UN-ECE  Operational Activities

Main orientations:

• Industrial policy as a means of accelerating economic development;
• The role and tasks of Governments in promoting R & D and innovation;
• The role and place of SMEs in the economies in transition. Methods and national experiences in developing SMEs.
• Index of SME development issues

Specific details of work:

An Advisory Workshop on Industrial Restructuring for Selected Economies in Transition (Newly Independent States) was held at the UN Palais des Nations in Geneva, 8-9 June 1995. To meet the needs of the new member countries on an individual basis would require significant resources. Therefore, in the interest of economizing ECE resources and to better involve those countries in the work programme of the ECE, the Industry and Technology Division has organized this Workshop. ECE Review ECE/IND/1 is unique in terms of country-by-country analysis of industrial restructuring.

Development of small and medium-sized enterprises (SMEs). Due to distorted size structure, the lack of entrepreneurship and the difficulties encountered in attracting domestic and foreign capital, a policy of dynamic support for small and medium-sized enterprises, including the establishment of appropriate promotion, credit and financial systems, is a crucial factor in overall industrial policy. It is recognized that SMEs play a major role in employment generation. A review of the legislative aspects of the establishment of SMEs, consultancy and advisory services as well as organizing workshops, training, exchanges of national experience and round-table discussions on SMEs could help further the development of the entrepreneurship and the growth of industry as a whole. In order to facilitate the development of entrepreneurship during the economic reform, Mr. Szabó prepared a discussion paper on The role of Governments in promoting SMEs in CITs. The development of the SME sector in the countries in transition is most effective when activities and assistance are integrated and aimed at three distinct levels (Integrated approach). The discussion paper is available at request.

A paper on Italian policies on small and medium-sized enterprises (national and regional initiatives in support of young and women entrepreneurs) is also available on the Internet. The Italian experience could be considered as a good example for enterprise development. This is the case for the following reasons: (i) in Italy, SMEs play a larger role than in other industrialized countries; and (ii) Italy has created some efficient mechanisms for SME promotion which could serve as a reference for the countries in transition and the south Mediterranean. Among its most recent activities (September 1996), the Italian Government intends to adopt a strategy to support employment in economically depressed areas. The intention is to allocate over three years an amount of about 10 billion US$ (16-17,000 billions lire), equal to 1 per cent of GDP, to promote the development of microenterprises. By analysing Italian policy, legislation and the institutional framework for SMEs and successful Italian mechanisms such as Law 44/86 for the creation of new enterprises, ECE hopes to stimulate the promotion of an entrepreneurial environment, in particular for young and women entrepreneurs and the formalization of the informal sector in countries in transition and in the south Mediterranean.

The Microcredit Summit, held in Washington on 2-4 February 1997, was the first step of a decade-long campaign which seeks to ensure that 100 million of the worlds poorest families will be receiving credit for self-employment by 2005. The number of poor is also increasing in the 27 countries in transition (CITs) of central and eastern Europe and the newly independent States in the European Commission for Europe's region, where the registered 14 million unemployed in 1996 are living below the poverty level. The ECE is being represented at the Council of UN Agencies for the Microcredit Summit highlights that besides an emphasis on developing countries also reference to the countries in transition should be included. The business potential for microcredit programmes in CITs is very high. However, both financial and human requirements are different because of the unique traits of these economies. ECE paper on MICROCREDITING SMEs IN COUNTRIES IN TRANSITION highlights the need for international assistance and shows the possible ways to alleviate poverty in CITs.

In 1995, ECE started to build up a statistical database on SMEs in CITs. ECE's intention is to regularly update and review the development of legislation and provide statistical data highlighting the problems faced by the SME sector during the economic transition process in individual countries. IND/AC.3/1 document on SMEs in Countries in Transition deals with the definition and current legislation on SMEs in countries in transition, statistics for individual member States and lists support institutions working as advisory, development and/or information service centres for SMEs. The second document on SMEs in CITs in 1995 (IND/AC.3/3) shows that there were tremendous changes and developments in the SME field indicating that entrepreneurship has really became a core issue in the economic transition process. You might ask copies of these documents by request.

The development of entrepreneurship is a pressing issue in the countries in transition. The change from a centralized economy to a market economy with decentralized power and decision-making on financial matters is a complicated process and enterprises in those countries often find themselves in need of advice. Several well-known consultants agencies have established themselves in CITs. However, their services are expensive and SMEs usually cannot afford to pay these agencies to develop a business plan. The UN/ECE has developed a guide entitled: HOW TO PREPARE A BUSINESS PLAN: A guide for start-ups and advanced private enterprises in countries in transition. The guide forms part of the Programme for the Development of SMEs in CITs. It was elaborated at the request of CITs to assist them in developing entrepreneurship and to contribute to their economic reform process. The guide is available in English, Hungarian and Russian. Further information is available here.

Tailor-made questions. At the request and initiative of Governments of the transition economies, special issues should be discussed and bilateral and/or regional/multilateral projects should be initiated. Regional Adviser could give advice during formulation of project(s) related to industry and technology, enterprise development, technical harmonization, quality assurance policy and accreditation, and cooperate with international financial institutions with the aim of financing projects elaborated between the government institution(s) of the economies in transition and representatives of ECE.

For further information, please contact Mr. Antal Szabó.
Telephone: +41-22-917 24 71.
Fax: +41-22-917 01 78.

Mr. Antal Szabó has been the Regional Adviser on Industry and Technology with UN/ECE in Geneva since 1994. Since that time he visited many countries in transition (CITs) and provided Ministries of Industry and Ministries of Economy with assistance and advise concerning industrial policy issues and development of entrepreneurship, small- and medium-sized enterprises.

Languages: Hungarian (mother tongue), English, German, Russian

• Industrial restructuring in selected countries in transition, 1995, 77 pp., ECE/IND/1, New York and Geneva.
• The role of Governments in promoting SMEs in countries in transition, 6 September 1995, ENG.AUT/AC.20/R.1, SME '95 Workshop on SMEs, 12-13 September 1995, Moscow.
• Small and medium-sized enterprises in countries in transition, 14 February 1996, IND/AC.3/1, Geneva.
• How to prepare a business plan: A guide for start-ups and advanced private enterprises in countries in transition, 16 September 1996, IND/AC.3/2, Geneva.
• Small and medium-sized enterprises in countries in transition in 1995, 22 October 1996, IND/AC.3/3, Geneva.
• Italian policies on small and medium-sized enterprises: National and regional initiatives in support of young and women entrepreneurs, 20 November 1996, IND/AC.3/4, Geneva.
• Development of entrepreneurship, SMEs in Central and Eastern Europe, Colloquium on Promoting small and medium-sized enterprises in Central and Eastern Europe organized by the Parliamentary Assembly of the Council of Europe, 28-29 November 1996, Budapest.
• Microcrediting SMEs in countries in transition, Prepared for the Microcredit Summit held on 2-4 February 1997 in Washington D.C.
• Development of entrepreneurship and SMEs in the Czech Republic, Workshop on The role of SMEs in economy and practical lessons learned by transition countries in promotion of entrepreneurship organized by the International Finance Corporation, 26-28 February 1997, Minsk.
• Development of entrepreneurship and SMEs in Hungary, Workshop on The role of SMEs in economy and practical lessons learned by transition countries in promotion of entrepreneurship organized by the International Finance Corporation, 26-28 February 1997, Minsk.
• Financial policies for strengthening SMEs through microcredit and credit guarantee schemes, Prepared for the Project Group on "Financial policies for strengthening SMEs through microcredit and credit guarantee schemes" of the Southeast European Cooperative Initiative (SECI), April 1997, Geneva.
• Index of SME development issues

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