Small and Medium Entrepreneurship

Small and Medium Entrepreneurship

In the context of sustainable economic growth policy the development of small and medium entrepreneurship (SME) sector is intended to ensure country's economic growth stability imparting an innovative focus and flexibility to the economy. In this regard the SME sector with its features and capabilities is the cornerstone, which has a significant impact on the country's economic development and provides the tangible socio-economic result, as well as balanced regional development.

Acknowledging the crucial role of the SME sector in country’s economic development, - creating new job places, raising the living standards, forming of the middle class society and provision of the social and political stability, the Government of the RA is taking consistent steps towards state support and development of the SME sector.

SME state support programs are based on fundamental principles of the economic policy adopted by the Government of the RA and contribute to the country’s economic development, especially in rural and remote areas, and inconsistency reduction, which is one of the strategic priorities of the economic policy pursued by the Government of the RA. Through effective and purposeful implementation of SME state support programs (Business Programs and Initiatives), as well as establishment of appropriate infrastructure in SME sector, in recent years the impact of the SME sector on the economy of Armenia has been increased.

Modern infrastructure and efficient SME support instruments have created necessary preconditions for SME prospective development in Armenia aimed to support to knowledge-based and innovative industries, formation of favorable environment for technology transfer and expansion of foreign economic activity of SMEs.

The Law on Small and Medium Entrepreneurship State Support (adopted by the National Assembly on 5th December, 2000), which first defined the SMEs standards and main directions of SME state support in the Republic of Armenia. In order to comply the standards of SMEs of Armenia with the standards set for SMEs by European Union, the Law of the RA "On Making Addendum and Amendments to the Law of the RA on State Support of Small and Medium Entrepreneurship" has been developed and adopted by NA on 5th October, 2010.

Since 2001, SME State Support Annual Programs are developed and implemented in Armenia, which aim to ensure SME sector development enforced by the Law of the RA on Small and Medium Entrepreneurship State Support. The competence for elaboration of SME development policy (strategy), as well as SME development and state support annual programs in Armenia is on the agenda of the Ministry of Economy, and the main organization implementing them is the "Small and Medium Entrepreneurship Development National Center of Armenia" Fund (SME DNC of Armenia), which was established by the Decree N282 of the Government of the RA on 19th March, 2002, as the program activity in the framework of the SME State Support Program for 2002.

The international and foreign organizations/programs also have a significant role in designing and implementation of SME development and support programs. The activities are carried out for establishment of contacts and cooperation between enterprises of Armenia and the EU countries, in particular:

Amendments were made to the Law of the RA "On Small and Medium Entrepreneurship State Support" (05.10.2010, HO-142-N), the goal is harmonizing the SMEs standards with standards adopted in EU countries,
Economic Policy Performance Program is realized under the platform of EU Eastern Partnership (EaP) "Economic Integration and Convergence with EU policies", which resulted in 2012 the report concerning general situation of SMEs in Armenia and each country participating in this process to be issued and presented by the European Commission.

On the 1 October 2015 the Small and Medium Enterprise Development strategy was approved, in which were presented the situation of SMEs in Armenia, the analysise of situation, the strategic objectives of the SME sector in the next three years, the ways and means to implement them, the study of the international experience, the fields policy marks, analysis of the strengths and weaknesses.

The Small and Medium Entrepreneurship (SME) sector is one of the priority directions of economic development of the Republic of Armenia. Continuous efforts are being made by the RA government towards the development of the sector, particularly towards the development of SME state support system.
While in the previous years the SME development policy was mostly focused on the SME entities’ quantitative growth and accessibility of resources, the coming years will focus on knowledge, enhancing the quality and competitiveness.
The SME development strategy goal over the next three years (2016-2018) is to ensure a competitive environment for small and medium business activity, through promotion of enterprise development and dissemination of knowledge in entrepreneurship, access to finance, simplifying the tax system and improving the mechanisms for dialogue with the private sector, as well as through promotion of innovation and sustainable development.

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