Strategies of the Development of Entrepreneurship and SME
Strategies of the Development of Entrepreneurship and SME
Strategies of the Development of Entrepreneurship and SME
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AZERBAIJANSTRENGTHS• Political <strong>and</strong> economic stability;• Government’s full support forentrepreneurship;• Easy enterprise registration procesure;• Entrepreneurial skills <strong>and</strong> attitude <strong>of</strong>population toward entrepreneurship isrelatively high;• Creation <strong>of</strong> legal basis for <strong>SME</strong>s activity;• State support mechanism toentrepreneurship;• Low share <strong>of</strong> <strong>the</strong> population in poverty.OPPORTUNITIES• Favourable geographical location <strong>of</strong> <strong>the</strong>country;• Favourable climate conditions fordevelopment <strong>of</strong> tourism sector;• The newly established Business Councilcould make recommendations in order toimprove <strong>the</strong> business climate;• Good economic environment for directforeign investments;• Possibility <strong>of</strong> cooperation <strong>and</strong> doingbusiness with <strong>the</strong> neighbouring South-Caucasian countries <strong>and</strong> countries <strong>of</strong> <strong>the</strong>SPECA region;• Possibility <strong>of</strong> becoming a supplier <strong>of</strong>Transnational Corporations (TNC) in <strong>the</strong> oil<strong>and</strong> oil related industries;WEAKNESSES• Sectoral structure <strong>of</strong> <strong>SME</strong>s does not meet <strong>the</strong>country’s production potential;• Predominance <strong>of</strong> individual <strong>and</strong> familyenterprises in entrepreneurship sector;• Unsatisfied support mechanism for start-ups;• Poor coordination <strong>of</strong> institutional changes,economic modernization <strong>and</strong> technologicalrenovation <strong>of</strong> economy;• Lack <strong>of</strong> credit guarantee system for <strong>SME</strong>s;• Lack <strong>of</strong> business incubators;• Low <strong>SME</strong>s share in export;• Underdeveloped market infrastructure;• Weak cooperation relations <strong>of</strong> MultinationalCompanies with local providers <strong>and</strong>producers;• Lack <strong>of</strong> quality consciousness.THREATS• The Nagorno-Karabakh conflict <strong>and</strong>occupation <strong>of</strong> Azerbaijan’s territories byArmenia that threatens <strong>the</strong> political, economic<strong>and</strong> social stability <strong>and</strong> absorbs significantfinancial resources;• The Government does not provide sufficientfinancial support from <strong>the</strong> oil resources,which could provide less favorite environmentfor <strong>SME</strong> development in long-term;.• High rate <strong>of</strong> <strong>the</strong> shadow economy;• Low-effective mechanism <strong>of</strong> solution <strong>of</strong>business disputes <strong>and</strong> economic conflicts.Source:(1) UNECE, Geneva, 2005(2) Alakbar Mammedov, National Confederation <strong>of</strong> Entrepreneurs (Employers’) Organizations,2007143