In <strong>the</strong> area <strong>of</strong> bankruptcy <strong>and</strong> restructuring procedures <strong>and</strong> to promote making a freshstart, more action is needed.Greece started to receive reduced EU funding after 2006 <strong>and</strong> face intense competitionfrom EU accession countries. Therefore reforms, implemented by Greek governments, shall beaccelerated to catch-up o<strong>the</strong>r countries started much earlier if growth is to be sustainable.Creation or initiation <strong>of</strong> <strong>the</strong> so called GREEN mutual fund instrument, which helpsenterprises dealing with ecological products <strong>and</strong> policies <strong>and</strong> operations, shall be developed.In <strong>the</strong> promotion activities, all kinds <strong>of</strong> promotional tools <strong>and</strong> means that are able t<strong>of</strong>oster <strong>the</strong> international business relations, should be envisaged.The existing network schemes currently look complicated <strong>and</strong> in some cases overlappingeach o<strong>the</strong>r, <strong>and</strong> <strong>the</strong>refore, <strong>the</strong>ir role <strong>and</strong> supports for <strong>SME</strong>s are in question.Although business expenditure on R&D (BERD) is not only a way for businesses tolaunch new products <strong>and</strong> processes, measures introduced should be improved for increasingBERD <strong>and</strong> <strong>SME</strong>s innovating in-house, at least to establish a way to improve <strong>the</strong>ir absorptivecapacities <strong>and</strong> hence facilitate an effective innovation diffusion process.The greatest part <strong>of</strong> RTD activity is financed from public expenditure, whereas <strong>the</strong>business sector is lagging behind dramatically, particularly, <strong>the</strong> highest proportion <strong>of</strong> businessexpenditure on RTD comes from large <strong>and</strong> medium-sized enterprises, although <strong>the</strong>y make up asmall proportion <strong>of</strong> <strong>the</strong> total <strong>of</strong> enterprises. Therefore, Greece should not only increase its ratio<strong>of</strong> private to public expenditure but also <strong>the</strong> contribution <strong>of</strong> small sized enterprises in RTDactivities.Sufficient participation <strong>of</strong> business sector, especially <strong>SME</strong>s, in innovation governanceprocess shall be providedSimplification or unification <strong>of</strong> licensing, documents, reports, procedures, etc. wherepossible, shall be continued without lowering quality level, however, measures shall be taken toencourage related parts for changes.Regarding Broadb<strong>and</strong> Action Plan to 2008, falling prices <strong>and</strong> <strong>the</strong> initiatives taken byservice providers have led to an increase in <strong>the</strong> penetration rate from 0.47% at <strong>the</strong> end <strong>of</strong>2004 to 2.67 in June 2006, though <strong>the</strong>re is need for fur<strong>the</strong>r study in this area to providefur<strong>the</strong>r spread <strong>of</strong> broadb<strong>and</strong> in regions where citizens <strong>and</strong> businesses currently have difficultiesin gaining broadb<strong>and</strong> access.The measures aims at increasing electronic governance implementation, creating onestopshops for <strong>the</strong> better service <strong>of</strong> citizens <strong>and</strong> enterprises, as well as for <strong>the</strong> use <strong>of</strong> <strong>the</strong>internet for commercial purposes (e-commerce) should be improved.Necessity-based entrepreneurship is still high due to <strong>the</strong> long-term development <strong>of</strong>Greek businesses, ra<strong>the</strong>r than opportunity <strong>and</strong>/or corporate entrepreneurship. Greece shouldnot only develop better employment opportunities, but also create favorable conditions for <strong>the</strong>transition from a small or medium-size “family business" to a “pr<strong>of</strong>essionally managed”business.Out <strong>of</strong> all entrepreneurial endeavors made in Greece, 16.14% can be characterized ashigh-potential (contributing to market expansion, new job creation, increasing exportorientation, etc.), which means, in <strong>the</strong> following years, very few activities are expected to126
create more than 20 new jobs (per activity). Thus, Greece should develop its entrepreneurialactivity type <strong>and</strong> quality.Greece’s entrepreneurship problems also include weaknesses with regard to <strong>the</strong> longtermdevelopment <strong>of</strong> Greek businesses <strong>and</strong> <strong>the</strong> transition from a small or medium-size “familybusiness" to a “pr<strong>of</strong>essionally managed” business.Small size enterprises face with relatively low production potential <strong>and</strong> a difficulty tooperate within global market due to lack <strong>of</strong> specialization <strong>and</strong> limited use <strong>of</strong> economies <strong>of</strong> scalein product manufacture <strong>and</strong> trading; limited capacity for high-volume investments in newtechnology equipment; difficulty <strong>of</strong> following developments in domestic <strong>and</strong> foreign markets;lack in information <strong>and</strong> in many skilled labor categories; difficult access to <strong>the</strong> banking system.The measurements related with ICTs should be accelerated to improve contributions <strong>of</strong>new technologies in <strong>the</strong> productivity <strong>of</strong> <strong>the</strong> Greek economy <strong>and</strong> in <strong>the</strong> quality <strong>of</strong> daily life <strong>of</strong> <strong>the</strong>citizens.Labor productivity, especially in <strong>SME</strong>s, should be increased via dealing wi<strong>the</strong>ntrepreneurial problems (red tape, regulatory interventions), lack <strong>of</strong> competition, <strong>the</strong> smallsize <strong>of</strong> enterprises, lags in adoption <strong>of</strong> new technologies, <strong>and</strong> weaknesses <strong>of</strong> <strong>the</strong> educationsystem.Funding mechanisms for <strong>SME</strong>s such as VC, PE funds, seed capital funds, <strong>and</strong> businessangels should be developed, especially for high-risk companies.6.2. TURKEY, AS THE EU CANDIDATE COUNTRYTurkish economy was restructured towards open market economy in 1980s. In o<strong>the</strong>rwords, it was redirected towards export-based growth. For instance, Turkey’s total exportincreased approximately 5 folds between 1979 <strong>and</strong> 1987, i.e. from USD 2.3 billion to USD11.7.In accord with this increase, <strong>the</strong> structure <strong>of</strong> exported materials started to change fromagricultural products to industrial products. This process was disrupted by two crises in 1990s,in <strong>the</strong> years 1994 <strong>and</strong> 1999. This trend continued by o<strong>the</strong>r two crises in 2000 <strong>and</strong> 2001, inwhich Turkish economy felt a sharp turnaround in GDP down to 7.5 decreases.Due to macroeconomic conditions, inevitably, Turkish <strong>SME</strong>s also oscillated. Last twocrises reflections can be best summarized by registry/closure ratio, according to TurkishStatistical Institute (TURKSTAT) data; 225,224 companies were <strong>of</strong>ficially registered while59.058 were closed down in 1999, put differently, <strong>the</strong> percentage <strong>of</strong> closure was 26. However,<strong>the</strong> number <strong>of</strong> registrations was 120,295 <strong>and</strong> that <strong>of</strong> closures was 101,999 in 2001; in o<strong>the</strong>rwords, <strong>the</strong> percentage <strong>of</strong> closure went up to 84. In 2002, although <strong>the</strong> number <strong>of</strong> newregistries rose to 122,091, that <strong>of</strong> closures increased to 116,100, so <strong>the</strong> percentage <strong>of</strong> closurerose to 95. In short, negative macroeconomic conditions resulted from several issues, such asrepetitive crises, high long-term inflation <strong>and</strong> high interest rates etc., let Turkish <strong>SME</strong>s morevulnerable to external influences. After recovery process, Turkish economy started to increaseits development acceleration. In <strong>the</strong> last three years, <strong>the</strong> average growth rate <strong>of</strong> Turkisheconomy was about 7%, export doubled from 35 to 72 billion USD <strong>and</strong> manufacturedproduction covers approximately 80% <strong>of</strong> Turkish export. In o<strong>the</strong>r words, <strong>the</strong> improvement <strong>of</strong>Turkey’s investment environment, <strong>the</strong> decrease in <strong>the</strong> inflation rate, <strong>the</strong> attractiveness forforeign capital, create suitable conditions for <strong>SME</strong>s, which form <strong>the</strong> backbone <strong>of</strong> Turkisheconomy <strong>and</strong> its success.Turkish <strong>SME</strong>s account for 99.8% <strong>of</strong> all companies, including those in <strong>the</strong> service sector<strong>and</strong> <strong>the</strong>y employ 76.7 % <strong>of</strong> <strong>the</strong> total workforce. The share <strong>of</strong> <strong>SME</strong> investments within totalinvestments reaches 38%, <strong>and</strong>, 26.5% <strong>of</strong> <strong>the</strong> total value added is also created by <strong>the</strong>se127
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cooperation with the United Nations
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GENERAL ASSESSMENT OF THE BSEC WG O
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(iii)Share of the labor force of SM
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3.1.4. FINANCING SMEsProf. Dr. Sela
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introduction of e-signatures, only
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The Code of Conduct for Civil Serva
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Bulgarian SMEs obtain additional ca
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Incubators host on average 11 SME,
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accounting standards, including med
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