Serbia’s Small Businesses Face a Stagnation Trap

The OECD’s latest SME Policy Index underscores a persistent structural imbalance: while small businesses generate more than half of the country's value added, their contribution to merchandise exports lingers at just 33.5%. This disconnect is rooted in a stark productivity disparity, where microenterprises produce less than 40% of the value per worker compared to their larger counterparts. This performance gap limits their ability to modernize or enter global supply chains, leaving them vulnerable to market shifts.

Financial and operational barriers further stifle progress. Access to capital remains tighter in Serbia than the regional average, with banks holding over 90% of financial assets and commercial lending to SMEs falling in recent years. Furthermore, technological adoption is sluggish; fewer than 25% of these firms utilize advanced cloud or ERP systems. Combined with an adult education participation rate of only 5.5%—less than half the EU average—the workforce faces a distinct skills shortage that hampers digital transformation.

To move beyond regulatory reforms like the ePapir program, the government must pivot toward execution. The path forward requires shifting focus from business creation to productivity growth through targeted technology grants and revised insolvency frameworks, which currently drag on for nearly five years. Without systemic improvements in worker training and financing, the divide between Serbia’s massive small-business sector and the global economy will likely persist.