ROLE OF SMEs IN THE ECONOMIC DEVELOPMENT

The aim of this paper is the analysis of data regarding the SME sector in Kosovo, the presentation of current positive and negative development trends within this sector as well as offering recommendations towards the intensification of government incentives towards creating a sustainable environment for SME development, focused on the economic development of Kosovo. This paper analyzes (i) data regarding SME development in Kosovo such as: size, activity, legal status, business age, strategic orientation of SMEs, their financing sources, SME contribution in GDP, their international activities, their impact in the labor market and other relevant data, (ii) data regarding existing barriers, opportunities and challenges towards SME development in Kosovo as well as (iii) data regarding developmental support for the private sector through government policies and SME development strategic aims. Aiming on creating the environment for supporting sustainable business development and employability optimization, emphasis should be given to: reduction of administrative and regulatory obstacles towards establishing new businesses as well as developing existing ones; improvement of businesses' access to funding opportunities especially for startups; reporting from SMEs in compliance with established standards; integration of prevalent informal economies into the formal economy; promotion of entrepreneurial culture and other alternative solutions for promoting SME growth as a catalyst for economic growth and unemployment reduction.