needs and therefore require tailored policies that support their creation and growth.6 The interim assessment captures progress made in the following areas:

The availability of business support services, including business incubators and the ease of access to information about these services (sub-dimensions 5.1 and 5.2 in the SME Policy Index 2014);

Measures to promote SME access to public procurement opportunities (sub-dimension 5.3 in the SME Policy Index 2014), in particular the ease of access to information on procurement opportunities and e-procurement; and

Measures to increase SME access to international trade (sub-dimension 10.2 in the SME Policy Index 2014).

5. Entrepreneurial human capital development

This report also includes an assessment of human capital development initiatives related to entrepreneurship and SME growth.7 This assessment was undertaken by the European Training Foundation (ETF) and looks at:

Entrepreneurial learning in upper secondary education (both general and vocational), addressing both policy and practice – with particular attention given to entrepreneurship as a key competence as well as entrepreneurship skills;

Women’s entrepreneurship, in particular how policies and training support for women’s entrepreneurship are addressed; and

SME skills, particularly training to help SMEs internationalise.

The report was undertaken jointly by the OECD, which focused on policy areas 1 to 4, and the ETF, which covered policy area 5. The information for policy areas 1 to 4 was collected through questionnaires completed by different stakeholders in co-operation with national co-ordinators. The information from the questionnaires was also discussed during fact-finding missions and focus groups in each MED economy. These meetings provided the opportunity to obtain more information on the policy reform efforts implemented.

The human capital dimension (policy area 5) was assessed by ETF through multi-stakeholder focus groups in each MED economy. This covered three policy indicators:

• Indicator 1 assessed the extent to which upper secondary education promotes entrepreneurship as a key competence, and entrepreneurship skills for young people.

• Indicator 2 assessed the extent to which training for women’s entrepreneurship is supported by mutually-reinforcing policies and implementation measures.

• Indicator 3 assessed the extent to which economies dispose of training provisions for SME trading, or with potential to trade, based on knowledge of international standards and markets

Notes

← 1.  OECD, European Commission, ETF. 2014. SME Policy Index for The Mediterranean Middle East and North Africa 2014: Implementation of the Small Business Act for Europe (Paris: OECD Publishing). http://www.etf.europa.eu/web.nsf/pages/SME_Policy_Index_MENA_2014.

← 2.  These policy areas correspond to SBA principle 3, “Design rules according to the ‘think small first’ principle”, which requires public authorities to consider SMEs’ interests early in the policy-making process. For all 10 principles, see http://publications.europa.eu/resource/cellar/4a5a13ba-4411-4602-a903-6d3b85005624.0005.02/DOC_5.

← 3.  This area corresponds to SBA principle 4, “Make public administrations responsive to SME needs”.

← 4.  This area corresponds to SBA principle 2, “Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance”.

← 5.  These policy areas correspond to SBA principle 6, “Facilitate SME access to finance and develop a legal and business environment supportive to timely payments and commercial transactions”.

← 6.  These policy areas correspond to SBA principles 5 (“Adapt public policy tools to SME needs”) and 10 (“Encourage and support SMEs to benefit from the growth of markets”).

← 7.  This section covers SBA principles 1 (“Create an environment in which entrepreneurs and family business can thrive and entrepreneurship is rewarded”) and 8 (“Promote the upgrading of skills in SMEs and all forms of innovation”).