The 2026 edition of the SME Policy Index comes at a critical juncture for the Western Balkans and Türkiye. Over the past decade, governments in the region have made sustained efforts to strengthen SME policy frameworks and align them with European standards. Yet, the context in which these policies operate has fundamentally changed, shaped by successive global shocks, accelerating green and digital transitions and rising geopolitical uncertainty.
Beyond these immediate pressures, a deeper shift is underway. Uncertainty has become structural, while the systems traditionally used to manage it are under strain. In this context, the challenge is no longer primarily to design better SME policies, but to ensure that the existing frameworks deliver.
SMEs remain central to economic growth in Albania, accounting for approximately 78% of value added and 82.5% of total employment. Against this backdrop, the economy has made progress across several areas key to SME development since the previous assessment cycle:
Support for SME greening has expanded, with stronger implementation of policy measures and an increasing range of financial instruments. Greening is embedded across major strategic frameworks, including the Business and Investment Development Strategy and the National Energy and Climate Plan. The range of supporting instruments has broadened, with SMEs able to access green grant schemes, certification support and emerging green financing initiatives. At the programme level, initiatives such as the Smart & Green Future grant scheme and donor-supported projects are promoting resource-efficient technologies, circular business models and compliance with environmental standards. Together, these developments reflect a gradual shift from strategic planning towards more active implementation of SME greening measures.
Entrepreneurial learning and women’s entrepreneurship have become more firmly embedded within Albania’s SME development framework through stronger strategic commitments and broader programme implementation. Entrepreneurship is formally recognised as a key competence in the education system, while practical learning initiatives, particularly the Junior Achievement programme, have achieved full coverage across the pre-university system, providing students with hands-on exposure to business creation. In parallel, support for women’s entrepreneurship has been reinforced through targeted measures, training opportunities and dedicated strategic commitments, with women accounting for 58% of participants in state-financed SME training programmes overall. Together, these developments are expanding opportunities for entrepreneurship and strengthening support available to women entrepreneurs, although participation remains lower in digital and technology-oriented activities.
The framework supporting SME innovation has strengthened, underpinned by improved strategic direction and the gradual development of the innovation ecosystem. Albania has reinforced its innovation policy framework through the adoption of the Smart Specialisation Strategy and the expansion of dedicated support for start-ups and innovative firms. Public support for innovation has increased through new and resumed grant programmes, supporting around 180 start-ups in 2024 and 2025, primarily in digital and technology-oriented sectors. This has been complemented by the continued development of incubators, accelerators and innovation support organisations, as well as the launch of the Durana Technology Park, strengthening opportunities for collaboration and innovation support. Continued alignment with EU standards and technical regulations further facilitates SME integration into regional and international markets by reducing technical barriers to trade.
However, despite these achievements, several challenges remain that constrain the ability of Albania’s SMEs to drive growth and convergence:
Mechanisms for business restructuring and second chance remain underdeveloped, constraining SME resilience and the efficient reallocation of resources. Albania lacks a dedicated second-chance programme, and preventive tools are largely absent, with no formal early-warning system for financial distress and limited integration of insolvency prevention into SME policy frameworks. While the legal insolvency framework includes relatively advanced provisions, implementation remains constrained by largely manual procedures, weak monitoring arrangements and the absence of SME-specific performance data. These shortcomings are compounded by structural constraints in access to finance, including the lack of a scalable and permanent credit-support instrument and persistent weaknesses in credit infrastructure. As a result, recovery rates remain low at around 13%, significantly below EU levels, limiting opportunities for business restructuring and entrepreneurial restart.
Skills shortages and mismatches represent a fundamental constraint on SME upgrading and transformation. Despite progress in strengthening skills intelligence and labour market analysis, significant gaps persist between education outcomes and business needs. These challenges are compounded by weak foundational skills, as reflected in declining PISA performance, and by very low participation in adult learning, which stands at just 0.81% of the adult population—well below EU averages. As a result, firms face difficulties in recruiting and developing the skills needed to support technological adoption, productivity growth and business upgrading. Although skills intelligence tools are becoming more sophisticated, they are not yet systematically integrated into policymaking, limiting their effectiveness in anticipating future labour market needs.
SME digitalisation remains limited in depth, despite the existence of relevant policy frameworks. Albania’s Digital Agenda and related strategies recognise digitalisation as a driver of competitiveness, but implementation remains uneven and largely dependent on donor-funded initiatives. While most SMEs use at least one digital tool, adoption is concentrated in basic applications, with the uptake of more advanced technologies such as cloud computing, data analytics and automation remaining low. Constraints also extend to SMEs’ ability to leverage digitalisation for market access: despite a regulatory framework showing a degree of alignment with EU standards, and the adoption of the Action Plan on E-Commerce 2024-2027, the development of SME-targeted e-commerce initiatives remains limited, with many programmes operating on a pilot basis and lacking scale. Domestic support instruments are limited in scope, and monitoring arrangements remain underdeveloped, with no systematic tracking of SME engagement in digital or e-commerce activities.
Going forward, addressing these gaps will be critical if Albania’s SMEs are to fulfil their role as drivers of growth and convergence in an increasingly competitive global economy.