November 24 (SeeNews) - Croatia will see roughly 12,500 new jobs open in its small and medium-sized enterprizes (SMEs) by 2018, the European Commission said.
In 2016, 152,099 SMEs in Croatia employed 722,648 people, according to data presented by the European Commission in a report reviewing the performance of SMEs in EU member states and several candidate countries.
Croatian SMEs are larger in terms of workforce, employing 4.8 people on average, compared with an average of 3.9 in the EU, the Commission said.
Employment by SMEs is expected to grow further by 1.7% in 2016-2018, the EC said, adding that the value added of the sector will also rise in that period, by 7.7%.
In Croatia, SMEs generate almost 60% of overall value added and provide over 70% of employment.
Despite good results, Croatia needs to significantly intensify the implementation of the Small Business Act for Europe (SBA), as it trails behind the EU average in six of the SBA principle areas, the EC warned.
Croatia is lagging in the categories of entrepreneurship, second chance for honest entrepreneurs who have gone bankrupt, responsive administration, access to finance, skills and innovation and single market.
In terms of entrepreneurship, Croatia's performance in this SBA policy area is among the three weakest in the EU, the EC said.
"While early-stage entrepreneurial activity improved slightly and the established business ownership rate improved from 2.8% in 2015 to 4.2% in 2016, the media attention given to successful entrepreneurship remains very low."
Croatia also continues to perform below the EU average in SBA's policy area of second chance, with the fear of failing in business increasing from 30.3% in 2014 to 34.4% in 2015 and then to 35.8% in 2016, according to the report.
In terms of responsive administration, which refers to public administration being responsive to the needs of SMEs, Croatia recorded the lowest score among all EU member states.
The Commission explained that in Croatia the number of tax payments per year has risen from 19 up to 31 in 2016-2017, increasing the administrative burden on SMEs instead of reducing it.
When it comes to access to finance, rejected loan applications and unacceptable loan offers have increased in the country, while the percentage of respondents indicating a deterioration in the willingness of banks to provide a loan has increased from 6.25% in 2015 to 10.3% in 2016.
Croatia also needs to boost skills and innovation, particularly in terms of Information Communication Technology (ICT), the Commission noted. It pointed out that a drop has been recorded in the percentage of employed people with specialist ICT skills and in the percentage of businesses providing ICT skills training to their employee.
The Commission commended Croatia for state aid & public procurement and internationalisation of SMEs - categories in which the country is performing above the EU average.