The challenge

Small and Medium enterprises  continue to be  the backbone of the Central and Eastern European economies (75% of employment, 60% of private sector value added).  The findings of the ILO’s enterprise surveys conducted in 5 countries of Western Balkans and Ukraine as part of its work on an enabling environment for sustainable enterprises (EESE) confirm that complex business regulations, lack of access to finance, competition from informal sector, shortage of skilled labour, and poor infrastructure are among the top five challenges faced by enterprises in the region.

Additional surveys conducted by the ILO and other agencies show that the Covid-19 pandemic hit this important segment of enterprises very hard. Their decline in revenues and employment was higher than for larger enterprises. It is not yet clear to what extent small enterprises benefitted from the quick economic recovery in 2021. But, this recovery is in trouble since early 2022 because of the war against Ukraine and the sharp increase of inflation related to the energy crisis and new disruptions of global supply chains.