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Ares(2017)1735504 - 31/03/2017
Key points
Past & future SME performance:1 SMEs in Romania provide about two thirds of employment, slightly more than the EU average. They
account for half of the value added, which is, however, about seven percentage points below the EU average. During 2010-2015,
value added increased by 29 %, while employment rose by 6 %. The value added of Romanian SMEs is forecasted to grow by 8 %
annually, while their employment is estimated to grow by 2 % in 2015-2017.
Implementing the Small Business Act for Europe (SBA): Overall, Romania’s SBA performance presents a mixed picture. Progress since
2008 is largely above the EU average, except in the areas of Internationalisation, Environment and Single market. Although a large
number of policy measures were implemented, SME stakeholders consider that progress in implementing the SBA has been moderate.
SME policy priorities: Romania needs to continue the ongoing process of simplifying administrative procedures for businesses, to
increase the transparency and efficiency of its public administration and to reform the public procurement system to address
systemic deficiencies by fully implementing the national public procurement strategy and to implement the civil service strategy and
reforms to strengthen inter-ministerial cooperation. A speedy resolution of insolvency, providing a better and easier re-start for
entrepreneurs, would also benefit SMEs. Policy initiatives to improve the innovation potential of SMEs should also be put in place.
Internal market,
industry,
entrepreneurship
and SMEs
Table of Contents
Key points ..................................................................................................................................................................................................................................................................... 1
1. SMEs — basic figures....................................................................................................................................................................................................................................... 2
2. SBA profile ............................................................................................................................................................................................................................................................. 3
3. SBA principles ....................................................................................................................................................................................................................................................... 5
3.0 ‘Think Small First’ ............................................................................................................................................................................................................................................. 5
3.1 Entrepreneurship............................................................................................................................................................................................................................................... 6
3.2 ‘Second chance’ ................................................................................................................................................................................................................................................. 7
3.3 ‘Responsive administration’ ........................................................................................................................................................................................................................ 8
3.4 State aid & public procurement ............................................................................................................................................................................................................... 9
3.5 Access to finance........................................................................................................................................................................................................................................... 10
3.6 Single market .................................................................................................................................................................................................................................................. 11
3.7 Skills & innovation ........................................................................................................................................................................................................................................ 12
3.8 Environment ..................................................................................................................................................................................................................................................... 13
3.9 Internationalisation ...................................................................................................................................................................................................................................... 14
4. Interesting initiative ....................................................................................................................................................................................................................................... 15
Romanian SMEs account for roughly two thirds of employment past 3 years. SMEs in the non-financial business economy have
in the ‘non-financial business economy’, similar to the average fully participated in this growth, particularly in terms of value
share elsewhere in EU. However, their 50 % share of total value added, which rose by 29 % in 2010-2015. SME employment has
added is lower than the EU average of 57 %. Micro-firms in also risen, but only by 6 % within the same period.
particular contribute 16 % of total value added, 5 percentage
points lower than in the rest of the EU. The manufacturing and SMEs in the mining sector experienced strong value added
wholesale and retail trade sectors generate the highest shares growth of more than 100 % in 2010-2015, exceeding the
of value added. Wholesale and retail trade is responsible for sector’s pre-crisis level by 13 %. The stimulus was international
more than a quarter of value added and almost 30 % of investment in the Romanian fossil fuel industry, which has led to
employment. This is significantly more than the EU average and an expansion of the sector despite its overall decline globally.2
a clear indicator that the focus of the Romanian economy is on The coal, mining supplements and petro-gas extraction
trade. subsectors have been the main drivers of growth in SME value
added.
Over recent years, Romania’s economy has continued on its road
to recovery. GDP has increased by at least 3 % annually for the In the transportation and storage sector, in 2010-2015 SME
value added grew by 44 % and employment rose by 27 %. This
2. SBA profile15
Since 2008, Romania has implemented a large amount of policy
measures addressing all policy areas of the Small Business Act
(SBA). In the previous reference period, i.e. in 2014 and the first
quarter of 2015, 37 measures were introduced, indicating strong
policy activity. Despite such an active approach, the overall
performance on the SBA areas remains modest due to persisting
weaknesses in its implementation, particularly on Skills &
innovation, the Single market, Environment and
Internationalisation.
There is a wide consensus that the areas that saw the most
important progress during the reference period were: Access to
finance, ‘Responsive administration’ and State aid & public
procurement.
Overall, Romania’s SBA performance presents a mixed picture.
Progress since 2008 is largely above the EU average, except for A mix of financing programmes and tax reductions was
the areas of Internationalisation, Environment and Single introduced under Access to finance. Among the measures
market. Although a large number of policy measures were adopted in 2015 under ‘Responsive administration’, two
implemented, SME stakeholders consider that progress in strategies are particularly relevant. The ‘National Strategy for
implementing the SBA has been moderate. Youth Policy for 2015-2020’ is expected to adapt vocational
training systems to the labour market in accordance with SMEs’
needs. Furthermore, the ‘Strategy for Competitiveness 2015-
SBA performance of Romania: state of play and development from 2008 to 201616
Established business ownership rate (%); 2015; Romania: 7.5; EU avg: 6.7
In Entrepreneurship, Romania’s performance is above the EU students and teachers, women and young people.
average. Even though results show an outstanding performance, Entrepreneurship curricula were also introduced in secondary
some indicators have worsened since the preceding year. This is schools and teacher training.
the case for opportunity-driven entrepreneurship, for which
activity significantly decreased (from 49.75 % in 2014 to 33.2 % In 2015 and the first quarter of 2016, four measures were
in 2015). implemented. These are actually a continuation of measures
started in 2014, which became operational through calls for
Although entrepreneurship education at post-secondary levels proposals during the second part of 2015, albeit with significant
indicator shows results slightly below the EU average, the delays, partially due to lack of funding.
implementation of the education curriculum, as an SBA
recommendation, is relatively well applied. In this regard, - ‘Romania HUB’ is an initiative of the Department for SMEs,
continued allocation of corresponding funding could help to Business Environment and Tourism, implemented in 2015. It
improve results. aims to create a common platform dedicated to
entrepreneurship. The platform places multiple stakeholders
In Romania, entrepreneurial intentions and entrepreneurship as a under the same umbrella in order to facilitate and promote
desirable career choice are among the highest compared with cooperation and set up partnerships.
EU. This shows good prospects for the setting-up of new
businesses in the country. - The ‘Programme to develop entrepreneurial skills among
young people and facilitate their access to funding’ (START
The promotion of entrepreneurship has been one of the most — Programul pentru dezvoltarea abilitatilor antreprenoriale
active areas since the implementation of the SBA in Romania. in randul tinerilor si facilitarea accesului acestora la
Relevant measures include school education initiatives and finantare), implemented by the Ministry of Energy, SMEs
action plans, creating an entrepreneurial culture/attitude among and Business Environment, supports the development of
Time to resolve insolvency (in years); 2016; Romania: 3.3; EU avg: 1.97
‘Second chance’ means ensuring that honest entrepreneurs who Insolvency became apparent as a consequence of the difficult
have gone bankrupt get a second chance quickly. Similar to last economic situation and previous legislation on insolvency. Under
year, the overall score for this principle is in line with EU the previous legislation, insolvency proceedings were excessively
average. No major changes could be seen on the indicators. protective of the debtor without maximising the recovery of
claims by creditors. In this context, the new Code of Insolvency
The biggest concern in this area is the time it takes to resolve made significant progress, but more should be done to reduce
insolvency procedures. This remains one of the longest in the EU the time to resolve insolvency.
(3.3 years) and prevents honest entrepreneurs from getting a
second chance quickly. Romania should focus on promoting a positive attitude in society
with regard to honest entrepreneurs being given a fresh start,
Over the last few years, a number of measures in this area have and set up an early warning system.
been formally announced, then postponed/repealed, approved
and finally implemented. Instances of this include the Law on In 2015 and the first quarter of 2016, there have been no
non-fraudulent bankruptcy in 2010 and the ‘Insolvency Law — specific significant policies addressing the ‘Second chance’ SBA
New Code of Insolvency’, approved in 2014. area.
Time to start a business (in calendar days); 2015; Romania: 2; EU avg: 3.35
Cost of starting a business (in euros); 2015; Romania: 100; EU avg: 315.74
Paid-in minimum capital (percentage of income per capita); 2016; Romania: 0.6;
EU avg: 10.66
Time required to transfer property (in calendar days); 2016; Romania: 19; EU
avg: 23.04
Number of tax payments per year; 2016; Romania: 14; EU avg: 10.89
Time it takes to pay taxes (hours per year); 2016; Romania: 159; EU avg:
185.55
SMEs interacting online with public authorities (%); 2013; Romania: 65.35; EU
avg: 87.85
'Responsive administration’ means public administration being of SMEs interacted online with the authorities, compared with an
responsive to the needs of SMEs. Romania has improved in this EU average of 88 %. A positive sign is that the new government
area since 2008. made supporting interoperability of online platforms at national
level and providing better digital services one of its priorities.
Romania’s public administration offers a reasonable time and The strategic framework for public administration reform has
costs for starting a business and for transferring property. been in place since 2014, but its implementation was slow in
2015. Complicated administrative procedures and widespread
Since the preceding period, Romania has improved on the corruption still constrain the delivery of services (including e-
perception that fast changing legislation and policies pose a government services). Strategic planning, programme budgeting,
problem for doing business (88 % in 2013 and 85 % in 2015). consultation practices and evidence-based policy-making remain
However, more work still needs to be done in this regard. under-used.
the ‘National Strategy for RDI 2014-2020’. - The ‘Law approving Government Emergency Ordinance
No 84/2014 supplementing Government Ordinance
During 2015 and the first quarter of 2016, four significant No 58/1998 on the organisation of tourism in Romania’
measures were adopted. (Lege nr. 93/2015 privind aprobarea Ordonantei de urgenta
a Guvernului nr 84/2014 pentru completarea Ordonantei
- The ‘National Strategy for Competitiveness 2015–2020’ Guvernului nr. 58/1998 privind organizarea si desfasurarea
(Strategia Nationala pentru Competitivitate 2015–2020), activitatii de turism in Romania), introduced in 2015,
implemented in 2015 by the Ministry of Economy. The reduces the VAT rate on tourism accommodation from 24 %
strategy’s relevance for SMEs lies in its support for the to 9 %. This has had positive repercussions on the revenues
development of a competitive business ecosystem, based of SMEs in the sector.
No major changes happened on State aid & public procurement address systemic deficiencies through full implementation of the
compared to the preceding year. Since 2008, Romania has national public procurement strategy. A new institution, the
significantly improved its performance on this principle National Authority for Public Procurement (ANAP), under the
compared with the EU and is now close to the EU average. authority of the Ministry of Public Finance, will play a crucial role
However, there is still room for improvement, mainly over public by providing better oversight of public investment management
tender participation. and ensuring increased quality of public spending.
Participation of businesses in public tenders decreased from On the average delay in payments from public authorities,
30 % in 2013 to 25 % in 2015. In this regard, it is important Romania has improved considerably since the preceding year (21
that Romania reforms its public procurement system in order to days of delay in 2014 against 0 days of delay in 2015). In order
Moderate progress was made during 2015 and the first quarter - The drafting of the ‘National Strategy for Public
of 2016. The following two significant new measures were Procurement 2015–2020’, which brings a new approach to
implemented in 2015 by the Ministry of Public Finance as part of public procurement. The strategy improves the procurement
the ‘public procurement reform’ (Reforma domeniului achizitiilor system by addressing law-making, policy-making,
publice), aiming to make procurement more accessible to SMEs monitoring and supervision, operational support and
and to apply the best price-quality ratio principle: helpdesk, control, remedies and redress.
On Access to finance, Romania’s score is in line with the EU The country is still at a preliminary stage in the diversification of
average. financing resources. Similarly, Romania has recently introduced a
law regulating conditions for individual investors so that they
In Romania, SMEs are perceived as risky for banks due to the can benefit from tax facilities. However, it is too early to assess
lack of collateral and their high share of non-performing loans. whether this will improve business angels funding.
Furthermore, there is a lack of comprehensive regulatory
framework, including investor and entrepreneur protection, for Since 2012, a significant number of measures (36) have been
alternative sources of financing. introduced in this area. For instance, to specifically address
The significant measures implemented include the following, - The ‘Reduction of the standard VAT rate’ (Reducerea
which consist of a mix of financing programmes and tax fiscalitatii prin reducerea cotei standard de TVA) from 24 %
reductions: to 20 %, starting from January 2016, aims to reduce fiscal
pressure, boost consumption and boost investments.
- The ‘Programme to develop marketing activities for market
products and services’ (Programul de dezvoltare a
Easy market access for new and growing firms (1-5); 2015; Romania: 2.11;
EU avg: 2.78
Market access for new and growing firms without being unfairly blocked by
established firms (1-5); 2015; Romania: 2.61; EU avg: 2.78
Percentage of all enterprises that train their employees; 2010; Romania: 24;
EU avg: 66
Percentage of persons employed that have ICT specialist skills; 2015;
Romania: 11.91; EU avg: 19.95
Percentage of enterprises providing ICT skills training to their employees;
2015; Romania: 4.67; EU avg: 20.08
National R&D available to SMEs (1-5); 2015; Romania: 2.16; EU avg: 2.48
Skills & innovation is the most problematic area for Romania, Another significant gap in this area has been the delay in
which is one of the poorest performing countries in the EU in this launching and completing the calls for proposals addressing R&D
area. and innovation issues
Romania has included all the policy advice from the SBA During 2015 and the first quarter of 2016, moderate progress
recommendations in its agenda, but this has not yet yielded was achieved in this domain, with only one significant measure
results. Companies do not invest enough in training, and the being implemented. The ‘Law providing for the suspension of
public authorities are not aligning the education of the future taxes in the field of protection of industrial property’, introduced
workforce with the market needs. Participation in adult education in 2015, aims to protect the intellectual property rights of SMEs,
is very low. thus stimulating and valorising research and innovation among
Romanian SMEs and research entities.
Romania’s score fell compared to the preceding period and the reduce greenhouse gas emissions, with the aim of improving
country is now one of the poorest performing countries in the EU energy efficiency in industry and increasing energy production
in this area. This could mainly be explained by the deterioration from renewable sources. These programmes were:
of two indicators: firstly, a lower proportion of SMEs have taken
resource-efficiency measures (62 % of SMEs in 2015 as the ‘Energy efficiency in industry for SMEs programme’
compared to 89 % of SMEs in 2013); secondly, the share of (Programul Eficienta Energetica in Industrie pentru
SMEs that benefited from public support measures to produce IMM); and
green products has significantly decreased.
the ‘Renewable energy programme’ (Programul Energie
In 2013, a grant-supported credit line for Romania from the EU Regenerabila), targeting hydro and geothermal energy.
funds and the EBRD was adopted, dedicated to promoting
private sector investments (including SMEs) in energy efficiency. During 2015 and the first quarter of 2016, no significant
In 2014, two Ministry of Economy programmes offered grants to additional measures were adopted under this SBA area.
Romanian score on Internationalisation is broadly in line with the - As part of the ongoing multiannual ‘Export Promotion
EU average. Measures were adopted between 2012 and 2014 to Programme’ (already enacted in 2014), 2015 saw the
support the promotion of the national products and services on implementation of an initiative entitled ‘Participation by
external markets and the participation of economic players at economic operators, under the national flag, at international
fairs and exhibitions abroad. In 2014, the ‘Office for attracting fairs and exhibitions abroad’ (Participarea operatorilor
investments in SMEs and Internationalisation’ was established economici, sub pavilion national, la targuri si expozitii
within the Ministry of Economy’s new Directorate-General for internationale in strainatate). With a budget of almost
Entrepreneurial Policies. EUR 9 million, the initiative offers financial support to SMEs
(with individual grants up to EUR 200 000), aiming to
During 2015 and the first quarter of 2016, three measures were promote export activities, improve company export structure
adopted by the Ministry of Economy, Trade and Tourism in order and boost the access of domestic products and services to
to offer internationalisation services for SMEs: foreign markets.
- In 2015, the ‘Romanian Institute for Foreign Trade’ - The ‘Organisation of economic missions and promotional
(Institutul Român de Comerţ Exterior) was established under events abroad’ (Organizarea de misiuni economice si
the direct coordination of the Ministry. Its aim is to promote evenimente de promovare in strainatate) initiative, also part
and support exports, organise fairs and exhibitions for of the ‘Export Promotion Programme’, was implemented in
economic players in the country and abroad, and promote 2015 with a budget of EUR 1.3 million. It offers financial
tourism at national and international level. The Institute support to SMEs (with grants up to EUR 200 000) to help
implements the activities of the ‘National Strategy for them participate in economic missions and promotional
Export 2014-2020’ and the ‘National Strategy for Tourism events abroad.
Development’.
Below is an example of an initiative from Romania to show what governments can do to support SMEs:
Implemented in 2015 by the Ministry of Energy, SMEs and Business Environment, the ‘Programme to develop marketing activities for
market products and services’ is an ongoing multiannual programme to support and stimulate the development of SMEs in Romania.
Its goal is to make it easier for them to access funds, so that they can boost their economic and technical performance. Ultimately,
the measure seeks to increase competitiveness, create new jobs and maintain existing ones. With a budget of EUR 6.2 million
(RON 28 million), the programme offers financial support through participation in call for proposals.
The programme has focused on strengthening the capacity of businesses to promote their products and services on the market, and
on developing and modernising the activity of traders and service providers in the market.
- 200 were funded, with a value of EUR 5.5 million (RON 24.5 million, absorption rate of 87.5 %);
- 724 jobs were created, including 400 new jobs among graduates.
References:
http://www.aippimm.ro/articol/comunicate/raport-activitate-2015/
http://www.aippimm.ro/articol/programe/programe-nationale-2015/programul-de-dezvoltare-351-i-modernizare-a-activit-259-355-
ilor-de-comercializare-a-produselor-351-i-serviciilor-de-pia-355-259-2015
The European Commission Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) produces the
SBA fact sheets as part of the SME Performance Review (SPR), its main vehicle for economic analysis of SME issues. They
combine the latest available statistical and policy information. Produced annually, the fact sheets help to organise the available
information to facilitate SME policy assessments and monitor SBA implementation. They take stock and record progress. They are
not an assessment of Member State policies. Rather, they should be regarded as an additional source of information to improve
evidence-based policy-making. For example, they cite only policy measures national SME policy experts consider relevant. They do
not and cannot reflect all measures the government has taken over the reference period. There is more policy information on a
database accessible from the SPR website.
http://ec.europa.eu/growth/smes/business-friendly-environment/performance-review/index_en.htm
grow-spr@ec.europa.eu
http://ec.europa.eu/growth/smes/business-friendly-environment/small-business-act/index_en.htm
http://ec.europa.eu/small-business/index_en.htm
Endnotes
1
The two graphs below present the trend over time for the variables. They consist of index values for the years since 2008, with
the base year 2008 set at a value of 100. As from 2014, the graphs show estimates of the development over time, produced by
DIW Econ on the basis of 2008-2013 figures from Eurostat’s Structural Business Statistics Database. The data cover the ‘non-
financial business economy’, which includes industry, construction, trade and services (NACE Rev. 2 sections B to J, L, M and N).
They do not cover enterprises in agriculture, forestry and fisheries or largely non-market service sectors such as education and
health. A detailed methodology can be consulted at: http://ec.europa.eu/growth/smes/business-friendly-environment/performance-
review/index_en.htm
2
http://www.traficmedia.ro/ro/7738-crestere-cu-15-fata-de-2014-si-noi-servicii-de-transport-specializat.html; last accessed
08.04.2016.
3
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08.04.2016.
4
http://turism.bzi.ro/profiturile-companiilor-aeriene-vor-continua-sa-creasca-in-2016-46875; last accessed 08.04.2016.
5
http://www.sursadestiri.net/aeroportul-timi-oara-extinde-aerogara-anul-acesta-se-estimeaza-un-tranzit-de-1-milion-de-
pasageri-s2952439265.html; last accessed 08.04.2016.
6
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7
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8
http://www.wall-street.ro/articol/Real-Estate/193987/cbre-sectorul-industrial-a-dominat-investitiile-imobiliare-in-2015.html; last
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9
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