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Nov 24, 2017 14:41 EEST
November 24 (SeeNews) - Slovenia's small and medium-sized companies (SMEs) face the challenge of finding qualified staff which calls for an urgent revamp of the country's education system, the European Commission has said.
In order to increase the productivity of its SMEs, Slovenia must focus on improving the skills of the labour force, which calls for the integration of entrepreneurship into curricula at all levels of education, the European Commission said in a report reviewing the performance of SMEs in member states.
The EC judged that the SME contribution to the Slovenian non-financial business economy is of key importance. Almost two-thirds of overall value added and three quarters of employment are generated by SMEs, which in both cases is almost 7 percentage points more than the EU average.
Micro firms are particularly important for employment, as they provide over one third of all jobs in the country, the EC said, adding that Slovenian SMEs employ an average of 3.2 people, slightly below the EU average of 3.9.
In order to boost their performance, Slovenia must also improve financing conditions for SMEs, particularly for access to alternative sources of financing.
Although the willingness of banks to provide loans to SMEs improved in 2016 compared to 2015, the percentage of rejected loan applications and unacceptable loan offers increased significantly during the same period - from 5.6 % in 2015 to 13.9 % in 2016, the EC pointed out.
"Setting aside the fact that some SMEs’ proposals may not have been well prepared, this suggests that the effects of improved SME access to loans remained limited due to the unfavourable loan conditions that prevail, also with the related costs", it added.
In addition to the above challenges, the EC also found that funding for new and growing firms (both equity funding and business angels funding) also deteriorated in 2016 compared to 2015.
Furthermore, the EC outlined that digitisation of businesses has to be actively supported, and the implementation of priority actions to further reduce administrative burden is needed.
The EC noted that Slovenia's SMEs have increased their value added by 18.9 %, while SME employment rose by 6.8 % between 2012 and 2016.
"This was markedly better than the performance of large firms, which posted increases of 12.9 % in value added and 1.3 % in employment over the same period."
The outlook for Slovenian SMEs in 2016-2018 is optimistic: SME value added is forecast to increase in this period by 9.7 %, while SME employment is predicted to rise by 3.1 %.
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