SMEs & entrepreneurship

Serbia’s small and mid-sized firms carry more of its economy than their peers do in Europe. Many took over the industrial skills of the old conglomerates as those collapsed, and a core of domestic exporters has grown largely on its own, making custom products in small series for buyers they know. Yet growth and support have run mostly through large foreign-owned plants and thin help for micro firms, while the firms in between are held back by people, management and new markets as much as by money.

Support for firms is built around two poles: grants per job for large investors, who take most of that money, and modest programmes for small firms, mostly co-financing equipment, rationed by administrative criteria or by who applies first and reimbursed only after the money is spent. Neither fits a firm of fifty people that exports custom machinery, cannot find engineers, needs a finance function or wants buyers beyond the one it knows. Measures that build capability reach few firms, least of all in less developed regions. The question for policy is how the same budget could serve what different firms need to grow: medium-term programmes for groups of firms with similar needs, chosen for their potential rather than their past success, paid in advance where that matters, and judged by what changed.

We wrote the SME sector chapters of the OECD’s SME Policy Index for the region and follow supported firms on the shop floor; the founder’s earlier work identified the leading domestic exporters and turned their proposals into policy.

For an investor, buyer or partner, these firms are where domestic know-how sits: precision metalwork, machinery and tools, plastics and packaging, furniture and fit-out, food and software. Most are run by their owners, often their founders, so succession is a live question, and they grew by serving a few buyers well rather than by building brands or sales channels. That leaves value an owner or partner can capture: professional management and finance, new markets, automation where labour is short, and consolidation in fragmented niches. They are hard to find in statistics but easy to read in their filed accounts, which show whose business will outlast its founder.

We read these firms from the filed accounts of every company in their niche and from inside, where costing, planning and finance decide whether a plan holds, and know the public programmes that can share the cost of growth.