1. 1 ENTERPRISE POLICY PERFORMANCE ASSESSMENT BULGARIA

2. 2 Agenda The Enterprise Policy Performance Assessment (EPPA) Programme and Methodology The Structure of the Report Key Findings Conclusions and Policy Recommendations

3. 3 THE EPPA Concept Partners in the initiative: OECD Investment Compact, EBRD, EC (DG Enterprise and Industry) in cooperation with the South East Europe ENTERPRISE FORUM (all SEE countries) The EPPA reports present a: Regular Comparative Independent Comprehensive Assessment The EPPAs complement and underpin achievement of the European Charter for Small Enterprises process

4. 4 Scope of the EPPA 7 Policy dimensions covered: Institutional framework. Rule of law and regulatory framework. Tax policy for small business. Financial instruments for new and small companies. Business consulting services. Business Incubators. Entrepreneurship, vocational education and access to technologies.

5. 5 EPPA Methodology The policy assessments have been formulated on the basis of : Business Feedback: Focus group research Individual SME interviews and expert interviews Desk research and analysis Expertise from the OECD, the EBRD and the EC

6. 6 Focus Groups with Business People Held in 5 Locations in Bulgaria: Sofia (2) Plovdiv Sevlievo Jambol Radomir 50 entrepreneurs participated in in-depth discussion + 11 experts interviewed including industry associations Cross checks with other reports/expert views Qualitative Research

7. 7 Structure of the Report: Part I: Overall Assessment Policy Recommendations Part II: Views of SME Owners and Managers Analysis and Assessment

8. 8 Bulgaria has a vibrant SME sector: Over 200,000 active enterprises 1SME for every 40 inhabitants, getting closer to EU level SME sector contributes to around 50% of GDP formation Close to 70 % of total employment The Small Business Sector in Bulgaria

9. 9 Key Findings Broad based progress on all 7 policy dimensions since EPPA 2002 Well balanced and well structured policy framework Improved institutional framework, more articulated policies Move towards the adoption of OECD best practices and progress in the implementation of the European Charter for Small Enterprises

10. 10 Key Findings But still some problems in communicating government policy to the enterprise sector and in conducting an effective dialogue Last phase before EU Accession opens new policy co-ordination and policy consultation issues: i.e. SME and regional development policy, EU standards, access to technology

11. 11 Average Ratings of the Seven Dimensions of Good Practice by SME Owners and Managers 012345 Financial System AdvisoryServices Business Incubators Entrepreneurship, Education and Technology 2002 2004 Institutional Context Regulatory Framework Tax System

12. 12 The Business Perspective Entrepreneurs moderately critical of the business environment They express some frustration on dealing with the administrative system, but also recognise the significant progress made over the last 2 years Surprisingly no major area of complaint

13. 13 Progress Areas Areas of most noticeable progress in: Institutional Framework: SME Law, clearer institutional structure Regulatory framework Tax Regime: neutral system, lower CIT rate, better VAT administration Access to Finance

14. 14 Deviation from Good Institutional Performance

15. 15 Most Critical Issues Rule of law and implementation of regulatory reform Business incubators

16. 16 Contract Enforcement and Corruption Perception Index in SEE

17. 17 Priority Reform Issues for Action 1.Institutional Framework for SME Policy Develop and implement a clear policy for information gathering and dissemination (information on legislative changes related to the EU accession, business support programmes, etc.) 2.Rule of Law and Regulatory Environment Accelerate introduction of the ‘one-stop shop’ principle at the local level and assure its implementation at the central level 3.Tax Policy for Small Businesses Develop a source for practical guidance on tax and social security contribution issues, easy to access and to consult, for SMEs, for wide dissemination

18. 18 Priority Reform Issues for Action 4.Financial Instruments for New and Small Business Ensure that the possibility for the debtor to prevent, slow down or otherwise obstruct the enforcement proceedings 5.Advisory Services Establish regional BSMEPA branches in every large administrative centre on the basis of public-private partnerships 6.Business Incubators Allocate responsibility for the implementation and co-ordination of national and international funding for the creation of business incubators

19. 19 Priority Reform Issues for Action 7.Entrepreneurship Education and Access to Technology Expand the secondary, vocational and higher level education curricula to include introductory courses in Entrepreneurship and Small Business Development. Ensure participation and coordination with the private sector

20. 20 For further information contact: Mr. Antonio Fanelli, Principal Administrator Antonio.Fanelli@oecd.org OECD Investment Compact for South East Europe www.investmentcompact.org