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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UKRAINESTRENGTHS• Well educated labor force• Legislative base for successful <strong>SME</strong>development is created in general• Established funds financing <strong>SME</strong> needs• Slightly growing domestic customer dem<strong>and</strong>for high tech <strong>SME</strong> products• More uncertainty accepting than Russians• More or less stable in disposition <strong>of</strong> ethnicgroupsOPPORTUNITIESWEAKNESSES• A low share <strong>of</strong> small enterprises in GDP• Limited opportunities <strong>of</strong> managerial educationfor <strong>SME</strong>• Low level <strong>of</strong> advantages for <strong>SME</strong> businessesproclaimed in <strong>the</strong> legislative system• Strongest lobbing <strong>of</strong> large companies’ interestsagainst <strong>SME</strong> sector• Underestimation <strong>of</strong> <strong>the</strong> <strong>SME</strong> role in <strong>the</strong>economy by politicians• Almost no <strong>SME</strong> cooperation with partnersfrom o<strong>the</strong>r countries• Not friendly to <strong>SME</strong> sector employeesretirement <strong>and</strong> health care systems• Crimea – is a multiethnic region with <strong>the</strong>complex inter-group relationships• Very low domestic customer dem<strong>and</strong> for hightech <strong>SME</strong> productsTHREATS• International integration, CEE cooperation• Regional integration blocks are interested inUkraine’s involvement• Slight GDP growth• Internet accessibility in <strong>the</strong> large cities isgrowing fast• Fast development <strong>of</strong> communicationtechnologies• Financial support <strong>of</strong> “business incubators”,<strong>and</strong> “technological parks”• Growing potential dem<strong>and</strong> for tourism inRussia (for Crimea region)• Growing opportunities for cooperation withRussian companies, <strong>and</strong> financing from Russia• Possibility pf participation in <strong>the</strong> EU goodneighbouring programme• Large number <strong>of</strong> workers abroad• Emigration• Still a low level <strong>of</strong> a consumer dem<strong>and</strong>• Part <strong>of</strong> <strong>the</strong> former centrally planned economy• Over-concentration <strong>of</strong> <strong>the</strong> former SU economyresulted in <strong>the</strong> lack <strong>of</strong> a state attention to <strong>the</strong><strong>SME</strong> in <strong>the</strong> recent past sector problems• Limited options for long-term financing• Sharp international competition in <strong>the</strong> area <strong>of</strong><strong>SME</strong> products• Political instability due to internal conflictbetween major political groups• Strong lobbing <strong>of</strong> large companies’ interestsagainst <strong>SME</strong> sector• Underestimation <strong>of</strong> <strong>the</strong> <strong>SME</strong> role in <strong>the</strong>economy by politicians• Corruption <strong>and</strong> low transparency <strong>of</strong> legislativesystem• Complex relationship with <strong>the</strong> neighboringcountries• Low income country• Part <strong>of</strong> <strong>the</strong> former centrally planned economy• Shadow economy <strong>and</strong> poor legislation control• Investment climate is not favorable forinternational investmentsSource: (1) <strong>SME</strong>s in CITs, UNECE, New York & Geneva, 2006, http://www.unece.org/indust/sme/smepub03.pdf(2) Dr. Irina Y.Naoumova, 2007152
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