Measuring Regional Entrepreneurship in Hungary

During transition, which in Serbia started belatedly, SME developed fast and became an important economic agent owing to their number, their share in GDP formation, and their share in total employment. The global economic crisis and general recession hampered their doing business. The slowdown of market reform was also an important factor in deterioration of the business climate. Business demography relates to the number of established and closed enterprises and shops, and presents a very important indicator of SME development. In 2010 and 2011 business demography was unfortunately negative as there were more closed companies and shops than established ones. This produced a fall in SME employment and, consequently, a rise in the total unemployment as the SME sector was significant in neutralizing a decline in the number of the employed in large companies undergoing restructuring. It will be important to see whether such an adverse trend continued in 2012 or not. Over the last several years there have been signs that small companies largely managed to recover owing to their flexibility. Fast growing companies and gazelles have also been pretty resistant to deteriorating circumstances. It will also be important to see if this is still the case. Entrepreneurs’ perception of the business climate is crucial for their plans and activities. Therefore it is relevant to see whether they are optimists or pessimists in their expectations about the future. Belgrade, as the capital of Serbia, participates in GDP formation with almost 40%; as a university center it represents a source of highly skilled labour and knowledge. One could expect that owing to its comparative advantages Belgrade is able to overcome the crisis more easily. Should this be the case, it is an important positive signal that entire Serbia can expect better results regarding SMEE development soon. It would be interesting to analyze the SME position in Belgrade and this sector’s future prospects in order to detect chances for overcoming the crisis. The aim of the paper is twofold: firstly, to examine the current situation, problems and limitations to SME development, and, secondly, to propose an adequate support policy mix by exemplifying the current situation in Belgrade.