Small companies in Serbia have shown the greatest fighting spirit during the corona crisis, and more and more market participants recognize the importance of accelerated digitalization. The biggest problem facing half of the companies that would like to invest is that they either do not have access to financing or are afraid of the uncertainty brought by the health crisis, are the results of the USAID Project’s Economic Development Cooperation Project “1,000 Companies”.
Specifically, that means that out of 100 euros that a businessman invests in his business, 79 comes from his pocket or the company’s reserves.
In a survey conducted by USAID over the past nine years, the attitudes of companies regarding imports and business volumes are identical to previous years.
Dragana Stanojevic, Director of USAID’s Economic Development Cooperation Project, assessed that the domestic economy has shown a certain resilience, which is a consequence of a better understanding of the digital world and business, as well as the effort and readiness of the domestic economy to “adapt and turn the crisis into opportunities.”
She also stated that the results of the research indicate that over half of the companies have only one manager, that only 12 percent of them have more than 20 workers, and that the share of women in management structures decreases with the growth of the company’s size.
“Despite the drop in income, most companies kept the same number of employees as before the crisis … Half of the economy estimates that they can recover in up to a year, while small and micro companies are more pessimistic,” Stanojevic states.
She adds that 40 percent of micro, small and medium-sized companies estimate that their revenues have dropped by one to two thirds, which is twice as bad as those reported by larger companies.
As far as the change in the business environment is concerned, companies are most positive about the improvements in inspections, the employment process, as well as the VAT refund.
The problems they state, as in previous years, are the amount of taxes and contributions on salaries, which were assessed as the most negative.
“Even in this atypical year, there has been an improvement in attitudes (managers), except on the topic of taxes and contributions on earnings. Businesses still fear declining liquidity and further uncertainty brought about by the coronavirus. For the first time, the number of those who believe the transparency of public administration has decreased, or the work of the state administration has been more efficient,” says Stanojevic.
The results suggest that the emergence of microcredit institutions or digital solutions for smaller loans and credits would significantly help the Serbian economy, and more and more companies are recognizing the importance of digitalization.
Stanojevic also announced that USAID will publish additional results and analyzes related to “1,000 companies” in the upcoming period.
US Ambassador to Serbia Anthony Godfrey states that USAID’s technical support is aimed at growing business and building a more transparent business environment.
He adds that it is encouraging that one third of all actors plan to digitally transform their business, as well as that he hopes to see even more micro, small and medium enterprises that will take this path.
“Financial markets still do not provide enough support to MSMEs, which would enable greater competitiveness of the economy. Two platforms are currently being developed that will enable alternative financing and new capital for companies in Serbia,” the ambassador said.
The Minister of Trade, Tourism and Telecommunications, Tatjana Matic, states that a strategy aimed at developing citizens’ digital skills, as well as further investments in broadband infrastructure, will soon begin to be implemented.
“If the citizens do not have a sufficient level of digital skills, we will not achieve the economic development of the entire society, nor the reduction of the gap between rural and urban areas,” says Matic.
Marko Cadez, President of the Serbian Chamber of Commerce, assessed that the current crisis is not a classic demand crisis, which could be solved with money from the financial markets, but that it also affects supply and demand in an unusual way.
As a result, the entire economy is “catapulted five years into the future,” Cadez concludes.
“Exports are one of the biggest generators of growth, we managed to protect and maintain it… The direct help we could get is that Brussels facilitates and enables imports into the EU in all areas where we are in line with EU standards, namely immediately, not in ten years when we become a member of the EU,” Cadez said, Nova Ekonomija reports.
